All-In with Chamath, Jason, Sacks & Friedberg - E73: Late-stage VC markdowns and mistakes, market strategy, Ukraine/Russia update with Brad Gerstner

Hey, everybody. Hey, everybody. Welcome to another episode of

the all in podcast. We have a new bestie yes, the filling in

for the prince of panic attacks. The Queen of quinoa, the

sultan of science can’t make it this week. I think after his

incredible performance last week, and him trending on tiktok

with his incredible insights over sadly, the the potential

famine that could come after this Ukraine war. He decided he

would take a week off. I think it’s just a little too much

attention for him. So we have a bestie guestie today. Yes, the

shaman of stocks is with us. He brings the equanimity to

equities. You know him. He’ll bring that namaste to your pay

day predictions are the anti Galloway. Brad Gerstner. Welcome

back to the program.

Thanks for having me. Namaste.

And also with us, of course, the rain man, man himself. He’s

bitter on Twitter. He’s brawling on Colin. He’s the Bill of

Rights from Pack Heights.

Sacks, boy, you’ve really outdone yourself today. And the

prince of Palo Alto, the overlord of the Overton window.

Shema Polly hoppity. Oh,

Jake, are you the stinker of stonks? Oh, God, relax. You

don’t leave the comedy to me. All right.

Rain Man David

we open source to the fans and they’ve just gone crazy.

It’s been a pretty, pretty crazy couple of weeks here. We are

not a political show here. But obviously, when world affairs

become acute, as they have, we cannot ignore the war that is

occurring in Ukraine. We’re going to talk a little bit

about markets. I think we’ll start with those with Brad

Gerstner here, the SAS market, and the index. Why don’t you

walk us through this chart here? Because everybody’s

wondering what’s happening with the markets given the war, given

interest rate hikes, and the repricing of stocks. I don’t

know how you would look at what happened in November, December,

January, Brad, how do you contextualize

certainly a repricing is certainly a repricing, but I

think of it more as normalization. Okay. Right.

Chamath was saying it November, I was I was on CNBC talking

about the fact that when, when we got to a post COVID world

rates, we’re going to normalize go back to where they were in

January 2020. That was around 2%. And the growth multiples

would have to come off of this historic Red Bull high that we

were on during most of 2020 and 2021. So we were 30 to 50%,

depending upon the index above the five year average growth

multiple pre COVID. So that just needed to happen. Like we should

be celebrating in one sense that that happened, because that

means that we overcame a global pandemic. The downside is we

couldn’t play with artificial money, 0% rates, trillions of

dollars, you know, of congressional and fed injection

in order to prop up valuations. And when it happened in and of

itself, that was going to be extraordinarily painful. What I

didn’t anticipate and what most people didn’t anticipate is that

on top of that, we’re going to have increasing fears of hyper

inflation, not just getting back to normal rates, and that

we were going to find ourselves in the middle of an incredibly

devastating war in Ukraine, those two things added to the

uncertainty, the risk premiums added to uncertainty around

future inflation, the dot plot exploded higher and expectations

of forward rates went higher. Now, why the hell does this

matter? It matters because when you take you know, if you’re

looking at that chart, the five year average, the 10 year was

two and a half percent, like we all got comfortable investing in

this period of time, the markets hate uncertainty, we had a

predictable way for us to estimate where we thought our

wax should be in our discounted cash flow models. All of a

sudden, that was thrown into thrown into the air. Oh my god,

look what we got going.

Look at this. Oh, yeah, never compete with babies or animals.

No chance. No chance. Hey, this is Talita. Talita. Look at this

little look at this little butterball. Oh, my Lord, look at

that. So so good. Saks. That’s called a child. It’s a you have

three of them. Those are babies. And what you’re seeing there is

affection from a father and a child. Look at how cute this

little baby is.

Sax is like, well, this is taken from my time. Get that baby out

of here. So cute. So Brad, I guess what everybody wants to

know now that we see this repricing occur is what do you

think is going to happen in 2022? And then into 2023?

So we’re now multiples are now below the five year average for

software. We’re about at the five year average for internet.

We’re well below the five year average. I said on Twitter that

the rate path last week became a lot more certain the Fed said

something last week that I think is still not well reported well

understood. The Fed said at the end of the year, we’re going to

have 2% negative real rates. They said we expect inflation

exiting the year to be 4.3. And we expect the 10 year to be

around 2.3. The reason the market exploded higher is

because under the Fed’s prior protocol, a 4% a 4% inflationary

rate would mean that rates would have to go to four and a half.

And if you take rates to four and a half, then growth

multiples need to be about 30% below the five year average.

Okay, so as investors, whether we’re investing in mid stage

venture, late stage venture, whether we’re investing in the

public markets, like we need to know what exit multiples are. And

it was bad enough that we had to bear the drawdown coming off of

you know, this, this Red Bull high of 2020 and 21. But if you

think we’re durably going to an inflation rate of 3%, or 4%, and

an interest rate environment of 3%, or 4%, then you simply have

to adjust what you’re willing to pay for growth assets. And so as

I look ahead, right, we don’t, we don’t know with certainty.

The question is, what’s the distribution of probabilities?

And, you know, just this morning, Citi, Goldman Sachs

raised their exit year, their their exit 10 year for 2022 to

2.7%, and took it as high as three and a half percent for

  1. I think it’s going to this period is going to be marked by a

lot of uncertainty around inflation and rates till we have

more clarity. And what that means is allocators of capital

are going to allocate less to risk assets, and they’re going

to pay less for risk assets. But you know, listen, if I look out

over the 5-10 year horizon, I don’t believe in global

stagflation. I don’t believe that we’re in this new

hyperinflation environment. But we’re going to have to get

through this next 6-12-18 months. And it’s going to be

filled with a lot of volatility and a lot of uncertainty.

Jamal, what rings most true about what Brad just said? And

then what can you add to the prediction for this coming year?

I mean, I don’t know what the prediction for this year is. I

think the markets are mostly moving upwards for the short

term. And then I think volatility is going to come

back. I’m just trying to find good long term businesses and

just kind of close my eyes and not have to look at these stock

prices every day. And as long as I can manage my own psychology,

I think I’ll be fine. And I think that’s probably the thing

that most of us need to be doing. The interesting thing

about Brad said is that the implication of that is that it

means that late stage venture is pretty badly mispriced.

And I think you’re going to have to knock these things back by

50 60%. I think you saw the first real big movement there

yesterday, which was the Instacart print, right, we went

from a $40 billion valuation to I think it was 24. If you look

at from February of last year, which was really the high for

all of us, right, that’s when we all thought we could do no

wrong. You know, the comps to Instacart are off anywhere

between 50 and 70%. You know, takeaway is off 70%. Uber is

down 60% DoorDash was down 55%. So these are some big moves. And

so, you know, it made sense that Instacart had to get kind of

like reset. The problem that it has is that it’s now the nth

player trying to get public into a space with many players who’ve

guzzled up a lot of capital in a low rate environment. And so if

you think about company building, this is why

entrepreneurs have to pay attention to this stuff. You

want to get money when money is cheap. But the problem is you

can’t control that timing. And so if you can’t control your

operating margins and your profitability, then you’re

going to have to go and basically pay somebody an

enormously high price to get their money. And I think that’s

what’s setting itself up to happen in a bunch of these

markets. I think enterprise SAS has always claimed long term

profitability. The thing is, when you look at sort of like

the real long term companies, they’ve built some enormous

moats, right? Like if you look at a service now or a Salesforce

at the high end, and then there’s a crop of a couple of

companies like Palo Alto networks, who are the next ones

coming after who seemed like behemoths in the making. But

everybody else, I think people have to really question like

where the long term profitability going to come

from. And so if that’s true, then the late stage private SAS

companies are in trouble. Similarly, in places like

delivery, where again, you’ve had a bunch of comps come out,

they’ve been curing in the public markets for years, you

know, Uber, DoorDash, there’s a couple of these behemoths

getting built DoorDash being the most obvious. And then there’s

a bunch of more kind of question mark business models, including

Uber, which is not really hanging together in the public

markets. So I think the real question for entrepreneurs is if

you have the nth business, nth being not the first, not the

second, but you’re the seventh or eighth or 10th trying to go

public, and all the seven or eight before you are gas

guzzling machines, you’re going to pay a very heavy price to get

public. And I think that that’s the reckoning that we’re

starting to see. So I’m really interested to see how that

plays out. You know, the Instacart valuation could easily

be cheap at 24. But it could just as easily be overpriced by

another $10 billion, depending on how people think about who

the last buyer of resort is in the public markets.

Saks did Instacart missed their window to go public. And then

what does this say about the backlog of hundreds of

unicorns that the venture community is investing heavily


Some of them are probably gonna have to IPO at down rounds. I

think that’s sort of the takeaway.

Explain what that is to to neophytes.

Well, it just means that they’re gonna have to go public at

evaluation lower than what the last private round was. So all

of these late stage private investors who assumed that they

would always make money investing in a company in the

last private round before when public they thought that was

sort of an automatic gain and arbitrage and it’s not and

there’s going to be some disappointment there. Brad’s

been sharing these charts with me since I guess what December,

Brad, where the charts basically show public SAS valuations as a

multiple of ARR. And then he’s got a similar chart for it sort

of the internet companies that sort of nonsense internet

companies as a function of revenue. And we’ve been looking

at these charts. You know, once Brad showed these to me, again,

four months ago, it became so obvious what was going on, which

is that valuations were reverting back to the

historical mean, if you look at, you know, during the two year

period during COVID, the they the multiples had risen to some

insane level, right. And because of all the liquidity that had

been pumped into the system. So as soon as you saw that the

charts that way, you could just see where things were headed,

which is back to historical averages. Now we’re below those

averages, partly because no, no, no, no, not really, the multiples

are, can I summarize Brad’s chart, because it is extremely

elegant and simple for the layman to understand. So here’s

the layman’s understanding of Brad’s analysis, technical

analysis and, and and balance sheet and P&L analysis, which is

accurate. When rates are zero, typically people are willing to

pay eight times revenue for a company. Okay, so if you’re

generating 100 million revenue, top line revenue, you’re

generating $100 million revenue in your reasonably high margin

reasonably high growth software business, that’s worth $800

million in the public markets. For every 100 basis point

increase in rates, you decrease the valuation between 15 and 20%.

So if you think rates are 2.75%, the price is somewhere

between 30 to 40% cheaper than what it was when rates were at

zero. So if you go back and you look at every TechCrunch

article, and every Bloomberg article, and every information

article, and you look at all those headline valuations, when

rates were at zero, we all just said rates are going to be

somewhere between, you know, 2.5 to 3% at the end of this year,

at a minimum, you have to haircut those things by 30 to 40%

steady state, meaning the company is continuing to execute

on all on all cylinders. If they have a downtick in their

performance, then it increases that discount. If rates go

higher, it increases the discount. But the basic way to

think about this is for every 100 basis point increase in

rates, you got to downtake that valuation by 15 to 20%.

And I think, you know, just to be fair, I think, I don’t think

there’s a daylight between you and sacks on this, what, what’s

actually saying is the 40% giving the numerical rule that

I think you’re right, that is the, that is the correlation.

And so this idea, listen, we all get paid to find good companies

and avoid bad companies. That’s generally what we get paid to do

we’re decent at it. All of a sudden, in fact, most

fundamental investors say, Hey, I’m not a macro expert. I don’t

know where inflation is going. I don’t know where interest rates

going, I just find good companies. We’ve had a decade or

longer, where that was okay to do that was easy to do. Because

guess what, inflation was at two. And we had two and a half

percent 10 year, when all of a sudden you have massive

volatility in that it’s not acceptable as an investor just

to say, well, none of this matters, because it does matter.

Right price matters, because what you can exit for is

essential to the game. And there were a lot of people invest in

2013, 14 and 15. When when the cost of entry was low and

exited, when the cost of entry was high, multiple expansion

hides many sins, right? And now just the opposite is happening

in a dramatic and historic way, in that multiples were higher

than they’ve ever been caused by a global pandemic. And the exit

rate for a lot of those companies, right is going to be

very painful. I think that sacks his point about downround IPOs,

I don’t think this is the exception, David, no Reddit, I

think the vast majority of companies that come public in

the next 12 months are going out below their last valuation.

Yes, the Reddit rumor was that Goldman put a $10 billion price

on the cover. And that, you know, it effectively been cut in

half. Again, these are all rumors. So these could

completely not be true. I don’t I don’t have any knowledge one

way or the other, to 5 billion. And that may actually end up

being too expensive. It just depends on where the market is.

Well, just so people are clear, when investors, sophisticated

investors make these late stage valuations at very high

multiples, like they have, they do have some downside

protections. In other words, they cannot lose more than the

money that was put in when this thing IPOs or they may get

kickers of additional shares. So maybe

these IPO No, no, in fairness, you’re talking about something

very important. But they’re very rarely in these high price

rounds, because most of these high price rounds are in go go

companies where all of those rights get stripped away. This

is why I do think Jason, what you’re actually bringing up is

in the last innings of a bull market, you have incredibly

irresponsible behavior by a bunch of these investors. And

that’s also going to get exposed as well. So Jason, what you’re

talking about is what’s called an IPO ratchet. Yeah, which

means I’m giving you this money at this price. But if you can’t

IPO at this price, then you’re going to give me an equivalent

number of shares that makes me whole, right, right. So it’s as

if I am, I am indifferent to what price you IPO at, that’s

extremely dilutive, to really one really important class of

individual, which is the employees of the company. It’s

also really dilutive to other investors who’ve come in before

them. But Jason, you’re probably right, to the extent that there

were IPO ratchets, they’ll get triggered. But I think in many

of these go go companies, and you know, Brad and sacks can

confirm, but I see it, all those rights get stripped away. It’s

like coming at this crazy price. Yeah, we’re not negotiating it

no governance, you know, get get our logo on your fundraising

deck for the next round. And so this is the price of the

capital. It’s been a little bit of sloppy behavior, just so

people understand this, if the Reddit valuation was 10 billion,

somebody put in, you know, 100 million in this late stage

round, if it came out at 5 billion, they would get twice as

many shares to make up for that difference.

That doesn’t exist in the case of Reddit, Jay cow, you know, as

fidelity who led that last round, so they’re going to be

price takers at whatever price the company comes public. What

does that mean? Explain that price take? So you know, if they

come public at $5 billion, and you put in $100 million, your

stake is now worth 50 million. Right, right. So you lost,

didn’t they have the discipline to put in these protective

provisions, ratchets, etc. What happened in the market

to Chamath’s point, they haven’t really existed in most deals for

the last five years. Right? I go back to 2000. I think 2007 2008

kayak raised money with a ratchet and their last pre IPO

round, it prevented them from getting public for three or four

years, that dilution overhang was a significant impediment to

getting public. So, you know, listen, we all know that Groupon

raised at $20 billion went public in a year laters were 2

billion. I mean, it’s not as though this hasn’t happened

before. But yes, people people got a little lackadaisical. I

just wanted to I just want to say one other thing, though,

because multiples coming down as a problem. What this really

reveals is the importance of stock and company selection.

Right? Because if you are a shitty company with an unproven

business model, right way out on the risk curve, okay. And you

had a super high valuation last year. And you don’t, you know,

there’s a good chance you never grow in it grow into it. You

never get back to that valuation example, your example, your

growth will decel. Well, give us an example company. Okay.


In the 15 minute delivery space in Europe, go puff. You know, I

would say go puff is one of the best of them. There are a lot of

startups that got funded with billions of dollars in Europe,

unproven business models burning tremendous amount of cash,

right? Like, I don’t know why they need to exist. I don’t

think they’re going to get funded. Right? Maybe one or two

of them do. But when you have DoorDash and Uber that are free

cash flow positive, that have strong brands, and that can

redeploy those profits back into compete in those markets think

it’s very tough.

neobanks are another example, neobanks, you know, the number

of neobanks that have been funded at exorbitant valuations,

where, you know, the problem is all of these financial services

companies are essentially an arbitrage on rates, right? When

rates are zero, they take that money at 0%. And then they can

go and execute a business model, you know, and sell that money at

1% and take the difference. But when their cost of capital is

two or two and a half or 3%, the whole business implodes on them.

So you’re going to see a bunch of these financial services

companies get under pressure. Another example, Jason is like

all the low end, you know, bottoms up SaaS companies. And

the reason is because they spend their time inside of Google and

Facebook doing customer acquisition and managing this

very intricate dance of LTV to CAC. And when all of those input

costs go up, their business implodes, because you can’t

raise rates faster, or you can’t raise prices, I would say faster

than the input costs are, and then all of a sudden, your unit

economics blow up. And in all of this, what is the salvation in a

moment like this? It’s being healthy gross margins, healthy

contribution margins, and a and a realistic path to

profitability, which means being EBITDA positive this year, or

within the next two years,

said another way, if you’re profitable, you’re not going to

go away.

If you can’t, if you can’t show that you’re, you know, to use

the famous Paul Graham adage default alive, in a moment like

this, then you are a price taker, which means that you will

have to pay probably a very high cost of capital to raise

incremental capital to support a fundamentally fragile and non

resilient business model is the issue here, sacks, that when you

see the getter gorillas zap all these instant delivery companies

get funded at exorbitant prices, and they’re the seventh, eighth,

ninth, as Chamath is pointing out, no, no, no, Instacart was

the seventh. Those are like the 10th, 11th. Okay, so now here we

are. This to me seems like the fault of poor judgment by

capital allocator sacks. Are there too many venture funds

tasting chasing too few deals, and not thinking through what

investing in the 10th, 11th or 12th player in a market is going

to be able to do? Is it too much?

Venture part, I think part of what’s going on with the

companies you mentioned is that they’re physical world

companies, they are very capital intensive, they burn a lot of

money, they’re operationally intensive. I have sort of sour

I soured on those businesses years ago. And that’s why I just

focus on SAS, because they’re basically perfect gross margin

businesses. They’re very, they can be very capital efficient,

if the founders want to run them that way. So what we’re doing

now is telling founders lengthen your runway, be more

capital efficient, you need to understand that, you know,

multiples, if you raise last year at 100 times ARR, you need

to understand that the next time you raise it may be at 20 times

ARR. So now you can grow into that, right? If you’re tripling

and then triple again, the next year, you’ll be able to grow

into that valuation. But, you know, make your money last two,

three, four years, instead of, you know, burning it in 12 to

18 months, unless you want to down round.

I think this is this is the point that now,

allocators, venture capitalists are going to spend the next six

months thinking about what’s in bucket one, low quality

companies burning a lot of cash that may very well not make it

across the chasm, no path to profitability, what are the high

quality companies that yeah, the multiples down because public

market multiples are down risk premiums have changed inflation

change, but they have plenty of cash on the balance sheet. And

think about it this way. Snowflake became a poster child

in the public markets of a high priced SaaS business. Snowflake

this year will grow its free cash flow at over 100% a year

next year, probably, you know, 80 or 90% free cash flow, not

just revenue, free cash flow. In Q4, I think they booked 1.4

billion of revenue Q4 on a business that entirely in last

year did 1.2 billion in revenue, right? You think about that the

incremental was more than what they had generated in the prior

many years, that business. So let’s say we reduce the

multiple by 50%. But the company’s growing top line and

free cash flow by 100% doesn’t take you very long to grow

through the multiple compression. So snowflakes

multiple is plummeting for two reasons. One, because the stock

price came down. Number two, because right, their growth rate

and free cash flow growth is so high. And so now if you look at

the multiple, it’s similar to what we would expect of a

regression of the five year analysis,

unless these companies unless these private companies are want

to go dark for the next three to five years, meaning not, you

know, no sophisticated late stage investor doing around or

going public, they’ll be okay. But otherwise, they’re going to

have to reckon with a version of what Brad just said, which is

the high the flight to quality problem. You know, when in

moments of uncertainty and high volatility, it’s just more

straightforward to go to the things that are reliable. And so

you know, when you think in the public tech markets, what is a

reliable must own company? Well, I would put snowflake in the

list of these must own high growth software businesses,

right? You know, the fangs tend to be in the must own category.

But then there are all these other businesses that then get

orphaned, because they’re kind of nice to own, would love to

own would be great in any other circumstance. And that gets even

more exacerbated in the in the private markets, you have to

remember, right now, like the private markets cannot really

exist without an incremental buyer of equity, right? A bag

holder, somebody has somebody needs to be somebody needs to be

the bag holder after you. And the problem right now is that

those folks have a lot more credible, safe, durable assets

that they can own, and not have to deal with all the crazy

anxiety that comes with owning something that’s, that’s high

volatility, like

or Chamath, correct me if I’m wrong, or Brad, if they don’t

want to even be involved in this machine, you know, they could

just be in cash, and the interest rates are going up. So

maybe they could say, you know what, I’ll just sit this out for

a year. Is that also happening with those folks? Well, I think

too hard to do because of

Brad actually knows a bunch of these folks. But like, take, for

example, D1, you know, it’s Dan Sondheim’s great investor. I

mean, my understanding is that they are sort of off privates

completely. Because why invest in a private company at x times

ARR when you can invest in a public SaaS company for six

times. So they’ve substituted, I think Tiger is still in market

with a gigantic fund for privates, but the valuations

have come down. So they’re essentially repricing

everything. I think those are probably the two broad

reactions you could have, right, Brad?

Certainly, I would say this, broadly speaking, the late

stage private financing market in venture is closed. Because

there hasn’t been, right, we’re in this, this buyer seller

standoff. sellers aren’t to the point where they’re willing to

accept that a new rate, a new regime of multiples exists.

Right? It’s painful. We saw, you know, the Instacart news here

recently. But I think, you know, like, listen, we’re not

even 10 or 20% of the way into the psychic reset that needs to

occur in order for us to see real price discovery. That’s not

going to occur until these companies need money or want to

go public. That’s right. This fall is when we’ll start to see

real price discovery. You couldn’t pry a late stage dollar

out of my hand right now. Because I don’t think that we

have real price discovery going on early stage venture for

investing in an incredible, you know, software business at 300

million 400 million 500 billion, we think could be worth 10s of

billions, you can withstand a little inflation. But the later

you get in the lifecycle of a business, it’s about IRRs and

IRRs in late stage at last year’s valuations relative

today’s public market valuations. That is a negative


Explain IRR why that matters? Yeah, just

you know, we expect our herder rate in the public markets is a

20% risk adjusted rate of return. So if I’m, you know,

like, you know, you look at these late stage private

valuations from last year, I mean, you know, Sachs just talked

about companies repricing down 40 or 50 or 60%. So if they

haven’t done that,

now just to have a conversation,

just to uplevel this, what Brad is saying is the following

Jason, any person can wake up tomorrow, and by the S&P index,

right, what Buffett would tell you to do just by the S&P 500

index, that historically has compounded at around 8% a year

if you reinvest the dividends, so you can do nothing, right,

get a basket of the 500 best companies in the world that are

automatically selected for you based on revenue and

profitability, you don’t have to do anything. And that’ll

compound at 8%. That is effectively the risk free rate

if you want to own an equity. So if you’re going to step into

the late stage private markets, and you know, buy some shares

and you know, ding dong calm, you got to be rewarded for that,

which typically means that there’s a premium above the 8%.

And what Brad is saying, like, you know, it’s actually more

than double, in his case, what he’s saying is, it’s two and a

half times, you know, you got to clear 20% to you. Otherwise,

you’re better off on a risk.

is what’s likely to happen. I’m looking here at a list go puff

at 40 billion canva at 40 billion. Florida at 45 billion

discord at 15 billion ripple at 15 billion, these grammarly at

13 billion. These don’t make sense, given that if they were

public, they would be trading at

what you can 50% of that. Here’s what you can say. If if

everything is held equal, just with the rise of rates, you have

to reset those valuations between probably 15 and 40%.

Okay, at a minimum, minimum. But what Brad said is also true,

which is if they then keep growing at a superior rate, they

can get back to even so meaning 18 months, they could also show

up again at 40 and be net net awash, they could get unstuck,

but a lot of hard work will need to happen underneath the covers

of these businesses in the next two years, okay, for that to


And that’s what’s going to happen with a lot of these early

stage private companies, right is let’s say the error multiple

has gone from 100 times to 20 or 30 times, they have to grow

their error 5x to get the same valuation. So the question is,

can they grow their error 5x before having to return to

market, that’s just to get a flat round. Now, if they are

tripling this year, and then doubling next year, then that’s

6x growth in ARR. So even if you know, the multiples gone down

5x, they could still get a slight up round. So that’s the

game, I think all these companies are going to be

playing is lengthen your runway so that you can grow into your

valuation and not take a down round. Because the problem is,

if you’re ever in a situation where you take a down round,

it’s way worse than just the dilution, because now the

psychology of everyone in the company changes, everyone has to

worry that you’re gone sideways.

But here’s the difficulty of what sacks is saying, though, in

order to grow revenue, you have to invest, right, you have to

invest in salespeople and account management functions in

engineers and product managers, right. And all of those people

need to exist, which actually increases opex, right, it

increases burn, it doesn’t maintain burn. And so this is

the death spiral, Jason, you’re talking about, which is in order

to actually grow by those multiples, you actually don’t

have more fuel, you got to increase your speed, burn more

fuel, you don’t actually have the money to withstand two or

three or the altitude, you’re now so it’s going to be a very

precarious balancing act of trying to figure out how these

companies actually get to the other side. Because again, I

think the the buyers in this case will be will drive a hard

bargain. I mean, like, look, it’s organizations like, you

know, durable D one tiger altimeter, these guys are the

smartest of the smart, they’re not dumb. And so you know, the

price of capital is going up in that case. And so you know,

they’re going to strike really good opportunities for their

investors, right for their LPS, if we were going to do an

analogy, they’re 20%. The analogy here is these founders

were on autopilot, they were asleep at the wheel. And now all

of a sudden, they’re in the soup, and they got to really

perform. No, that’s not fair. I don’t think they were asleep at

the wheel at all. I just think that they, you know, when the

when the music is on, you got to dance. They did it, they

raised money at the highest valuation possible. God bless

them. Now, you’re going to see who is really good at what they

do. And who was benefiting from a lot of just natural, you know,

you know, right. But people were

already sharpening the pencils for the first time. For the

first time that I’m talking about, you have to make real

trade. Look, in an in an upmarket, well, in an upmarket

or a boom market, the three things that matter are growth,

growth and growth. In a down market, the three things that

matter are growth, burn and margins. It’s not that growth

stops mattering. It’s just that burn and margins also matter.

And now there’s gonna have to be real trade offs before it was

just how much money can we spend how quickly to get growth? Now

it’s wait a second, is this growth efficient? You know, and

will we have enough runway to get to the next round without

having to take it down round?

Brad, when we saw at the peak of the pandemic, some leadership,

I’d say, you know, seasoned or well informed leadership, Airbnb

and Uber come to mind, cut their staffs massively. They use that

crisis to reset their cost structure and get to

profitability quicker. Those were money losing businesses for

a long time, maybe, you know, taking advantage of these hot

markets. Is that what needs to happen here? Are we going to see

a cascade of companies, lowering their valuation, lowering their

cost, sharpening their pencils, cutting staff, and then becoming

more efficient, and more ruthless at, you know, the six,

seventh, eighth product, they’re launching saying, hey, let’s go

to the core product and make it sing, make it profitable.

You know, Frank Slootman has said that Silicon Valley is full

of companies that are walking dead, and they don’t even know

it. Right. You know, Frank is, you know, he says in tape socks,

he says, Listen, I’m a wartime CEO, not a peacetime CEO. Right.

He came into he came into snowflake when it was growing

over 300%. And he, you know, he reconstituted what what that

culture was about to prepare for wartime. Right? Because he says

when wartime comes, right, and it gets challenging, I want to

run the field. Right? I don’t want to be laying off employees.

I want to be that’s the time to hire. That’s the time to press

the advantage. That’s the time to invest in product. That’s the

time to win the new customers. Unfortunately, over the course of

the last 12 to 18 months, a lot of people without that

experience, right took a negative signal. And the signal

was money will always be available. And it will be

available at ever increasing valuations. And of course,

anybody who’s been at this for 20 years, like the four of us,

we know that isn’t true. But it’s amazing. I mean, the

behavioral psychology, our ability to gaslight ourselves

totally in these moments and move out on the risk curve and

ignore these lessons, right. And so I really actually hurt

and I’ve spent a lot of time on zooms lately, with founders and

with their teams, talking them through this, because like, we

talk about it in the abstract and in through the lens of a

spreadsheet. But there are a lot of people’s lives at stake. If

you’re an employee, and you went to this company, and you took

everything in stock at 15 billion, that’s now worth 5

billion, you’re totally underwater. At the same time,

the cost of buying a home and mortgage rates and everything

else is going up against you. I mean, this is a massive morale

problem, right? You know, for companies that frankly, we want

to invest in these are the innovators. But this is what

happens when you have government intrusion, right, that we can

all debate whether or not it’s worthwhile, but it was hugely

distortive. What we know to be true is that we had more

distortion in markets the last two years than probably any time

since post World War Two. And the consequence of that is

dramatic. And you know, we all kind of saw it, but we all kind

of gaslighted ourselves as well. Because you were like, well,

maybe there is a new normal, maybe we have accelerated

digitization. The truth of the matter is the law of economic

gravity is interest rates and inflation, and it remains.

Yeah. And and this time turns out is not really that much

different. I think Jason, if you take your list of these high

price startups, yep, I think it would be a good useful exercise

for somebody to do somebody in the press should probably do it.

But if you take that list and just rank companies based on

valuation, the last announced date, yep. And then if they’re

not announcing layoffs of any kind, you can probably forecast

when they’re going to burn through the money, especially if

they’re hiring. And the reason that you can probably forecast

that accurately is you can pretty much predict what opex

will be, especially knowing the fact that their input costs are

actually going up. So for example, most of these

businesses that rely on Facebook and Google and Instagram for

customer acquisition, those input costs are going up. And

the reason you know that is that’s $2 trillion of market cap

that doesn’t give a flying fuck what’s happening in startup

land, they’re going to make their numbers, right? Okay, those

are the most important companies in the world, they will ratchet

up the prices. And so your input costs are going up. It’s not

just the physical supply of materials that I think is going

up. It’s just the cost of customer acquisition is going to

probably go up by 2030 40%. Right? And you know this because

Facebook and Google guide to where they need to perform. And

so if you pass that through the venture ecosystem, that all of a

sudden now upticks your burn. Yeah, if you’re adding more

people, it upticks your burn. Yeah. And now back to David’s

math, you then also have to grow five or six x that it none of

this hangs together. So we are at the beginning of probably a

very complicated process of unwinding. Yeah, the distortion

that we’ve lived through in the last couple years.

At this point, I mean, you have to blame the capital allocators

in this instance, they bought these logos, they suspended

disbelief. We’ve had this ridiculous culture of no

governance, uncapped notes, just pushing, I see it on the boards

I’m on, you guys probably see to some people just pushing top

line growth, never discussing unique economics, never

discussing the bottom line. And they created these crazy fugazi

markups, they raised bigger funds based on it. And they just

were never the adults in the room, the stewards of capital,

it’s infuriating.

I’ll tell you an incredible conversation I had yesterday

with one of my partners. So he’s been, you know, with me for 10

years. He was really the one that pushed us very early on to

go into deep, deep, deep tech when nobody else is doing 3d

printing of rockets, satellites, all that stuff. And it’s been so

I really trust and respect his perspective. And he was telling

me a story. He called a recruiter, you know, because

we’ve been toying with, you know, helping get some folks to

help us manage some of our early stage deal flow. And he asked

her essentially something to the point of like, who are the types

of GPS that are getting hired today in early stage. And he

said, you know, this is how we approach our business, right? We

have a permanent capital balance sheet, you know, we do, you know,

at most one deal a year per partner. And she said, Well,

you’re never going to get anybody. Because a mid level

executive at one of these high flying startups that then goes

and joins a venture firm. She said, the consistent single

thing that they make their decision on, are you ready for

this? Is how many deals will I be allowed to do per year? What?

And so you know, these people are make work construction

workers, right? That’s dig a ditch fill a ditch. That is not

what investing is. That’s not about having a discerning

philosophy on what a business should be or a market. So if you

have a bunch of capital allocators, Jason, to your

point, who are unsophisticated about investing, probably very

sophisticated operationally, but fundamentally don’t know what

they’re doing. And they’re coming and transforming an

organization that should be a disciplined, discerning

allocator of capital and turning them into a velocity deal

machine. This is what you’re going to get.

I mean, sometimes the best money sacks is money you put into a

bet you’ve already made continuing to build the pot with

a startup that’s already proven themselves. Correct. So I think

we’re gonna see

we have a follow on fund. Yeah, I mean, I gotta say the things

you guys are saying are making me feel great about our

portfolio. Explain. Not not because we won’t get hit with

the same valuation corrections that everybody else is going to

suffer. But because, you know, a few years ago, we decided we

were going to invest in a certain kind of company. I mean,

high margin SaaS and marketplace businesses that were not capital

intensive, we defined a new metric that didn’t exist called

burn multiple, which is the amount of money you burn for

every dollar of incremental error that you generate

incremental subscription revenue. And, you know, we turned

out investments that were growing fast, but they had a

horrible burn multiple. And so and I do think most of our

companies raised last year when, you know, they made a while the

sun shine. So there’s going to be, they need to manage their

cash flow. So they don’t have to raise too quickly. But as

long as they do that, and they keep growing, they’re going to

weather the storm.

What’s the right number, spend $3 to make one spend $2 to add

one, what’s what’s your ratio?

So what I’ve said is that if you can spend $1 or less to generate

an incremental dollar of ARR, you’re doing amazing. And

between one and two is good. So in other words, if you’re

burning 20 million in a year to add an incremental 10 million of

ARR, you’re doing quite well and start planned. And then when

you start getting into two and a half, three, that’s a problem.

And then above three is just bad.

You spent spending 30 million to add 10 million in ARR. It means

it takes three years, or probably four or five, because

you’ll have turned to get that money back. Yeah. And that’s

just a lack of discipline. And how many VCs are we on the

boards? Or, you know, other investors? Are we on the board

and having that nuanced of a discussion? It’s always just

top line, top line, top line.

I think it’s very difficult, because I think the number of

qualified investors have gone way down as the surface area of

investing has gone way up. So again, just going back to this

conversation, this woman is staffing most of these venture

firms with their junior and mid level partners. And again, the

qualification to become a venture capitalist at this point

is not that you have an ability to pick or, you know, in David’s

case, have operated and actually run a business and then actually

have developed a methodical framework or Brad’s business,

which is Brad had to start from literally zero in the public

markets and work his way backwards to end up with 15 or

20 billion of assets. It’s none of that. It’s Are you a VP at an

XYZ unicorn that may also be poorly run. And all of a sudden

that, you know, gives you the qualification to go into a job

where, and it’s not their fault, where what they are told is what

you want is what we’re going to give you, which is the ability

to write, you know, x number of checks per year. That is

insanity. That’s not what makes a good investor. And then your

ability to then give advice, I don’t know, it’s probably zero,

or less than zero,

your ability to give advice is, I think we have to qualify bad

advice is being given. So the ability to give quality advice

as that was what’s missing in this formula.

I just think these people are really naive, like, you know,

and it’s not their fault. But, you know, they’re given way too

much rope to hang themselves with. And they’re and the the

unfortunate byproduct is going to be the, the companies who

gets bad advice or the bad businesses that get funded. And

that’s not what you know, an efficient capital market should


So one of the things I’m seeing our portfolio companies do is

use burn multiple as a governor for how fast they’re going to

grow. So for example, they will say that the burn multiple

should not exceed two in the next quarter. So you know, we

want to so that the old way of doing it would be that the

company would just have a forecast and say, we’re going to

grow three x’s here, we’re going to grow error from 10 million to

30 million. And whatever that costs, it costs, right? That was

basically how companies did it. Now what I’m seeing from some of

our portfolio companies is they are saying, yeah, our goal is to

grow from 10 to 30. But we will not spend so much money that our

burn multiple exceeds two. So you know, if it turns out that

there’s a trade off here between growth, and burn burn is

going to win, we’re not going to exceed that level of that ratio

of spending. And that’s actually a good I mean, I’ve seen a few

companies implement that already. And it’s probably

something they should all be doing.

I mean, if these are pilots, they basically created a rule to

not stall the plane. Right, you got to keep a certain altitude a

certain speed. So what is the opportunity here, then if we’re

going to have too many companies, too high valuations,

if we’re going to hang around the rim and try to get some

rebounds here and try to find opportunities, what are the

opportunities? What are the layups here for capital

allocators? And for founders, if we have there are no great

advice for them, there’s nothing

there, there’ve never been layups. And the problem is, you

know, in up markets, whenever we think that there are, it ends up

being what causes our downfall later, because we we just take

the wrong signal away. I don’t think that there are, I don’t

want to be investing incremental capital into a late stage

startup that’s poorly run, that doesn’t have their margins in

line. And then having to work it out. Why do that? Again, I can

just go in the S&P 500 and get 8%. And yeah, it’s not 30%. But

it’s 8%. And I don’t have to deal with all this nonsense,

like, well, a bunch of people because you’re a crossover

investor, right? I mean, you have the ability to choose

between public, private, or wherever you want to play.

I actually think what I am is an investor. Right? Yeah, you

don’t have LPS for a VC fund like sacks. And I do. But but

this but this is my point, like, I think investing

irrespective of whatever stage you do it still fundamentally

comes down to the following, which is do you have the

judgment to understand whether these decisions are marginally

good, marginally average or marginally destructive for the

short, medium and long term of a business. And I just don’t think

that enough people steep themselves in the practice that

it takes to get good at that kind of a game. And I think what

these moments expose is that the status games that come

around investing, because it just seems like it’s easy, it

just seems like you don’t do much work. That’s what ruins

these periods. And the implications, I think, as Brad

said, is really right. It affects the employees, it

affects the entrepreneurs, it affects the startup culture, it

affects the incremental desire for people to take a shot at

things, you can overcome all of it, we have and we will again.

But I really think like to the entrepreneur, the message is if

you’re, you know, taking a term sheet, I think you have to have

better judgment to really look at that on that investor and say

is this person really qualified to help me? Because in these

moments, in the absence of help, you’re probably going to

basically have a valuation reset at the minimum case. And the

worst case is you go out of business.

What’s insightful about you said Shamath, and I’ll hand it to

you, Brad, is that a lot of the founders picked based on the

highest valuation who their next investor should be. And now we

see what a trap that is spread.

You know, the takeaway for me is we return to a place we’ve

always been, which is about selection. Right? Look at the

mean returns for ventures for 20 years, they’re lousy, lousy,

right? 90% of the of the spoils,

they barely, barely mapped to the public,

five to 10% of the investments. And that’s the way it’s always

been. Look at look at Buffett, right? by superior companies at

good prices. What are the two technology companies Buffett

bought in the public markets?


Apple and Snowflake,


Apple and Snowflake, he doesn’t own a broad basket of law, a

long tail internet or long tail software. And so I think what

you’re going to see, and to Sax’s point, I think even

running a recipe on software as though all ARR is created equal.

I mean, I can show you five companies, each with 100 million

of ARR, each growing at 30%. And there’s massive dispersion in

future outcomes. Yeah, right. And so like, I just think that

this at the end of the day is a craft business. It’s an

essentialist business. It’s about finding and identifying

those very, very, very few companies that ever durably are

worth more than $10 billion. You know, on my screen today, Chamath

was just talking. There are four internet companies that are

green today. Amazon, Google, Apple and Facebook. Everything

else on my screen is bleeding

must own must own versus

everything else is red. And my growth internet stocks are down

400 basis points. Right? The market is voting with its wallet

where it wants to sit on the risk curve. Right. And I think

we’re just going to go there’s no new normal here. This is just

back to the future, right, is what we’ve always done. And, you

know, the reset is always painful. The only surprising

thing is how often we have to go through it.

If opportunities do arise, where will they where will they be

bred? I mean, I was watching Peloton, I always love that

company. I see the change in management, I see the

management, you know, thinking about profitability, thinking

about creating it into a marketplace, maybe having more

hardware available, disconnected from the software, etc. Do you

think there’s opportunities there? Or there will be

opportunities over the next year to buy some of the names that

aren’t the fangs?

What we do in the first instance, Jason, and listen, we

outperformed last year, because we owned quality, and we’re

short, lower quality stuff. Unfortunately, this year, the

market said, guess what, it’s all overvalued quality, low

quality doesn’t matter. We’re taking it all lower. And so for

us in moments like this, and I’ve lived probably through five

of them in the public markets, we always do the same thing.

degross, take risk down. First thing is, like have less chits

on the board. Number two, reduce the number of outliers pull in

the risk curve. Right? For me, I want to own five or six things,

because remember, I’m the biggest LP in the fund. This is

my money, I want to sleep well at night. And I want to protect

the foundations, the endowments, the good causes we represent. I

can’t do that with a company that has an unproven business

model. I may think that it’s going to be great in the future,

but I don’t know. So the problem with for the Pelotons of the

world, right, they may be incredible returners. But what

every portfolio manager on the planet is doing today is

compressing the number of names in their portfolio, saying what

are the companies I know with absolute certainty, whether

rates are two and a half, three and a half, four and a half,

five and a half is going to be worth more over the course of

the next two to three years. That’s what I want to own. Right.

Wait, what, what I was just gonna say, I don’t know about

Brad, but Jason, what you’re talking about is what a lot of

people do. You see a lot on Twitter, and I call it clapping

as a strategy. What about this? And what about that? And what

about if they do this? And what about clapping is not a

strategy? clapping is something people do at the blackjack

table, it turns out it doesn’t actually influence the cards.

Sure. And so I think you have to stop with the clapping as a

strategy, because

to be clear, that’s not my strategy. I was asking that as

the moderator. Is there just to be clear, I’m not advising that

as a strategy. I’m saying I think you’re representing a

psychological reaction that a lot of people have. And I think

what Brad is trying to tell you is clapping is not a strategy.

Yeah, no, I’m asking that on behalf of the audience. It is

not my belief, just to be clear. My commentary to the audience

is clapping is not a strategy. Yes, correct. Yes. If enough

people, though, do what you’re saying, Brad, and they just

retreat to quality, at some point that quality, those

quality companies would then become fully valued, maybe even

overvalued. And thus the cycle begins again or not. So how long

does that take?

No, you nailed it. What happened last year 2021. dispersion

collapsed. Go check out jam and ball who does incredible

software analysis on our team. dispersion collapse between the

best cohort and the worst cohort of software companies last year.

The first thing that happened is dispersion returns, we pay a

higher price for the best shit, and we pay a lower price for the

low quality stuff, right? Then when we start to recover, when

there’s more predictability in the world, when we resolve the

war, when we understand the path of inflation, right, the stuff

and close in on the risk curve, that’ll start being fully

valued. So then we will be brave enough to walk a little further

out on the ice on the lake, testing it, is it safe to walk

here. And then you walk out a little further. And sadly,

right, eventually, we’re in the exact same pattern we’ve been

before, which is we’ll know we’re at a market top five or

six or seven years from now, when we repeat the same asinine

behavior that we just went through when everybody becomes

complacent again, and overbidding this stuff way out

on the risk curve. I’m just suggesting to you the number one

question I get from GPs, venture capitalists and others right now

is when are we going to bounce back? Let me be absolutely

clear. There is no bouncing back to where we were the last 18

months. That was the outlier. That was the make believe. What

I hope and expect is that we can bat bounce back to the five year

average. But even to durably trade at the five year average,

we have to have a lot more clarity on the war in Ukraine on

inflation and rates.

So that’s a perfect place to pivot sacks. We’re now here and

I think this is the fourth or fifth episode where we’ve been

discussing the war and we flipped it today just to do

markets first. For a little change of pace. And since we had

Brad here, where are we at with the war? And what are your what

is your expectation of it wrapping up or it escalating?

Well, actually, there’s a tweet storm this morning, that

Chamath you sent to the group that from a Russian official,

and it seemed to indicate, well, it indicate what we’ve kind of

known for a few weeks now, which is what the broad contours of

what a peace deal would look like, which is there’s three

main pieces. Neutrality for Ukraine, the Russians insist

that it not be part of NATO, they get to keep Crimea, which

they annexed in 2014. That’s been a fait accompli. And then

some version of independence for these sort of breakaway

territories. In eastern Ukraine, the in the Donbass region,

everyone kind of knows that’s the the broad strokes of the

deal, then there’s, you know, a lot of details are going to

matter a lot to the people who live there, like is there this

land bridge from Crimea to Donbass, but frankly, don’t

matter as much to all of us, the United States of America. So the

question is, you know, what is the administration going to do

about it? Biden just went to Europe. And, you know, my

concern is that no one in Washington, and I talked about

this last week seems to be pushing for a ceasefire, it

seems like their preferred position is for Russia to bleed

out as as long as possible in Ukraine for the US to fund an

insurgency Allah Afghanistan, where, you know, these fighters

in eastern Ukraine are sort of like the Mujahideen. Is that the

right word? Well, sure. Because, you know, if they’re defending

their own land, and so we’re the Mujahideen, I mean, I know, but

why would you call it an insurgency? Well, defending

their land, if the government of Ukraine falls, and it becomes an

insurgency. So the point is that the administration, the question

is, what’s the administration’s endgame here? Do they want to

lead the world to a ceasefire? Or do they want to protract the

conflict to impose on the Russian state, a Afghan style,

you know, debilitating defeat to destabilize the Russian regime.

Neil Ferguson had a column this week in it’s his Bloomberg

column from the Brookings Institute at Stanford. No, he’s

from he’s from Hoover. Hoover, rather. Sorry. Yeah. So I’ll

read. I’ll read this book.

Hoover is at it. Can you just explain to people what the

Hoover Institute is and how that leans?

Hoover Institute for War and Peace, I would say it sort of

leans idealistic in foreign policy, I would describe Neil as

sort of the most realistic idealist. Got it. So context,

but he’s quite well sourced, I think, with, you know, and with,

you know, various people in Washington, Europe, and what he

wrote is, the US intends to keep this war going, the

administration will continue to supply the Ukrainians with

anti aircraft stingers, anti tank javelins, explosive

switchblade drones, it will keep trying to persuade other NATO

governments supply heavier defensive weaponry, and so on.

He says, Washington will revert to the Afghanistan after 1979

playbook of supplying an insurgency, only if the

Ukrainian government loses the conventional war. So the

concern here is that the US government has an incentive,

actually, that they don’t want a quick end to this war is

basically the theory is they want the Russian state to bleed

out and be destabilized.

In a way, it’s the one chance we have for like regime change

there without us actually starting a war is that they have

this self inflicted wound. That is the theory.

Yeah. And I think a lot of people are saying that that is

what a lot of people want in Washington. I don’t you know,

this is not like conspiracy theory, people are saying this

is our chance to topple the Russian state destabilize it.

There was a Rand Corporation. How do you survey a few years

ago, hold on, there’s a Rand Corporation studied on a few

years ago, that was commissioned by somebody probably in our

State Department, or someone like that, where they talked

about this, that if we want to destabilize the Russian regime,

Ukraine is the way to do it.

Right, they would fall for it, right, they would actually fight

that fight that is an unwinnable fight, we would basically be

putting an app, we’d be supporting an Afghanistan like

path for them to go down like we did. And they previously to

that, right?

And the problem, the problem that I see is just this, which

is, we’ve discussed on on this program, the downsides of this

war. First, it’s a humanitarian disaster. Second, we’ve talked

about the risks of recession later in the year. Third,

Freeberg talked about famine, the risk of famine later this

year, if the spring planning doesn’t happen. And then fourth,

we have this, always we have this risk that the war spins

out of control, and goes nuclear, right, and leads into

World War Three. Those are some vital American interests to

avoid all of those scenarios. I don’t see an equivalent vital

American interest in determining the exact nuances

of who rules the Donbass. In other words, the broad strokes

of this agreement are there. You know, what the US should be

doing is leading, they should be pushing for lead, not bleed,

lead the way to a ceasefire, not to inflict maximum damage on the

Russian regime,

which we don’t know exactly what their intent is, because they’re

doing this behind closed doors. Brad, what’s your take on this?

I think they’re David and I talked about this at dinner the

other night, I think there’s something bigger playing out

here. I mean, clearly, he’s the expert on real politic. And, you

know, but it seems to me that we have had decades of military

diplomacy. Right. And and most recently, the pal doctrine of

overwhelming force, we don’t want to make the same mistake we

made in Vietnam. So like, we’re going to go in with full force.

And, you know, basically, the public doesn’t support, you

know, military adventure ism anymore. Right. And so now we

have maybe we’ll call it the Blinken doctrine, which is the

pal doctrine equivalent, but for economic force. It’s the nuclear

economic weapon that is on full display by the West right now

that I think has really significant implications, right,

it’s reunited the West. And I don’t think this is just about

Putin. And I think the reason that the US and Western Europe

is slow playing this a bit is they’re sending a message to the

Chinese as well, which is that we will we are unified and we

will use an economic weapon of mass destruction. If, right, you

don’t play by global norms. And so the box I think we’re in from

a negotiating perspective, right, in Ukraine right now is

not a box around neutrality. I mean, neutrality is already

clear. I mean, we had Zelensky didn’t even ask for a no fly

zone. He’s not even asking for NATO membership. They’ve already

seeded neutrality. I think the real question is sanctions. I

don’t think the West wants to roll back sanctions. And I think

Putin saying I can’t hightail it out of here, unless you roll

back all the sanctions and give me a little bit of the Donbass.

And so watch the next week or two, like in any good

negotiation. Unfortunately, I think both sides are going to

amp up their current strategies, we may see missiles coming out

of Russia, and we may see European, complete European

embargo of Russian oil 3 million barrels a day. Those

will be the final straws right before we enter negotiations,

because then they can see the last things that they took as

part of the negotiation. But this I think is going to be all

about economic sanctions. And, and I think the West is playing

a really strong game. What I worry about, and Saks has talked

about this at length, is that we overreach, we overplay our hand

here in an effort to send a signal to other parties around

the world. Right. And that has fat tail risk associated with


You’re referencing China and Taiwan.

Let me ask a question. How many of us woke up or this at the

beginning of this year, or in making our New Year’s

resolutions and said that we need to risk recession, famine

and war in order to destabilize and topple the Russian regime?

When did this become a vital American interest? No one at the

beginning of the year thought this was an important goal of

America. What’s more important is, is basically getting our

economy back on track and back on track after this long, this

long, this this plague we’ve had. I mean, nobody needed this

problem. And what the administration should have done

was use diplomacy and all the resources to try and prevent the

conflict. And now the conflict has occurred, we should be

pushing for a negotiated peace and ceasefire. We do not have a

vital national interest in the details of who rolls rolls the

Don bass.

Yeah, the problem with your setting up of that question is

that we did not start the war Putin did. Chamath, you’ve been

silent so far. What are your thoughts on this war that

we started the war?

Well, you’re saying did we wake up and say that we should do

this? We did not listen.

The people in the media woke up on February 24. And you think

Putin went mad. And there’s no pre history to this conflict.

Now, here’s the deal. Hold on a second. This is a war of

Russian aggression. It’s true that Putin started it. He’s the

invader. However, there were things we could have done to

prevent or to avoid this war. And American diplomacy

completely failed. And we even discussed it the month before

this war started. We talked about how the US could have

given a written guarantee to Russia that Ukraine would not be

part of NATO. Just this week, Zelensky in an interview with

Freed Zakaria admitted he was told by Blinken, you will not be

part of NATO. But we don’t want to admit that publicly. What

games were they playing? What is the point of playing that kind

of game with a grave issue of war and peace? Why didn’t

Blinken say publicly what he said to Zelensky? This

administration did not do everything it could do to

prevent war. And now we are faced with all of these

existential risks. Why? For what reason?

The reason is that it gave the United States an opportunity to

topple Russia. I mean, exactly. And who have us thought we

needed that at the beginning of this year? Well, I think that

you know, the thing to keep in mind, and again, I don’t I don’t

I’m not saying that this is right, but I’m just game

theorizing that these are like, you know, grudges that these

guys have held for a very long time. And I think it started

when they were in the Obama White House, and it carried

over to now. And I think they saw an opportunity to basically

execute a strategy that essentially now I think we’re

moving into the second phase of this war, which is effectively

trying to bait Russia into doing something really egregiously

bad. And that is terrible, David, to your point, I think

we’re willing to, you know, sacrifice a lot. I think we’ve

decided that implicitly by based on the actions of the American

government. And, and it’s weird, it’s like we’re trying to get

Russia to react. And so the rhetoric, in fact, the rhetoric

since that, do you guys remember, I think it was only 10

days ago that both Russia and Ukraine said the surface area of

a deal is pretty much in sight. Oh, Friedberg from the top rope

coming in. Look at you, Friedberg. I mean, like you, you

look like an everyman. I mean, I’m so proud of you. Are you

actually driving your own car, gas guzzling car, SUV in the

you should be

in that tank. Is that Putin’s gas?

I only use ethanol I make in vats in my backyard.

When I use solar panels that are handcrafted in my way to find a

luke oil gas station filled up.

What I was saying guys was that, you know, from the 10 days from

when, you know, both sides, Russia and Ukraine were like,

Hey, you know, we think we’re basically there, we have a deal.

The rhetoric has gotten really insane. You know, yesterday, I

think it was like, the United States said, you know, we, we

think that Russia should be kicked out of the G 20. Then

Russia responded and said, I’m only going to sell that gas and

settle it in rubles. You know, all of a sudden, other actors,

China and Saudi Arabia are in the game. Now, you know, China

and Saudi Arabia are negotiating settling a huge oil trade in

new one. Why in the last 10 days of all these things happened

when we were so close to getting something done? I think the best

explanation is that we are willing to, I guess we’ve

decided, I mean, we, none of us have decided, but American

government said that some amount of sacrifice is okay. If it

could trigger a Russian escalation, which could then

further destabilize that country. And I think they

believe that that’s more important than anything else.

I think we, you know, from where I sit, I think we can take

putting out his word that he actually cares about

reunification. And that’s not to say he’s crazy, David. And I

don’t think we can control his behavior. I think you’re

Wednesday, or his word reunification.

Never said that, Jason. And also just today, the Russian

military, the tweet that I sent you guys was from the Russian

military. And that was an official statement. And I don’t

think he they would be allowed without Putin’s explicit sign

off. They no longer talked about denazificating Ukraine or

demilitarizing Ukraine. They simply focused it on the Don

boss. And to use your son zoo argument, it’s almost like

they’re trying to construct their own golden bridge to exit

in a way where they can claim victory to the Russian people to

explain the 10s of 1000s of, you know, Russian military people

that have been killed in this whole conflict, right, because

they have an explanation that they have to give. But in all of

this, I think that we’re, we’re probably exposing a very high

risk game of poker that we’re playing, which is it seems that

the US government is focused more on the destabilization of,

of Russia than they are in getting this conflict behind us.

I mean, he did. He did say in his speech, since time

immemorial, the people living in the southwest of what has

historically been Russian land have called themselves Russians

and Orthodox Christians. That’s Don bass. Yeah, I know. But he


there’s been a Jason, there’s been a civil war going on since

  1. In this Don bass region between Ukrainians and these

sort of these Russian speakers. And now that civil wars as this

a Balkan style civil war that has now escalated with, you

know, Ukraine and Russia getting in and now the whole West

potentially could get in. This is a very dangerous situation.

We should not let spin out of control.

I’m agreeing with that. You guys asked me, did he ever talk about

reunification? He did. He did in his speech was not one of his

stated war objectives. Now you could keep accusing him of being

a liar. But look what his objective is, just take him at

his word that he believes these areas are Russian, and they

should be considered

area where they are predominantly Russian speakers.

Look, and I’m not taking a side in who should rule the Don bass.

Okay, yeah, I think it’s a complicated, ethnic strife sort

of issue, like we saw in the Balkans all the time between the

Russians who live there and the Ukrainians who live there. What

I do know is it’s not worth risking war three, over 100%

agreement, 100% agreement,

sex, let me Can I ask you a question? So how is Putin going

to withdraw without 100% lifting of the sanctions? And how is the

West possibly going to trust him to withdraw? Right? Well,

while taking all the sanctions off, that seems to me like, when

I try to construct the Golden Bridge, in my mind, it comes

down to, you know, like, how do we how do we whack up the

sanctions? Do we take some of them off? Say prove to us be out

for x period of time, and then we’ll roll the other ones off.

Because these sanctions are not going to be rolled back in the

next three months based on some ceasefire.

I agree with that. I don’t know that Putin can expect the

sanctions to be lifted, or that he can effectively negotiate for

that. I think, again, where I think the the peace deal is, is

that we’ve known all along what it’s going to be Ukraine will

agree to neutrality in exchange for some security guarantees

from the West. Russia will get to keep Crimea because that’s

been a fait accompli since the annexation 2014. And there will

be some sort of regional autonomy for these sort of

Russian speaking areas in the Donbass, which, by the way, we

could have had that too. There was a deal called Minsk two

since 2015. That simply hasn’t been implemented. So, you know,

I think that those are the broad strokes of the deal. And then

there’s questions about, well, is there a land bridge from

Crimea to the Donbass? And, you know, what weapons exactly does

Ukraine get to get from the United States or get to keep? I

mean, so look, those details matter a lot to the people who

live there. But the broad strokes of this, I think are

pretty well understood.

I’m not betting this way with with our book. But if I had to

guess, we are going to have a period of significant escalation

on both sides. Before they both get to the table. Macron said

this week that we still have the Europeans have not made a

decision about the embargo of Russian oil that will collapse

the Russian economy and oil will go to 180 or $200 a barrel.

I think that’s a real likelihood. And the second one

is I think the Russians will amp up military aggression in some

face saving measure and to have more to negotiate with. So maybe

to answer my own question is if there is an oil embargo, then

you take the oil embargo off, right as part of the economic

sanction whacking up of the sanctions, because that’s really

the nuclear option against the Russians economically. But it’s

a, you know, unfortunately, I think we have to be prepared for

this to get worse before it gets better, because it makes sense

from just a game theory for both sides to grab as much as they

can, right before they sit down at the table, so they have more

shit to give to each other.

Right. But the problem is, if both sides keep asking, I agree

with that fundamental analysis is that neither Putin nor

Zelensky can be trusted on their own to basically make

peace because they want to push their advantage. If either one

believes that they’re winning on the battlefield, they’re going

to push their advantage to grab as much as they can to then

negotiate from a position of greater strength. The problem is

that they’re in an escalatory spiral, where if you know one or

both of them miscalculate, we never get that deal. And I think

the longer the war drags on, the harder it is to make a deal not

easier. One of the I’d say one of the disturbing things that

came out over the past week was in that interview that I

mentioned, where freed Zakaria interviewed Zelensky. Zelensky

said, he said that it’s either going to get a peace deal, or

World War Three. And I’m listening to this thinking, wait

a second. You know, that, that is a pretty scary posture for

him to be taking. And furthermore, who appointed him

leader of the free world, you know, the decision to have war

three is not his decision. He is not the President United

States, we did not vote for him. We may think he’s heroic, we may

think he deserves our support. But he does not get to turn this

into war three for us. The American people did not choose

that. And this is where I go back to Biden and the

administration and their leadership, what are they

pushing for? Are they pushing for a protracted, never ending

Afghan style war in Ukraine? Or are they going to lead the

situation to some sort of negotiation or ceasefire? And I

just think if we’re considering the interest of the United

States, we would not let this decision purely be Zelensky’s,

this guy’s willing to entertain war three, that can’t be

acceptable to us.

But what what what what is his worst alternative? I mean, like

he’s losing his country. So of course, he wants to say, the

thing that would scare us into action, potentially, right? So

he has nothing to lose. So right.

That’s what we can’t let him decide for us.

He’s not deciding. He’s, he’s using rhetoric to get us to talk

about it, which he just won. Like he, you can see that what

he’s saying, right? Yeah, because you’re talking about it.

So I think the I think the bigger question in all of this

is, when is the United States willing to draw a really hard

line. So there was a another thing that happened, which is

that, you know, Biden essentially said, like, you

know, if they use chemical weapons, we will react sort of

in kind, right? There was some some version of that. It’s a

red line, basically, he said, yes. And, and then he also said,

you know, depending on, you know, how they use nuclear

weapons, we could theoretically respond. So just the rhetoric is

ratcheting way, way up. And that is surprising to me, because I

would have thought we had a deal in sight, just get it done. Be


You’re assuming that we have the influence, you assume, David,

that we have the influence to actually cut a deal. You were

saying yourself in the last couple of months, that the US

power has waned, and that we don’t have influence. So which

is it? I believe we have the influence to to get facilitated

deal. Listen, let me give you an example. We are giving Zelensky

and the Ukrainians all these incredible weapons. What are the

conditions on that? If Zelensky is unwilling to make a

reasonable peace deal? Do we do we have any conditions and are

giving him these weapons? Why wouldn’t we insist Zelensky?

Listen, we support you. We basically are against this

Russian aggression, you should have the right to defend your

homeland and drive them out. But we also want you to take a

reasonable peace deal, if one is available, and we need you to

specify what that is. You’re only exercising that kind of

discretion. I don’t think so.

I think you’re assuming that Biden is blocking this when in

fact, it might be that Putin is and I believe you’re taking

Putin’s sort of position here over our own presidents. I think

you need to know for a second that we don’t want to have this

continual escalate. You actually think there’s a world in which

Biden wants to see this escalate? I don’t think that

that’s the case. I think that we don’t have influence. We don’t

have the David, we do not have the influence today that we did.

It is no longer Neil Ferguson’s days, you know, gets to dictate

to the world what’s going on here. We no longer have that

about this. Israel, Putin wants to talk to Macron in France, not

us, because we’re not seen as an honest broker. But But look,

tomorrow, we don’t have the influence we once had. Okay,

let me explain. I’m not saying we can dictate the outcome. Okay.

But we can push for a negotiated settlement instead of a

protracted we can lead not bleed. Okay. Chamath laid it out.

Neil Ferguson laid it out. The Rand Corporation laid it out.

These there is a significant chance that there are

definitely actors in the State Department who want to see an

Afghan style situation insurgency play out in Eastern

Europe. That’s their goal. Okay. Now, I don’t know what Biden is

thinking. But he has made no statement. To the contrary, what

have we done to help lead the situation to a negotiated

settlement? Name one thing.

Well, I don’t think we’re in the room, David. But Biden is in

your honor, I read all their public statements. I don’t see

anything. I don’t think they want to negotiate to the press

with Putin. I don’t think they want to go to Europe right now.

I think that says enough about what his intent is. He’s in

Poland, right? He’s going to Poland. He’s in Poland. We’re

scaling up our military presence. Listen, yeah. I mean,

I don’t. All I’m saying is, look, I don’t know exactly what

Biden is saying or doing behind closed doors. What I’m saying is

that the US should be playing a constructive role to get to a

negotiated ceasefire, not indulging this sort of

fantastical thinking, that we can basically perpetrate a

regime change operation in Russia with you on that. I agree

with you on that.

I, I’m worried that there may be a small strain of that

probability in the range of outcomes here. And I didn’t

think that before. I really thought that, okay, maybe we

were a little bit on the outside looking in. But it looks like,

you know, we’re pretty close to a deal, these guys will get in a

room, they’ll, you know, chop it up, and it’ll be done. And

instead, honestly, if you just look at the headlines and the

rhetoric, and the words from all these three leaders in the last

10 days, it’s been, it’s been in the other direction. And so you

have to wonder what is the point of all of this right now, other


crescendoing, like Brad said,

it’s a, I listened to Blinken over the weekend. And he talked

about what I think he defined what is this new doctrine of

economic statecraft, he said, our objective is, we have the

power to impose overwhelming costs on our target, economic

costs. And he said, our cause, Putin’s actions are remembered

as a strategic failure, not regime change. That’s what’s

within our control. That is very different. Bush wanted regime

change in Iraq, and we executed it through the pal doctrine of

overwhelming military force. I think that this is a doctrine of

overwhelming economic force that is meant to not only signal to

the Russians, but every other rogue dictator in the world. If

you go rolling into your neighbor, uninvited, you can

count on the fact that there’s going to be massive economic

sanctions, because our military deterrence is no longer a

deterrent. Everybody knows we’re not going to go defend Taiwan,

everybody knows we’re not going to send our military to Ukraine.

So we have to demonstrate that we actually have economic

resolve, not these poo poo sanctions we’ve been having

around the world for the last 20 years. And if that is the

lasting impact on this, I think you’re right, you know, that we

turn this into an economic nuclear weapon. Yeah, better

than sending our kids around the world to get killed. I think

you’re absolutely right. And I think Tony is very smart to say

what he said. The, the one thing that I would want, though,

on top of that, tell me if you agree, is just to ratchet down

our rhetoric, which we can control.

And maybe to, I mean, why not say that, listen, we’re willing

to put these sanctions on the table, we’re willing to

basically re institute economic ties with Russia, if we can get

to a satisfactory outcome,

but you don’t want to reward. I would say is we’re making a big

assumption to say that there’s not back channel diplomacy going

on from the Israelis, the Turks, the French, you know,

having those conversations on our behalf, right? Like, I

don’t, I honestly, I don’t know that there, that’s a high

probability that we’re not sending those signals. But to

your point, I just don’t know. I don’t know.

Either, but I don’t know either. But But here’s what I would say

is, look, I can only judge from the public statements. And I

think there is signal in these public statements. And the

statements are all one way, there is no olive branch. It’s

all it’s all basically about escalation. Just like in January

before the war, what were the State Department’s statements

about the situation? They said that NATO’s door is open and

will remain open, even though they told Zelenskyy in private

that he would not be joining NATO. Okay, that was an

astounding revelation that came out this week on the Fried

Zakaria show. Number two, Blinken was saying that there

was no change in the American position, and there would be no

change. He said, these are all public statements, that the US

would never recognize the Russian annexation of Crimea

never. You know, he said that we went into these peace talks to

represent our core values, there’s no change on that. So

in other words, it’s been the position of the United States to

be hardline with Russia to basically engage in no

compromise whatsoever. And it’s basically a double down, it’s a

double down. You assume, David, you don’t know, those are the

public statements. I know, but you’re assuming that there’s no

back channels going on. And just to just I wanted to make

one quick point, Chamath, which was, you know, what if we offer

to take the sanctions off, and then we are training Putin that

these kind of misadventures, get him something, Don Bass, etc.

And that the sanctions roll off. So isn’t there a possibility

Chamath, that if we don’t keep the sanctions up, we’re actually

rewarding his behavior?

I’m a huge guys. Look, I’ve been the first person in the front of

the line on sanctions. I thought this was the most brilliant

approach to this whole thing. And I still believe that

sanctions work. And I think that this will cripple that country.

What I’m saying, though, is that there are these moments where

instead of then sticking to the rhetoric that Tony talked about

what he said, I don’t know, Brad, where Tony said this, this

weekend, but like, sticking to that, there are these added

flourishes that I think are unnecessary. So what I mean by

that is the talk about, you know, us reacting, or

retaliating for the use of chemical weapons. Biden made a

campaign vow, I don’t know if you guys remember this about

nuclear weapons, where, you know, he was very clear that,

you know, it is a mechanism to demonstrate that this deterrence

exists. And instead, he actually caved. And instead, he put out

this carefully worded statement, which kind of walked back the

campaign vow earlier this week, and I’ll just read it to you.

I’ll just read what the Wall Street Journal said. It said,

by President Biden, stepping back from a campaign vow, has

embraced the long standing us approach of using the threat of

a potential nuclear response to deter conventional and other

nuclear dangers in addition to nuclear ones. During the 2020

campaign, Biden promised to work towards a policy in which the

sole purpose of us nuclear, the nuclear arsenal would be to

deter or respond to an enemy nuclear attack. Instead, now it

holds that the fundamental role of the nuclear arsenal will be

to deter, but that it leaves the opening to respond and use it in

extreme circumstances. So these are big changes. And if our

whole goal is to just focus the service area to an economic set

of sanctions, these are somewhat unnecessary. Would we all agree

we don’t need to talk about nuclear policy. Yeah, Biden was

right on the campaign trail, the United States of America should

never use nukes, except if nukes are used on us. Come on, we know

that. Yeah. And we’re talking about changing that now. That’s

insane. No, we changed it. We changed. Look, it shows that

there there’s an influence in our government, our State

Department of certain hardline elements who want this very

tough policy that includes destabilizing the Russian regime

and maybe toppling Putin. I’m just saying that objective is

not worth all the existential risks that we’re now facing.

All right, do we want to touch on the CCP tax cuts? We want to

wrap we’re at 80 minutes.

I mean, the the CCP tax cuts harkens me back, Brad, you can

react to this because you lived it with me. 2018 19. I’ll say it

again, we were in this unique moment where, you know, we were

not sure whether there was runaway rampant inflation. And

in q4 of 2018. The Fed basically said, Okay, you got us, you

know, the boogeyman exists, we’re gonna go tame inflation,

and they ran forward and raised rates. And lo and behold, the

Chinese economy turned over in q1 of 2019. We had like a, you

know, kind of a blippy little recession. And we had to

overcome it, because China became stimulative. Now, here we

are, again, we’re worried about this inflationary boogeyman. And

the Chinese government basically extended these tax cuts,

increased the tax cuts, and essentially said, we’re going to

be very stimulative in the economy, especially through the

back half of the year. Now, China, again, is a massively

export driven economy, right? So the reality is that as goes

China, so goes the rest of our economies. And so I think that

it’s a setup where how can the United States be under so much

inflationary pressure, where China is effectively telling you

that we are in a, in a contraction and a recessionary

period. And so, if that’s where China is, there’s a risk that we

may already be there or entering that. And so I think it’s a

little, you know,

contorted, you hit two really important points. Number one,

which we didn’t get to earlier. I tweeted a few weeks ago, the

Fed’s probably behind the curve on recession, not inflation.

Right? We have massive demand destruction going on right now

in the US economy.


the producer

define what that means, Brad, define what that means.

So I mean, if you just think about what a $6 gas mean, what

is no stimmy checks mean? What is the fact that you actually

have to go and get a job again mean, you know, we’re, we’re

rolling back trillions of dollars off the Fed balance

sheet, I’ll tell you what it means is that people can’t spend

as much money. Just the increase in the 30 year mortgage means

you’re buying power in December four months ago, to buy a house

and you if you could afford 1200 bucks a month that buying power

budget $350,000 house today, it buys you a $295,000 house

people’s ability, right to have money to spend money is getting

crushed. So I think we are going to face an economic slowdown. If

you look at the PMI. So this was the inflation read in January,

little people didn’t really notice it. PMI in January came

in at point two versus the consensus estimate estimate of

point six. That means the producer level of inflation was

meaningfully less than we expected. If you look at

consumer confidence, it’s plummeted one of the four

biggest drawdowns over the last 20 years, retail sales in UK

this morning crashing consumer confidence in the UK crashing

the Chinese government sees this we’re we’re not surprised to look

at the what’s going on in the world with energy prices. We’ve

never had oil over 120 bucks and not gone into a recession. We’re

facing a global slowdown. That will have big implications for

inflation big implications for rates. But China sees this

coming and says we’re going to get ahead of this. We’ve got a

People’s Congress in November, we promised him five and a half

percent GDP growth. 3 trillion of that is export driven. That

means if Europe and the United States catches a cold, they

catch the flu. Okay, so they have to do everything in their

power. This is why they’re not going to supply the Russians

with weapons, right? Because it’s economically assassinated

themselves. Right? So we have this interconnected world, this

idea that we’re de globalizing, what we do doesn’t impact

anybody else like that ship is sailed a long time ago. And the

Chinese see this. That’s why I think there’s also a probability

by the Middle East this summer, the Fed in the United States is

saying we now see a balanced risk between growth and


sacks, let’s get you in on this. Just as we wrap here, the

Chinese Communist Party premier talked about tax custs. And this

is a quote fertilizer applied directly to the roots of the

economy tax rebates look like reductions, but actually are an

addition. Today, give back tomorrow, you get more in

returns. Does this mean the United States, people will go

back and get jobs because they need to have more money and that

maybe we should be looking at, you know, tax cuts at some


Listen, Jake, I think we got big problems here at home in the

United States, Brad and Chamath, they’ve laid out these gigantic

economic risks that are facing the country. You know, I tweeted

at the beginning of the year, January 24. The President’s main

job is to ensure peace and prosperity. And Biden’s

popularity was already plummeting. I think this is when

his poll numbers were at 38%. But if he gets us into war and

recession, he ain’t seen nothing yet. This war, the longer it

drags on, the longer it basically can spin out of

control and become something worse that sucks us in, the

longer it creates the risk of basically causing a recession in

the United States. We need the American we need the Biden

administration to help try and lead to a better outcome here

instead of ratcheting up the rhetoric.

All right, folks, there you have it. That’s your all in podcast

for this week. Thanks so much to Brad Gerstner for joining us and

filling in for the Sultan of Science BG. Thanks, bro. And a

lot of great announcements here. Brad will also be joining us for

the all in summit. We’re about to wrap up tickets. We’ve

announced a bunch of great speakers for the event may 1516

and 17 in Miami. You can just do a search for the all in summit.

We have given out. We’ve sent 200 emails to people who asked

for scholarships and 100 of them have taken the tickets. 500 of

the 650 tickets or so are accounted for we’ll be wrapping

up registration in the next week or two. And we look forward to

seeing you all at the New World Symphony in South Beach.

You got any announcements of people who else is appearing? Oh

my lord, we have great announcements keys were boy is

coming. Joe Lonsdale is coming. Nate Silver is coming.

Nate Silver. I love Nate Silver.

Well, we decided Chamath we would have people do 15 to 20

minute, Ted style talks like position papers. And so who

else do we have doing that? Tim urban of weight but why he was a

brilliant speaker and writer. Nate Silver is going to do that.

And then Antonio is coming. He was just on. And he was just on

Rogan show. And so we’re going to have these like 20 minute

kind of hits, then the besties will sit with them. We’ll do

those back to back. Kimball Musk is going to come and talk about

his DAO that he’s doing for nonprofits, Brad, we’re going to

talk about what topics so we’re collecting all this talent, and

then we’ll figure out what positions are going to play in

the show, and what the themes will be. But the themes will

match what we’ve been talking about here. And we don’t want to

pre set the themes six or seven weeks, seven weeks out from the

event, because we don’t know what the world will look like

then. And then Freeberg said he wanted to do a position paper

and actually give a 20 minute talk. So besties will have that

ability. And besties will start the event and any event, tons of

different speakers rotating in and out talking about the most

important topics of our time, but I would like to have Peter

there. Can you get Peter to come? He’s maybe the most

iconoclastic, please. I’m just not I’m just not I have to get

over my uncertainty that this whole conference thing is really

a grift. It’s not a grift. We’re putting all the money is going

back into the event. And we gave 200 scholarships, there’ll be no

profit from the

there needs to be a really nice swag bag. And I think it’s

already at $600 a person I just spent three or 400. What is the

material of the hoodie? All right.

It’s gotta be a cashmere hoodie if to be on brand.

To be able to buy up to the to the special hoodie,

Brad, I just spent $600,000 per gift bag for 600 gift bags. Okay,

it’s like 400 grand and gift bags. And Chamath wants to put a

$6,000. So I just wanted to know what the material was of the

hoodie in the bag. That’s all I’m just asking. This is my

life, Brad, I am busting my ass to put this event on and

complaining about the gift bag. sax is complaining on me making

a dollar from it. And freebergs having a panic attack that we

don’t have enough great speakers. And I’m doing all the

work. It’s my whole fucking life. I appreciate you, Jacob.

I’m going to say some nice stuff to me. You did say some nice

stuff. I want to get on board with you getting a fee for your

hard work. You know, I don’t need an hourly wage, you know,

$15 an hour. I’m not your wage slave, David Sachs. I’m working

hard here. Working hard, but I just want to be appreciated. I

don’t think you should have like a cotton blend is my I think it’s


By the way, Brad, do you have any thoughts on the sushi? Is

there should we be using brown rice and not the line caught


No, just make sure there’s gold leaf on the sushi.

No, literally, we’re spending, I think, for 300 or 400,000 per

party. It’s over a million dollars in parties. And I’m

talking to talent bookers about serious talent coming to

perform. Drake, can you get drink? How about that’s $3

million. dual depot $2 million. I’m deep in $2 million. That’s

what I got. How much is doja cat? She’s great. I think those

are all seven figures. I would like to anyway, what I’m trying

to use use of that. I mean, that would make it an incredible

party. Oh, God. I mean, I really would like to get by. So how

much is Drake again? $2 million. I heard for 20 bags and get

Drake. Yeah. Yeah. Yeah. Cancel the bag. Give it all to Drake.

So you guys are saying and all the work I do, I should take $2

million and hand it to fucking Drake. Yes, yes.

Drake is more valuable than you 25 years of working on events

and media Brad. And these these are my friends. We’re like,

take the $2 million put in your pocket and finally make a profit

on your work. And just hand $2 million in a bag.

Drake, we don’t need the bag.


Jet card. Do we get to work with Drake on which songs he’s he

would sing?

He does like a medley of like three what I would like to do

is have three songs for two. Come on. I think it’s basically

like 100,000 a minute. I think that’s what you’re in for 100,000

per minute. 20 minutes.

That seems egregious. No, I mean, these guys get paid bang

when I hired Snoop. He did like 20 songs for me. I mean, it was

unbelievable. And what was that two or three hours show? 300?

Sax because he forgot he was there. Yeah, he had a great

time. Oh my god, man. He was blowing this joint that was so

powerful that I was 10 feet away and I got stoned it mean it

was like he walked in it was like I remember how it was like

20 Super Bowl shows. Good stuff. All right, everybody. Love you

besties. Love you, Brad.

Let your winners ride.

Rain Man David.

We open source it to the fans and they’ve just gone crazy with

it. Love you.

What what your winners ride?

Besties are gone.

That’s my dog taking a notice in your driveway.

We should all just get a room and just have one big huge orgy

because they’re all just like this like sexual tension that

they just need to release somehow.

What you’re about to be

waiting to get

keys are

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