All-In with Chamath, Jason, Sacks & Friedberg - E1: US Response to COVID-19 & Impact on Startups, Venture Capital & Public Markets with David Friedberg

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All right, everybody, welcome to another edition of the all in podcast.

We’ll call this episode one.

We did a test and over 100,000 of you listened to the test podcast that we did in a few days,

in a few days.

Chamath is already getting addicted to his statistics, a new podcaster.

I need to focus on something going up.

Yes, exactly.

Our portfolios are getting crushed, but the podcast numbers are going up there with a

meaningless victory to be sure, but we got a lot of positive feedback and we’re all sitting

at home in quarantine.

As you can see, I’d set up my home office.

I got a microphone here and Chamath is in his bedroom and Dave Friedberg, I think is

in his wine room or something in his, in his compound.

Are you in the safe room?

Is this the safe room?

Dave Friedberg is with us again.

He got a lot of great feedback and he’s now on the Twitter.

You can follow him at Friedberg.

I don’t know if he shut his Twitter down because he was getting harassed on Twitter.

Welcome to the club.

Are you in your safe room, David?


It’s brutal on Twitter.

I don’t know how you guys do it.

You put something up and everyone, you know, just goes after you.

It’s harsh out there in the Twitter world, in the Twitterverse.

Basically you have to mute and block anybody who is under 100 followers and being an absolute

jerk because it’s likely a Russian bot, you know, being run out of like Manila or something

like that.

You have all these like sophisticated rings of people that they just hire for 10 bucks

a day to harass people online.

I mean, I know it sounds like a crazy conspiracy theory, but it’s actually true.

This large groups of bots who go after people and try to create chaos.

But hey, we’re sitting here.

It’s today’s Wednesday.

We did our podcast on Saturday.

The stock market has gone down another 20% since then, I guess, or so.

We are looking like this is going to be a 50% correction or something like that.

We’re now well past a 30 plus percent.

On the good news front, it looks like testing is actually occurring and that work on treatments

is occurring.

I don’t know if we can call them cures, but treatments is occurring and a quarantine in

place is being taken seriously.

I guess the biggest thing is that Trump has basically admitted that this is a crisis and

he’s taking it seriously.

Friedberg, what is your assessment of where we are today versus when we taped on Saturday

in terms of the resolution to this?

Are we overreacting, reacting just enough or not reacting enough?

There’s three things to consider.

The health, the policy, and then the markets.

On the health front, it seems like we have done a lot in terms of containment and we’re

ramping up testing.

We are still not doing broad general population testing, which is necessary for us to truly

understand the dynamics of this disease and also to understand the contagion of this disease.

We need to fix that problem.

There’s a task force of 100 people out of DC being led by Jared Kushner and a number

of people from the tech industry that are working on ramping up testing and doing broader

general population testing.

The policy decisions are what get quite scary, and that is all of the containment, shutting

down travel, shutting down borders, shutting down bridges, and the economic ramifications

of doing so are frightening.

I think I mentioned the other day that 48% roughly of the US workforce works in small

businesses, another roughly 10% work in travel, another roughly 12% work in energy.

You kind of add this up and you can quickly see why Steve Mnuchin, the US Treasury Secretary,

was saying that we should expect 20% to 30% of the workforce to be unemployed by this

summer if we keep this up.

So that is a frustrating and staggering statistic and something worth debating whether that

policy decision is appropriate relative to the potential life and health system impact,

which one is worse.

And then the market question is just … I don’t know how to address that, but things

go from bad to worse, right?

I have eight things that I want to cover.

Hold on.

Hold on.

We’ll take one thing at a time here.

Everybody’s warned to go.

I want to say one more thing, and it is I think the most important data to come out


So the markets are fucked.

We’re all in trouble.

We’re, you know, yada, yada.

The most scary thing is Ford and GM just shut down their plants today, and the reason they

shut down their plants is because out of fear of coronavirus and autoworkers, and the UAW

basically forced them to do it.

The world lives on a 30-day food supply.

So if you stop food production today, there would only be 30 days of food for the whole

world to eat based on our calorie consumption per day, and especially with an isolated border

and we import a lot of food in the United States.

If that means that we are then going to shut down other factories, the Ford-GM shutdown,

and we’re going to shut down food production, processing, and distribution factories, then

we have a food security crisis, and this becomes a real societal problem.

So the concern that I have with the factories being shut down today is the precedent it

sets and the potential follow-on from there in the food system, and one thing we can’t

stop doing is making and distributing food to humans in the United States or else we

are going to have problems.

No, no, no.

You’re right, but before we go there, the good news is that these directives don’t apply

to national critical infrastructure, and the food supply is covered within that.

So unless something cataclysmic happens, those folks are still going to make sure that

food supply is there.

I do agree with you that the issue that we have to contend with is that there may not

be as much, and in the 30th to 90th day, that becomes a real issue if this thing becomes

a very protracted problem.

This sort of brings us back, David, without being too alarmist about how we started and

how you started really importantly at the beginning, which is there is a small but very

credible body of evidence that is starting to show, and this is what you put out on Twitter

and part of why you got attacked probably by the pharma lobby.

But that shows that there is potentially an enormously large asymptomatic spreader dynamic

in this disease.

Can you describe that and what that may mean and why there’s a lot of silver lining and

good news in that if it’s true?

There are several data points that are showing us that there may be an unexpectedly high

number of people that get this disease and don’t have any symptoms and show it.

The historical data that we’ve gathered to date has been largely symptomatic patients,

and in some places like in Korea, asymptomatic patients that had really close contact with

symptomatic patients that were confirmed to be positive.

And in Korea in particular, they found a large cohort, nearly 40% of the infected population

were people between 20 and 29 years old that did not exhibit any symptoms or had very mild

symptoms, had a runny nose, and didn’t even know that they were sick.

On the Princess cruise ship, it turns out that up to 50% may have been asymptomatic.

People were all tested on that cruise ship because there were so many people that were

positive and through that data set, that cohort, we found a very large asymptomatic

population, 50% roughly.

The NBA players have now been tested and out of seven players on five teams, so out of

seven players on those five teams that have tested positive, it seems like none of them

are having any symptoms.

There may be one person who’s having a cough, but generally they seem one of, I think it

was Donovan Mitchell said, I could go play a seven game series tomorrow.

So this data is really important and it hasn’t been fully accounted for in the models and

the predictions of the pandemic and the predictions of the fatality rate.

We’re assuming that let’s say 2% of people that get this disease end up dying.

And by the way, that’s also based on an age histogram that may not be appropriate for

our particular cohort in the United States.

If you took that data and then you just did it based on the fact that a large percentage

of people actually don’t die, but they end up just being asymptomatic, it really changes

the denominator and it skews the results.

A paper published showed that in China, up to 86% of people did not realize that they

were sick or they were unreported and they had mild symptoms.

If you take that high level, you take that low level, call it somewhere between 25 and

86%, maybe even as high as 86% of patients are asymptomatic, which means that the actual

fatality rate is much, much lower even in a large cohort that gets infected here.

So we should be mindful of this new data that’s emerging and we’re still racing and acting

from a policy basis as if 2% of people, 3% of people, 4% of people that get this are

going to die and that may not actually be true based on what we’re seeing in the last week.

I have a comment and a statement.

The comment is people will say, David, you can’t extrapolate from an NBA player who may

just be in peak physical fitness, although I think your answer is going to be, it’s not

clear that the disease is correlated necessarily with physical fitness for unphysical fitness

at all.

It’s just maybe the strain and how your body processes it.

But then the question is, doesn’t this mean that we need to have broad-based massive testing,

not just of symptomatic population, so not just the PCR test that we’ve heard a lot about,

but also these antibody tests so that we know that people have had it?

And what’s the status of that, David?

What’s the status of it?

That’s exactly right, Chamath.

And by the way, on the healthy NBA player point, it’s absolutely true.

People that are between 20 and 30, the average age in the NBA is 26 years old.

People that are between 20 and 30 years old generally seem to have no to mild symptoms

based on what we saw in Korea.

The other data sets need to be taken into account.

So the NBA is an interesting anecdote, sure, and you could discredit it all you want and

say that it’s a highly correlated class and so on because everyone’s together all the


But we could look at the data that came out of China in a paper that was published in

the journal Science and a paper that was published in the journal Nature from Korea that showed

very large percentages, anywhere from 20 to 50 to 80% or 90% of people being completely

asymptomatic across an age spectrum.

Certainly very heavier weighted towards the younger age bracket from children all the

way up to 30 or 40 years old, you can be completely asymptomatic.

And so these are really interesting discoveries that have happened.

And so to your point, we need more data and we need to confirm that hypothesis because

that’s how science works.

So we have a hypothesis, let’s go test it.

The problem is we’re not testing it and we should be as a priority right now because

the policy decisions we’re making are based upon a denominator that may be wrong.

So the correct action should be to go get those antibody tests, go out into the population

and start testing the asymptomatic general population and see what percentage of people

in these high risk zones like Seattle and LA and New York and SF already have the antibodies

to this virus, meaning they’ve been infected with this virus and have not or are not showing

any symptoms.

And that gives us a better sense of A, how widespread this infection is and B, the true

dynamics of the fatality rate and the symptomology of this disease and how it may affect people.

Those IgG tests are being made en masse in China today.

They’re being shipped to countries like Italy where they are in fact being used on the front


They involve a blood draw and then they have this lateral, they’re called a lateral flow

assay in terms of how they’re kind of tested.

The blood runs across a strip and you see a value and you have a pretty good sense at

that point.

Those kits cost a couple of pennies to make in China.

We could probably get a couple million of them.

I don’t understand why we’re not.

I don’t understand why someone in the federal government isn’t begging China and apologizing

and appeasing to them to send us those kits.

There are a lot of people I know that have bought them on the internet.

I have a bunch of people that I know have bought them.

They have been shipped in through brokers and they are not FDA approved.

They cannot be used for diagnostic purposes because of FDA guidelines and how the FDA

regulates these things.

They can be used for research purposes, but they may not be very sensitive and very specific

and they don’t have great testing on them.

They estimate the sensitivity and the specificity to be 90%, roughly 10% false positive, roughly

10% false negative, but for what we’re trying to accomplish, that’s good enough.

We’re not trying to give people a diagnosis of disease.

We’re trying to run an epidemiological study and we should on the general population to

figure out how many people out there are asymptomatic and have been infected.

That is an important statistic that’s missing.

To your point, if we find out that there is a large population of people that have actually

felt this disease pass through them, it’s faster that we can sort of get people back

to work out in the streets, which is now probably going to be the most important thing we can

do to just prevent a complete economic calamity.

There are Jason.

By the way, sorry, treatments, Shamoff.

Sorry to interrupt you, but treatments are the other thing and I think you’re going to

talk about that.

Treatments are interesting.

Let’s talk about that right now because to me, what’s incredible is again, now what is

emerging and it’s small in scale relative to how amplified it may, may, should or should

not be is remdesivir is very different, but it just seems like prophylactically even there’s

some data that’s showing out of France that chloroquine seems to be the most effective


I mean, there’s no doubt about that.

I mean, there’s no doubt about that.

I mean, there’s no doubt about that.

I mean, there’s no doubt about that.

I mean, there’s no doubt about that.

I mean, there’s no doubt about that.

to be effective.

These are solutions that are pennies to make and some of the feedback that I’ve heard is

that part of why the FDA, the CDC, the federal apparatus is reluctant to embrace these things

is in part because of pressure from those lobbies, but that seems to me unfathomable

in a moment like this.

So why do you think the government hasn’t put out, the CDC has zero directive right

now on the management and efficacious management of this disease?

Why is that?


What Feucci and others have said and doctors around the country echo is that these treatments

have not been clinically tested through a blinded controlled study.

That is a very fair assertion, generally speaking, for doing good medicine, but we are in a crisis

state and in a crisis state, you have to triage and you also have to triage policy and we

should be considering triaging policy and changing the way that we do policy under these

extenuating circumstances.

If doing treatment can reduce fatality rates by up to 4X, as Korean doctors have claimed,

it is worth taking the risk or perhaps it is worth letting the FDA say remdesivir,

cholesterol, chloroquine, and others are being widely produced, widely distributed.

The government is mandating it and doctors and their patients can decide if and when

they want to use it and let them take the risk without clinical trials and without data

and the typical process of the FDA.

What’s the downside of taking these drugs?

Are they particularly dangerous?

I mean, I’ve heard the colloquine, am I pronouncing it correctly, colloquine, chloroquine.

I’ve heard that this can be a little bit nasty in terms of side effects.

So is there some major downside that, I mean, it’s kind of like an off use of a drug, right?

Like this is an off use of a drug as opposed to…

It’s an off use of a drug and some of the antivirals aren’t even fully tested in humans.

So we don’t yet know what the side effects may be.

And also remember, side effects can change based upon your health condition.

So someone that’s in respiratory distress may have different side effects than someone

who’s taking it in a healthy controlled clinical trial.

So we’re not really sure.

That’s the argument that doctors would make is our first mandate is to do no harm.

And so they don’t want to apply a medicine that might do harm.

And so that is the standard protocol and practice and process.

However, again, in a crisis state, China and Korea said, guys, we’re trying this thing

and it’s working and we’re adopting it.

Let’s go for it.

And they raced forward.

It could be that this is a good time for the United States to consider an emergency policy

action where we make a lot of this stuff, make it available and simply let doctors use

their best judgment rather than have the FDA be the paternal state that makes a decision

for the doctors or makes a recommendation to the doctors.

What do we think the fatality rate actually is like, David, if you were looking at this

and you had to place a bet and put 100% of your net worth on it and be all in and have

massive skin in the game, where do you think the fatality rate here in the United States

winds up being overall, because the data that came out of Wuhan has been markedly going

down as they get the numbers corrected, who knows Chinese numbers, you know, censored

by the government and maybe perhaps massaged, it’s going to be hard to tell.

What do you think the real fatality rate is?

The first fatality rate I heard was 5.8% out of China.

The Wuhan data, based on the paper that came out in Science over the weekend, the Wuhan

data was estimated to be 1.4%.

And Wuhan was the worst data out of China.

The quote-unquote rest of China is still estimated at about 0.15% or 0.16% or 0.14%,

something like that.

Where is that versus like the flu every year or something or the normal flu?

1.1% roughly.

And so, you know, if you’re looking at somewhere between 0.2% and 1.5%, now in Italy, I think

they’re at over 7%.

We talked about this on the last show, but Italy is a much older population and their

health system is completely overwhelmed.

So there’s some confounding data, there’s confounding variables there that may be making

Italy a very unique outlier on a distribution of what’s going to happen here.

The United States has a population that’s a little bit older than China, but much younger

than Italy.

So our health system is, and our health system is generally more ICU beds per capita than


So we should be in a better place.

The thing we don’t know that does concern me about the health system in the United States

and the population of the United States is it seems that there may be a high correlation

with severity of disease and A1C levels.

And as a result, the U.S. has one of the highest obesity rates of any country in the world

and highest diabetes rates.

And so we may have a population that has a very high percentage of people with a high

A1C that may be at higher risk than, say, people in other countries.

I don’t know that for sure, but that is, those are two kind of confounding statistics that

may kind of make things a little bit worse.

If I were to put my money on this, look, I’m a betting guy, I would be a little bit nervous

at this point, but I’d say it’s probably somewhere between 0.15 and call it 1.8%.

That’s an order of magnitude, I know.

But you could do the math.

That’s probably somewhere between one and 10 times as bad as the flu.

And so that, again, leads to the big policy question about are the actions warranted and

is it okay to let the health system crash?

So that’s a perfect then flip to you, Chamath.

You’ve heard his, basically his line at 0.1 to 10 times the flu, 1.8 or something.

If we split the difference of those two, it’s 0.5, it’s 0.6, 0.7 fatality rate.

Is the reaction of sheltering in place and the economic turmoil it’s causing worth it?

Yes or no?

Right now, you guys need to keep talking.

I need to jump off for two seconds and I’m going to come right back.

No problem.

I’ll be right back.

And so what do you think now, if we were to look at your estimate, David, is it actually

worth what’s happening?

Would we, if you and I were making the policy or you and I and Chamath were, you know, the

cabinet members, as it were, making this decision, is this decision and the economy crashing

and a potentiality of 10, 15, 20% unemployment and all the downstream effects, would it be

better to do what the UK was originally doing, which is just, hey, let’s get the herd mentality

going and let’s get the herd immunity going?

I know this is like the most difficult question in the world, but we’re here, so let’s speculate.

Look, there’s a spectrum of options.

It’s not binary, right?

It may not be lock everyone up and let everyone out the door.

It may be that you have a more nuanced policy where you say, let’s keep people over 65 years

old, give them the strong recommendation to stay home and make sure that you distribute

chloroquine to doctors around the country.

So as soon as elderly people start having symptoms, they maybe get some treatment.

That’s kind of an option.

You keep 65-year-olds at home, you do random general population antibody testing, and once

you hit a certain percentage of the population having been exposed to this thing, it may

be that at that point you say, okay, the over 65 limit is lifted, or it may be that you

do something similar to that.

Different age brackets have different containment recommendations.

You also do it with random GenPOP screening.

You also do it with medicine being distributed.

So there’s a nuanced answer to that where the policy should be a little bit more directed.

It should be a little bit more involved in terms of treatment, testing, and containment

strategy, and it doesn’t need to be so binary.


It doesn’t have to be everybody stay at home.

If we get to the point where a population has very few people have had it, then more

people should stay home so it doesn’t spread, and then if more people have it, so if 50%

of young people in San Francisco have it already, we’ve got herd immunity, then maybe

we can start saying, hey, if you’re over 65, you can go out, but just stay at a restaurant

or something.

Is that what you’re saying?


Once you hit like 50% to 60% of the population having antibodies to a particular virus, like

a flu, for example, you’ll see that R-naught number drop well below one, and then basically

Explain R-naught to everybody again, just so we can get it.


It’s basically like the viral coefficient.

For every one person that’s infected, R-naught tells you how many other people will get infected

after them, and so if it’s 2.5, which is what some estimates say it is for coronavirus right

now, then for every one person that gets infected, roughly two and a half people get infected,

and that number goes down as more people get infected, because as more people get infected,

there’s less people to infect, and the rate at which you can then infect other people

also drops, so your R-naught collapses, and so at a certain point, you have this kind

of basis for saying, hey, guys, let’s, okay, now I got to step off, sorry, guys.

Yeah, no problem.

Do your thing.

So Shama, what David was just explaining.

This is incredible.

I mean, what you are seeing in real time as we’re doing this is literally like, I’ve never

seen this before.

We should probably explain what is going on.

So what is going on in the background is the markets are just completely torn.

Now, why are the markets important?

Many people aren’t invested at all in the stock market.

I get it, but it is where liquidity and capital markets function, and derived out of those

capital markets is the money that then hits startups.

It hits the banks, which then lend to small businesses.

It is the functional machine, the undergirding of the U.S. and the world economy, and we

are in a moment that I have really not seen since 08, where there are seizures in this

market in extremely violent ways.

And so when I had to jump off the phone, it was me trying to do my part to kind of help,

but also trying to make sure that we maintain full liquidity in times like this.

It’s incredible.

Jason, on the assumption that, you know, Friedberg may or may not come back, I mean, what dramatic

podcasting we’re dealing with.

I know.

Well, you know, I mean, people also have their kids at home, so, you know, I might have to

jump out and take care of the twins or my 10-year-old.

So it is definitely having a psychological impact on everybody being home.

You’ve been home for over two weeks.

I’ve been home for a week.

I went out once to do a podcast at my office with just one person there.

What I wanted to do was start at sort of the 10-foot level, and I’d like to build up

to the 100,000-foot level.

And I think that’ll be a good way of talking about what we teased and talked about a little

bit in episode zero, which is sort of these second and third order dynamics.

Before we go to that, let me just, I want to wrap up with Dave was saying about what

the change in policy should or could be.

So right now, we’re having, you know, this basically quarantine.

In some cases, it’s a hard quarantine.

In some cases, a little bit softer.

It’s a recommendation.

And, you know, people are being told to, you know, stay at home.

Should this change?

And under what conditions do we start going back to normalcy?

Because I think that’s what people want to know is when is this going to end and under

what circumstances?

I’m just talking about, you know, staying home.

Well, look, if it were me, I think what we would do is adopt some of the mitigation

strategies of China and Korea and Singapore.

All of these countries have kind of showed us a way to deal with it.

Now, we have to decide that a short-term suspension of typical civil liberties

is worth the trade-off.

Now, it’s not worth it under the normal course under any imaginable way.

But if we had to trade off some of those civil liberties in the short course so that we could

get back to normalcy, I think most of us at this point and definitely all of us after

another week or two of home isolation will do it.

And what I think it would entail is setting up zones that we would understand to be uninfected.

And what that means are people that don’t have it or people that have antibodies and

eventually allowing those zones to reopen so that we can actually have some amount of

economic activity.

And what that will require is massive testing of the entire population.

Testing, testing, testing.

I mean, there should be lines and lines and lines.

It should be, you know, how we would have and we know, by the way, how to mobilize this.

It is no different than when we would go to vote.


And, you know, we could all be told based on birth year, right?

Everybody go based on birth year to your local voting facility.

There are phlebotomists there.

They can run these LFIAs.

And they can allow you to be in a safe zone or not a safe zone.

If you’re found to be an asymptomatic carrier, then you can self-quarantine and socially


And we can really, you know, nip this thing in the bud in a, you know, four, five, six

week timeframe.

And because these tests are available at such large scale, and because these tests are so

insignificantly cheap, if it were up to me, I would mobilize the military and the National


I would mobilize our voting infrastructure.

I mean, another way to do this would be why don’t we just have the National Guard or doctors

or whatever, just go to everybody’s mailbox, put in the kits, and then say, you know, we

have your kit in here on this date, and we’ll go pick up the kits.

The problem with these LFIAs is that the amount of blood that you need, you cannot draw by


It’s not a thing.

But what about the swab stuff?

I mean, if we just did the swab testing, we just said, hey, we’re coming by your house.

The swab is a PCR test that’s looking for RNA.

And the problem with that is that it’s effective in a window.

It’s uncomfortable to administer, and it has to be done right away for those that are in

the process of viral shedding.

Got it.

If you are not in the process of viral shedding, then that PCR test is effectively ineffective.

And what I’m advocating for is move past the PCR testing.

That should be done in an acute situation.

If you come into a hospital where you’re exhibiting symptoms.

The more important thing right now is to find people that don’t have it, or people who are

asymptomatically spreading, or those people that are immune.

Because if we can rebaseline the denominator, as Friedberg said, we may find some good

news in that it’s very much like the flu in terms of numerical distribution, in which

case we can make some policy changes and reestablish economic activity.

If it turns out that it’s not, at least we know that too.

But right now, we’re in the worst place, which is that we are in a situation of isolation

and confinement in the absence of data.

And this is, I think, what’s so infuriating to folks is that we, you know, it’s like Winston

Churchill said, America will do the right thing.

It’s just that they’ll try everything else first.

And I think that we are clearly on that path to trying everything until we do the right thing.

Everything okay, Friedberg?

And I think it’s political.

I think it’s political poker as the reason why.

Friedberg, everything okay?

Just market trades.


He’s like, literally, you’re trying to cover stuff and just.

It’s a great time to tax harvest losses, man.


If you’ve got companies that you’re really

religious about that you would love to own for a long time, and you’re underwater on them,

it’s a great time to sell them, take the loss, harvest it, and then buying back in the next 30


So, David, I have a list of eight things.

And what I told Jason is I wanted to start at the 10-foot level and end at the 100,000-foot

level, okay?

And so, I’m going to tee up the first question for both of you guys.

And I have a view, but I’ll save it to the end.

So, question number one of these eight lists of interesting things to talk about,

which may be relevant for the folks listening.

What does this mean for startups?

And what should you do if you are a unprofitable…

Well, I mean, by definition, these companies are default dead.

What do you do if you’re a startup CEO today?

Yeah, I think it’s a great question.

I’m dealing with it like with about a dozen companies a day who are in this very acute


You have to look at the instrument panel and then try to, like a pilot, I use the analogy,

understand exactly how much altitude you have, where the nearest airport is, how much fuel

you’ve got on board.

So, I literally told folks, listen, if you can close this money, because a lot of people

were in the middle of doing deals, close it immediately.

So, that’s number one.

If you’ve got a deal on the table, take the money.

And some people do, but most people don’t.

And I’m already seeing people retrading deal terms based and backing out.

So, I had one person back out of a deal on

An angel investor said, because of market conditions, I’m backing out.

And they had made the commitment, they’re backing out.

So, you can see commitments broken.

So, assume it’s going to…

That no money is going to get raised for the next three or six months at a minimum.

And then you have to ask yourself, well, how do I keep this company alive?

I have people who are founders taking 80% salary cuts and then giving their staff 50%

salary cuts.

And then that takes their six months of runway, makes it nine.

So, that’s number one.

You have to just make the cuts.

And if you’ve chosen to be the founder of the company, that’s your job is to get everybody

to safety.

And better to have four out of five or three out of five employees lose their job and the

company be alive to come back and maybe get some stimulus later than to have the company

go out of business, because you wouldn’t make the cuts.

So, you got to just take the medicine.

And that’s really with first time entrepreneurs, they don’t understand that.

And if they have…

Every business is different.

We have some companies that are subscription-based business or delivery-based businesses.

They’re actually seeing an increase in utilization, increase of people trialing their software.

So, I have one company that’s a consumer subscription.

They had more trials this week than ever because people have free time.

So, that company is going to be fine.

But you got to make the cuts.

David, I’m not sure what your advice is or what you’re doing in your portfolio.

Yeah, I mean, look, I’m on 12 boards.

Four companies have been or are in the middle of term sheet or closing a deal.

So, it’s been an unfortunate timing for all this stuff.

What happens to those four companies?

Do you think they close the term sheets?


Yeah, very different things.

I mean, we’ve got one that I hope we close on Friday.

We signed on last Friday, the final docs and money’s not in the bank account yet.

I’ve got another one that’s had a bunch of offers that got rescinded, but they weren’t

signed yet.

It’s just all over the place.

And I think one thing that’s worth paying attention to for every company is you’ve got

to ask yourself, firstly, the hard question of going into this and coming out of this

era that we’re now entering that is a very bleak and dark era economically.

Where’s your customer going to be?

And what is your customer going to be doing?

The customer model is changing overnight.

If you’re a company that sold software into restaurants, and restaurants are about to

potentially go bankrupt, or suffer absolutely loss of revenue and get debt payments restructured,

they’re not going to necessarily be rushing to spend more money each month unless you

can help them immediately save money.

If you’re a company selling to consumers, and you’re selling to consumers that are going

to lose their jobs in the next three months, or lending to consumers, they’re going to

be losing their jobs in the next three months, you’ve got to be asking yourself the question,

what can I be doing with my business?

So you got to start with your strategy question.

And you got to make sure that you got to think about where your customer is going to be,

and how you can adjust your strategy as a result.

The second thing I’d say is, and I sent out a note to my CEOs, and I was like, guys, you

got to cut your burn, and then you got to cut your burn, and then you got to cut your


If you’ve got burned, you got to do everything you can to give yourself the greatest chance

of survival.

And I think on the last All In podcast, Jason, you mentioned having a 36 months of cash,

that’s ideal.

But if you can get your cash to get you to an 18 month runway…

Yeah, 18 is my average.

You should be doing everything you can to number one, kind of give yourself that breathing


Even if that means trading milestones, trading features, trading revenue goals, trading all

the things that you’re expecting to do, survival matters more than growth right now.

David Sinclair, who wrote the book Lifespan and is a Harvard biochemist, has highlighted

that there’s basically a gene, the SIRT genes, there’s about seven of them in humans, and

the SIRT genes get turned on or off.

And it turns out every biological organism on planet Earth has a SIRT gene.

The SIRT gene tells the organism or tells the cell to either grow or heal.

And this is a time for everyone to activate their SIRT genes and stop focusing on growth

and focus on healing.

It’s really important to optimize your unit economics to make sure you know where your

customer is, to really reduce the burn, to reduce the spend, to reduce the push for growth

and expansion.

And just make sure you’ve got a core business, that you have a customer, that you can make

money from that customer, that you’ve really got unit economics right.

And reduce your burn and give yourself that runway and extend your life.

So that’s my kind of advice.

Well, I think we got question one out of the way.

Let me give you my advice, which is building on the back of both of what you said.

But I’m going to take it from a different perspective.

So let’s look inside of a VC firm.

VC firms have limited partners.

And those limited partners are the most sophisticated financial institutions in the world.

Family offices of well-renowned individuals, foundations, university endowments, nonprofits,

you name it.

And all of them are allowed to invest in this asset class because they themselves can prove

that they’re sophisticated.

And one way in which they do it is they have what’s called portfolio allocation theory.

They construct a portfolio of every $100 they have and they say, well, I’d like to have

70% of that in liquid instruments.

And that I’m going to have 60% in bonds and 40% in equities.

And then that 30% they’ll take and they’ll say, I want to have a mixture of all kinds

of different stuff.

Some real estate, some hedge funds, some private equity.

And eventually, when all of those allocations are done, there’s an allocation to venture.

Now, in the last few years, what happened is all of these folks move the dial.

They push the risk meter so that the allocation into venture was upwards of 7, 8, 9% of their

overall portfolio.

Now, just to remind you guys, basic theory, monetary theory would tell you when you put

money in into an illiquid instrument, remember venture doesn’t return money until 13 years

after it’s done and you can’t get it out.

It’s not like a bond where you can go and instantaneously sell it in a second.

You have to get returns that are much better than the market because you need to be rewarded,

paid back for that illiquidity.

Now, in the last month, what you’ve seen are portfolios get completely turned upside down.

If your bonds and equities before were worth $60 or $70 of that 100, it’s now worth $56.

It could be worth $40.

What that means is that that other $30 needs to be worth much, much less.

Otherwise, your portfolio model is completely upside down and all of these limited partners

become forced sellers as well.

So that can’t happen.

So what is the – my understanding is the last time this happened in 2008, LPs kind

of winked to the GPs and said, listen, it would be good if there wasn’t a capital call

right now.

And then GPs not wanting to piss off their LPs, the VC firms not wanting to piss off

the endowments as an example, said, okay, we’re just going to not make any capital calls

right now while the market recovers so that your equities go up and the percentage of

venture goes back down.

Is that the likely scenario is LPs?

It’s worse than that.

It’s worse than that because right now, these foundations and sovereign wealth funds are

trying to just stay above water.

And as we get to the 10,000 and 100,000 foot view, I’ll give you the picture of what’s

happening in their offices.

And again, it’s important because it is what makes sure we come out of this reasonably

well, which is a properly functioning capital market.

And right now, it is the most precarious that I have seen in 20 years.

So basically, these LPs are going to have to portfolio rebalance and they’re going to

have to force venture capitalists to mark down their books.

So wait, VCs are just going to make that decision to say, hey, my investment in Airbnb, Slack,

or Uber is worth X now.

I mean, when they were private companies.

Not Slack and not Uber because they’re public.

But previously private, yeah.

But Airbnb, can it be marked at $30 or $40 billion?

The auditors will probably say no.

The LPs will say that it’s not.

The GPs will want to because it’ll allow them to maintain their IRRs, their rates of return.

And so, what you’re going to have is when these markdowns are forced to happen, which

will take another six months, venture capitalists returns will look terrible.

And so, their propensity to be able to add bad dollars after good, quote unquote, to defend

every company is going to go to zero.

And as you said, Jason, there’s going to be a pall on activity.

So, I don’t think 18 months is sufficient.

I think you need at least 36 months.


You need to have three years of capital in the bank.

The worst thing that’ll happen if you have 36 months is you think to yourself, wow, I

was really conservative.

The best thing that happens with 36 months is you survive.

The distribution of outcomes would tell you there is zero point in taking the risk if

you don’t have to.

And this is why, unfortunately, it’s going to be a very difficult process of recalibrating

all of this stuff.

So, for folks that are in these startups, we’re going to have to go through an unfortunate

period of pain.

And as Buffett said, rule number one of our business is to not go out of business.

Rule number two is not to forget rule number one.


All right.

I think it’s well said.

And is there any chance while we’re sort of at this, you know, street level on the front

lines, is there any chance that we contain this very quickly, let’s say under 60 days,

and that it looks like this virus mitigation through the various drugs we talked about

actually starts to work?

If that happens in the next 60 days, what will happen to the markets?

It’s not what we’re dealing with.

But Trump says there’s a chance it could come roaring back.

What are the chances of a roar back?

It cannot come roaring back.

So, let me explain to you what’s happening right now in the capital markets.

So, let’s take a step back and first look at what the Fed has announced over the last

couple of days.

And here’s why the Federal Reserve is important.

So, the Fed basically acts as a market making and liquidity function in what’s called the

overnight repo market.

Now, that’s an obscure market for the average individual on Main Street.

But let me roughly explain why it exists.

And at the end of it, you’re probably going to have the same reaction as me, which is

what the fuck, fucking, what the fucking fuck?

Okay, but I’ll explain it in English first.

So, you’re an LP, a limited partner, and you give a hedge fund a dollar.

And very much like last episode, how I explained why hedge funds run levered, the hedge fund

says, well, if I take this dollar, you know, the bank will give me some amount of leverage

on it.

But it would be much better if I was able to basically, you know, give them an instrument

like a bond or some sort of short term commercial paper.

And then they’ll give me more because they’ll believe in the quality of the instrument.

Okay, so they go in the repo market, and they basically do a transaction overnight where

they basically, you know, buy some short term commercial paper, they use it as collateral,

and then they lever it up, and then they go put it in the market.

That entire dynamic works as long as the repo function works every day.

Every night, you kind of go and you clean up your balance sheet, you look at how much

leverage you have, you look at your leverage ratio, you make sure that you have enough


And you go and you refinance your short term paper that keeps, you know, JP Morgan, Goldman

Sachs, Morgan Stanley lending to you.

But if that market seizes, when the repo market seizes, and there’s no way for you to either

buy or sell commercial paper, buy or sell short term money market instruments.

And on the other side, the markets are whipsawing up and down.

And so you’re being margin called, not being margin called, being margin called, not being

margin called, the markets start to really seize and capitulate, and everybody is just

losing enormous amounts of money.

And what I mean by everybody, it’s everybody.

It’s hedge funds, it’s sovereign wealth funds, it’s foundations, it’s central banks, everybody

is losing money.

And if we don’t figure out how to bring some calm into the financial markets, it will leave

all of these limited partners and all these other people with not just a lack of liquidity

and a lot less money than they had before, but this psychological pain of remembering

what they just went through.

And that’ll prolong what we have to deal with to get out of it, right?

So, you know, this is why I think it’s really important to understand that if we can nip

the, you know, stage zero of this problem, which is the disease itself in the bud, and

I don’t mean by curing it, and I don’t mean with a vaccine, I mean by testing and data.

If we can understand and bound it, then everybody’s psychology can move to fixing

the capital markets.

And right now, we need it to be fixed.

How close do you think we are to having that mass testing done?

And then I think we all think we’re going to have a low mortality rate.

And then go back to normalcy.

Is that something that’s happening in 10 days, 30 days or 60 days?

If you had to pick a number, the march back to normality.

David, I don’t see any action to get the testing done that needs to get done right


My mom got tested yesterday.

It seems like there are more tests out there this week than oh, yeah, Stanford opened up

the test.

There’s definitely PCR testing available now.

And you can probably get your results in three to four days on average, although some labs

are super backed up.

Yeah, my mom said she’s going to take three days or four days.


But the stuff that we’re talking about, which is the general population testing, I’ll keep

saying it.

It’s so critical that we do this to figure out how many people have already been infected

and didn’t know it.

We don’t have that data that we don’t even have a plan for.

And it’s not on the radar.

The task force in DC is focused right now on increasing the throughput and the availability

of PCR or just in time.

You know, PCR testing, blood testing.

That’s yeah, it’s all blood testing.

It’s just a matter of like, like, let me explain that the PCR test involved the RT

PCR test involves taking blood.

And then there’s basically six steps that you have to go through with it in a lab.

And it’s done on like three different machines.

And the actual cycle takes 30 to 60 minutes at 30 to 45 minutes.

So by the time you have that backlog, and you can multiplex it, but meaning you can

do multiple at the same time, and you can kind of do different things.

But generally, these machines are not highly automated.

There are new machines that are allowing us to automate more of these steps and making

them go a little bit faster and do more multiplexing.

But it is still a multi step cycle to take the blood and turn it into a test result.

Once you’ve amplified the viral RNA and tried to measure its content.

And so this takes this takes some time.

And so it’s a chemistry lab that’s doing this work.

So until we have a point of care solution, which is like a test strip or something else,

and these are technically possible.

It’s just that they’re not FDA approved.

And so they’re not getting made and distributed here.

Whereas China and Korea and Italy are using them out of and they’re made in factories in China,

even though they’re not tested and approved in the normal way.

Isn’t the plan to have these untested tests online this week?

It’s not what they’re saying.

Yeah, a bunch of people are buying them.


But it so I guess the question is, when do you think we will have these, you know,

the general population taking tests, and we get like a large scale testing like South Korea did?

I do all agree, that’s the part of the solution.

When does that happen?

Unfortunately, we’re not parallel pathing it, we’ve put all of our resources into

increasing the availability and throughput of the RT PCR tests for acute infection cases.

And as a result, we have everyone focused on this, there was some

lab work and some research departments, I won’t name them,

that were working on doing this general population testing, but they got yanked into the

getting the RT PCR scaled up, because oh my god, we’re behind the curve, we got to fix this thing.

So we got to get over this first hump.

I think once we get over this first hump, then you’re going to see people distribute and work on this.

And I think getting over the first hump is happening in the next call it seven to 10 days.

And so then it’s probably another 30 to 45 days before we get these tests

for general population testing more broadly distributed.

So call it 45 days out.

Why can’t we do this at the same time?

I mean, why can’t we parallel this?

This makes no sense to me.

And we have so many scientists and so many entrepreneurs in Silicon Valley

that are banging their head on the wall, asking this question.

I’ve done so many phone calls over the last few days of people being like,

what can we do?

How can we get these things made?

Where can we go?

And everyone’s just like, flustered.

It’s really frustrating.

Anyway, we’ve got a lot of individuals that we’re trying to kind of collect together to do this work.

Some folks are calling China today, we’re trying to see if we can get big bulk orders out of China,

we’re just going to pay for it ourselves.

And then try and get some research labs to run the, you know,

universities around the country to run the experiments for us,

using these untested, unproven, you know, not FDA approved test kits.

Have you run one of these on yourself yet?

One of these unproven tests yet?

I haven’t.

I actually, a friend of ours, I did one with video on with him this morning.

And so, you know, someone that we own.

A mutual friend of ours.

A mutual friend of ours.


And so, and then I know lots of people that have them and have used them.

And I’ve seen them and I’ve gone through, like, you know, I bought a bunch of them.

They arrive tomorrow.

Um, and so I see, uh, you know, we’ve seen, we know how these things work.

They’re actually from a reliable source.

You know, these are not, uh, we, no, no, one’s actually done the testing to prove

the specificity and sensitivity.

We’re relying on a third party, you know, test.

So we don’t really know, but.

I keep hearing they’re uncomfortable.

I keep hearing they’re uncomfortable.

What’s uncomfortable with them?

They stick it very far up your nose.

Is that what people are referring to?

Or you’re, you’re referring to the RT-PCR test.

So what you’re trying to do there is you’re trying to get a sample of living virus on a swab.

And the best place to get that living virus for this particular virus is in your nose or in your,

the back of your throat.

So they’re taking a long Q-tip and they’re sticking it up your nose and they’re sticking

it in the back of your throat.

Then they put it in a little solution that will keep the viral RNA alive.

And then that’s what they’re shipping to the lab.

And that’s what then gets.

So it’s uncomfortable to have it that far up your nose is what they’re saying.

That’s why people keep saying it’s uncomfortable.

I’ve had more uncomfortable things up my nose.

I’m sure it’s fine.

You know, it’s a Q-tip in your nose.



It’s a Q-tip way up in your nose.

Way up in your nose.

So we actually think that mass testing is a 30 to 60 day.

No, I think mass testing, if in the worst case is 30 to 60 days of what I’m imploring

anybody with any influence is we need to get this starting to happen in the next two to three weeks.

It needs to start happening in the next two to three weeks.

And, you know, this is where I would say there are a lot of other people other than

David, myself, you, Jason, the people on our group chat, buying tests for the mass population.

You know, I just want to say something here, which is it is incredible to see guys like Jack Ma

step up and, you know, do what he can to send stuff here.

But I would say that thus far, there’s largely been an inverse correlation of

contribution and wealth during all of this.

And folks that are in a position to help, I think, need to be more vocal.

You know, we all can’t just participate when the times are good.

Take advantage of the bully pulpit when the times are good.

And then when times are complicated, disappear and become anonymous.

It’s part in why I think you and I decided to just do these as often as we can.


Because at least we can think through the problem so that at least people can hear

our voices and understand that we are thinking through as much as possible what to do.

I am literally calling folks in Wall Street all the time because what little I can do to

assure them or be a market participant right now to maintain liquidity, I need to do.

Because in the absence of that participation, we’re going to just create more and more havoc.

And I think it’s important for other people who are in a position either monetarily or

through influence or both to be out there right now doing something.

You know, they should call Friedberg right now.

They should give Friedberg $100 million.

We’ll go to China.

We’ll get the test.

And we can do our own broad-based population study right now.

Yeah, I would jump on that.

Right now, looking at the statistics as of today, obviously, the total cases in China

hit 80,000 with 3,237 deaths.

They had only 11 new deaths yesterday.

And Italy, 35,000 total cases, 4,200 new cases.

And they added 475 deaths yesterday with a total death count of 2,978.

So that is just stunning what’s happening in Italy.

And it seems…

I don’t know if the trend line is it’s getting worse or not.

But Italy’s just overwhelmed.

It’s a horrific and awful situation.

They’re completely out of beds.

They’re triaging elderly people and letting them die in the hall so that younger people

who have a higher chance of surviving can actually get oxygen.

It’s just awful.

And they’re having 3,500 new cases or they’re at 3,500.

Yeah, they’re over 3,000 cases, but added yesterday.

So there’s really…

It is flattening.

But who knows if that’s because they’re just overwhelmed and they can’t do the testing.

But the deaths are something that seems to have gone down in the last three days.

We’re looking at different time series.

The number of people that died yesterday are, in fact, the number of people that died yesterday.

The number of people that tested positive yesterday doesn’t tell you as much because

the test results may be four days delayed and they may be 10 days into their symptoms

by the time they get tested and so on and so forth.

So the testing data significantly lags the infected population count

likely and may not represent much of anything, right?

So it’s very…

And it’s also hard to know what the average fatality timeline looks like.

There are published reports now out of China and Korea that start to try and specify this

a little bit.

But we are looking at different time series when we try and compare these things.

And so everyone be cognizant of that as you look at these numbers.

It’s not simple apples and apples.

Let’s move to a slightly second and third order, Jason.

I think if we stay in the disease, it’s just going to be a fucking mental quagmire.

We’re going to jump out the window.



Let’s talk about something that Mark Cuban said, which I really agree with, which is

that if we’re going to do bailouts, they can’t come where we also do things like allowing

these companies to do buybacks where CEO pay isn’t curtailed.

It turns out that the airline industry, which looks like it’s going to be first in line

for bailout, spent $0.96 of every single dollar of free cash that they had on buying back

stock, which is only used to drive up earnings per share, which is only relevant for CEO


So they don’t have the cash buffer.

They don’t have the 36 months of operating window that everybody should have.

They blew it on trying to have their earnings per share go up by reducing the number of

shares in existence.



Just so people understand.

If you can’t earnings per share, you take earnings, you divide it by the number of shares.

So if earnings can’t go up, just divide by the number of shares and earnings per share

goes up.

Lower the number of shares.


If you had a million dollars in earnings, a million shares, it was a dollar per, you

get rid of half the shares, it now goes up.

And so now you have CEO pay go through the roof, but these companies are not any more

resilient than they were before.

And so now they’re in line for a bailout.

And I think the large caucus of people across both aisles are very clear that these things

need to be wipeouts of the equity versus bailouts where folks who took advantage of the financial

system here continue to get rewarded.

What do you guys think about that?

Totally agree.

If you wipe out the equity, though, just pausing for a second and taking the other side of

the argument, I’m not saying this is the side I would take.

If you wipe out the equity, would not some of the people who would hit that pain are

shareholders from a retirement home or a retirement plan?

Like CalPERS maybe owns-

Pension funds, yeah.

Pension funds, et cetera.

So it does seem like if you wipe out the equity, you could have some unintended consequences

with equity holders.

But I think what the other side of the argument is, we’re going to have to have there be

repercussions for people running companies so close and recklessly to the cliff.

And there has to be some pain, not reward for doing that.

And a bailout is a reward for operating irresponsibly.

Is that what you’re saying, Shamath?

Yeah, I think that actually you have to wipe out the equity.

And I think the reason why wiping out the equity is important is that it overwhelmingly

does not punish the retiree who owns Boeing stock in their 401k.

Boeing has not been held by retirees in their 401ks for years as a cohort of impactful investors.

Massive, large institutional pools of money own these companies.

These are the balance sheets of governments.

These are the balance sheets of foundations.

These are the balance sheets of a very few, very, very wealthy people.

And the reality is that for the broad-based population, for the 350-odd million Americans

in the United States, how many of them do you think are really active market participants,

meaning for every dollar of value creation or destruction, how much do they actually see?

I would guess it’s less than 10%, meaning 90 cents of every dollar are nameless,

faceless organizations in a financial infrastructure.

I think the lesson we have to tell and the place we have to move to is one of

compassionate capitalism, which is that we have been so hell-bent on the use of leverage,

on the use of these financial gimmicks, on the use of accounting tricks

to enrich a few at the sake of the many.

And this is the right time where you should nationalize some of these businesses.

And when they eventually do get taken back out and floated publicly, all of those proceeds

should go back to the United States Treasury, who should then use it to reinforce social

security and Medicare and everything else.

Because we are going to run a multi, multi-trillion dollar budget deficit to get out of this.

And to just give people some context here, the US national debt is at $23 trillion,

which is $72,000 per citizen and $189,000 for each citizen who pays taxes.

And we run our spending, our budget deficit is a trillion dollars a year.

We’re going to talk about here, I think, a $2 to $3 trillion stimulus package,

which will increase the national debt load by only 10%.

So, it does seem like we can manage that.

But boy, was this a strategic mistake for us to run up the debt during good times, was it not?

It’s even simpler than this.

And I hate to say this so bluntly, but the Eurozone is going to collapse.

Japan is finished.

So, there are two economies that matter.

There’s China and the United States as of today.

And the great thing about that is in a set of two, there’s only one instrument of safety,

which is the United States dollar.

Thank God.

In that world, the United States has exceptional leverage, exceptional, exceptional leverage.

It is and it has always been the beacon, the light on the hill, etc.

Now, in a moment like this, the United States has the most ability

to reset how we think about things.

It could run $5 trillion deficits tomorrow.

It could run $10 trillion deficits because it is still the backstop.

I’m not advocating for that.

But this is where I think you need bold, decisive action and not piecemeal strategies.

I don’t think a trillion dollars is enough.

I really think that if you think about what the Eurozone will have to do and what’s going

to happen to the US dollar, we should be basically saying right off the bat at a minimum, anyone

who makes less than, you know, pick your number, a million dollars a year, every man, woman and

child, every or every 18-year-old American man and woman should immediately get $5,000.

Forget $1,000, $2,000, $5,000.

And next month, if we’re still out of business, $5,000.

And all of that does is just it’s a trillion dollars.

It’s $2 trillion over two months.

And then you add another trillion dollars and all this, you know, small business loans

and all the other things, that’s $3 trillion.

That you can deal with because we’re the United States.

And I think it’s really important to keep it in mind.

I know that sounds crazy.

Well, I mean…

Some people don’t think, oh, you know, blah, blah, blah, you know, budgets and deficits,

but it’s not.

Because everybody else is just as fucked if not more fucked.

Well, let me give you another perspective.

The GDP of the United States is $20 trillion roughly.

Let’s assume the whole economy shuts down.

Every month that we’re shut down costs us $1.5 trillion.

So if we’re going to have the country shut down for, say, three months,

we’re losing $4.5 trillion right there.

The problem is economic growth in the economy is actually a first order function, right?

So the movement of cash drives the future economy.

And so if we were just needing to fill that hole, you would need to come up with a couple

of trillion dollars and you would have the government going out and buying ice cream

cones and paying hair salons and paying for dog walkers and, you know, paying for construction

workers and paying for oil rig workers and basically employing and buying all of those

goods and services for that functional equivalent of a $20 trillion GDP.

That’s what it would take to just fill the hole.

Well, that’s if you’re assuming no economic activity.

I mean, we don’t think there’s going to be no economic activity.

Maybe let’s say it’s a third less economic activity.

The shoe, guys, the shoe that hasn’t dropped is this idea that everybody is at home working.

Nobody’s at home working.

That’s a joke.

That’s a lie.

Okay, because as David said, companies are not, you know, self-contained units.

Very few are.

Many of them and most of them operate in a very interconnected, socially dependent way

with other companies.

They’re your customers.

You are their customers.

Nobody is doing anything right now.

There’s nobody evaluating the next great SaaS tool.

Guys, come on.

And the other issue is just leverage, Jason, right?

So we’ve also got to remember that a big chunk of the economy is not just about

meaning that there’s debt and debt payments that need to be paid.

And so those income streams are now going to be absent.

And so there’s a multiplier effect.

When revenue goes down, the economic impact is actually multiplied.

And so you can’t just fill the hole.

So it becomes a very complicated, nonlinear kind of system that you have to try and fill

the holes.

And you got to find the places where cash is missing and it’s not moving the fastest.

And that’s where you got to throw the money in the first like these repo markets and so


And there’s no doubt that we all agree bottom up is the way to do this.

So if we have 330 million Americans, if you just have the bottom half, get $1,000 a month,

that’s call it $160 billion a month.

That’s only over the year $2 trillion.

So if we just did that and gave everybody $1,000 a month, that’s $12,000 for the bottom


They’re not saving that money.

They’re going to use it to spend it in the market, correct?

They’re going to pay their rent.

They’re going to go get dinner.

I don’t think so.

You think that poor people who are laid off right now are going to save the money?

Well, if you gave me $1,000 or somebody $1,000 when they’re in their house on the sixth week

of their home confinement, what do you think they’re going to do?

I’m assuming that we’re in week 10 and we’re not in self-confinement anymore.

We agreed in the first third of the program that we’re going to get there in whatever

it is, 60 days, 90 days, and we’ll be back at work.

You know what I’ve realized after wearing the same pair of jeans four days in a row?

I have too many jeans.

That’s what I’ve realized.

And you know what I’ve also realized?

That the cotton shirts that I buy from H&M are fucking perfect.

And I’ve complicated my life with all kinds of bullshit that I’ve been buying because I

thought it meant something.

And right now it means absolutely jack shit.


I’d agree with that perspective.

That’s what’s really interesting.

When you see your entire portfolio collapse, when you see this belt tightening, it’s happening

even amongst, and we have, listen, all three of us are lucky enough to be in the top of

our careers and top of our income at this point in our lives, but we all came from humble

beginnings as well.

And if the people at the top are belt tightening and saying, you know what, I don’t need to

buy a $60 t-shirt.

I’m going to buy a $16 t-shirt.

Boy, does that have ramifications across the entire economy.

And this reminds me very much of the recession.

They said luxury goods would never rebound.

And sure enough, the last 10 years, luxury rebound, luxury has rebounded massively.

Because it was not a psychological broad-based impact to people’s philosophy and framing

of how they viewed the world.

You think so?

I thought after the economic crisis last time, people did say there would never be, people

specifically said there would never be luxury goods again.

And that it was the end of people buying that kind of shit.

I’m not talking about some prognosticating analysts.

You know, the analyst is only as good as their own biases.

What I’m saying is the average person didn’t really have to internalize a broad-based impact

to their way in which they view what’s important in their life.

This touches everybody.

And I think that there is an opportunity for us to really recalibrate what’s important.

I think conspicuous consumption is unimportant.

You know, helping each other is important.

Taking, you know, unnecessary vacations because it drives your Instagram follower feed is

fucking stupid.

Making sure that we can contribute the incremental dollar we have so that other people could

get tested and get back to work.

That seems like a better use of your money and time.



No, go ahead, David.

Get in there.

I think that there, yeah, there’s just great perspective setting that’s happening and is

going to happen broadly across the economy.

We’ve been fat and happy for a long time.

And at least a subsegment of the population has been.

But we also have it really, really well, really, really good here in the United States.

There’s a website I just recommend everyone check out and spend some time on.

It’s called Dollar Street.

And you can go to slash dollar dash street and check out the website.

It is unbelievable and it is probably my favorite website on the Internet.

And Dollar Street is a project of Ola Rosling’s wife.

Ola is the son of Hans Rosling, the great visual economist who told people stories with

visuals on like the world and income and population and growth and so on.

And she went around and she photographed families all over the world and showed how much money

they make each month and then showed all these common household activities and goods, brushing

your teeth, the oven.

How do you what kind of clothes you have?

What does your closet look like?

What do you sleep on?

And it’s pretty striking that half of the people don’t have a toothbrush.

A quarter of people use mud off the floor to brush their teeth.

Most people don’t have a bed on planet Earth, right?

Only the top 1% have a kitchen, right?

I mean, there’s like these amazing statistics with photos that really help kind of illustrate

this point.

And I think that I’m not saying that the extreme demonstration of humanity and the

distribution of wealth, income and prosperity and humanity is as relevant here.

But in all these photos, everyone’s very happy and they live a happy life.

And there’s a great reset happen that’s happening that’s underway.

Happiness eventually finds itself when the delta goes from being negative to being positive


When the delta is flat or the delta is negative, people are getting into a worse condition,

things are bad.

So we’re going to bottom out here.

And then we’re going to, you know, no matter what state we find ourselves in, we’ll very

quickly find ourselves back in a state of happiness.

And we’ll all reset with respect to Chamath’s point on, hey, maybe I don’t need all these


Maybe I don’t need all this and this and this.

But there’s certainly like critical, you know, needs that people have.

And it’s going to be pretty apparent pretty quickly, you know, how the economy and people

are going to adjust to this new world.

But there’s going to be an adjustment.

The part of this that I think is actually constructive is I do think that we’re going

to swing the pendulum back towards nationalized economies and away from global economies.

Because I think this is a way that politicians all around the world, they’ll characterize

it in different political language.

You know, some people will call it, you know, sort of like American exceptionalism if you’re

on the right.

If you’re on the left, you’ll describe it in much more social terms.

But they all lead to the same outcome, which is that what we have seen is that in the push

to globalization, we have created too much brittle infrastructure that doesn’t work.

And that we are not resilient enough.

Man, we are hyper efficient and we are just in time and all of that is great and everything

is super cheap.

But when we really need infrastructure to work, whether it’s tests or whether it’s the

government or what have you, it just doesn’t.

And I think resiliency will force us to be more nationally attuned.

And I think it’ll be the right thing.

It’ll cause all governments to think about their own food supply differently, to think

about their own supply chains differently.

It’ll demand companies to be less profitable if it means that they can withstand these

kinds of shocks.

And it’s one thing to say that we could never have modeled, you know, sort of like this

two or three sigma event we’re dealing with.

But after the fact, it’s no longer a two or three sigma event.

And governments have to now internalize this and companies have to internalize it.

We are not going to act the same.

Well, I mean, just-

Borders will be different.

Think about the iPhone and obviously medicine and respirators.

We’ve been talking about these things over the last couple of weeks as this happens.

If we do have a breakdown in relations with China, if we let’s say we stop importing stuff,

what would happen to Apple, the most powerful and valuable company?

How would they ever be able to make iPhones again in the United States?

Are they capable of making them?

No, it depends.

It depends on who you’re answering it for.

On behalf of the U.S. customer, Apple should probably be forced to bring a lot of their

production capacity back into the United States.

They should find a diversified global supply chain so that you have multiple suppliers

in many countries in the world.

But they should rely more on America.

It will be less profitable, but it’ll be okay.

And it’s the right thing to do.

Yeah, it’s $100.

What I read in the estimates was an iPhone would cost 100 or 100 and change more to make

in the United States.

But if they did, they wouldn’t have this supply chain issue.

They make $500, $600 per iPhone anyway.

Well, by the way, the real outcome is that, you know, and we were going to do this anyways

after this, which is I don’t think people are lining up to buy, you know, kind of irrelevant

products anymore in a way where we’re just slavish to things.

I mean, I think it’s important to ask ourselves, like, this is probably the most

socially impactful world event the globe has had to deal with since World War II.

And it’s probably really important to talk to somebody you know.

And if you don’t know, you can document and you can easily find the documents of people

who survived the Holocaust or lived through the bombings in London, etc.

Their mentality was different as a result of it.

It changed their behavior in very positive ways, right?

It was like the great advances in humanity happened after that.

It was refocused.

You’re less focused on things that are not core or critically important.

And Friberg, what do you think about what this is showing in the health care system

and the holes in the health care system?

The fact that we couldn’t mobilize to deal with this after we did scenario planning about

this after SARS, we’ve done scenario planning.

We’ve had, you know, I sent to our group list the link of Bill Gates talking about

this four or five years ago and how this would be an issue.

I sent a couple of links to people writing about closing the wet markets in China

after the SARS outbreak.

I’m curious, David, what you think the holes in the health care system are that need to

be fixed and what we can learn from this, because I think we’re now coming into the,

you know, as we as we got through the virus, we got through the economic second order effects.

Let’s talk about positively what we’re going to learn, because I think that’s what

Schmott’s getting at, is that there’s a personal recalibrating of what matters,

maybe morality, ethics, focus in our lives.

David, what can we learn from this on a health perspective?

What should we do when this ends?

There’s no easy answer to that, right?

Nationalized health care systems in some countries, you could say they’re great.

My brother, my family lives in London.

I was talking to my brother yesterday.

And, you know, they tried to go down and get tested for a tooth infection yesterday.

And, like, it’s just brutal dealing with NHS in the UK.

You know, people aren’t telling great stories about NHS.

And they’re not saying, Oh, my God, it’s the best health system.

I love it.

Health care is hard.

People want personalized care.

They want a lot of attention.

There’s only so many doctors, there’s only so much beds.

When you start giving people good care, it costs a lot.

Solving this stuff and the R&D dollars required to enter markets

is so, you know, so extraordinarily high,

you end up charging a lot for products and services on the back end.

It’s a very complicated system.

And there’s no simple answer.

I do think that we’re learning and realizing pretty quickly that the US

and we’re going to we’re going to do some postmortems on this,

obviously, as a world as a society.

One thing that’s clear is the Chinese response,

in part was driven by a lack of bureaucratic red tape,

and an ability to manifest action,

and an ability to produce and distribute drugs

and produce and distribute tests without needing approvals.

I think that’s something that’s going to change in the United States, it has to

be regulatory burden on health care companies on pharmaceutical companies

on testing and diagnostics companies is extraordinarily high.

But the objective in the United States has been do no harm,

which means don’t let anyone die through the action.

But it may be that many people are dying through the inaction.

And I think we’re going to maybe see a big shift in policy and allow

right to try laws that are going to be federalized.

So you know, states can make decisions about right to try laws and doctors and

patients can try drugs on their own discretion without having a federal

oversight body.

Perhaps the same will happen with diagnostics and testing.

And, you know, with respect to what the what services the government provides

and doesn’t provide, you know, I’m not sure there’s a lot of data on either

side here that nationalized health care systems do and don’t work.

So it’s very hard to say what the right solution is, is here, you know, and I

don’t think that you want to try and take R&D and put it in the government.

I think that’s a terrible idea.

I think that there’s a financial and a capitalistic motivation to find discover

molecules, get them tested and prove that they have a positive effect in human


And we need to move this towards personalized medicine, which actually

changes the construct, and probably increases the cost of doing this about


We’re already seeing this with stem cell therapies and CRISPR based gene

therapies, is there so much more expensive in order to get that stuff moving

faster, we need to remove the regulatory burden and allow companies the ability

to move quickly and make this stuff more affordable.

The more we the more barriers we put in front of companies, the harder it’s

going to be.

And if we try to do this with a top down approach with the government deciding

what to do R&D on and what not to do R&D on, we’re going to be in a fucking


So those are some of my points.

Yeah, I would say as well, I think that there has to be, you know, after the

great financial crisis, we, we smartened up about what the banks were allowed to


Unfortunately, we didn’t really spartan up about what other financial

participants were allowed to do.

And a lot of what we’re seeing here is our excesses around leverage and credit.

And I think we need to fix those we need to tell companies that, you know, you

can’t put out certain amounts of debt, we need to be a little draconian actually

to reset this properly.

We need to tell, you know, market participants that you can’t run 10 or 13

times levered, you can’t take $100 billion and make it act like 1.3 trillion and

then blow a 50% hole in it.

You’re just not allowed to do that.

I’m just sorry, but nobody should be allowed to do that.

Okay, so if we look now on to politics, which is the least fun to talk about in

many ways, but just on international relations, I think it’s worth discussing.

There’s been a bit of a debate about what we call this virus and the

relationship between the United States and China.

China went on a little bit of a propaganda campaign the last couple days

saying the US that the US created the virus.

Trump has now been trolling them actively talking about the Chinese virus.

I used the other day the Wuhan virus, I didn’t realize that that people consider

that racist to say Wuhan virus, because we called it the Spanish flu and we

called it the German measles.

But I guess people are particularly sensitive to this topic now.

And I think there’s a critical issue here that I don’t understand why we’re not

talking about this, but wet markets specifically trade in exotic animals.

These viruses are contained in certain animals like bats, which are, you know,

together in flocks of like thousands and the viruses.

And then these animals in wet markets, people don’t know what that is.

You can you can Google it if you’ve got if you’re not squeamish.

But essentially, in Chinese culture, as I’ve read it in The Wall Street Journal

and in the World Health Organization’s advisements to cancel and to shut down

wet markets, then there’s unanimous agreement on this from the health

officials that these have to be shut down.

The Chinese culture says we don’t want to see meat in a package because we

believe it’s counterfeiting, it’s been frozen and it won’t be as tasty and it

won’t have the same nutritional properties.

So you must slaughter the animal in front of us, at least for some

significant percentage of the population there.

It’s a tradition.

And this is where these viruses have uniformly been generated from.

And now we have the president and China going at each other.

And we have to have this very delicate conversation, I think, David, and I’m

curious as to your position on this, because it’s now hitting like a racial

and, you know, in a in a bias against a certain culture is how this is being

framed by the left, which is just maddening because it’s actually a


It is a cultural issue that has to end, just like our cultural tradition of

shaking hands obviously needs to end or be deprecated in some severe way.

So, David, maybe you could talk a little bit about what you think the outcome

here is on a political basis in relation to those wet markets and China

and US relationships.

Look, I think China suffered heavily.

I’m sure they’re good.

I’ve heard they’re going to shut down the wet markets.

But all I know is what I’ve read on the internet.

So, you know, I think they’re fucking awful and stupid.

They should be shut down.

Cultural, you know, dependence aside, there’s another issue in China.

Apparently, there’s a huge amount of the impoverished communities in China are

encouraged to actually grow and harvest rats.

I don’t know if you guys are aware of this, but there’s a bamboo rat business

where you grow these rats inside of bamboo and then you kill them and you

sell them.

And so the poorest people in China make money growing and selling rats, rat


And the Chinese government just in the last week has told them to stop, which

actually is a huge effect on many millions of families who are growing

these rats.

So there’s an economic effect, but it’s obvious that it’s a terrible health


But I’m not sure that getting rid of the wet markets truly eliminates or

eradicates the risk of a new viral outbreak, right?

Like I think I mentioned to you guys on our on our text stream the other day,

you know, 40% of the bacteria in the oceans are killed every day by viruses.

This is a great stat that Jennifer Doudna uses in her book on the discovery


And there’s 10 to the 28th bacteria in the oceans.

So half of them, they all get killed every other day, every two days by


There are viruses everywhere.

They are going to emerge.

They’re going to hit us.

The issue isn’t necessarily where the source of the virus is coming from.

It’s just that we have to have better testing and diagnostics and

preparedness and treatment plans and an ability to motivate and mobilize

ourselves to address pandemics like this in the future.

With respect to the relationship with China.

I’m not an economist.

I’m not a trade guy.

I don’t really know the nature of the relationship.

So I’ll leave that.

No, my thought my thought on this is that this is not a question of, you

know, wet markets or no wet markets.

I think this is a question of if you are an anchor participant of

globalization in the global economy, is there an expectation to have a

common set of behaviors, the lowest common denominator set of behaviors

and hygienes that everybody signs up for to be a fully fledged global

market participant?

Now, the pros of that is that maybe everybody decides to be a participant

and to have lax borders and, you know, free trade agreements that there

can be no wet markets and a whole host of other things.

We all agree on, you know, whether we are OK with shaking hands or maybe

it’s namaste from now on, or maybe it’s bowing.

The problem with that on the other side is that all of a sudden you create

a monoculture that strips away the individuality and the richness of

every country.

And, you know, I kind of think that like, you know, we could have

attacked wet markets when HIV started to spread because it was, you know,

as we understand it, it was the emergence of the bushmeat and raw

bushmeat and the killing of monkeys that had this virus that was then

passed to humans, et cetera, et cetera, that started the HIV epidemic.

So these things have happened before and it’s not as if we shut down,

you know, all of those markets in Africa.

They still exist in some form or fashion.

And as David said, there are huge economic ramifications to having

these cultural edicts.

And it’s very difficult, I think, for an American to demand China to do it

when we’re not willing to step up, just like in other ways, you know,

countries can demand us to lower our carbon emissions and we say we’re

not going to do it.

So there are implications and very difficult issues all over the place.

But I do think in general that if we move towards a more nationalistic,

economic dependency, interdependency, I think that it’s probably the right

thing to allow more resilience to exist and for cultural diversity to

continue to compound.

Because the world of just in time efficiency, I think we’re learning now

was the wrong optimization for the world.

We need to optimize for resiliency.

And that means some amount of inefficiency.

It means more mom and pop shops.

I think that that’s a good thing.

It doesn’t mean everything is Amazon Prime now and Walmart.

I think that’s okay.

It means that the iPhone is a little bit more expensive, which means you

upgrade every other year.

That’s okay.

It means that companies like Google and Facebook and others are less

profitable in the short term.

That’s also okay.

All of these things are okay.

We just need to decide.

And now we need to move forward.

When do we what’s our best estimate of when people will be allowed to go to

a restaurant?

I think it’s, you know, again, getting back to what the people listening to

this podcast probably care about most as we wrap up here in the in the second


And thank you for tuning into the all in podcast.

David Freeberg is with us from what’s the name of your incubator again?

David, the production board, the production board.

Previously, and Chamath Palihapitiya of Social Capital


When do we suspect people will be allowed to go back to work in the Bay

Area in New York?

When will people be able to go and have a meal in a restaurant?

Do you think this is May, June or July or August?

When will we be out of quarantine?

I’m going crazy.

I’ll give you my optimistic and then we can give the final word to David.

Here’s my optimistic view.


I’m dying.

I think that the emerging evidence will soon be hard to ignore that we have a

denominator problem, which means that we’re not testing enough.

And that these IgG and IgM tests will come online at scale in the next two


And that we will establish demarked zones within cities and towns to

green zones, if you will, where people who are either negative or who have

already gotten it and have tested positive for the antibodies will be

allowed to interact.

So I am telling you that it’s within six weeks from now.

Six weeks from now, we’ll be in restaurants and we may have to show our

papers to somebody to get in or have our foreheads tested.

No, no, you just have to show your test result and have your passport or

driver’s license.

Yeah, I mean, I know this sounds crazy.

I would much rather go to a restaurant in the next six weeks where I had to

show my papers, a little bit draconian, sounds a little dystopian.

I would much rather go back to Taishoken and have my goddamn ramen and

show my papers and know everybody else did and then have everybody go through

the, you know, a very simple temperature test on their forehead like I give to

my kids when they’re sick.

David, you’re taking the over or the under at six weeks for when we’ll all be

at Taishoken having a ramen.

I’m taking the under, I’m taking April 7th or 8th.

April 7th or 8th, and we’re recording this, I think, on the 17th or the 18th,

I think, and so you’re saying we’re just going to be whatever, 20 days out.

I, too, am taking the under, but barely.

I think it’s, I think we’re four or five weeks.

David, David, explain the under case just so, and we can end on that, but

what’s the under case because that’s a great note to end on.

Yeah, so as we see the number, if you look at the UW virology website, and

I’ve shared this with people on my Twitter account, which I started doing

yesterday, which is at Friedberg, I’m not sure I’m going to stick with it.

I don’t know if I have the stomach for it like you guys do, but basically

they’re showing, you know, steady caseloads of positives per day, which

again, it’s delayed.

And if you look at the ICU availability, the emergency room wait time data,

which I think are better leading indicators of where we are in the cycle.

New York is about two weeks behind us.

New York is going to be fucked right now.

New York is going to be fucked for a little while, but I do think that the

West Coast and with some travel restrictions is going to be able to

reopen for business, probably around April 7th or 8th, because we’re going

to see a dramatic decline at that point.

And we’re going to see a lower fatality rate than everyone’s predicting.

And we’re going to start to have measures around washing your hands and

masks because you can’t keep stay shut down for that long without literally

never being able to open again.

So I’m kind of balancing the economic need against what I think the data is

starting to show that hopefully we are seeing the second derivative turning

negative now.

And so we start to see a slowdown in new cases.

And then we see a reduction in cases.

And I think that, you know, there’s a huge distribution on what that model

can tell you.

But I feel really good about kind of April 7th or 8th, us getting enough

confidence that, okay, it’s safe to go outside again.

And by the way, if we don’t open up for fucking business, everyone’s done


All right.

So that’s where I get the number.

And most importantly, when do we feel comfortable playing cards again in


Because I’m starting to think that I want, I know this sounds crazy, but at

this point, if the three of us were positive and we’d gotten through it

already, I would like to know that.

I think the entire poker group needs to get tested.

And the best possible scenario is that we’re all inoculated.

We’re not carriers anymore.

We’re blockers in the system.

And we can get back to playing cards because I am, and I’m being a little

facetious here, but the chances are we might all have it, right?

I mean, it’s a possibility.

I am going bonkers being at home.

I am not designed for social isolation.

I’m going crazy.

Timoth, do you like it?


I mean, I’m a pretty isolated person as a matter of course, anyway.

So other than work and, you know, my doing this or TV, I’m always at home.


And, but the one thing that I cannot live without is Monday pokers.

And I’ll really tell you why it’s like in a moment like this, here’s what I’ve realized.

I’ve realized just how much extraneous stuff I have in my life, how much I don’t need it,

how much I’ve occupied my time with things that are just not important.

And it’s really allowed me to clarify like, you know, working on the next deal, not important.

Thinking about my status in society, not important.

Thinking about what other people think of me, not important.

My health, important.

My family and their health, important.

And my friends, I love my friends.


And we’re very blessed.

I mean, I love the both of you.

That group saved me in some really tough moments in my life.


And I hate not seeing you guys and being able to, you know, just touch and feel you once a week.

It’s that to me is brutalizing.

Just to be clear, this is a poker group.

When we define touching and feeling, we’re talking about poker chips.

It’s fine.

We make man love.

We make man love over the poker table.

And that’s how men commune is by just shifting large amounts of money across the table.

I miss you guys too.

I’m going crazy.

I’m not going to be, I don’t think like you’re going to see me after this said and done.

I can’t take seriously buying things.

I just think it’s like, what the fuck is the point?

I really take seriously that we need to fix the social infrastructure of the United States

and in part, do what we can to help as many people as possible.

All right.

They have the folks Chamath Friedberg, 2024.

Hey, Dave Friedberg.

Love you both.

Thanks a lot for doing this.

Chamath, thanks a lot for doing this.

Follow at Chamath, follow at Friedberg.

If you want to help out the podcast.

Well, there’s no ads to click on because Chamath wants me to go broke on this.

No ads, but I will say if you write us a five-star review on iTunes, I guess that means we’ll get

indexed and follow Friedberg, follow at Chamath, follow at Jason.

We’ll see you all next time.