SPEAKER_01: He's optimizing the view. Now I'm optimizing for shade, actually.
SPEAKER_00: Trying to get out of the.
SPEAKER_06: Oh, fucking Christ, you look like a moron. I mean, this dipshit showed up.
SPEAKER_01: He showed up to my beach club yesterday. And it was basically like someone had taken a mummy and then wrapped a mummy inside of a white sheet and then presented him at this place. Oh, he lathered in his like SPF 500.
SPEAKER_05: And so I at one point I said at one point, let's go for a walk.
SPEAKER_01: And this asshole had the nerve to grab his cell phone and a battery pack for the cell phone. I forced him to leave the phone. He felt naked. Then I made him take off his shoes and socks. And then I tried to get him to take a shirt off. We got almost all the way there. Yeah, that's that makes sense. All right, everybody. Here we go.
SPEAKER_05: Great.
SPEAKER_05: Hey, everybody. Hey, everybody. Welcome to everybody's favorite game show. Guess who's not in Italy?
SPEAKER_01: Doo doo doo doo with us today.
SPEAKER_05: David Sachs, wearing sunglasses with the view of an ocean, clearly on a nautical vessel. And I am in an old apartment in the center of Florence. And Chamath is at his hideaway somewhere in the countryside. And Friedberg is in front of a abstract piece of art. Two people high on crystal meth trying to break into his car in San Francisco.
SPEAKER_01: I'm no longer a San Francisco resident. I'm proud and sad to say after 20 years of living in the
SPEAKER_04: city, I have relocated still in a not to a nondescript location still in California, but no, enough said in the Bay Area. So with us again, obviously Rain Man, the dictator and back from a
SPEAKER_05: week off the queen of Kenwa. What tell us, Queen, you had a big week you had some nice ink come out some press about the production board raising some monster round, and you took the week off. Give us the feedback. What was it like taking a week off from the pod and now you're getting press and you're becoming a public figure. What's it been like for you the past week and tell everybody what went down with this new fund? You know, my strategy was to take a week off from the pod and
SPEAKER_04: then have the ratings go up and then I could quietly and nicely exit as a member of the cast. But unfortunately, I've been drawn as Al Pacino said, just when I thought I was out, I am back in. So it's I missed you guys. I actually listened to the all in pod for the first time ever last week. You guys did a great job. You've been complaining these other last 41 times without even listening
SPEAKER_01: to it. You know, I will say I listened to it while we're on it. But this was actually really
SPEAKER_04: interesting because I've never actually been big of you. You're actually listening while we're taping. We do it ourselves. I hear the whole freaking thing in real life. So listening to it,
SPEAKER_04: I found it really entertaining. And I think I have a better appreciation. It's less about some of the points and facts we make, which I've been pitching and complaining about the topics and, you know, where we go with the conversation and stuff. But it's just generally just nice to just hear everyone kind of shoot the shit. Anyway, good job. So you're saying you're a fan of the all in pod?
SPEAKER_00: I might get a wet your beak mug from one of our fans.
SPEAKER_04: I have one. I actually have three. I use it. You sent me a whole gift basket from the kid who's
SPEAKER_01: paying for college based on our IP.
SPEAKER_05: It's all good. No. So we announced our TBB funding last week, too, which I have been running the production
SPEAKER_04: board for 4 years now. A little over 4 years. It's been my primary vehicle where I've been primarily incubating new businesses and making some investments from the balance sheet. We've raised several rounds of capital over the last few years. We've never talked about it publicly. We've never done press around it. But as you guys know, we've been doing a lot of work with the production board. And we've been able to, as you guys know, have a lot of people who are going to be doing a lot of work with it. We've been able to get a lot of people who are going to be doing a lot of work with it. So we really want to see great people be made aware of the work we're doing at the production board and at each of our individual businesses, so we could start to at least get folks knowledgeable and aware of us. So when we reach out and folks are interested in thinking about it, we're hopefully there for that. So it was great. It's nice to share what we're doing. We also shared 5 of our businesses that we've incubated, several of which have been stealth up until now. One of which, Jason, I think you've referenced in the past, our molecular beverage printing company, Kanna. So that one's starting to emerge a little bit more now after several years of R&D and work. So we're making progress now. And I'll hopefully have more to share over time in terms of what we're doing. But we're excited. And it's great to have great investors. Yeah, it's a great piece in CNBC by Ari Levy. I guess you gave him he's a great journalist,
SPEAKER_05: by the way, like old school legit journalist. Yeah, I think fan of the pod. How did you pick Ari to be the the vehicle for this is use a PR firm where you just decided, I'm going to share it with this one person, we had a mutual person who's in PR who introduces I
SPEAKER_04: didn't want to go do a broad PR thing. So I was just kind of like, let's get you know, I was going to do my medium post, which I wrote as like a blog post. And that was the primary content. And then it was like, let's just find someone good who can kind of at least, you know, push people to that content that can speak well to our business. And you know, he was recommended. I've never met him before. Great guy. So you know, we just wanted to kind of get that one piece done. Anyway, he did a great job. He said he, I think he's been on your show, right? But for your show, he's been on this week and startups. Yeah. And I see it when I used to go
SPEAKER_05: to CNBC. I would you walk down at one market used to go there, chum off to and you walk down like a row of journalists. And as you go to get on set, I don't know if it's time to you chum off one or two of the journals will intercept you and try to get a story. So he would always stop me, hey, I heard that Travis at Uber was this or whatever. But great job on the ink. It's great to see you, you know, raise 300 million. There was a lot of references to Larry and Sergey and Google, maybe you could tell us what how much who led the round this $300 million round and what's Google's involvement. When I first started the production board, it was my I had made
SPEAKER_04: personal investments with my own money and started some businesses with my own money. And I had a series of dinners and conversations with Larry Page about like, doing something together with alphabet. I knew Larry from my Google days, obviously. And, you know, we ended up kind of after a bunch of conversations with folks at the level below kind of saying, let's, I didn't want to manage a fund. And I didn't want to go work at alphabet. So the idea was I would set up a holding company, kind of a permanent company, that like any business has a balance sheet with cash on it and can do stuff with that money. And alphabet invested in the holding company, they put some cash in. This was 4 years ago, and they became a minority shareholder and had a board seat and I set up a board. And so that's the work. And then we've raised another round since then. And then we just raised this brand we announced last week. And so our, you know, the round was, I think, I don't know if we announced, but it was kind of co-led by BlackRock. We had Morgan Stanley, Koch Industries, Bailey Gifford, Allen & Company, Fox Haven, Arrowmark, just a bunch of really high quality, long-term institutional investors. Alphabet put more money in. The Gates family office called Cascade has been an investor with us for a while. So they all put money in into the round. And it's great because we can use that capital to build new businesses and support some of our existing businesses. So some of our businesses are really hard, deep tech companies. We don't want to have to go rush out and raise venture money or... And we don't want to have an incentive to try and mark the asset up and get a good mark on it. So really, we can use some of our money now to support some of our businesses until they're ready to go commercial or until they're ready to raise outside capital, if that makes sense for them. Not always gonna make sense. And so we have a lot of flexibility. So you own 100% of every business that comes out of here,
SPEAKER_05: then you find a management team, as we discussed, and then spin them out, Chamath. What do you think of this venture studio approach, which has only really worked for Bill Gross from IdeaLab, and maybe John Borthwick with Beta Works in New York, and I guess science maybe worked as well with Dollar Shave Club. But here you have, you know, I think, Friedberg, a great entrepreneur as well, doing this. What are your thoughts on this studio model going long in building companies in a studio system?
SPEAKER_01: Well, I think it means a lot of different things to different people. So I'm not sure. Honestly, what a venture studio is, that's different in somebody else's view than what Friedberg is doing. But what I will say is that the different thing that he's doing, which I believe in, is you have to become extremely hyper focused. You know, I think that there was a moment where if you look at when IdeaLab was really successful, or when Beta Works was really successful, in the case of IdeaLabs, they had a very specific prototypical Web 1.0 business. Beta Works had a very prototypical Web 2.0 kind of social business. They all worked because these guys were experts in those things. And so I'm pretty bullish on what Friedberg's doing just because he's not trying to boil the ocean. He's being very specific around, you know, synthetic biology. And I think that that is probably what got other people excited, because then not only from Friedberg's execution capability, which I really believe in, but then now think about it if you're an investor. I don't want to put my money into something that all of a sudden looks like nine other things, where all of a sudden it creates a lot of correlation that I didn't really know existed, especially when I'm investing hundreds of millions of dollars. It's a very big deal that a lot of investors have. And so when Friedberg can very legitimately say, look, I'm, you know, explicitly focused in this thing. And then he also said, and Friedberg, you may want to talk about this. And this is the only thing I'm going to focus on. It gives an investor a lot of confidence because it's like, here's a really smart guy who's done this before he's going to stay in the swim lane and do something really specific here. And now I can understand how it fits into the rest of my portfolio. So I think that there is a lot of value for investors in a bunch of different ways. So I don't know, I'm super excited.
SPEAKER_04: I appreciate that. I mean, I think like one of the things that mattered to me, Jason, and the way I kind of frame it, like a lot of people think, oh, venture studio, it's about how many things you crank out. That's like Y Combinators model. For me, it's not about how many businesses you start, it's about absolute value creation. So you have to do the things that you have the resourcing to do with the objective being to drive business value as a whole. So that means doing 1 thing, doing 3 things, doing 5 things. It's not about how many things... Whatever the right balance is, it's not about just cranking out businesses. Because each one of these things, we have to continue to be active. And we need to continue to build. And when we start a business, we reserve a good chunk of the business as equity for the team that works on it. So it's not like we're 100% owners. We've got to get the right people. They've got to feel like and act like owners in that business with us. You wind up owning 50% or ballpark 40%? What do you think?
SPEAKER_05: It actually varies quite a bit. So without getting into too many details, I mean,
SPEAKER_04: when we start the business, we're the majority owner. And in many cases, when we've brought in other investors, over time, we get diluted down to become a minority owner. So 30% or something like that, like if you did the series A or something?
SPEAKER_04: But in many cases, we end up being... We want to continuously fund some of these businesses. Because it may not make sense to bring in outside investors. And we'll continue to be the majority owner. But we create an independent board. We make sure that the team feels like it's an independent business. And we give them a lot of infrastructure and tooling, finance, HR, legal facilities, support, recruiting support, etc. And obviously templates for how to succeed and playbooks and so on. So that's a lot of what I would call our platform value. Amazing.
SPEAKER_05: Another bestie housekeeping.
SPEAKER_04: By the way, David Sachs is an investor in TPB. I don't know if you guys need that. So good job, Sachs.
SPEAKER_00: Good job, Sachs.
SPEAKER_05: Is that another unicorn for me?
SPEAKER_04: Technically, yes.
SPEAKER_05: Look at you. Well, in other news, Sachs. This is like the victory lap episode. Sachs, you announced you're closing $1.1 billion with a B in Kraft's third fund. And explicitly talking about focus to Chamat's point, explicit focus on marketplaces and SaaS. Maybe you could explain how long it took you to raise the 1.1 billion. I think the first one was 300 million. The second was 600 million. So you're basically doubling each time? Almost. I mean, the first one was 350. Second fund was 510. This one is 1.12 billion. It's
SPEAKER_00: going to be 612 million for venture, which is C series A series B and 510 for growth. And yeah, we are focused on SaaS and marketplaces. I kind of run the SaaS practice and my thesis is really the same as it was when I was doing Yammer, which is apply consumer growth tactics to enterprise software, make it go viral inside companies, sort of sell it bottom up through the average employee as opposed to top down through the CIO. And then the other GP in the fund, Jeff Flohr, is focused on marketplaces. He was the founder CEO of StubHub, which was one of the original e-commerce marketplaces on the web. And so he leads the marketplace practice. And those are also, you know, I would say along with SaaS marketplaces are the best kind of internet businesses to create. And so we've just decided to focus on those two areas. And that's kind of enough for the world for us. And in related news, your project call in, which is a podcasting plus
SPEAKER_05: casual audio application has been doing great in beta. Yeah. And I am proud to announce that we had a small allocation for our syndicate, the syndicate.com, which is my syndicate, and then the all in syndicate, which we created as a lark. Between those two syndicates, my syndicate had 900 requests to invest over I think $7 million, we had a small $1 million allocation. And we basically did a lottery. So something like one in, I don't know, seven or six got in. And then the all in syndicate also filled up and then the all in syndicate, no carry no fees, everybody gets a free ride. Thanks to David Sacks. And that's our first all in syndicate, chipping away at my core business and eating my lunch. Thank you. And that the all in the all in syndicate is going to be
SPEAKER_00: 250,000. It says $251,000 checks with no fee, no carry. And we're the company is paying the administrative expense of that. We just want to let you know, 250 of our listeners what their beaks. Yeah. So and is it open yet? sex? Like, can anyone download the app and use it yet?
SPEAKER_04: No, it's still in private beta. We're gonna open up soon. You know, we'll certainly get better. I
SPEAKER_00: will. I was looking at it the other day. It's getting really tight. I mean, can I talk a little
SPEAKER_05: bit about it? Or do you not want to keep it? Yeah, go for it. Yeah. Well, I mean, here's, here's the genius of it. And I mean that sincerely. Not just because you gave me an allocation. I mean, not just because you gave me an allocation, but clubhouse, when you go to clubhouse, if you miss the great conversation, it's gone. And clubhouse has really bad audio quality and the rooms are
SPEAKER_05: and there's really, you know, there's clubs as a concept, but in call in, everybody creates a show, then the show is syndicated to an RSS feed like a podcast. So you can basically start your own podcast with no staff, no post production, you just talk, and then it goes out to an RSS feed. So we're thinking David and I have doing like a post show after all in like two days after just to talk to the fans and do like a little private group thing. But it's kind of like a really nice overlap of podcasting. And yeah, well, I was gonna say it's it's basically long tail podcasting,
SPEAKER_00: using social audio as the gateway drug to you know, to long tail podcasting. The cut is a company worth 4 billion yet. We have we internally marked up the round four times.
SPEAKER_06: Like in Jason Horowitz did with clubhouse. Let me ask them to get your mouth in the conversation.
SPEAKER_05: Jamal, what do you think of a venture firm making a seed investment at 100 million, then a billion, then at 4 billion for a product that you know, it's largely sideways. This is like in terms of internal three bats, and marking it up 10 x and then four x, so 40 x lift over three rounds. What do we think of this?
SPEAKER_01: I think the best venture firms shouldn't give a shit about any company. And I don't think that they really do. Because if they're very savvy, they should be doing exactly what Andreessen you've seen the articles about Tiger, you've seen all these other folks. The real question is, maybe if you want, can you please explain what they're doing. And what they're doing is, to me, if you understand, the investing landscape makes a ton of sense, which is technology used to be the small niche. And so we used to only get, you know, when I started social capital, there was probably 25 to 30 billion dollars a year flowing into venture just in 2011. Fast forward a decade, we have like 120 billion dollars a year going into tech and it's going up like crazy. And if you're the best brands, you're going to get the overwhelming amount of interest from people who want to get into the asset class as the asset class expands, right? So if all of a sudden, you know, you decided to invest in private equity when private equity was going bonkers, you're not going to take as much of a shot on an emerging manager, you're going to want to take a shot on Blackstone or KKR, right? And that's what's allowed those folks, Carlisle, to scale AUM just unbelievably. Blackstone, I think, is under management.
SPEAKER_01: Exactly half a trillion dollars now at Blackstone. Similarly, there are these indelible brands in venture. And when everybody realizes they need to be long tech, they jump in. Now, when they do that, you have to understand who these people are. There are two things that matter. One, they are people like pension funds and their hurdle rate, meaning, you know, what are they trying to do better than in terms of a rate of return is in the low to mid single digits. That's really important to know. 9%, 10%, what the stock market? Not even. Not even. Not even. Not even. 5%, 6%, okay? And then the second thing you need to know
SPEAKER_01: is that these guys have so much money that they would rather, when they spend an hour meeting with you, they'd rather give you a $50 million check than a $5 million check. A $5 million check just compounds their problems. So if you put these two things together, it makes a ton of sense for companies like Andreessen to now focus on the velocity of money. Raise a fund, put the money to work, raise a new fund in a very systematic way that everybody can understand and can predict so that Andreessen can tell their LPs on a calendar, guys, I'm going to be back to you in 18 months. Guys, I'm going to be back to you in a year and be able to scale the capital. And I think if you look at it in that framework, it explains Andreessen, it explains Excel, it explains Sequoia. And by the way, it's a brilliant strategy because these guys still make 2.5% on the money. They end up returning the market beta, meaning what the average market would do anyways plus a little bit of alpha, right? So they'll still do a little bit better than the market, which means they'll be able to raise money infinitely. So if I'm in recent, I've had a public market or
SPEAKER_05: the venture market, so venture market, venture market, no, but that'll decay, right? So that'll
SPEAKER_01: decay down to the two to 10% or 12%. But my point is, it's still better than the five or 6%. These pension funds and other folks need to earn. So today, the goal of every fund that's successful that has a brand, David's included, should be do good deals, make sure you're in things that can work. And the thing that David has, which other folks don't, is David can help make things work when they're not necessarily obvious, but then pound the money in and then raise more money as fast as you can. Because then, you know, it helps the investor, that's what they want, and they're happy to pay you. And then for you, the GP, you start to make enormous fees, and the whole cycle works. So for Andreessen, I think that's the calculus. It's like, shit, if I can put 100 million in that's 100 million less I have in my fund. Now I can go I'm 100 million closer to raising the new fund. Okay, now the criticism has been freeburg, I'll go to you. It's bad hygiene
SPEAKER_05: for the same firm to mark up the same product three times in this case, you know, clubhouse, what's it called house. So is that a warning sign for you that it's a bubble? Or it's kind of the worst case I've heard is like marking up your own book, self dealing, whatever. How do you look at that issue? freeburg? And then I'll go to you sex? Well, if it were SpaceX, you would look like a genius. So, you know, I think we can criticize it
SPEAKER_04: until what's up, or what's up. And Sequoia has done this many times where they've been the lead in multiple rounds in the company, and they have high conviction in the quality of a business and they don't want to bring other investors in. And when you have high conviction, and you can continuously buy more of the stock and buy more of the company and be a bigger owner, and then it works out, you look like a freaking genius. And so I don't want to criticize the investing style of these guys. I mean, time will tell if they made good bets or not as a whole. You can kind of make the case maybe that they're trying to be asset managers and drive assets under management up and gain more fees. But I think LPs are a little shrewder than that. We'll kind of take a smarter look at that. At the end of the day, the guys that are known for doing this, like Sequoia and Founders Fund and others have had incredible returns by doing exactly this. So the strategy does work. And, you know, you just have to have to do it with the right businesses. And that I think that will, you know, demonstrate the quality of your investing acumen.
SPEAKER_05: All right, Sax, any further thoughts on that the marking up your own book? Is that something you plan on doing with this new fund and having the growth? And how would you look at, hey, calling starts getting some traction? Does that mean your growth fund is going to go mark it up and take that those shares? Or do you think that it's better hygiene to have the market price? Well, I guess it just depends. I mean, the growth fund does give us the ability to double down at a
SPEAKER_00: later stage on our own early stage companies. But you do have to be really sure when you do that, because it does, you know, it certainly raises questions if you're wrong, right, that you wouldn't have with any other investments. So it just it definitely raises the stakes. You have to be really certain, I guess. But you know, if Colin's a big hit, do we go raise, you know, a growth round? Yeah. And now I think what we might do in that case, because we incubated it is we'd let somebody else lead the round, and then we would participate. So you have some third party setting the price, because we incubated the company. And frankly, that's what we did with the round that you just participated in is craft participated, but we did not set the terms it was actually Goldcrest and Sequoia co led the round with craft when you incubate a company like that,
SPEAKER_05: let me ask another technical question, because the audience last week, or in the week before really responded well to us talking about this as opposed to COVID and Delta variant, which we'll talk about at the end of the show. For those people, you can basically turn off the show at 50 minutes or 75 minutes when we talk about the impact of the pandemic. But and I'm hoping you're thinking right now about who's not in Italy, I hope we'll get back to that. When you incubate a company like that, who owns the original founder shares craft, the organization, David Sachs, the individual came up with it. What's the inside baseball there. So it's sort of all the above. And we meaning craft
SPEAKER_00: have a deal with our LPS, that's called an LPA, limited partner agreement. And one of the things that was negotiated, when I founded craft four years ago, was the terms on which craft would incubate deals. And, and so it's all predetermined what I get as a founder, what what our funds get, what the LPS get, so there can be no argument about it later. And this is this call it it. Well, we've actually done. Now, we have a few incubations in development. You know, for me, it's really important to scratch that product itch. You know, I'm originally a product guy. And, and I, you know, I love investing in helping companies. But occasionally, about, I'd say, maybe once a year, I get a product idea that I think is worth developing. And so this gives us the ability to incubate it. So we did it a few years ago with a crypto company called Harbor, we ended up selling that company to BitGo, which just announced that we're going to announce that the largest acquisition of a crypto company, galaxies acquiring it for something like 1.2 billion. So anyway, so Harbor, I think, will work out, you know, once that deal closes, and Collins, the second one, there's a couple other things that are still, you know, they're too early to talk about. But but I think Colin will be the second one to launch Chammoth as an LP and a lot of funds. What do you think when somebody comes to you and says,
SPEAKER_05: I want to in my LPA, my limited partner agreement, have the ability to incubate these companies? Is that a good trend, bad trend? How do you think about it? I think it's great. I mean, I don't
SPEAKER_01: really, you know, push back on a single term in any LPA, because I'm only doing it mostly to support people. And so whatever terms they want, they get from me. And, you know, kind of just like let them go and hope they get lucky, you know, I have a very different approach to, to these kinds of things, because I'm not necessarily trying to compound my capital, I'm just there to sort of enable folks and, you know, take 1% of the fund or sometimes a little bit more if I really have an asymmetric view on a specific thing that they're doing. But otherwise, I just take 1% sign the thing and, you know, wish them wish them the best and then try to support them. And that's all I'm trying to do. If I believe in what how they're investing and the deals they've done, you know, however they do it is fine with me. I want to go back to something which is, I actually think it's not a question of hygiene. It's really a question of governance, because when you do these things, and you mark these companies up, the real question if a company stops working, is they tend to have too much money, and then they tend to not have enough governance. And the reason is because governance typically comes with board diversity and board diversity comes with more and different investors who have different, you know, puts and takes at any given point in time. That diversity is very helpful to keep everybody on the same page and to actually get a decent outcome when things aren't working as much now when things are working. Obviously, nobody cares, you know, because like, you can just have Jim gets on the board of WhatsApp with Jan, and it's all kind of said and done. It's not been to the right. So as we're saying, when things are
SPEAKER_05: when things are good, nobody complains. Yeah. No, and you know, this may be a good jumping off point
SPEAKER_01: for, you know, we wanted to talk about Zymergin today, can I say one thing for you, Zymergin, which is just look, I think there's all sorts of new models
SPEAKER_00: now with with this sort of tech, and the money going into tech, the venture capital exploding. There's all these innovative new models. I think it's all for the good studio that I think is great is what Jack Abrahams done with atomic, you know, they produced multiple unicorns out of there, because Jack is just a phenomenal idea guy. He's like a 10x idea guy. So he then, as part of atomic, comes up with the idea and then brings on an operating partner, and that model works for them. And then, you know, he just partnered with Keith Raboy on Open Store. And Keith decided to become the CEO. And Keith is still a GP at Founders Fund. So we're seeing like the blending of these models, you know, it used to be that you made the decision to become a VC and your career as a founder was just over, it was like this line that could never be crossed again. And now you're seeing the blurring of these lines. And look, I think it's good for everybody. Because, frankly, when you know, Keith or, you know, what I'm doing with Colin, we remind people that we're still founders, and product people. And, you know, not just sort of semi retired guys. And frankly, it's like, it's good for what we do as investors. I mean, we saw it with Mike Spicer, who is a
SPEAKER_04: partner at Sutter Hill. He incubated, started and was the original head of Snowflake, which was a massive... And before that, this is his third. So, you know,
SPEAKER_01: he did Pure Storage, he did Snowflake. I think he did Laceworks. Incredible. He's incredible. He's just fucking money. And just folks that don't know, Snowflake, you know, it's an enterprise software company. They
SPEAKER_04: make software. So he's a venture capitalist. He started this company while working as a venture capitalist. They brought on a great CEO. It's an incredible guy later who's Frank Flugman, who's a legend. And the company just went public last year, I think, or the year before, and they're worth $82 billion today. And so it really highlights that while this guy is still operating as a venture capitalist and a GP, he's been able to generate incredible returns for his fund and build amazing businesses at the same time. So... I mean, Spicer is a perfect example because I've known him since like the early 2000s.
SPEAKER_01: And at one point, Spicer started this consumer company called Bix. And I was like, we were like an investor. I was a small investor in Bix. And I think it was acquired by Yahoo. And it was always curious because like Spicer was clearly the smartest one in the room. And it's like, he was kind of grinding this consumer thing. And then he left Yahoo, went to Sutter Hill, and he basically said, you know what, fuck this, I'm going back to my roots. Because before that, he was a pretty traditional enterprise guy. And he just crushed it. It's kind of like Michael Jordan was finally like, fuck baseball. I'm going back to basketball. And it's like Reid Hoffman and Neil Bueser at Greylock, right? I mean, these guys are
SPEAKER_04: incredible operators, business builders, and they continue to do that work while being partners in the venture.
SPEAKER_05: We have three directions we can go moving on. Zymergin. Zymergin is so interesting. I think we should do it.
SPEAKER_04: Okay. Let's do Zymergin. I agree. All right. So for people who don't know, Zymergin went public
SPEAKER_05: at $31 a share in April, traded as high as $48. Shortly after that, I had the CEO on my podcast. And I was confounded trying to understand the business. You had told me I had asked you for some questions for you, Burke. You gave me some choice statements of what to ask. Which I can I
SPEAKER_06: say, No, I don't think so. But anyway, you gave me some choice questions. I didn't ask them exactly
SPEAKER_05: the way you said them. But here is the quote of what happened on Tuesday. Zymergin stated the following. Zymergin recently became aware of issues with its commercial product pipeline that will impact the company's delivery timeline and revenue projections. Accordingly, the company no longer expects product revenue in 2021. And expects proven product revenue to be immaterial in 2022. They also announced that the founding CEO Josh Hoffman, who was on this week in startups to maybe a month ago, stepping down as CEO will be replaced. And Zymergin stock then dropped 70% on the news. I don't know if this was a SPAC or not SoftBank hype them. It was a straight IPO
SPEAKER_04: and a stock rate 80% yesterday. 80% a day after going public three months ago. Yeah. So I think
SPEAKER_05: freeburg a good way to start would be what did they say they were going to do? And then why has this happened? So Zymergin and a couple companies like them started around the same time, which is
SPEAKER_04: around 2014 2013 2012, that era 2015 even. And the promise of these companies is truly to be everyone wants to be this platform for synthetic biology. And what that means is they can take cells, and in a smart way, edit the cells and get those cells to make things that humans need. And so you can kind of think about making materials like silk and leather and plastics. And you can think about making food like egg proteins and milk proteins and so on. And you can think about making industrial products, you know, enzymes and things that might be used in laundry detergent other applications. And so for years, you know, we've gotten DNA sequencing cheaper, we now have DNA writing and editing cheaper, we've now got other tools to basically screen cells. So we have these, the set of tools, where the synthetic biology platform companies popped up and said, you know, we're going to put all these tools together and build a platform for editing cells and doing a better job of making things and we're going to get into all these markets. And Zymergin when they first started, were like several other companies like them a services business. So they would go to big partners like DuPont and say, hey, let us make a new enzyme for you pay off $25 million upfront, and then we'll get a royalty on the back end when that product eventually goes to market. And they did that for years. They went after insecticidal products, they went after plastics and materials and all sorts of stuff. And as is the case with a lot of deep tech, it turns out it's really friggin hard. You know, these tools might be there. But like we saw with the clean tech era where everyone thought they could make oil from sugarcane, you know, 20 years ago, using the same sort of approach to get the unit economics, meaning can you make the product cheap enough, it's really, really hard. That means you got to get these cells to be just perfect, and you got to get the systems to be perfect. And so at the end of the day, they went through a lot of customers at Zymergin that paid them 10s of millions of dollars. And Zymergin didn't have anything at the end of the projects to say, here's something that works that you guys are willing to pay for that you're going to go take to market because it really wasn't that compelling. The unit economics weren't good enough. And it didn't really have big breakthroughs for any big industry. And so Zymergin, like other companies in the space, pivoted and said, you know what, we're going to now be a products company. So we're going to make our own products instead of just being a services company. And as they started to get into that, they decided that their first big product would be this kind of, you know, plastic for cell phones, or what have you, protective film. And in the meantime, what happened is it takes so much money to do all this R&D to run all these labs, to have all these robotic arms that they have that are moving test tubes around hundreds of people building and running these labs. And so they've had to raise money. And in order to raise money, as you guys know, you have to kind of hype the story. You have to say, look, we're going to change the world. We're reinventing everything. We're using synthetic biology to rebuild everything, yada yada. And the story resonates with me because I truly do believe that the potential is there. But the timing and the sequencing of these things is hard. As is the case with a lot of deep tech companies, when you get too far ahead of the curve, and you start saying, I'm going to do X, Y, and Z, but you can really only do A, B, and C today, you raise money saying I'm worth billions of dollars, you raise hundreds of millions of dollars, and the hype has to keep stepping up. And they eventually got into the trap that a lot of companies got into, which is taking money from SoftBank. And SoftBank said, here's $400 million at a $3 billion valuation a few years ago. And they said, great, let's run at it. Let's be a product company. And they burned through a lot of that money. And suddenly, they didn't have any products to show because deep tech is hard. It took a lot longer than anyone thought. And what will... We better try and craft a narrative and get public. And so they did that, they got public. And a lot of what they had been telling people was coming, was coming, it's going to be here soon, didn't really work. So they had to pivot the business, they had to become a product company, they kept telling folks they were going to be X, Y, and Z months away. And they were going to be able to hit these targets on the product. And it turns out, it was always a little bit further away, a little bit further away. And then boom, they have a big board review recently. And they look at the product pipeline, and they look at where they are, and they're like, Oh, this really isn't going to work. And the whole thing falls apart. Because everyone was banking on this massive return. And everyone missed the story, which is that they've been doing this for many years, and had to eventually abandon and pivot away from their business because no one was willing to pay them for it. So truly, they never found product-market fit in their first generation of their business. And they never found product-market fit in the second generation of the business. And it's really worth taking a watchful eye based on this learning, which is just a fundamental basic premise for starting a company. Do you have product-market fit? And can you make money from your product? And if you can't answer those 2 things, there isn't a business. And then the third thing is how valuable is the company as a function of how much you can grow. And so, they really hadn't even gotten past phase 1. And everyone kind of wanted to believe the hype. So it's a bit disappointing to see, but it's really going to impact the industry broadly. Because now people are going to say a lot of synthetic biology companies are smoking mirrors, and they're really not there yet. So a lot of folks in the industry are really concerned right now. So to dovetail this with the previous discussion, Saks, funding your own company,
SPEAKER_05: overfunding of companies, we talked about, hey, if it goes well, like WhatsApp did, well, you're a genius. But if it doesn't go well, and you get ahead of your skis, you don't have product-market fit, and you've raised a bunch of money, then somebody becomes the bag holder. No, Jason, it's even bigger than that. It's not just that it happened just in the private markets.
SPEAKER_01: And we then you had JP Morgan and Goldman Sachs take them public. And then they raised, you know, another half a billion dollars in the public markets, and then they shut the bet. Right. And we see the same thing. This is the same week that Nikola founder,
SPEAKER_05: who went out by SPAC and was going to compete with Tesla and Ford. There, he's now under indictment for lying and selling shares, also known as security fraud, probably going to go to jail had him on the podcast that was underwhelming. So Saks, when we look at these, which is it should we on a hygiene basis, be throttling these companies and have milestone based financing? Or is this the sign of a top in the market that people are able to go public, people are being given large amounts of money by SoftBank. And these things, probably people should pump the brakes. Yeah, look, SoftBank is engaged in a style of investing that we would
SPEAKER_00: never engage in. It's absolutely antithetical to the way that we invest, right? They're making $500 million seed investments in massively overvalued companies. You know, one of the reasons why we like SaaS and marketplace at Kraft is they're very milestone based. I mean, you know, if we invest before you have a functional product, it's going to be at a seed valuation, you know, like a 10 cap $10 million valuation, not in the billions, like, you know, like Zymergin. And, you know, in order to do a series A, by and large, we need to see some revenue, you know. And then, you know, if we're going to do a growth round, we need to see more revenue and more customers. And so, you know, you show incremental progress, you know, we're engaged in milestone based investing, where the amount of money you raise and the valuation, you're able to get scales with the amount of proof that you have delivered, you know, to investors about the company. And the crazy thing about these like spectacular implosions, and they're usually around deep tech, is because these entrepreneurs can tell a story. And people just seem to suspend belief and don't demand any proof for years and years. So it was Theranos, it was Nikola, and now it's Zymergin. And I think, by the way, deep tech
SPEAKER_04: is it's not that we should dismiss technically difficult problems, we should engage and fund and build great businesses that are technically difficult. How much we fund them for how many
SPEAKER_05: months or quarters? Yeah, but what is important here? What's important is, you know, what is the
SPEAKER_04: representation that's being made? And I think there's only one hype man on planet Earth that is good enough to pull this off, and actually deliver the goods at the end of the day, it's probably Elon, like, because, you know, he funded these businesses that were deep tech businesses, Tesla and SpaceX for many, many years, he was able to get investors excited. He funded them himself. He funded himself for but remember, most of the capital, I mean, he put in some capital, but the vast majority billion, no, no, with Tesla, he put in 50 million
SPEAKER_05: and went bankrupt. He went bankrupt. He was living off a $200,000 loan from a billionaire friend of ours. Yeah, yeah. Beep that part out. You're not allowed to say sorry, sorry, sorry. Sorry.
SPEAKER_00: Elon only self funded the first couple hundred million in these companies. He delivered revenue very early on your member at Tesla, he first developed the sports car, roadster, and that was real $150,000. He sold 100 in advance, not dissimilar to Virgin Galactic playbook, right?
SPEAKER_05: And that's an important lesson, right? Like in deep tech, you can't just say I'm going from zero
SPEAKER_04: to one with billions of dollars over decades, you know that that's a government funded program, or you can if it's your own. And that's what that's what Branson did.
SPEAKER_01: When I showed up, Richard had spent 1.1 or 1.2 billion of his own money. And I thought, I mean,
SPEAKER_01: at some point in the game, that's that skin of the game. Bezos has been funding Blue Origin for 20
SPEAKER_04: years, right? I think they take nekker and mosquito island if he if that doesn't work out.
SPEAKER_05: There was also quibi. It's another story. Yeah, quibi didn't even involve deep tech. It didn't
SPEAKER_00: require any scientific breakthrough. It just required some marketing proof that people were interested in that format. And they just basically Katzenberg along with Meg Whitman, with who was kind of a weird choice to be a co founder, because she's more of like the, like the late stage CEO you bring on take the company public once it's already working. She's not really like a founder, personal innovator. No, she's Yeah, exactly. But Katzenberg, Katzenberg is though, right? Katzenberg is obviously very creative. And so this idea, he knows talent. So they came up with this idea to build a studio that put a billion dollars into creating short 10 minute videos. The problem was, there's no proof that the market was one at that format, they should have spent five or 10 million proving that the format made sense and then spent a billion dollars if it worked. And, you know, I just I don't understand why, why founders or really investors kind of put up with these types of stories. Look at we work, same thing. Yeah, there is not a shred of evidence that there is an economically
SPEAKER_01: viable model there. And yet billions and billions of dollars went into that company before the ball. It actually in fairness, agree. I disagree on that one. Because like, years was economic
SPEAKER_05: viable. It just wasn't a software business. They had great gross margins. It just wasn't scalable,
SPEAKER_04: like software. Exactly. There's no leverage in the model. It was just purely like, go lease something for x dollars and then sublet it for x plus y, you know, x plus y dollars and, and it worked. It just like, how do you scale that? And then they got ahead of their skis and did all sorts of crazy stuff to get the tech valuation. Oh, hold on a second. But it's not like you can
SPEAKER_01: just go to the store and buy it off the shelf. Like there's a tech valuation thing you can buy. Other people had to believe it as well. And those other people were also pretty credible, smart people. Were they the later stage people? Do you read the we workbook? The later stage ones?
SPEAKER_05: I think we're like, we're like evading the thing that that we're not saying, which is that
SPEAKER_01: as much as we all want to believe that we're all doing incredibly, incredibly diligent work, there are a lot of examples where belief trumps logic. And even the smartest people just look past the obvious. And we just talked about four pretty obvious examples. In no world should a credible tech investor not be able to do a simple valuation or see a business model and brazenly believe that real estate business is a tech business. At the same time, there should be no world where you know, your pitch something that is just so incredibly grandiose from a technical perspective, and be and the reason you invest is actually because you don't understand it. Because if you did, you'd be more critical. That's fucking insane. Well, this is the thing. Well, this is the thing. Exactly that. Yes, they're suspending out of greed, and they're not
SPEAKER_05: doing the basic tenants of investing, which is milestones, talking to the customer. These are blocking and tackling. I think it's more than it's greed. It's fraud. Let's be honest, it's fraud.
SPEAKER_00: So it's fraud. So read the quote, read the quote from the US Attorney of Manhattan, who said Milton with respect to nickel lied about nearly every aspect of the business. People like that need to go to jail. Okay, yeah, this big time jail big time. The startup world, the investing world only works if investors can trust the information and the financial statements are being given by operators because we have to make decisions quickly. And if they give us bogus numbers, how are we supposed to make educated decisions? Well, somebody want to do diligence,
SPEAKER_05: Sax. People don't want to do. We look at metrics, we always look at metrics. Okay, we look at, look,
SPEAKER_00: we can get we can do the metrics in one day churn. We look we look at ARR, we look at net revenue retention, we look at churn, we look at CAC, and we look at your financials, we can do it in one day. Okay, it's not an invasive process, we can decide very, very quickly because we know what numbers we're looking for and how to read the statements. But question for you when the founders
SPEAKER_05: say I have a competitive process, we don't want to do all that. Has that been happening in today's crazy market? Where people say the trains leaving the station, and we can't do diligence. We don't have time for this. Are you? Has that happened to you? Has that happened to you in the last six
SPEAKER_00: months? In a sense, but we say to them, listen, here's what we need. And if you give us these numbers today, we can make a decision within 24 hours. So and there's no reason we can't. And by the way, they have those numbers. And if they say they don't have those numbers, they're too incompetent to be funded, because these are all the core SaaS metrics that you should have to be tracking your business. So we would never make an investment without seeing the SaaS metrics for a SaaS business. So yeah, let me just step in for a second, because I think there's two camps. One is
SPEAKER_04: businesses, companies that are operate a business. And what you're talking about, it makes a lot of sense. You could have looked at the business metrics of WeWork and made an assessment of the quality of that business or Nicola or Nicola. Well, on the other hand, or on the other hand, you have companies, I'm saying not there notes and not Nicola, because those are not businesses yet. Those are still in technology development, they're deep tech. So what happens is the founder, the CEO, the management team, they put together their own representation of the metrics that they believe should matter. And then they try and show how those metrics translate into value over time. So there's no revenue, there's no customers, there's no profits. What they're saying is we can, in the case of Zymergine, we've got X number of experiments we can run per day. And as a result, those experiments should translate into Y discoveries per year. And those discoveries should translate into Z dollars of revenue per year. And that's where the pyramid gets built. And the same was true of Nicola, the same was true of a lot of these companies where they say, we can do X, therefore we're worth Y. And it's that sort of narrative that investors then say, my God, the story is so compelling, if you're right, I want to believe it, I want to put the money in, and I want this thing to work, and therefore I'll fund this thing. And I think that's what we've seen continuously. It started with the clean tech industry, and now we're seeing it increasingly with all these other tech companies. And in a lot of these cases, by the way, I will also say, it's easy to do that, but it shouldn't be a representation that the entire set of opportunities is a false narrative. There are many great businesses in biotech that actually do deliver the goods, and they turn into incredible companies. There's a synthetic biology competitor
SPEAKER_01: design region, who I spent a bunch of time with, I'm not gonna say the name of the company. And they and I asked them, what gross revenue? simple question, what's your gross margin? What's your revenue? What are your cogs? What's gross margin? And I got an asterisk laden answer. What does it mean? Asterisk? Lending answer? It's kind of like adjusted EBITDA adjusted for what?
SPEAKER_05: Speak English. That's what you got to tell them speak speak fucking English. This is like when I would come home. My dad say, Where's your report card? I say, you know, it's interesting. My report card? Yeah, I don't have it. So where is it? I passed. And then I, you know, again,
SPEAKER_01: it's still shocking to see the number of people that will still do these deals. And look, maybe it all works out in the end. But I tend to think like, if you can't present things simply, and you can't explain things simply, that's on you. However, if then you still do that, and you still have good intentions, maybe you don't. But then investors toe the line. The problem is, there's this momentum thing that happens among investors, as Friedberg said, where the FOMO kicks in. And some of the smartest people become some of the dumbest fucking people. No, they are
SPEAKER_05: suspending disbelief, like you would not believe in the industry, right? Because it's not their
SPEAKER_01: money. I mean, look, at the end of the day, why does it happen? Meaning? How can a zymogen IPO happened like this or Nicola? Like meaning if you look under the hood in the s1, I was trying to find it in the s1. Was there somebody that actually did like some due diligence into highline? Clearly not. Was there was there a synthetic chemist or synthetic biologist that basically helped? Clearly not. Did everybody say that that was okay? Clearly, yes. You know, did I don't know anybody get under the hood of Nicola? And actually, like, look at the engine, make sure the thing were I don't know, by the way people did, there just were enough people that didn't, that
SPEAKER_04: they were able to get a financing done. Right. And I think that that's the important point is there's enough people in the private markets. I'm talking about two public market examples, you're not allowed
SPEAKER_01: to have sick sequester diligence when you're going through an IPO. Yeah, so how it works.
SPEAKER_04: By the way, I like do you guys know the difference between humans and animals? There's one there's one distinguishing characteristic that that that I think making toys making narratives, narrative stories, all come down to narratives like there are dolphins that can communicate with one another. There are monkeys that sit in a tree and they can warn each other about approaching predators, meaning that there are other species that can communicate what humans can do that no other species can do is create a narrative to create an ethereal belief in something that does not exist and get others to believe in our story. Religion, democracy, the financial institutions, the monetary system, a business like this. They're all the same. It's all about highlighting highlights. Nicola. Yeah, exactly. And I think in all these cases,
SPEAKER_05: by the way, this is the cliff notes version of sapiens, everybody. Yes, yes. It's a version of sapiens. I have a funny Theranos story. If you guys want to hear it.
SPEAKER_01: Let me just finish this one point like there's a fundamental premise, which is humans want to
SPEAKER_04: believe. And so when you have a Barnum type person show up when you have a you know, a compelling narrative and a compelling deliverer of that narrative, whether it's a religious leader, or a presidential or a government leader or a business leader, and you want to see what they're selling come to reality, you want to write a check and you want to put your time or your money into seeing that thing come real. No, no, I fundamentally look at your you're missing a key
SPEAKER_01: point. It's not their money. So stop saying that. Go ahead. They would not put their children's fucking education account into these companies. They're putting other people's money. They're putting other people's money. This is the key thing. Not enough skin. Put their time into
SPEAKER_04: these companies for the same reason people join is not their money. People trade off money and
SPEAKER_01: time all my point is people will take their time. They're giving up the opportunity cost of working
SPEAKER_04: somewhere else to go work. No, David, David, I honestly I really fucking disagree with you here.
SPEAKER_01: The reason why somebody goes and works at this company because they believe there's positive signaling from a soft bank. Okay. So these people are smart. They think this money must mean it's real. They think I'm now going to commit my reputation and my time to get options because obviously these folks must have done their work. How I'm not making the mistake. And that's the lie because those folks are not doing the work. There's a group of people. There's a group of people placing bets, who are placing bets of other people's money. It's a great you would do
SPEAKER_01: different diligence. Let's be honest, the zymogen IPO, the traditional IPO would have been entirely different if they had to write if the underwriters were at risk for their own net worth. It would be
SPEAKER_05: if their stock was locked up of the management teams for five years or 10 years. I do agree with that point. I do agree with the point you're making for sex go sex go sex from a boat go.
SPEAKER_00: Yeah, I'm not I'm not disagreeing with Jamal. But the the point the point that resonates with me that freeburg said is actually the book sapiens really did impact my thinking as a VC, which is, you know, you've all Harari makes this point that it's narratives that kind of define, you know, humans, and that's what binds us together in societies. And frankly, the vast majority of narratives throughout human history have just been wrong. But they still worked as good stories, finding people together. And I kind of and I kind of applied that to VC, which is the VC process revolves around a pitch. It's a narrative session, where the entrepreneur goes up there, yeah, and presents a narrative and then everyone debates the narrative and decides where they buy into it. And, you know, after reading sapiens, I'm like, this whole process, like is stupid. How do I get out of a narrative driven investing philosophy? And that's where I'm back to look, I understand sass, I know what the metrics are supposed to be. Also, listen to the pitch, I want to hear it, but to show me the numbers first, and at least I can get to a decision that's somewhat grounded in reality. Because I think most of what the VC process does is just measure a founder's ability to tell narratives. And that may be correlated with their ability to do marketing, but it's not correlated with whether their idea is fundamentally correct or not. It's fine in the seed state is fine in the seed stage, I think,
SPEAKER_05: yeah, I think there will be the least amount of fraud, when you either have irrefutable metrics,
SPEAKER_01: or the investor has to invest their own money. Yeah, that's the gold standard. Everything else is just you know, catch this catch can and you're just gonna have a bunch of trash. Yeah, here's how I'm handling at the early stage, sacks, you because you get to meet my companies.
SPEAKER_05: I have told them to craft their narratives around their traction now, because I know that all this performative stuff is nonsense. So when you meet those companies, they do a three minute pitch, it's the majority of it is, here's the product, here's the traction, and I accept people based on traction. And then I give them more money as the traction goes up. And we bet four or five times on the same company based on metrics. And I tell them all, you're coming to the accelerator, here's 100k. If you want more money from us, we'll keep giving you money if you can grow 10% or more per month on real metrics, period. And we will keep giving you money forever. Right. And I like these launch, like demo sessions that you do with us, because now you force them
SPEAKER_00: to base their presentation around a chart. So at least I can see some metrics. And the other thing we do similar to you is I always start with a product demo, our motto is show me the product, not a PowerPoint, because the same PowerPoint can describe 10 or 100 different products, it can describe a product that might be great, it can describe a product that sucks totally. So show me the product. And now at least I'm grounded in what you're doing. And I'm not just listening to some story. By the way, I go back to this, I still think that funding narratives makes a ton
SPEAKER_01: of sense. In the early stage, see, I rip I rip in 50k to $5 million checks all the time. I could care less if it sounds reasonable, I take a punt at it, right. But the minute that I'm writing 100 or 200 or $500 million check, I pay fucking attention. Yes, because it's my money. It's my money. And I go back to this, when it's not their money, you're going to see this thing riddled with fraud, you're going to see cases like this stuff constantly. And the person that pays the price where I do agree with freeburg is the employee because they mistakenly think that these folks must know what they're doing. But the reality is, it's not it's somebody else's money, they don't really care. They're just doing a job, they want to get paid themselves. And so this is how these things you got you guys, let me just give you some specifics on the
SPEAKER_04: zymergen scenario. So they're going to go public right leading up to their IPO, the stocks at 31 bucks in the IPO. So if you're an employee, and you have stock options in zymergen, you have the option to exercise your stock options anytime, which means you buy the stock at your strike price. And then you can sell the stock later when the IPO is over. So a lot of employees, you know, exercise their stock options, meaning they put their own money up to buy the stock at 10, 5 bucks, 4 bucks, whatever it is, and they actually owe taxes on the difference between their exercise price and the fair market value at the time that they exercised. So if the stock goes public at 30 bucks, and they exercise, they got to pay taxes as if the stock was at 30 bucks. And then they end up in a situation where they can't actually get liquid. And so there's a lot of employees that got really screwed on this transaction when zymergen went public, because they thought the company was going to be worth $10, $20, $30, $40, $50. And now the stock's at 8 bucks. And they're going to actually owe money to the IRS and they paid for their stock option. So it's a brutal scenario when it plays out for employees. And I just feel really bad for a lot of really, really great, you know, smart people that work there, that take a massive hit on this thing. I hired two more researchers on my team just to do diligence at the syndicate. And I would
SPEAKER_05: say between 20 and 30% of deals that look great. When we get under the covers and look at the diligence, we look at the cap table, we look at the revenue, we look at the accounting, we ask them who's doing their accounting, we ask them for bank statements, we asked them for incorporation docs, we asked them for IP assignments. This is like the basic blocking tackling 20 to 30% do not pass diligence and we find stuff that is crazy. I had one founder give themselves a loan. And then we didn't know about it. And then we find out about it later they they did a loan, the company owes them hundreds of thousands of dollars had another one where they were presented their revenue as reoccurring and it was a it was a cruel base. It wasn't a cruel based county was a cash based accounting. And I'm like, Yeah, what is going on here? You're basically lying. And you're misrepresenting your company. Don't do that. It's called securities fraud. When you make a representation. Don't ever bend it or exaggerated. Just tell the truth. Period. What's the Theranos story? Chumath I need the Theranos story and then I'll give you a follow up story. The Theranos story is so I had I had a couple I had a very famous investor
SPEAKER_01: telling me this is like 2015 2016. And I said, guys, you know, we were just talking I said, what do you like? What do you like? Like, you know, we all kind of talk like that. At some point, whenever we interact, you know, and he said, this company Theranos you have to maybe it was 2014. Anyways, 2015. Theranos Theranos Theranos. And I said, Are you an investor? And he said, No, but I wish I was. It's incredible. And I tried to get an introduction. I thought, Okay, this is this is going to be really interesting. I couldn't get an introduction. But then I find out who the board is. And instantly I get turned off. So in my mind, I had a very negative impression because the board was literally not all 90 year olds. And I thought, what do 90 year olds know about, you know, blood testing, and, you know, basically building a tricorder. And at that time, you know, I think I told the story before, but I had burned about maybe 50 75 million bucks on six different startups trying to do this, like, you know, in situ, kind of like, you know, finger prick, blood testing, blah, blah, blah. So I was really fascinated with the space. A year and a half later, a guy that I work with at Facebook, a very senior guy says to me, I'm thinking and I was trying to recruit him to come work at one of my companies as CEO. I'm thinking of going to Theranos. And I said, just go to the interview and tell me what happens. Before I, you know, try to convince you to not go. He goes into the, to the interview to be COO of this fucking company. They don't let him past reception. They interview him in a makeshift room outside of the meeting. And he said, Well, can I, you know, go inside? And you know, when do we have a follow up interview? You know, I'd like to meet some of the team. I want to see what it is. And they said, No, no, no, we're good. Here's your offer letter. Do you want to join? Well, can I see the device? Can I try it? I don't know. No, we're good. Let's go. And I said to this guy, I said, How can you fucking join this company? I mean, it's not like you're you're coming in as a junior flunky. You know, you're coming in as the second or third most important person in this business. You haven't been past reception. You don't even know what's past reception. You don't even know what your office will look like. You don't even know if you like the office furniture. At that basic level. Think about everything else that comes after that. And then you know, what happened happened. So what a disaster. William Perry,
SPEAKER_05: former head of sacred advance Henry Kissinger. We did just it was like,
SPEAKER_00: it was a bunch of grand poo bah types. That's how you knew it was a red flag. If you got one red for those guys, you got one guy like Kissinger on your board. It's okay. If they're all like that it's a problem. Problem huge. So I go on CNBC, I just had John Kerry rue from the Wall Street
SPEAKER_05: Journal who broke this thing wide open on my podcast. And I start getting all these inside tips about Theranos. And one of them was that Elizabeth Holmes and balwani who is the CEO, we're in a relationship together. They lived at the same address all this nonsense. And I check with Carrie rue and I'm like, Hey, is this true? And he's like, Yeah, that's true. Yeah. I was like, Why didn't you report? It's like, I'm just chasing it down. Whatever. It'll be in the next story. So I go on CBC. And I was like, Listen, when they're smoked as fire. If they had the device, my game theory is if you have the device, you show it. If you don't have the goods, you don't show it. Period. End of story. I think my gut tells me this is a total fraud. It'll be zero. And they're like, Oh, and I was like, Yeah, and you know, when the CEO and the CEO are in a relationship, that's bad. And they're like, What? And they didn't know this. And I like, they're like, Are you sure? And I'm like, Yeah, that's what people are telling me. I don't know if it's true or not. I don't know first knowledge, but that's what I think is going on. So this whole thing blows up. Callicana says this, but the policy and we see that night, I got invited to beeps house in the valley for movie night. We've all been to that. Yeah, yeah, yeah, yeah, yeah,
SPEAKER_01: yeah, I walk in. There's Zuck. There's this famous person. There's this Googler, that person.
SPEAKER_05: It's, you know, it's 50 people and the celebrities who are in the blockbuster movie are there. I think it was the movie arrival, but I'm not going to make any, I don't want to give away whose house it was. I go to the secret movie night. I walk in, I get greeted. And I kid you not 15 feet in front of me looking directly at me is Elizabeth Holmes. And I get with like 10 feet and she just looks at me snarls and walks away. It's like the most uncomfortable moment of my life. Clearly a giant scam and fraud. And she's going to go to jail too. By the way, she's going on trial. This month, August, I believe she'll be on trial. It's taking way too long. I hope she goes. Yeah, I
SPEAKER_05: mean, the justice system's a little bit screwed. Okay, we got to wrap up. You have a pretty good
SPEAKER_00: you have a pretty good track record of calling out these frauds. I think it's a service to the community. Yeah, I agree. You're one of the few who actually does it. You got any other budding
SPEAKER_01: frauds? Well, you know, that ripple, right? Oh, it's not good. Let's go easy on the ripple to
SPEAKER_05: some people who are friends with. Well, I think one of your back it off. I'm not backing off. I just don't want to lose a member of our little quartet here. But I will say that my fraud of the moment, the one that's making my spidey sense go crazy is tether us dt these these guys are I mean,
SPEAKER_05: this feels like it is going to be a C billion. Oh, the crypto thing. There's a crypto stable coin. The idea is they said it's $1 in US currency $1 per tether, always. And then over time, we find out maybe they don't have $1 in their bank account for each one. The New York Attorney General finds them $18 million says you can't work with anybody in New York. They say we're not a fraud. And I'm like, Well, what about the Attorney General who said you were a fucking fraud? And they're like, Yeah, yeah, no, no, that was a misunderstanding. yada yada. I'm like, there's no misunderstanding. You know, we should do you know, we should do we should get all the fans the all in pod we're
SPEAKER_00: going to declare a certain time and date where and we encourage everyone who's in tether to pull out a tether to stress the system and see what stress test Well, the problem is, you don't actually own
SPEAKER_05: your tethers. That's the other scam. It's like eight or nine of these offshore unregulated crypto exchanges, not the ones in the United States that are highly regulated like Coinbase. This is offshore. And there are white, what I've been told is you can create an exchange yourself with white label software and pop up your own. You're like a bloodhound. I mean, like, you just got to my life when I find this out. I kind of I like it. I love it. It's like one of my Bronx brawler. He's
SPEAKER_04: roaming the streets looking for Brooklyn. I love a good fight. I love going on right now. Yeah. There's some other people to call out. There's some other people I want to call out. So let's
SPEAKER_00: let's move on to it. Oh, Scott Galloway. dipshit. No, no, for he's small potatoes, but small potato irrelevant.
SPEAKER_04: Like Thurston how the third on his. He does. He does. All right. So,
SPEAKER_05: Jason's in Florence. Chama Chama is that his estate? I'll tell you where I am actually,
SPEAKER_00: Jake, I appreciate this. I'm on a boat outside Elba, which is the pizza. It's where Napoleon was in prison. I'll actually I'll show you the prison where he was, where he was kept. I think you can see it me if I get to the spot. You know what we put the Nicola founder in there, and we'll
SPEAKER_05: put Elizabeth Holmes in there. Same place. Can you see the the just see your fucking ugly face?
SPEAKER_01: There whatever. And you're beautiful. How much are people gonna hate us? Three of us are in
SPEAKER_06: Italy in August. It is like the stereotypical work card and you'll be on the of course,
SPEAKER_05: of course I'm staying in an Airbnb is costing me 350 euros a night for four bedrooms. I feel pretty good about myself. I'm the center of Florence. I think it's you're spending about the same amount on your boat, right? 350 400 euros a night per room. Yeah, I got I got the Airbnb deal.
SPEAKER_00: Talk talk to us about afterpay sex. Okay, so well first, I mean, if we're gonna call somebody out
SPEAKER_00: first, I want to call out PayPal. Okay, what's going on there? I actually wrote a blog post about it called the no buy list. Basically, PayPal is creating the equivalent of a no fly list with respect to their service. Well, for anybody who they put this, they deem as deplorable or undesirable. Basically, they're working with the ADL, the anti defamation league and the Southern Poverty Law Center SPLC to create lists of people and groups who they are going to ban their accounts. Now, I got to say this, the ADL and the SPLC are storied institutions that did great work combating both anti semitism and racism, but they are now under new management and new leadership, and they have greatly expanded their missions. The ADL was originally about stopping anti semitism. Now it's about basically opposing extremism or white supremacy in, you know, in any of the places they find it. And so for example, they've taken positions on US Supreme Court nominations. I mean, it's like they've gone very, very far afield of their original mission. SPLC has gotten sued a number of times for putting people on these lists. They put Sam Harris at some
SPEAKER_05: point on the list. They put another human rights person on this anybody who challenges any or has any guest on their podcast that they the Southern Poverty Law Center doesn't like they write, they basically blacklist them. Right, right. And the list has become very expansive. They've
SPEAKER_00: become very expansive. So here's the problem is you now have, look, before this was just some ivory tower, you know, non 501 type thing where they would basically it was hyperbolic rhetoric, they would basically call these people and groups names. But now PayPal is operationalizing these ban lists, they're turning it into a no buy list or saying we're gonna cut off your account. And that's very dangerous because we've already seen the precedent with speech online that we had a bunch of social media companies banning people from participating in online speech. Now, what PayPal is potentially doing is banning people from financial access. And losing your right to speech is bad, but losing your right to make a livelihood is even worse. And I think Republicans in Congress need to say to Dan Schulman, first of all, it'd be great for them to haul him up there in front of Congress to a hearing like they did with Jack and Zuck and Sundar, haul him up there and say to him in no uncertain terms, we see what you're doing. We don't like it. We oppose it. We're gonna get on our hind legs and fight this. If you try to deny Americans their right to access the new economy, we see no reason for your company to get any bigger. We're gonna oppose every acquisition you ever do. And we may not be in power today, but one day the tide will turn, we will get control of Congress. And at that point, you know, elephants have long memories. So, you know, we're watching you. And, you know, it's been a long time since Republicans thought of their role this way. For the last few decades, they've been very laissez-faire with respect to the economy. But there's a very successful Republican president on Mount Rushmore, Teddy Roosevelt, and he's on Mount Rushmore because he busted up the cartels and the oligarchs of his era, and he fought for the rights of the common American to make a living. That is the playbook that Republicans need to follow right now. Okay, Henry bell caster, you got that right here.
SPEAKER_05: Let's get some animations on top of it. Let's go. All right, Square has bought afterpay for 30 billion, which represents a large portion of their outstanding equity. It's an equity based deal. What do we think freebird? They issued a third of their stock to buy this company. So
SPEAKER_04: basically, Square is a public company, they issued shares to afterpay shareholders. And afterpay only represents about 4% of Square's revenue. So, they gave away a third of their company to increase their revenue by 4%. That's the pessimist view of the business. Now, if you kind of think about Square, they've got two businesses that are equally sized. One is like a consumer business, this cash app. Yeah, and they do a bunch of stuff, including crypto in there. And then they have another app, another set of tools for merchants, which is businesses on the other side. So, it's becoming more of a marketplace business. And the idea is that this afterpay deal can solidify their ability to basically be a lender to their consumers and provide a tool to merchants to increase sales because the way afterpay works, it's a buy now pay later product. These have been around for a long time. And you can basically make a purchase online without having to put down a credit card or to pay for it. And they instantly run a credit check on you and instantly offer you credit to buy that thing and then you pay in installments over time. And so, it allows websites and businesses to get more consumers to buy stuff because it's really easy for them to buy stuff if they don't have the money today. And by the way, this business concept has been around for a long time. There's a company called Bill Me Later that was bought by PayPal in 2008 for a billion dollars. And it was a similar thesis. So, the thesis, what's old is new again. The thesis is, if you can provide these tools to merchants, they will get more sales and PayPal on the other side would make more money because consumers would spend more through the system. And I think that's the same model with Square. But most important, we're seeing Square consolidate the marketplace dynamics of their business. They're also effectively stepping up and competing and making sure they're locking in the competitive advantage they have with having this two-sided marketplace against emerging competitors like a firm and so far. Quarna was the original. Yeah. The public capital markets will always reward
SPEAKER_01: great growth strategies. The minute that they announced this deal, the market cap of Square
SPEAKER_01: went up by almost 25%. The deal is free. Free. I repeat, they just acquired a $30 billion company for fucking free. Which is what happened with Whole Foods and Amazon. Here is the secret hiding in plain sight that not enough CEOs understand about the public markets. And so, for the CEOs out there listening, there are two ways for you to get constantly rewarded by the public markets. Number one is what Square did, which is to incrementally acquire feature after feature after feature. The thing with Buy Now Pay Later is that it is not a company. It has always been a feature. And it's a feature of a much larger financial services platform. And I think Square is proving that. And everybody else over time will realize it. Goldman Sachs and Apple are about to do something there with Buy Now Pay Later as well for themselves. Apple already does it for the phones. So the idea is that this is just a credit feature that should be on every single major network. I wouldn't be surprised if WhatsApp and Facebook had a Buy Now Pay Later feature. Amazon. Over time. Everybody needs to have this feature. You can't build a company around it. And so, if Square can basically continue to acquire or build adjacent features that consolidates the financial services stack for their consumers, the stock market will reward these guys. They'll be able to grow and buy things for free for the next five or 10 years. The second way that companies can get rewarded in the public markets is if you look at your costs and you flip them from a cost or an expense into revenue. And the gold standard is Amazon. So, if you guys look back, I'll just give you a very quick example because it's incredible. In 2005, year-end 2005 Amazon, they had $8.5 billion of sales, $2 billion of net profit. Their two biggest costs there was product and shipping. So what did they do? They started Amazon Kindle, they started Amazon Basics, they started Amazon Fire, they started Amazon Echo. And all of a sudden, that whole thing shrank, their gross margins went up. Then on the operating expense side, Amazon was spending 6% of revenue on fulfillment. They started a fulfillment business. They were spending 5% of revenue on technology. They started AWS. They were spending 2% of revenue on marketing. They started Amazon Prime. They were spending 2% on payment processing. They started Amazon payments. So if you look at any company like this square, I think Stripe is another part of me, Shopify is another great example where you can see the path to growth. If you can see folks acquiring adjacent features, or if you can see folks taking expense lines and turning them into revenue lines, these are, in my opinion, sure bet companies that compound forever in the public markets. And there's great network effects. If you
SPEAKER_04: think about financial services for consumers, I would argue there's 5 general categories. There's banking, lending, trading, crypto, and insurance. And I think in order of retention, meaning how long a customer is likely to stick with a service provider, it's banking, then lending, then trading, then crypto, then insurance. And in terms of profit generation per customer per year, it's trading, then crypto, then lending, then insurance, and then banking. And so what we're seeing is a lot of these financial services providers to consumers in the digital world, replacing the old school world by starting to consolidate these categories in a smarter way than the old school offline companies have been able to do. Banks need to make money through overdraft fees. They make $30 billion a year in overdraft fees. So if you make banking entirely online and make it free, you retain a customer and then you can make money by offering them lending, trading, crypto, some of these other services. And that's certainly the trend. I have a big thesis and a big belief that over the next decade, we're going to see those 5 categories start to merge and you're going to have 3 to 5 superpowers that are going to offer a consolidated stack of services and the unit economics are going to change because they're going to focus on getting the high retention products to be cheap and free. And then they're going to make money on the high margin products. The canary, I completely agree with you. And the canary
SPEAKER_01: in the coal mine is who will be given a federal banking license because that is the only gate that the authorities have to king make who those consolidators will be. And that's an easy thing that can be unemotionally assessed. Can't like Google or Amazon just buy one of the banks out there? You have to apply. No, you have to. This is an incredibly arduous process to get a federal banking license to be cleared by the Federal Reserve to be able to borrow. But what if Amazon bought a bank? You have to get it approved, Jason. You're not listening to me. These are
SPEAKER_01: regulatory hoops. That's why I'm asking a question for the audience. About acquisition versus applying.
SPEAKER_05: Okay, so even if you want to, you can't just buy a company like you bought Whole Foods. So for example, I think Square now is a federally licensed bank. And I believe that
SPEAKER_01: the Federal Reserve recognizes these guys, they can borrow money at the discount window at the discount rate. As startups get more successful and can get there, those will be the ones that will do what David said, because it doesn't matter how many users or how much momentum you have, if you cannot get a federal license to operate, you can't consolidate. So you can be a vertically specific great business. But eventually you have to sell E-Trade. Morgan Stanley is a great example, where in the absence of an inability to expand, you have to sell yourself because the cost of capital eats you up. The comment on this, by the way, the most obvious one here, which I think is interesting is the Shopify Stripe debate. Because if you look inside the P&L of Shopify, an enormous line item now, about 350 million bucks a year is what they're paying to Stripe. And there's going to be a lot of pressure over time to figure out what these big businesses want to do with respect to their payment strategies and do it themselves because they may be able to save a lot of money. Unclear. Can I be like the lone voice of dissent on this afterpay thing?
SPEAKER_00: Oh, go ahead. Yeah. Well, look, it's clear the market loved it. Chamath is right about that. It's sending a signal to everybody in the industry, in the finance industry, that consolidation is going to be rewarded. It seems like finance is going to go the same way that media did, where you start to see studios in Hollywood all get gobbled up by big tech players, sort of the final convergence of digital analog. You're clearly going to see that in banking now too. So as a business person and as an entrepreneur, I respect and admire what Jack Dorsey has done with Square. But as an American, I'm definitely concerned about this accumulation of power. And we now see Jack as the first person, I don't think there's ever been anyone in American history who holds in his hands the right to deny people's speech on a major speech platform and the ability to deny them access to a major consumer payments platform. Now, he doesn't have dominant market share in either one of those things. In either, no. He's got less than 10% in each.
SPEAKER_00: But he's an influencer. And we saw that Twitter was the first site to kick off Trump. And then in the wake of that, every other tech platform did it. And Square, after January 6, cut off the accounts of everybody who was involved or connected to it, whatever that means. And a bunch of other players in the fintech stack did it. So we now have this issue of financial deplatforming. PayPal is already well down that road. What will Jack Dorsey do? I don't know. I mean, on the one hand, why don't you start up? Why don't you buy or start or incubate your own? That's
SPEAKER_05: protection freeze free. You're not going to ban people from calling. So you win. Just fucking start your own square competitors, acts and stop complaining. Jason, look, these companies have
SPEAKER_00: gigantic network effects. PayPal is over a $300 billion market cap company. If all of them, if
SPEAKER_05: they back those 10% if they knocked 10% of people off, you get them now you got your now you got your beachhead stop complaining. It is not it is it is a non argument to claim that a cartel
SPEAKER_00: of gigantic fintech companies that have monopoly scale, monopoly network effects acting together, that is not a threat to people's rights to have a it's not I'm talking about how you can make money
SPEAKER_05: from it. I'm just talking your book like you. This is not about making money for me. It's not
SPEAKER_00: about making money for me. This is I know, but it is an opportunity like who's to stop somebody
SPEAKER_05: from creating isn't parlor back? And isn't there some other like right wing or more conservative Twitter that's booming right now? I heard there's another one Kara Swisher was talking about. I'm
SPEAKER_00: predicting right now that financial deplatforming is going to be the big hot potato political hot potato over the next year. This is the next wave of censorship. And what I agree with Republicans on the FTC on that board need to ask jack Dorsey right now is, will you import the Twitter block list over to square? Or will you keep things separate? Bestie guestie jack?
SPEAKER_01: Can I just say something sexy? I think you're right. But if you just want to make a lot of money, and you have to have some financial stock ownership over the next few years, I think the way to do it is just to kind of like figure out which of these emerging companies have or are about to get or have disclosed in their earnings that they're filing for licensure. And I think you want to own those things. Because the key thing is like when you get these licenses, you just get a cheaper cost of capital, it just allows you to out compete and out maneuver. And then all of a sudden, you're competing with these big lumbering incumbents, who just don't have the access to the same flexible technology, and they're running code that's, you know, 4050 years old. Then the policy decision becomes much more complicated, because I do agree with you that there's going to be platforming or deplatforming issues that happen. The good thing about this that it is highly fragmented, and that there is no clear path, at least that I see, for two or three folks to have 25 to 30 to 35% ownership that already happened, sort of in credit cards. And I think we've learned our lesson from that. And it hasn't happened since.
SPEAKER_00: I hope it remains that decentralized. But what I think the reaction of the stock market to Square buying Afterpay is now everyone's gonna be looking at that and going, wait a second, I can spend, you know, a quarter of the market, my company and have the opposition be free. No, but David, my point, that's not what they're saying. What they're saying is,
SPEAKER_01: hold on a second. These companies are features. And we want to have folks who are licensed and capable to consolidate what Freedbrook said, these five categories. And if you look inside a square, they have an incredible lending business, they have incredible merchant services business, they have a, you know, a pretty decent and emerging crypto and trading business, right. So they're putting all the pieces together. That's what they saw. And they're licensed.
SPEAKER_00: Right. But who are the big winners in this wave of consolidation going to be at the end of the day, it's going to be Square, it's going to be stripe, it might be, it's going to be PayPal, it's going to be the big online companies, not the offline legacy banks. It's the same, same thing that happened in Hollywood, the only studio that didn't get gobbled up by a tech company is Disney. Right. So it's gone 80% became a tech company, and they become a tech company.
SPEAKER_00: So I their whole business, they're gonna, they're gonna catch up to Netflix,
SPEAKER_05: and then they're gonna roll Netflix, they're gonna roll right over Netflix.
SPEAKER_00: The reality is that there is something about big tech that wants to de platform people, the legacy analog offline companies were never this more realistic towards their customer base, they'd never deep de platformed and banned people the way that these are limited. They limited their moralizations and their high horse to the Oscar awards and the Emmys. You're
SPEAKER_05: correct. Jake, Jake, I'm gonna do a I'm gonna do a crazy wine dinner tomorrow night. And it's about
SPEAKER_01: 45 minutes from you, you should take a car, have them wait, eat dinner and then drive back. All right, I'll try I got I'm doing I'm going to see David, which you know, for me as a lifelong
SPEAKER_05: dream, because you every time I I'm gonna go see David because not David Sacks, David, you know, the statue of David, which to me is like looking in a mirror my whole life. I looked at that.
SPEAKER_01: Yeah, that's a small stubby schlong. I get it.
SPEAKER_05: I have so many tours I'm doing in Florence. Maybe I'll zip out. Let's see. Maybe I'll zip out. But
SPEAKER_05: I'm gonna see you next week. It's 45. The question is freeberg. What are you fucking doing? Get on a plane and come see your besties. You're the only person not in Italy. You come for three or four days. I know you got a pregnant wife. I know you got a lot. You're moving all this stuff. You gave up. Let me go talk to her. Just come for three days, three days, get her some present and maybe get some extra help at that. All your pilots. They're all just sitting there in Italy, hanging
SPEAKER_04: out. Mine are literally having the best time but they're living their best lives right now. They're
SPEAKER_01: like, Oh, we're gonna take a tour of Venice. Do you want to get some hours in? I'll send my plane.
SPEAKER_05: It's United. I'll send United for you. Jake, why don't you come visit me tomorrow? You don't need
SPEAKER_00: to see a museum. You know, you don't want to spend time in museums. I'll see you all next week. Relax.
SPEAKER_01: I'm only going for a day. I'm coming to drop. Yeah, yeah. My mom's here. You know, like, I have a lot of people for two days and hang out for two days with us. What are you doing?
SPEAKER_05: 48 hours. It's not a big deal. Bring everybody. All right. Love you guys. Love you besties. Yeah. Oh, congratulations. Congratulations on Robin Hood. Okay, thanks, guys.
SPEAKER_05: All I'm gonna say is, is my first fund my little $11 million fund right now. You know, we'll see what happens a long way to go. Once again, I'll have a top 5% 1% fund. The first fund I did with Sequoia with the scouts was like 150 cash on cash. Who knows this first fund I did with you guys backing me. Thank you for supporting me that $11 million fund could be Jake. JK, six, seven x could be who knows? We'll see. Go big boy cash on cash. Yeah. You know, it's a good feeling. It's a good feeling. Yeah. Thank you for your free birth. Proud of you. Saxy poo. Everybody. Wait, did you have any wins this week? Aside from spending a lot of money on wine chamap? Is there any spectacular news that we need to know? I think David David can confirm but
SPEAKER_01: I think I probably made a billion dollars this week. All right, there you go. Something's going
SPEAKER_06: to be back coming. No, no, no. No. No. No. Something's getting sold. All right. We'll find
SPEAKER_05: out next week. We'll see you all next week. Bye bye. Love you guys. Love you guys. Love you besties love you Italy. Of course, everybody's favorite, the queen of quinoa, the science conductor himself, David. All the data all the stuff it says go do whatever you want to do. Go into a nightclub,
SPEAKER_02: sweaty, throbbing. Nothing else matters. Go into a throbbing rave.
SPEAKER_04: But I think understanding what the other counterpoints and counter arguments might be is critical to get people to actually get to that opinion themselves, as opposed to just telling them this is a single point that you should believe. Nothing else matters. Nothing else matters. So much is all about like the good and evil, them and us. And we don't recognize that in moments where there are shared values, we're just sitting on both sides of the same coin or recognizing that sometimes having different values doesn't necessarily make someone evil. Nothing else matters. Nothing else matters. I'm like seven tequila watermelon tequila. I'm like, what's up? Coolio my god, this is like a dream come true. His face is right next to my face. I didn't know what to say. And I like, I'm a little bit of tequila. And I whispering coolio's here. Appreciate you. I appreciate you. I try and kind of elevate the conversation a little bit and why I care so much about this point. Go into a throbbing rave.
SPEAKER_05: Of course, everybody's favorite, the queen of quinoa, the science conductor himself, David Friedberg, the quality of the show. He calls it the Friedberg index. If Friedberg talks a lot, it's a great episode.
SPEAKER_02: All the data, all the science says do whatever you want to do.
SPEAKER_03: Go into a nightclub. Sweaty, Max and Peeples. Nothing else matters. Go into a throbbing rave.
SPEAKER_04: Nothing else matters. Nothing else matters. Nothing else matters.
