All-In with Chamath, Jason, Sacks & Friedberg - E96: Adobe acquires Figma for $20B, TPB SPAC, FedEx CEO's recession warning, macro picture & more

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It was getting pretty

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I’m going all in.

All right, everybody, welcome

to Episode 96 of the All In podcast.

We had a bomb drop just yesterday

with Adobe agreeing to acquire Figma,

the design tool.

We’ll get into that in a minute,

what it actually does

for 20 billion dollars.

This is just astounding

for this to happen.


Full stop.

It’s the largest private

company purchase,

I believe, in history.

This company, if you don’t know,

it helps you design web apps

or user interfaces.

So if you’re a designer,

we used to make mockups.

We’d send them around in the industry.

As images or PDFs,

and then like Google Docs,

where you can put comments

on somebody else’s words

and you can collaborate in real time,

we call it multiplayer mode.

Figma is multiplayer mode.

The company is just a juggernaut.

If you work in startups,

you get Figma designs all day.

And Adobe stock got crushed

because of this was down

as much as 18 percent on Thursday.

Figma’s most recent valuation

was 10 billion dollars

in June of 2021.

Their Series E, so peak market.

They had raised 200 million

at that time.

There’s a lot of details

to get into here.

But, you know, listen,

let’s ask the sultan of SaaS here

what you think of this,

because it’s double

what was an incredible

market last year that was overheated.

So what does this say about the market?

Figma, you know, Figma itself

or maybe Adobe’s,

you know, jumping the fence

or being skittish?

How do we reconcile this, Sax?

Oh, if you judge Adobe stock price

the other day,

the market hated the deal.

I mean, the Adobe stock

price went down like 15 percent

and that’s 150 billion dollar

company roughly.

So they lost almost

the entire purchase price

in the market capitalization of Figma.

I think that’s.

That’s basically an overreaction.

I, you know, I know all the news

is basically on how

Adobe is paying 50 times

and that’s no longer the multiple.

The multiple is more like,

you know, eight, nine,

10 times for high growth SaaS companies.

There is truth to that, but

but I think it misses

some important details

about how fast Figma is growing.

Can we actually throw up on the screen

the AR history of this company?

So and for people who know

the multiple is the multiple

times top line revenue.

Times ARR, really.

So, OK, so explain that to folks.

Yeah, well, ARR is just

the annually recurring revenue.

It’s subscription revenue.

Sometimes people will look at

next 12 months revenue,

which is a similar concept,

not quite the same,

but sort of in the ballpark.

So, you know, what’s

interesting about this company,

I think it was founded 2011, 2012.

It had a very long wilderness period.

That’s what I call the period

where the founders

are trying to figure out

what the product is going to be.

Really, for almost five years,

they finally launched

a private beta in 2015.

They then opened it up

to public launch in 2016,

and they didn’t turn on monetization

until 2017.

So five years into the company,

they hadn’t made a dime.

So, you know, it’s roughly

a 10 year old company.

And for the first five years,

didn’t make any money.

And then they started to make money

five years ago.

And then in 2018,

I think they turned on

the enterprise tier

and then it’s been kind of

off to the races.

That’s incredible.

Yeah, what I can tell you

looking at these numbers,

by the way, so I don’t know

if these numbers

are perfectly correct.

This is sort of

I would call the scuttlebutt numbers.

These are numbers that I believe

to be true.

But it’s not like these are numbers

that the company’s confirmed

or anything like that.

This is just me

gathering intelligence

from talking to people

in Silicon Valley.

So this is what I believe

to be the case.

Can you read the numbers for people

that aren’t on YouTube watching this?

Yeah. So in 2017, again,

the first year they monetized,

they did 700,000.

They ended the year with 700,000 of ARR.

Remember that ARR

is kind of a point in time metric.

It’s the amount of subscription

revenue, your annual run rate,

subscription revenue at that time.

So they ended 2017 with 700,000.

2018, they ended with 4 million.

2019, they ended with 23 million.

2020, they ended with 77 million.

2021, 210 million.

And then the estimated number

for this year is 450.

So you’ve seen in the press,

I think it has been publicly reported

a 400 million dollar ARR

numbers currently where they’re at.

I’ve heard that they’re going to end

with something more like 450 this year.

And then their forecast for next year

is or was at some point in time

when somebody heard this.

800 million forecast for 2023.

So my point is, I’ve seen

a lot of SAS metrics.

And I can tell you that this ARR

ramp is phenomenal.

You know, I’m sure people

have kind of heard about the

triple, triple, double, double.

That’s kind of what VCs want you to do.

They want you to triple two years in a row.

Then they want you to double

two years in a row and so forth.

This company did way better than that.

I mean, 700K to 4 million

is a really fast ramp.

And then 4 million to 23

million is incredible.

That’s like, you know, over a 5X.

And then they did over a 3X

going from 23 to 77 million.

I can tell you that is super hard.

I think most companies,

even the ones that hit,

you know, low 20s,

tripling year over year,

they tend to decelerate

to two and a half times

or something like that.

This company was still growing over 3X.

Then they roughly tripled

again to get to 210.

And then since they got to the question.


So now they’re double that.

Do you think the triple in 2020

was a COVID pull forward?

Or do you think that

that was a natural, like a zoom or not?

That’s what I was going to say.

I mean, it’s possible, but

people were collaborating.

I’m not I don’t see.

I mean, so far in the numbers,

I don’t see a huge slowdown here.

I mean, look, once the numbers

get into the hundreds of millions,

it’s really hard to maintain

the same growth rate.

You’re compounding off such a large base

that it’s just inevitable.

You can’t keep growing 3X year over year

once you’re at,

you know, 200 million of ARR.

But the fact they got first from 23 to 77

and then 77 to 210 and now 210,

let’s say they’re at 400 now

and they’re going to be at 450

by the end of the year plus.

It’s it’s pretty amazing.

And so, OK, so, yeah.

So Adobe’s paying 50 times

current ARR.

But if you believe this,

they’re only paying divide by two.

They’re paying 25 times

end of next year.

So like 18 months from now.

And then you figure, you know,

within, say, two years after that.

They’re going to be,

you know, at somewhere between

one and a half and two billion of ARR.

And as you guys know,

there just aren’t that many SAS companies

that even get to a billion of ARR.

So so I don’t think Adobe’s

making a bad deal here.

I think there’s a question about

is there any point at which this product

hits some sort of market saturation?

But Adobe’s in a good position

to know that because

they understand this market.

They are in this market.

It feels to me like, I don’t know,

I’ve been using Adobe Photoshop

right around when it first came out,

like 1992.

And this product I’ve used,

it was built web first,

it was built for collaborative use

and Photoshop over the years,

they’ve really tried to take

what is a desktop installed

software application

and then try and create cloud based

features. And it’s a terrible,

terrible user experience,

at least from my perspective,

having grown up on using Adobe Photoshop.

But what’s most important,

I think, is a lot of people

think about this on

is it the right price to pay for the company?

But at the end of the day,

the right price to pay for the company

is what Adobe views to be

the risk and reward for their business.

And they effectively paid roughly

12% dilution of their company

to do this deal.

So they’re saying, let’s take 12%

of our company and effectively de-risk

the biggest risk to our business,

take out the biggest threat

to our business for 12% of our company.

Not 12%.

Wasn’t it 12%?

You have to factor in the actual

drawdown of the stock as well.

So it’s about 33%.

They they they effectively.

Well, I’m talking about like assume

take take the price of the stock aside

the number of shares they’re issuing

because by the way,

the deal value went down with the stock.

So I read the the merger terms last night

and there’s a couple billion of cash

and then a good chunk of it is in stock.

And it’s a it’s 10 billion of cash

and it’s 10 billion of shares

at the price when the deal was announced

and to your point.

So it’s a fixed number of shares.

The stock, it’s a fixed number of shares.

It’s not a fixed.

It’s not a fixed monetary value.

So it’s down 20%

from the deal announcement.

So that 10 billion of stock

is now actually 8 billion of stock.

So no, the whole deal is now 18 billion,

not 10 billion of cash to month

the 10 billion cash.


And then there’s there’s 2 billion

of deferred RSUs and stock based


But there but I mean,

if you think about it

at the time of the merger,

they’re they’re either, you know,

I think they have

they’re going to use some term loan

that they have to get the cash.

But they’re effectively issuing,

you know, 10 divided

by their total share count,

which is roughly 6%

of their total shares outstanding.

So, you know, they’re kind of taking 6%.

Or let’s just aggregate

the two together and say

they’re taking roughly 12% dilution.

Sure, the value of the stock goes down.

So look, I think like this deal

is really interesting.

So first, let’s just give huge kudos

to the CEO and the team and the investors.

What an enormous win

for all those folks.

That’s awesome.

It keeps Silicon Valley

kind of going right.

And that’s just awesome

to see these kind of big wins.

I read this incredible profile

about the founder.

And he sounded like

such a fascinating person,

he basically said

that the profile basically said

that he was spending months and months

going from office to office

all around the world,

meeting customers,

sitting with customers,

reading trouble tickets.

That’s what he would do.

You know, reading help desk tickets

about the product on vacation.

Whenever you see a CEO

that is so customer obsessed,

typically there’s good outcome.

And so this is just another

validating point on that theme.

Now, let’s just put Figma aside

and let’s just talk

about Adobe for a second.

What is so incredible is

you have a company.

Yes, they spent.

Twenty billion dollars

or whatever, 18 billion now.

But the way that they did it

is really interesting.

If you go back to Zendesk

and SurveyMonkey,

when those guys announced that merger.

It was above a threshold of stock

where you had to go

to a shareholder vote.

And because there was so much

turbulence in the market,

whether the industrial logic

of that deal made sense or not,

didn’t matter as much to shareholders

when it came time to vote

and they voted it down.


So interestingly,

Adobe was very clever.

They said, I’m going to do

half cash, half stock

so that I’m below the threshold.

We are below the threshold

where it goes to a shareholder vote.

OK, interesting.

But then you have to factor

in the dilution,

not just the dilution of the stock,

but then the rewriting of the stock.

And this is where, you know,

you lose 20 percent of your market cap

and then you tack on this.

You’re talking about, you know,

a 40, 30, 40 billion dollar

price tag to get the deal done.

And I think that’s where

the head scratcher

was in the public markets,

where folks basically

rebuilt their model and said,

hold on a second.

You know, you’ve been telling me

that this problem is a solved problem.

But when you pay such a premium,

not only does it mean

that this product

is clearly materially

growing and disrupting,

but the existing revenue

base that I was counting on in my model

must be wrong as well.

And that’s the actual flywheel

that now Adobe is in,

where people are trying

to really figure out

how under pressure

are those existing cash flows.

And then if you compound

that with something else,

which is nothing specific to Adobe,

but to the whole market,

which is now interest rates

are going up behind the scenes.

You have this sort of parade

of terribles for Adobe

that they’re going to have to navigate.


They have a very large portion of cash.

They have a large portion of stock.

They have decaying earnings

in their core business

that they now have to explain.

And then they don’t really

have a lot of earnings.

I think Shantanu said

that it’s going to be year three

before it’s accretive,

which is typically a way of saying

we’re going to lose money

and then in year three

we’ll make at least a penny.

That’s what accretive means.

Doesn’t mean you’re going to make

billions necessarily.

And so these guys have to find a way

for Figma to drop

about a billion and a half dollars

of free cash flow into the business

for this to kind of make sense

in the short term.

So I think those are all the mechanics

that’s sort of putting a lot of pressure

on the Adobe stock,

but it just goes to show you

the amount of disruption that happens,

this movement to the cloud

or the movement to collaboration.

Oh, yeah.

Monolithic products

are just sort of very much DOA, you know?

That is the key.

I think you guys did a great job

of summarizing it.

This is an absolutely great deal for Adobe.

It’s a transformative deal

in the same way the WhatsApp deal

was for Facebook.

It removes one of the two

existential threats to Adobe.

And it turns Adobe, I guess,

into a growth story now,

as pointed out, Adobe’s product

was single player mode

and Adobe grows at about 12 or 13 percent

quarter right now.

And now you have a company that doubles

and they really have been facing

three paradigm shifts

in the last five or so years.

Obviously, you pointed out one, Friedberg,

desktop software downloading it

versus cloud based software.

Well, here they go.

Now they’ve got experts in cloud.

And then the second one.

Yeah, but they have a thing

called Creative Cloud.

And they are slowly

trying to figure that out.

It’s a paradigm shift inside the company.

And they’ve really struggled.

So now they have somebody

who’s cloud first.

Do you guys ever use those products?

Those Adobe products?

We have.

But hold on, let me finish here.

There’s three paradigm shifts here.

Feature for feature.

They look very similar.


So these these three paradigm shifts,

the one is the desktop versus the web.

The other one is subscription.

So Adobe was charging

$1,000 a year for the creative cloud.

Now they charge 25 bucks a month for it.

They successfully did that.

Now they’ve successfully.

I think have figured out

collaboration software.

But Adobe has one thing

that they have not done,

which I think is the real reason

they had to buy Figma Adobe.

See, this is the problem

with these big public companies.

Adobe and all of their investors

got very addicted

to the free cash flow

generation of that stock,

and it’s been an incredible performer.

And let’s just be honest,

Shantanu is one of the best CEOs

of the last few decades

in the public markets.

Period. End of story.

OK, since 2007,

he has just run a masterful playbook.

At the tail end of that, though,

you know, in 2022,

this is a company that has,

I think, six or seven, maybe

I think maybe $8 billion

of free cash flow.

It is a gargantuan

money making business.

And so they refused in Creative Cloud

to go to that free tier that Figma has.

And if you look at all of the stories

around Figma,

one of the most powerful things they did

was basically allow people to use this

for free, effectively forever.

Yeah. Bottom up sass.

Yeah. And the problem with Adobe

is like that’s a business model

disruption that they could not afford

in the public markets,

because if you condition

a set of institutional investors

to be expecting seven to $8 billion

of annual free cash flow

and all of a sudden

you’re willing to torch it

to take a quarter of that

and take it free.

That is probably the biggest reason

why they had to buy this thing,

which was that they needed to tuck it in.

And they’re like, how can I do it?

Well, I just have to do it

by diluting the stock.

One time, that was one time

stock issuance.

Yeah, that was it.

It was a one time 12% diluted.

They’re still in there.

It’s one and done.

It’s one more to go.

The point the point

you guys are making is more

broad, which is it’s

not just about Adobe.

This is the classic innovator’s dilemma.

Right. Like any big company

that reaches maturity in their market,

and has scale and has cash flows,

you have a different shareholder base.

You move over from growth to value.

And once you’ve got value shareholders,

I mean, I’ve been to these

institutional meetings

when I was on the exec team at Monsanto.

And, you know, they wanted dividends

and they wanted stock buybacks.

And they’re like,

it’s nice to see growth.

But at the end of the day,

I want to know where’s my dividend

going to be and what’s my stock

buyback target going to be.

And then to say, hey,

I got to go invest in

innovating my way out of my corner

because, you know, in this case,

cloud is reinventing my marketplace.

It is a very hard place

for a manager of a business

of that scale to be, by the way.

I think there’s another

every industry, by the way.

I think there’s another takeaway

that’s really interesting here,

which is that if you look

at big tech companies,

I think you almost have to sort them

into two buckets,

at least in the enterprise.

And that sucks.

You can tell me if you disagree.

But there’s one type

of enterprise company

which makes basically a single

linear monolithic product

or a handful of those

monolithic products.

Right. Think Workday,

think Adobe, et cetera.

But then there’s this

other type of company

which are more platform

level businesses that have this,

you know, mixture of things

that they do relatively well integrated.

Maybe each product is not so great,

but together they’re pretty decent.

And you have distribution leverage

and you have pricing power.

Think Microsoft and the totality

of those products.

So what’s interesting to me is

you cannot effectively compete,

as it turns out, against Microsoft

at any point product.

And Slack, I think, is the best example

where, you know, Microsoft Teams

was fundamentally

cannibalizing this business,

which is what drove Slack

into the arms of Salesforce.

And, you know, you could say that

Teams was not as great of a product.

I would have I would make that claim.

But what Microsoft had

was distribution scale and pricing

power where you could discount

and effectively give it away for free.

Adobe isn’t in that situation.

Right. They can’t do

that kind of stuff.

And so when you compete

against those kinds of businesses,

you have a better chance of winning.

The takeaway, I think,

for the entrepreneur

is when you’re thinking about

the next enterprise business to start,

I would try to bucket these companies

that you want to compete with and say,

if I’m going to build

a newer version of X,

make sure that version of X

is going after a company like Adobe

versus a company like Microsoft,

because it’s much, much, much easier

to build value when you’re competing

against a monolithic product company

versus an entangled platform company.

Saks, would you bundle

if you were the CEO of Figma

would you now, I’m sorry, CEO of Adobe,

would you bundle Figma

into the creative cloud

and then just make it one subscription?

Would you Microsoft teams that?

Yeah, maybe.

I don’t know.

I’m not sure about that.

I do think that Microsoft

is a little bit unique

in its ability to bundle.

So what so is right

about the power of the bundling.

What they do is I think

it’s called the E5 bundle.

They have all these products

that virtually all enterprises

use from office to,

you know, Active Directory to,

you know, there’s like

a whole long list of them.

And so what they’ve done

is they’ve created one price

for all of those products.

They sold a bundle

under a wall to wall enterprise license.

And what they do is

when they see a new competitor

come along, whether it’s Slack or

Zoom or or Okta,

is they’ll basically just clone it,

create a worse version of that product

and throw it into the bundle.

And so now every single enterprise

is getting the Slack clone

or the Zoom clone or whatever for free.

And that has a huge material impact on,

you know, it pulls the rug out

from under those startups.

So now that’s not to say

that Microsoft’s product

is anywhere near as good

as those those competitors.

But, you know, now all of a sudden

the Microsoft product

is on a marginal basis free.

But then what Microsoft does is,

you know, every year or two,

they go raise the price of the bundle.

So basically, you know,

they get you hooked on the bundle.

They then use it to systematically kill

or undermine a competitor.

And then they know you’re stuck

and then they raise the price.

They basically have inflation

of the price of the whole bundle.

I think it’s very anti-competitive,


I think it’s it’s akin to dumping.

I’m not sure what the logical

stopping point of it is.

Like, I don’t know if we can have

a healthy SaaS market

if Microsoft is allowed

to keep doing this forever.

Because think about it.

I mean, they will just every year

they will take the hot SaaS company

in du jour, clone it.

It’ll be a shitty version.

They’ll throw it into their bundle.

And now they’re dumping

they’re dumping the product in the market.

It’s basically free.

It’s free until they basically drive

and they drive out the competitor

or destroy it or basically

undermine this market cap

to the point where it can no longer

make the kinds of investments

it needs to pose a real threat

to the Microsoft larger entity.

Right. So think about

how anti-competitive this is.

And you don’t hear a word about this

from Lena Khan or Washington.

They’re only focused on social networks.

No, it’s so funny.

It’s like she’s more focused on,

you know, making sure

Amazon doesn’t buy Roomba

that, you know, this stuff

that’s happening.

Facebook doesn’t buy one VR app.

Yeah, it’s not very

sophisticated approach.

This is the kind of stuff

that actually really matters.

I really think you nailed it

on the headsacks.

It’s a it’s an impossible strategy

to defend against.

The the other thing

that is interesting, by the way,

about all of this is,

you know, if you think

that the valuation,

the takeout premium

was basically two X post to post.

What that means is that if Figma

was last valued at 10

is now worth 20,

you know, does that mean that Canva,

which was last priced at 40,

is worth 80?

Well, potentially to

potentially to Adobe.

Right. And if you add

those two together now,

you know, what you really have

is basically the the entire totality

of the creative cloud for Adobe

is basically embedded now

in these two businesses

at an extreme premium.

And so it makes it very difficult

now, I think, as well

for Adobe to execute a strategy here

without it being forced

to do some more expensive

dilutive M&A.

Well, and the other problem, Chamath,

is this is going to ring bells.

So when I said before,

there were two existential threats.

Canva is the other one.

And that is the other paradigm

shift that’s occurred in computing

is that making things radically simple.

You talked about a free bird.

Photoshop is complex

and it’s single player.

Canva is how people create,

you know, any kind of

marketing materials today.

And they don’t hire a designer anymore.

The job of graphic designer

is now everybody’s job.

Everybody can make something on Canva.

But then I think Sachs or Freiburg,

maybe you have thoughts on this.

If you’re Alina Khan

and they do make a run at Canva, Adobe,

now are you saying like, hey, wait a second.

You now run the table on all design tools.

You can’t buy it.

It’s a weird classification.

It’s only called design tools

because it was sold to someone

that was called a designer before.

And that’s not the case anymore.

Now it’s a tool

that anyone can use

in the enterprise setting

or in a small, small business setting

or in an individual setting

to create stuff.

And that wasn’t the case with Photoshop.

And I think that’s what makes this

arguably a very different business,

a bigger business,

a more transformative business

and a farther reaching business.

And I don’t think that there’s necessarily

a speaking of the Figma deal, right?

A case to be made here

that they’re preventing

the extinction of their monopoly.

They’re buying what looks

like a very different business.

And it’s really additive.

It’s it’s a business

that can turn anyone into a creator.

That’s really cool.

Yeah, but you’re kind of

you’re kind of speaking

out of both sides of your mouth now,

because on the one hand,

you’re saying it’s a different business.

But on the other hand,

you said that this is

basically protecting them

against an existential disruption

to their core business.

So if it’s an existential disruption

to their core business,

how could it not be in the same market?

Of course, it’s in the same market.

Well, there are new

entrance competitors.

Yeah, there are new entrants.

And there are, you know,

different underlying,

you know, technology trends.

This is all about cloud.

But nonetheless, I don’t see

how these things aren’t competitors

with each other to some degree.

So I don’t know how this doesn’t

get seriously reviewed.

Yeah, I trust authorities.

It feels so similar to Facebook,

Instagram and Google, YouTube.

And by the way, it’s similar

in both those examples

in a number of ways.

Both Facebook, Instagram

was not competing in the same product

as Facebook at the time

with the newsfeed or whatever.

It was a photo sharing service

that clearly created

a broader addressable market

that got more people

to use a social network.

And YouTube people

thought they were overpaying.

Right. And then YouTube,

everyone thought it was crazy.

They paid a billion six

for that business.

And it’s probably the greatest

acquisition of all time.

It’s been the greatest managed

acquisition of all time, I should say.

And that business, similarly,

I think Google recognized

that people were going to move

to video content

as an alternative

to text based web content

and that it was a bigger

picture opportunity

than what they were pursuing

and in the lane that they operated

in at that time.

And they were right.

And in both cases,

it was more about paying

whatever it took to get the deal done

than, you know, hey,

how many users do you have?

How much revenue?

How much EBITDA?

What’s your ARR?

All that stuff goes out the window

when you’re sitting

in that strategic driver’s seat

at that big company.

And you’re saying

this is a bigger market.

These guys are transforming the market.

And ultimately, over time,

that will eclipse us.

And you can say, hey,

you’re protecting your business,

but really you’re protecting your market.

I mean, the market is going to go away

is what the vision is

like the market that you exist in today

isn’t going to exist in the same way

in five, 10 years.

And that’s what you’re trying

to buy your way into.

I have a question and a statement.

The statement is.

I think Canva should absolutely go

public versus sell,

because it seems like they’ll have

a much easier time

competing against whomever

that they compete with.

I do think that, David, you’re right,

that there is.

A lot here for regulatory review,

because if you go back

and think about visa plaid,

you know, it’s not dissimilar,

meaning you have a young startup

that has this really credible

and viable technology

potentially being acquired by in that case,

it was one of a duopoly.

But here you could make

a very credible claim

that it’s in a market

where it’s roughly a monopoly

because there aren’t really that

that many meaningful alternatives.

So I think Saks is right,

that there’s that there’s some,

you know, oh, there’s a case here.

Yeah, there’s a case here

where it just depends

whether that was literally my question

or this.

Well, not just Roomba.

How about how about that

VR game that Facebook was before?

Like that was a tiny acquisition

that maybe have a million users.

Look, it’s just exactly

they are being punitive.

I think I think it seems like.

Yeah, well, it seems like

what the antitrust authorities

are doing right now in Washington

is they’ve got a list of companies

that they think are punitively suspect.

And our job is to stop these companies

from accumulating more power.

And it’s really about seeing everything

through this lens of power.

But that’s not

what the competition

authorities are supposed to do.

They’re supposed to ensure competition.

It’s about it should be a rule book, right?

And the problem with just approaching

things in this way of the punitive way,

we just have to stop these companies.

Is it creates a chilling effect

on on reasonable exits in Silicon Valley?

There aren’t that many great exits

and we want them to go through.

Now, I think if monopolies

need to be reined in,

there are other tools to use besides

just saying that those companies

can’t acquire other companies,

no matter how unobjectionable they are.

I mean, let’s do things

like allow sideloading.

Let’s basically.

What explain what that is?

Well, that’s basically a way to say that

I think Google, the Android

already does it, but iOS does not,

where you would be able

to basically install an app

or download an app

without going through the Apple App Store.

You could enable competitive app stores.

Basically, you know, I think

I think it’s a real issue

that you have operating system monopolies.

I mean, Google, Android and iOS with Apple

and then Amazon with sort of.

You know, white label products,

those are all operating systems

that are competing

with apps on their own platform,

and there have to be some constraints

and rules around that.

Otherwise, the operating system

will eventually dominate

and replace any app

they want to on the platform.

We saw that’s what the whole

Microsoft thing was about.

Microsoft Netscape was 100% about that.

So I think if you can show

that somebody has an operating

system monopoly,

there absolutely should be rules

of constraints around that.

Does it mean the company

should never be able to buy anything?


I mean, I think all that does

is stifle innovation

without really getting to the crux

of what the issue is.

I think you nailed it.

A good first step would be

allow other app stores.

So Google’s app store could be on iOS.

iOS app store could be

on another platform, et cetera.

And I mean, the other issue here

is Lena Khan’s been pretty clear.

Her entire thesis in taking the job was,

well, I want to prevent

downstream competitive issues.

So future competition.

There’s no better example

of a future competitive issue

and future consumer harm.

I think it’s how she phrases it.

Then this acquisition,

if you’re going to do it

through the lens of future consumer harm,

this creates future consumer harm

because Figma is not going

to compete with Adobe.

You’re saying that it does.

It does massively, massively.

I mean, this is the the dissonance here.

It is great for consumers

because they will bundle it.

They’ll bundle the two things together

and it’ll it’ll make it more valuable

and reduce churn

and it’ll make it simple to buy.

So that’s good for consumers, right?

You get more free stuff.

But future harm

and a future competitive harm

here is the marketplace

will be less competitive

if there is one less

independent, strong company in it.

That’s and if you if they buy Canva,

that’s the definition

of downstream competitive harm.

It’ll be a less competitive marketplace

with these two companies together.

Full stop.

So, Jake, do you if you’re Lena Khan?

You actually pay attention

to this Adobe Figma thing

in like a serious way,

or are you still more focused on Amazon

and, you know, Facebook?

And I would hope that

they would do multiple things.

I’m saying, what would you do

if I was her?

I would create a rulebook

and apply the rulebook

evenly and fairly.

And this is the problem.

This feels very political.

It feels like they’re

going after Facebook

because of the downstream

political issues Facebook causes.

And they’re ignoring the Microsoft issue

and they’re ignoring issues like this.

You know, it just feels like

they have their thumb on the scale.

If you look at what happened

to the Visa Platt thing,

it was an enormous blessing in disguise

because, you know,

the the thing went away

and that was, I think,

like a five billion dollar acquisition.

And then Platt turned around

to raise money.

And it’s like, you know,

multiple teens billion.

It’s going to be a wonderful

independent company.

To your point, Jason, that will now,

you know, create more competition

in a space that desperately needed.

Now, in that case,

that was sort of like

financial payments and rails

and Visa, MasterCard, blah, blah, blah.

But that that that could also be,

you know, if there is a lot of attention

paid to the deal

and it doesn’t end up being consummated,

that could be the positive outcome.

But if you want a future competition,

if you ask me if I was a betting man,

I think this thing is going to close.

I think it closes.

Yeah. Yeah.

I mean, it closes.

It closes because it doesn’t intrude

on the hot buttons of Washington,

not because the merits

of the antitrust are superior

to the Roomba deal or to that deal

that Facebook wants to have.

This is all about political

and cultural hot buttons.

So it’s so weird.

Yeah, but I think we all understand

what’s really going on.

It’s all political.

But I just can’t go back to your question.

I think it was a really good question.

And I’ve had more chance

to think about about should Adobe

change the pricing of Figma?

Should they basically bundle it?

I’ve spoken about the merits

of what Microsoft does.

I don’t think that Figma

should do that here.

Now that I’ve had a chance

to think about it,

and the reason is this, that

you have to think of pricing

as not an element by itself,

but as sort of the most important

element of a go to market strategy.

And there’s no way

that you can basically reprice

Figma completely as part

of some other bundle

and expect not to create

massive disruption

to your go to market organization.

So, for example, you’ve got now

a whole huge sales team at Figma,

including enterprise sales.

They are commissioned

based on their the quotas

that they close.

And that’s based on the ACV

of the deals and so on.

If all of a sudden you price

this as being free

because it’s part of some bundle

that enterprises get

because they’re buying old Adobe.

Now, all of a sudden,

those salespeople can’t earn

commission on that sale.

They can’t be incentivized

to take that product

to market the same way.

The marketing team is tasked

with feeding the sales team.

So now all of a sudden

they’re like, well, wait a second.

Can we spend money

to basically promote this product

when it’s going to lead to a deal

that’s priced at zero

because the enterprise already has

an ELA with Adobe?

So you can’t just look at a pricing

change in isolation.

You have to look at it

as the tip of the spear

of the whole go to market.

I can tell you what’s going to happen

because I kind of experience

this with with Yammer

when Microsoft bought

my company 10 years ago.

And by the way, I’m not critical

of Microsoft at all.

They were an extremely

high quality acquirer

that lived up to all their promises

and did everything

they said they were going to do.

I think if you ever get an offer

from Microsoft,

you should take it really seriously.

I think like I said,

I think they’re a great company,

great acquirer.

But I can tell you what happened

is that once Yammer was folded

in to the office suite

and didn’t have its own

independent pricing

and didn’t have its own

independent sales team,

it just disappeared.

I mean, the promotion of it to stop

because nobody had an incentive

to basically go sell it.

And nobody had an incentive

to go market and promote it.

And it just kind of disappeared.

And that is why you remember

a couple of years after we sold it,

Slack kind of came out of nowhere

and there was no one

to really oppose them

because, you know,

all the promotional activity

we had done around Yammer just ended

because, again, we weren’t

we didn’t have the incentive

that was created

by the sales organization.

Just to explain the pricing thing, David,

I think that the way

this decision will get made

and I’m not saying it’s right or wrong.

But it will get made

not by the sales teams

and not by the product teams,

but it will get made by the CEO

and the CFO in talking

to their largest shareholders.

And the reason is because

there is an implied cost of capital

that Adobe has.

In fact, right now,

if you look at like all of the models

that all of the analysts use

is roughly around 9%.

And so, you know,

they’re going to have to achieve a return

on top of that cost of capital.

What that means is that

they’re going to be forced

to find a way in short order

to make this accretive

and to start generating

incremental cash flow.

And I think that they will be hard

pressed not.

To bundle and not to do

these creative packaging strategies,

because otherwise I think that

there is a risk

that this free cash flow machine

that folks have become

very addicted to it,

Adobe starts to shrink

and that will have huge ramifications,

I think, to the stock

and to the executives and to the morale.

And so I think that they’re going

to do whatever it takes.

And by the way, you see that

you’ve seen that in other companies

who’ve gone into this

phase of their growth,

Oracle being the best example.

You know, they have consistently

found ways to package, to bundle,

to cross sell, to upsell.

And they have incrementally

walked free cash flow generation up.

If they do that,

they’re taking a huge risk

because here’s what’s going to happen is.

So I agree with you

about what may happen.

This may be decided

by the CEO and the board,

but I think if they do this,

they could blow it.

I mean, the Dylan Field,

the founder in his blog post on this

said that Adobe is committed

to letting them run independently.

Well, you can’t run independently

if you don’t have

your own independent pricing.

You just can’t.

For how long is the question?

How long does it take to be independent?

Two years? Four years?

If all of a sudden Adobe salespeople

can sell this product

and include it in their bundle

and the marginal price

is basically free

because it’s part of some bundle,

that means the sale

has been taken away

from whoever the dedicated

salespeople are

on the Figma side of the house.

I can tell you

that will create irrationality

in the sales organization.

And very soon there’ll be pressure

to consolidate

the Figma sales organization

with a larger Adobe sales organization.

They will be moved in.

They may become product

specialists or experts,

but the go to market

efforts will be consolidated.

And then Dylan’s going to end up running

a quote, standalone version of Figma

that doesn’t have its own

go to market organization.

And then you don’t get the feedback

into product from your sales

and marketing team.

So all of a sudden you’re running

a product and engineering team,

but you don’t have eyes

and ears in the market.

I hear all of that.

I think that the Facebook

WhatsApp merger

is probably pretty instructive,

which is Jan had two years roughly

where he was left alone

to kind of like run independently

and then slowly and slowly

it was absorbed back into the mothership.

And, you know, that was a product

with zero monetization.

But there was a lot of strategic

touch points within WhatsApp

and, you know, core Facebook app

and everything else that they were doing.

And I think that you have to do that,

because when you’re spending

tens of billions of dollars

on something,

there needs to be an industrial logic

that is beyond just let me

just buy this thing

and stick it on the shelf

and let it be on its own.

So I think that, you know,

that die is sort of cast.

I think we’re just debating

the timeline in which it happens.

Let’s talk about, you know,

you’re probably right.

And that’s what usually happens

is when they promise the founder

that you’ll be left alone.

That usually last two years.

That coincidentally,

that’s coincidentally

usually the length of the earn out

or the golden handcuffs.

That’s how long my golden handcuffs were.

And they left us alone for one year.

By the way, our error

are tripled that year.

But then once they got

serious about integration,

the organization started merging.

And really, I was just running

a product organization, which is fine,

but that’s not running

an independent company.

Because like I said,

you lose your eyes and ears.

You lose the pulse of the market

when you’re not selling into the market.

Freeberg, how did YouTube do it so well?

It was a very different situation.

They were. Yes.

Google basically took a team of,

you know, two dozen people

and their infrastructure was terrible.

And they basically

rebuilt the entire company,

so it was the complete opposite.

Think about them

taking the front end shell of YouTube

and then they rebuilt

everything underneath it, ran it.

And then they actually put

their own people in

to optimize the front end.

They put their own ad

sales team on top of it.

I mean, they just bought

a skeleton of a growth engine

and they built everything.

And so it was a very different story.

And the one thing that YouTube,

the one thing that Google did so well

with that acquisition

was the conviction bet

that they made on the business.

And they made billions

and billions of dollars

of investments into that business

for years before it started to make money.

And that is a very hard thing to do,

because to Chamath’s point,

you often have this question

of where your free cash flows,

where’s your dividends,

where’s your buybacks

as a business gets to

a certain point of maturity.

But what Google had,

that many businesses of that scale

have never had before

is their extraordinary growth rate

that continued even as

they were of that scale.

So the the leeway

that Google’s executives

and board were given by shareholders

was extraordinary,

not to mention the dual voting

where Larry and Sergei could decide

to do whatever the heck they wanted.

But they really were able

to take advantage

of their high growth rate

to take all this cash

they were generating and reinvest it

into this YouTube platform,

as well as many other things,

many of which haven’t worked out.

But when they do work out,

you have a business

that I think YouTube’s

probably worth what?

Three hundred, four hundred,

five hundred billion dollars

at this point.

And and it’s really paid back multiple.

So YouTube’s really a one off

because it’s a one off acquirer

and it was a one off

kind of acquisition integration

scenario that we haven’t seen before.

What Google, in effect,

got when they acquired

YouTube was a flywheel.

I mean, it was a brand

and it was a network effect

that the network effect was massive.

It was off to the races.

And I remember Google had Google videos,

but they just couldn’t come close

to catching YouTube

because the flywheel of creators

wanted to be where all the viewers were

and viewers wanted to be

where the most content was.

It was just impossible to catch.

But that organization

was relatively tiny

at the time it was acquired

and it didn’t have any monetization

and it was being deluged.

It was being deluged by legal problems

that that Google legal could solve.

Very unique situation.

Yeah, that was one of the bold

acquisitions of all time.

But what was incredible

is right after the acquisition

and Google started to scale this thing,

most of the content being watched

on YouTube was copyright content.

And I was at a conference

and I remember Philippe Daumon,

the CEO of Viacom, stood up

and Larry Page and Eric

or Larry and Sergey

or someone was on stage

and he yelled at them

and he was like,

you guys are making all this money

and growing this YouTube business

off of the back of our content.

And, you know, the DMCA,

the Digital Millennium Copyright Act

says that someone can file

a takedown notice

and then the platform

has a period of time

to respond and to deal with it.

And the amount of time

it was taking them to deal with it,

new content was being uploaded

and then they’d have to file

another takedown notice.

So it created this insurmountable

you know, copyright, copyright thing.

And and then what did Google do

that YouTube would have

never been able to do?

To Sax’s point,

they built an engine

that could automatically

recognize copyright content

and pull it down

before it was made publicly available

finger without ruining

the user experience

of instant upload

and availability of content

for the fingerprint system

was even more nuanced than that.

The fingerprint system

not only told him, hey,

this is an SNL skit

or this is a music video from Prince.

It said, what would you like to do?

And it put the power in their hands

and said, turn it off, claim it,

and we get the money from it.

And then it was like, well,

we’re telling you

before you even know about it.

And what all these people did

was they say, OK, yeah,

you can make a remix of my Prince

song or this episode of a TV show.

We’ll collect the money.

And that was just, yeah,

the revenue share

was the brilliant part about it

because you put the power

in the copyright holders names.

This just speaks to how singularly

how singular and unique that deal was,

because I don’t think

any other company at that time,

maybe Microsoft

would have been able

to develop technology

to do this and do it at the scale

and do it with this low latency

and high speed for users and so on.

It really was.

A singular transaction,

which Friberg, I think,

speaks to their accumulation of talent,

especially in those early years

where they were just like

hire smart people,

we’ll figure out

what to do with them later.

They actually had those people

sitting around

who could just go jump on the YouTube team.

Oh, my God.

Salt Salar Comongar

went and ran YouTube

and absolutely crushed it.

Probably one of the best CEO runs

that’s never talked about

in the history of tech.

He stepped in and he ran YouTube.

And now Susan runs it.

You know, another incredible run

and monetizing that thing since.

But I mean, and these are people,

by the way, both Salar and Susan

were sub 30 employee people at Google.

So, yeah, good point.

Nick, can we throw up the slide

contrasting valuation to ARR?

This is actually more interesting

than just who made all the money.

So I actually created a plot.

ARR is the red chart

and it’s the right axis.

So as we talked about,

they’re at around 400,

450 million of ARR right now.

And then the left axis

is expected value.

Basically, this was their valuation

and it’s in purple.

And it obviously it goes up

to the 20 billion or 22 billion

that Adobe just paid.

You can see E was the last round

they did in 2021

where they were valued at 10 billion.

Before that, they were valued

at two billion in 2020.

And then, you know, the series C,

I think they were valued at like

440 million or something like that.

And then I think the B,

they were valued at like 125 million.

And then the A, they were valued

at like 50 ish million, you know.

And then there were seed and so forth.

I think what you see here is that

is how efficient in a way

venture capital is,

where it’s tracking

just slightly ahead of ARR.

It is predicting

where the hockey stick is.

So first of all, look at ARR.

It is as close to a pure hockey stick

as I’ve ever seen in SAS.

Kudos to them.

I mean, the crazy thing

is just how long it took

for the hockey stick to get going.

Why didn’t you invest in this company?

Did you see it?

Well, no, we didn’t see it.

Also, look at what a late

bloomer this thing is, you know.

Like that’s incredible.

I see it like look, look

like hockey stick

didn’t really start inflecting

until 2018, 2019, right?

So it’s more that your

table is more striking

where these guys for years

were toiling away.

And then all of a sudden

this thing just took off, right?

It’s really this was such a late bloomer.

And for anyone

who’s doing a SAS company

and you’re in it five years

and you still have zero revenue

and like that doesn’t mean you’re dead.

I mean, they basically

were a zero for five years.

I’m doing exactly absolutely nothing.

And now it’s a $20 billion exit

five years later.

I actually think

I think the only hard round

to invest in this company

would have been

if you were going to invest in.

I think the 2014.

Time period 2015

because you were investing

in a company that hadn’t

even launched yet

that had been grinding

for three or four years

with, by the way,

the founder was like 19

when he started this.

He was a teal fellow.

He was one of the first,

you know, 20 under 20 teal fellows.

Yeah, yeah.

And he dropped out of school to do this.

And, you know, and they spent

several years in the wilderness.

I think that’s when

it would have been hard to invest

is maybe not the first seed round,

because you could tell

this guy was brilliant.

He had a really specific idea.

Moving design tools to the cloud was,

I think, like a very clear

and sensible vision, clear.

You know, why now underlying trend?

I always say my three biggest traits

for entrepreneurial success.

One of them is grit.

I mean, you know,

if you have a high index on grit,

you’re you’re able

to grind your way there.

It’s really that’s a really incredible.

This chart is brilliant

because, you know,

what we see in the seed stage

is right before that series

that is where most people give up sacks.

You know, you get three or four years in.

People aren’t paying for the products.

You’re under resourced

and they don’t get the A

and they got, you know,

that 2013, 14, 15 period.

They were probably trying to get an A.

But it take them two years to get the A.

And then somebody finally decided

easy for a young person to give up

and go get a friggin job at Google

or go back to school

and to to grind it out,

to have the grit and the persistence

and commit to your vision.

He didn’t pivot away.

He persisted and he executed.

He clarified.

He clarified. Right. Yeah.

But he but he didn’t

he didn’t go five steps away and say,

I’m going to do a new startup.

And, you know,

there was no his business, right?

And there’s no pivot here.

Yeah. Dylan Field, by the way,

is the founder.

I had him on the pod back in the day

and really the, you know,

ultimate customer focus,

customer obsession.

Like I said, that wins.

You need to just have your pulse

on what your customers are saying

constantly, because the answer is there.

You just have to develop it

and give it to them.

By the way, also in this chart,

that’s, I think, very interesting.

Saks, I’m interested

in your position on this.

If you look at the chart one more time,

they could have turned on monetization,

I think, a year or two before they did.

So they purposely didn’t charge for it

to get the network effects going.

I would love to see and hear

the number of users as a third vector,

you know, as a third line on here,

because I think they started

getting a lot of users in 2014, 2015, 2016.

That’s when that’s why they got the seed.

But they purposely did not charge

to let the network.

Yeah, 2015 was a private beta.

I don’t think they were even

had a product in 2014

that was usable yet.

2015 was private beta.

2016 was public launch.

And then they turned on monetization in 2017.

And then they turned on

enterprise pricing in 2018.

So I think that’s a pretty

sound progression.

I, I’m not, I mean, to be honest,

I’m not a big fan of taking three

or four years in the wilderness

to build your product.

I think you need to get to market sooner.

But I do think it is a little different

in an existing industry

where the table stakes are high.

So, you know, Adobe

is not a cloud based product,

but those were very rich client products.

And so to get to the point

where you could even compete with them

with the classic Clay Christensen

Innovator’s Dilemma

lightweight version of the product,

there were significant

table stakes there.

And it was a significant

technical challenge to move

design tools into the browser.

They had to do a lot of

cutting edge browser tech.

The browser wasn’t ready for it.

Yeah, this chart is going to be

calling in a few years.

Now that I’m doing after all in

48 hours after it,

I think that’s correct.

Come join me with your questions.

SPACs are back.

I don’t know if you saw on the news,

but Freeberg launched a SPAC.

Freeberg, no, no, no.

He he he announced a target

and a merger agreement.


So now he goes into the D-SPAC process.

Now we have two out of four

besties have SPAC’d.

Freeberg, you want to tell us

about what you SPAC’d?

Well, I mean, we announced

that we’re merging

the production board SPAC,

which is TPB Acquisition Corp.

with Lavoro, which is the largest

agricultural inputs retailer

in Brazil

and operates across Latin America.

You know, we’ve got a good slide

in the presentation

that I think echoes

some of the points I’ve talked about

on our podcast here

about the importance of having

resiliency and redundancy

in global food supply chains

and increasing famine risk.

So we’ve got a slide that shows

for about 30 years,

you know, we’ve reduced

the number of people globally

that have been undernourished

down to about 600 million

as of about three or four years ago.

And in the last three years,

we’ve seen that number spike

back up to 800 million,

which we thought we were done

with global famine.

And now here we are

facing these issues again.

Climate change, the lockdown,

supply chain disruption,

the Ukraine war

and all the other geopolitical

tension issues.

So that’s been a big thesis

of mine individually.

You guys know we’ve talked offline

about some investments I’ve made

and my strong interest in the area.

Brazil and Latin America

is the largest ag export

market in the world.

So they produce calories

for the rest of the world.

And farmers there largely lag

in terms of technology adoption.

I’ve got a nice Brazilian farm

as my background today.

But technology adoption

doesn’t look like it does in the US.

There’s a huge opportunity

to influence and drive

productivity up in that region.

And so we partnered

with the largest ag retailer,

ag retailers, the local locations

that work with farmers.

They have these teams

called agronomists.

They meet with the farmers

typically weekly,

help them make decisions

about what products to use,

what to do, how to do it.

And so with the footprint

and the reach that they have,

I think we can really drive up

productivity per acre

across the region,

increased total

global calorie production.

And that’s why I’m so excited about it.

Fundamentally, it’s also

a great business.

It’s all the financials

are presented in the

in the investor presentation

and will be published

with the SEC here

in the next couple of days.

But it’s a it’s a scaled business,

it’s a profitable business

and it’s growing

pretty significantly.

So it’s got great tailwinds.

It’s a great base business.

But for me, there’s huge opportunity

to continue to drive

what their drive technology

through the platform

that they’ve built.

And that’s why, you know,

we’re also making

100 million dollar investment

of our balance sheet into the company.

So that’s big skin in the game.

Big skin in the game.

And, you know, we put two thirds

of our these founder promote shares.

They’re, you know, the only vest

if we can hit the stock

price of 1250 and 15

over the next three years.

Otherwise, we lose them.

So we’ve really tried to align

ourselves with shareholders

and really put our money

where our mouth is on this

and show people that,

you know, that this is a real

strategic partnership for us.

It’s not just, you know,

an investment that we intend to kind of.

You know, hold for

a short period of time,

this is a key platform for me,

for our for our TPB business

and for many of the companies

that we operate at TPB.

So I’m super excited.

It’s been a long time coming.

It’s been a very hard process.

As Chamath can attest

and as we all talk about,

capital markets are very

difficult right now.

Getting a transaction announced

is the first step.

Now there’s a bigger step

of getting it closed.

But yeah, a lot of work,

but I’m super excited about this.

And thanks for letting me

talk about it. Yeah.

Well, and the other thing I just want

to double click on there, Chamath,

this idea that two thirds

of the sponsor promote

have to hit certain hurdles.

I think that’s probably

a pretty good thing

for folks who maybe want to invest

to just say, hey, yeah, this is great.

Where there’s some alignment

in how these shares get distributed.


I mean, I think it’s a good feature.

I think that the thing with SPACs

in general in a moment like this

is that it’s it actually performs

better in periods of high volatility.

And the reason is because,

you know, you have this redemption

feature which essentially allows you

to get back your your basis.

And so meanwhile, while, you know,

Friedberg was hunting

for a deal or whatever,

that cash, you know,

that you’ve contributed into this back

sits in a savings account

that then actually is generating some,

you know, reasonable interest as rates go up.

So the whole combination

of all of this stuff

actually makes back a pretty good

risk adjusted vehicle

when the markets are highly volatile,

because if at any point

you don’t like how you feel,

even if you love the deal,

you just vote to redeem,

get your ten dollars back

and effectively win the market.

Right. Let’s say the market

goes down 30 percent from here

to March of next year

when Friedberg’s deal closes.

Well, an investor could theoretically

just say, you know what?

I just want my ten dollars back.

Now, all of a sudden

they’ve gotten zero.

They felt zero percentage

of that drawdown.

And that’s what’s so interesting

about the structure

in a moment like this.

So I think there’s a lot

of really interesting features

that that SPACs in the future,

I think, will have to incorporate

in order to in order to be a successful

tool in the toolbox.

One thing I learned from,

I guess, the Pattern AG company

that I think you incubated as well,

or was that a company?

Yeah, you incubated as well.

Yeah. And you guys invested

through your launch platform.

Yeah. So we invested in this syndicate.

Is that the way this retail works

is we have farmers,

but then there are these retailers

or these sales reps,

I guess they call them in the industry

that service the farmers.

And so that’s what this.

Yeah. Yeah.

That’s exactly how this technology.

Yeah, that’s right.

They don’t they don’t know

how else is a farmer supposed to know

what to buy and what to do?

So ag retail, the local retail store,

the people that work there

are called agronomists.

And so the agronomists are like

technical salespeople.

They understand the science

and the technology of farming.

They understand

what the farmers have done in the past.

And then they partner with them

to help them decide

what to do going forward,

what products to buy, how to use them,

how to get the most out of their land.

And so when new technology,

when new ag technology comes to market,

it’s the retailer

that can influence the farmer

to make a decision on making a switch

or using a new tool

or using some software,

you know, to drive that decision.

And so that’s why ag retail is so important.

And why it’s critical

for any new technology

to get adopted in farming,

it has to go through retail.

You know, there’s the big ag input companies.

They’re the seed companies

and the chemistry companies

and the protection companies

and the software companies.

They all don’t sell direct to farmers.

Typically, they’re going

through these retailers.

And so is there a version of Lavoro

that’s been that’s an American company

that’s public or not?

Yeah, it’s called Nutrien.

And so Nutrien own CPS,

which is the largest retail

chain in the US ag retail chain in the US

about, I think,

70, 80 percent of Nutrien’s business

is actually fertilizer production.

And then the rest is the retail business.

You know, that’s the key comp

that we actually show

in our financial presentation

that we published yesterday.

How is Nutrien done

just as a public market?

Do people understand sort of the value

that it creates in the marketplace?


So in the last year,

as we’ve talked about on the show,

companies that are in the fertilizer

business are making money hand over fist

because of the

the issues with the supply chain

for natural gas, potash and phosphates.

And so if you have access to supply

like Nutrien does

and various other fertilizer companies,

do you are absolutely

minting money this year.

And so they’re having record

earnings right now.

And, you know, people are kind of

estimating that the fertilizer market

will kind of reset.

And as a result,

these companies are over earning right now,

which means that they’re getting

low forward multiples.

But generally speaking,

yeah, these businesses

have done very well.

And one of the you know,

I would say the US is about 15 years

ahead of Latin America.

And remember, Latin America produces

and exports more calories than the US.

And they’re all and corn farmers

in Brazil, for example,

are only getting half the yield

of corn farmers in America

or a little more than half

per acre yield per acre.

And the reason is the retailers

in the US are so sophisticated

that they’re introducing services

and they make a bunch of money

selling services now.

That wasn’t the case 20 years ago.

So now they’re offering farmers

advice using software

and and other kind of custom

soil testing services and whatnot.

And that’s really changed agriculture.

It’s given farmers data

that they didn’t have before

and help them make better decisions

using that data that didn’t exist before.

And that’s really,

you know, I would say

concentrated in the US

that kind of sophisticated behavior.

I think it’s really important.

We see it happen around the world now

because we need to grow more food

and we need to do it

without expanding land and acreage

and so on.

And we need to do it more sustainably.

Which is another kind of key part of this.

Did you worry a lot about

like the FX risk of?

You know, all these inputs

coming into Brazil,

having to deal in local currency,

then having to kind of get the revenues

out in US dollars

and all of that stuff.

How did you think about that?

Yeah, it’s a good question.

So when all ag commodities

around the world,

most commodities, right?

They trade in dollars.

And so, you know,

if the dollar strengthens

against the local currency, the AI,

the farmers actually make more money

and the input companies

charge more money in local currency.

So basically, the entire ag market

and around the world,

commodity markets, generally speaking,

inputs and outputs trade in dollars.

And so if you’re a local business,

you actually make more money

when your local currency goes down

and you’re willing to spend more money.

And so businesses in a commodity

cyclical business

generally are currency

hedged because of that,

because they’re selling stuff in dollars.

And then as a result,

the places that they’re buying stuff

from charge them more

in their local currency

and they can still make a good spread.

So, you know, there may be fluctuations

in FX risk.

But generally speaking, I think we see

and I’m just speaking generally here,

not about this particular transaction.

We generally see

and we saw this at Monsanto.

So that’s a good example.

All ag input companies,

when the local currencies devalue

in a market that they’re selling into,

they charge more

and the farmers can afford to pay more

because they’re making more

selling their product

into the market.

I am.

I think this company is super interesting.

So I’m I’m rooting for you.

It looks it looks really cool.

And it seems like a very good

entry valuation, good margin of safety to.

Yeah, one point two billion dollar

one point two billion dollar valuation,

if I’m reading correctly here.

So, yeah, congratulations.

Hard to get a deal done at this time

for people don’t know FX

foreign exchange just.

Trading one dollar

or one currency for another.

Did you guys see that

there was a Title six lawsuit?

Filed against Pfizer for some,

you know, in the in the Civil Rights Act,

there’s something called Title six,

which means that

if you take federal funds of any kind,

you can’t discriminate.

And Pfizer has a program

to recruit African-American

and Latino people into the company.

And they’re not being sued

because, you know,

Pfizer takes NIH grants,

they, you know,

work with the US government,

they work with Medicare,

they work with Medicaid.

And so as a result of that,

it’s really happening

one month before something else

that we talked about, which is

there’s the affirmative action case

that’s going to the Supreme Court, where

I think it’s Harvard, actually.

You know, push people

pushing back on Harvard’s ability to

have some form of race based admissions.

So I just don’t know if you guys

were monitoring this for me.

I just took a step back.

And I thought, look at what has happened

legislatively in 2022.

We basically repealed Roe v. Wade.

The Supreme Court also went after

concealed carry in New York

and said that New York cannot legislate

against concealed carry,

which had pretty big ramifications

with respect to gun laws.

The consensus opinion

is that we’re going to repeal

affirmative action in the next month

or the Supreme Court is going to do that.

These are three pieces

of an enormous change

in the United States

civil society that

that has happened

in a really small,

condensed period of time.

So I have these thoughts

on affirmative action.

But my other thought is like

it’s incredible how conservatives

have been able to organize

and how disorganized,

you know, progressive have been

in order to create

a countermaneuver against them.

Because this has been a systematic

effort since Karl Rove

literally wrote about it

in the mid 2000s and said,

here’s what we’re going to do.

We’re going to raise a bunch of money.

We’re going to redistrict everything.

We’re going to get the state

legislators on our side.

We’re going to basically,

you know, fund the federalist society.

We’re going to and they did it.

And in 20 years, they’ve created

an enormous amount of change

that I’m not sure all Americans

agree with.

Meanwhile, the progressives

are just kind of like

navel gazing at each other.

I mean, and then you left off

this past week, Chamath,

that it seems like

the gay marriage bill

is going to be put to a vote

and that they’re not

going to be able to find

I didn’t see that. What?

Yeah. Yeah.

And Ted Cruz said he’s not

going to vote for it

because it’s attacking

religious freedom.

So we had talked on a previous episode

and I think you said

you didn’t think gay marriage

would come up.

And well, no, if I had to guess

what the political gamesmanship

is here, because they think

it’s not going to pass,

they want to bring it up for a vote

because it preserves the issue.

It intensifies the wedge issue.

When it looked like

they had enough votes,

they weren’t going to put it up

for a vote.

So I don’t know.

I think it’s a lot of gamesmanship

here. Look, I think enough

Republicans should vote for this

just to pass it.

I don’t know.

Why wouldn’t they?

Yeah, well, I think there

I think there’s some issues

with the way the bill is written

in terms of maybe requiring

religious organizations

to perform gay marriages.

I think that somebody should just

make an amendment to clarify

that’s not the case to solve

this religious freedom issue.

I think if that happened,

then you get more Republicans on board

or at least it wouldn’t have an excuse.

But yeah, look, I would like to see

enough Republicans vote for this

to take it off the issue.

I don’t think that

gay marriage is at any risk of being

overturned by the Supreme Court.

Remember, it was Gorsuch

who wrote that opinion.

So I think this is a scare tactic

that progressives are able to use

to fundraise off their base.

Nonetheless, it’d be nice

if enough Republicans would vote

to canonize

marriage equality so that

they wouldn’t be able to do that.

That’s the smart play here

for Republicans.

Yeah, it looks like, by the way,

breaking news in The Washington Post,

Democrats have postponed

the same sex marriage vote

until after the midterms.

So, but I mean, you can understand

why people are going to be

nervous about this after

Roe v. Wade.

They’re doing that because they want to

they want to run on it as an issue.

They want to have that as an issue.

Yeah, I mean,

force it, though.

70 percent of people are in favor, right?

80 percent.

Look, if Republicans want to be smart,

find 10 Republicans in the Senate

who can support this.

Announce now that you’re

going to support it.

Come on, Republicans have a brain.

Don’t let them change the issue from

this economy that’s spiraling out of


I mean, the Republicans are clueless.

What do you guys think

is going on there?

Oh, yeah.

So FedEx stock has dropped

as much as 25 percent

as we’re taping this Friday

after the CEO,

after a little I don’t know if you saw

the video I sent to the group chat, but.

Kramer, Jim Kramer was kind of pushing

him, do you think this recession

do you think he finally said, yes,

I think there’s a global recession.

They missed on revenue and they have

cut their.

Predictions for next year severely

and the stock’s way down, I think

based on what I heard on CNBC from

and reading some stories right before

this breaking news is happening, some

people think this is 60 40 market

versus management.

But either way, I think

the Fed’s interest rates are doing

their job and less packages

are being shipped because people are

Chamath, you would think spending

less money.

And that was the whole point of this

exercise was to slow the economy down.


I think this is a little bit of a

scratcher. This is a new CEO.

So I think the game

theory on this is that it made a lot

of sense for him to reset expectations.

I get that. And I think that that’s a

that’s a reasonably smart thing to do

when you’re incoming,

you know, leader of a very complicated


That really is at the end of the

bullwhip, so to speak, on

on consumer demand.

The problem is, there’s just so much

conflicting data.

You know, retail sales was pretty


You know, China actually looked a

little bit stronger than people

expected just this past week on some

data that came out there.

It looks like Europe is going to

really draw a hard line and make sure

that they spend whatever it takes to

have enough energy so that their

productivity doesn’t fall off a cliff.

All of those signals would say that,

you know, we’re not at the precipice

of this kind of like cratering of


And then you have Powell basically

saying, yeah, we’re going to go

another seventy five and, you know,

we’re going to take rates to

probably somewhere between four and

five percent.

So the FedEx data point

was pretty starkly in contrast

with at least some of the data that

we’ve seen over the last few weeks.

So I don’t know, it was a bit of a

head scratcher.

They got three things working

against them.

Number one,

Amazon just continues

to build out local delivery

infrastructure at an incredible


At the end of 2020,

Amazon was already up to 25 percent

market share,

which put them ahead of both FedEx

and UPS.

And FedEx has seen their market

share decline for the past

eight or nine years now.

So that’s kind of a key

point. Number two is people are just

shipping less stuff, doing more

stuff digitally.

And number three is this recession

impact where

they obviously have key economic

indicators that allow them to do a

better job forecasting deliveries

than most companies, I would imagine.

And so they can see order volume and

trading volume and use that as a

predictor for

what volume for shipping is going to

be in the future.

And I would guess that all three

continue to work against them.

It’s not like they have a lot of

diversification in the business

and other ways to expand out into.

So you’ve got a key vertically

integrated player, namely Amazon,

that is investing heavily

to replace whatever they use you for.

I think as of a few years ago, Amazon

was only like two percent or three

percent of FedEx’s revenue anyway.

But still, I would imagine Amazon is

playing a key role here.

Your first your first comment to me

is is now that sounds like the

most credible explanation.

And to blame a recession

is sort of a little bit of hiding the


It’s probably fair to say that their

lunches get eaten by Amazon.

So I can understand why FedEx is

under a lot of pressure because of


But if you just compare it to just

all the other data, it doesn’t seem

like this whole thing

makes any sense.

What you just said about competition

makes to me a lot more sense.

And yeah, competition with digital

and Amazon.

I mean, digital, like how much do you

guys sign letters today versus


I mean, there’s just a lot and, you

know, I’m giving an example.

Maybe that’s a one percent impact.

And there’s probably a few more


And these things all layer up.

Well, they could be losing market

share while still growing because

e-commerce is growing so violently

in the world. But Saks, what do you


I think what’s going on here is that

whatever the issues of FedEx and

no matter how overstated

these warnings may have been, I think

they’re directionally correct.

He’s saying that the world’s headed

for a global recession and

directionally, he appears to be

right. I mean, things look really


We just had this inflation report

that was much worse than what people

were expecting.

It was inflation was supposed to go

down to

8.0 percent.

And actually, it was 8.3

percent. That’s why the stock market

cratered a few days ago.

It’s like the worst day in the stock


I think maybe all year or certainly

since June, we’re almost towards

the June lows.

Now, this FedEx executive

is saying we’re headed for global


So it seems to me that the economic

news is just pretty grim here.

And we’re in a we’re in

stagflation. The Fed has to keep

raising interest rates at the same

time that we have persistent, high

chronic inflation.

And you have to wonder, you know, I

tweeted a few months ago that the

White House economic adviser,

Brian Deese, he said

that in this interview with

CNN, that the Biden

administration was willing to endure

a global recession in order to

keep Russia from controlling the

Donbass region in Ukraine.

Well, mission accomplished.

It looks like it’s getting its wish.

The administration has made some

progress in the Donbass,

but we are also having a global


So what percentage of this, what

percent of the recession and

inflation has to do with the

Russian invasion of Ukraine?

I think it’s meaningful.

It’s meaningful.

We know it’s a huge exacerbator

of all these problems.

If you were going to put a number on


Listen, I don’t think the economy is

going to get better with the risk of

war three hanging over our heads.

How does that work?

Yeah. But what percent of the

economic issue do you think is

percentage wise impact?

I don’t think we’re in a recession.

Maybe you answer.

I don’t think we’re in a recession


You know, retail sales are still

quite strong.

There’s just a lot of signals that

tell us that people

are still consuming a lot of

things and jobs, too.

And that GDP is pretty reasonable

and that jobs and wages, you

know, are pretty much, you know,

quite full. So I think, Sax,

you are right that we

will be there because you can only

bring rates up so high until you

break things.

Do you see there’s a tweet by, I

think, a Charles Schwab analyst

today about that issue of


And she was tweeting off

to find it that for the second year

in a row, we now have

because of inflation, we now have

real wage decreases.

So you may be right about like where

things stand today.

But this is about the trajectory

right now of the economy.

And the trajectory is not good.

Inflation is not coming down as

fast as people were anticipating.

It’s worse than expected.

You have the situation in Ukraine

where, listen, we can all cheer on

Ukrainians for this counteroffensive

that appear to be successful.

But we are playing with fire over

there. I mean, I

don’t recall a time during the Cold

War where we did anything remotely

this risky.

You have, listen, we have American

generals, American generals

were taking credit for this


Do you see this New York Times story

where they talk about the inside

moment of this Ukraine


So you now have America.

America is now giving Ukraine

more and more advanced weapons.

OK, this sort of the the

long range artillery, they’re

telling them where to point the

weapons or giving them the

intelligence for it.

They’re training them on how to use

it. They’ve got commanders on the

ground there and

and they actually are hand

correcting the battle plans.

The Ukrainians had a

counteroffensive plan.

The Americans said that’s not good

enough and they rewrote it.

So the Americans are now doing

everything in this war except

pulling the triggers and taking the

bullets. And I don’t want to

minimize the sacrifice

the Ukrainians are making because

they are dying in huge numbers.

And, you know, we can all

respect and admire the sacrifice

they’re making for their own


But this is a very risky strategy

for the United States of America to

be pursuing.

I mean, we are we are basically

playing with fire and

we are, you know, this close to

being at war with a nuclear

armed Russia.

And we never came close to this

type of behavior during the Cold

War. And I don’t understand what’s

changed so much that we have to

take this kind of risk.

Now, at the beginning of this

conflict, I said that I was open

to arming the Ukrainians under

Cold War rules, Cold War

rules, meaning covertly, like

we did in Afghanistan.

We now have multiple examples of

the administration boasting and

taking credit, taking credit for

the counteroffensive, for the

sinking of the Moskva, for

killing Russian generals.

This seems very risky to me.

So, Saxon, a court

premise of the discussions we’ve

had here is that the United

States screwed up the negotiation

with Putin by not taking NATO off

the table. Reuters

reported that Putin rejected a

Ukrainian peace deal at the start

of the war, at the start of

the war, Russian chief envoy on

Ukraine told Putin that a

provisional deal with Kiev had

been struck, deal would have

satisfied Russia’s demand that

Ukraine stay out of NATO.

Two of three sources said the

push to get a deal finalized

occurred immediately after

Russia’s February 24th invasion.

Does that change any of your

thinking on

what’s happened here and Putin’s


I think it’s a data point, you


But let me explain why I don’t

think it’s just positive.

And by the way, I saw the

article, every neocon on Twitter

was basically tweeting this,

trying to prove that this

yeah, I would see it on

everybody’s seeing your

Shimer analysis.

Let me tell you why it doesn’t.

OK, first of all, if you read the

article closely, this offer

did not come until after the

invasion started.

OK, and we already knew Zelensky

was publicly saying in the early

weeks of the war that they were

willing to take Ukraine off the

NATO off the table.

So this isn’t that much

news. It happened after.

The other key point here is I

know it didn’t happen too late,

but also the offer did

not come from the Americans.

This is a really important point

to understand about the Russian

position on this.

And I’m just saying this based on

all their public pronouncements.

The Russians made an ultimatum

in December and then Lavrov

negotiated with Blinken in


They were absolutely insistent

that they would accept nothing

less but a written guarantee

from Washington.

Why is that?

Well, the written guarantee was

necessary because they’ve

always claimed that James

Baker, Uyghur Gorbachev

over, you know, German

reunification and not one inch

eastward. So they’ve always

demanded a written assurance from

the Americans.

And the reason they wanted from

America and not Europe

is because they know that Europe

are America’s poodles

and Ukraine is a client state of

America. So listen, they wanted

a written guarantee from America

before the war started.

They never got that.

Now, if your point is to Putin,

do everything he could to avoid

this war. Absolutely not.

I will absolutely grant you that.

But we already knew that.

The question is, did the U.S.

State Department do everything

they could to avoid this war?

And my point is absolutely not.

They should have taken this

Ukraine issue off the table

in writing before the invasion.

Got it. OK, and you’re talking

about Ukraine.

No, I just it

was major news.

And we have an obligation, I think,

to close the loop on it.

I’m glad we have an obligation

to listen.

People are taking this one article

on this one day.

There I think it’s going to talk

about it, because, listen, I’ve

seen all over Twitter that people

take this one article and they’re

like, see, there’s nothing to

this. We’re giving you the

opportunity, Saks.

Now, let me ask another question

for Freeberg. Freeberg.

The other follow up people would

like us to have made here is

we predicted famine

and massive disruption in food.

We debated that here.

You were pretty clear that this was

going to be or could be disastrous.

It hasn’t turned out to be

disastrous yet.

What’s the update on, you know,

fertilizer is shipping, not

shipping? Are we going to have

global famine? Are we not going

to have global famine? What’s the

update there based on this


Yeah, we have a massive

starvation problem.

The U.N.


told everyone.

I mean, no one writes about this

stuff because it’s seemingly not

interesting in mainstream media,

which I don’t friggin understand.

But the U.N.

thinks that three hundred and

forty five million people

now are incrementally

marching towards starvation.

And so I think they did this

at their meeting.

Yesterday, because

of the war in the Ukraine,

so David Beasley, whom who

I know well, he’s the executive

director of the U.N.

World Food Program.

He told the U.N.

Security Council yesterday that

three hundred and forty five

million people are now facing

acute food insecurity

in 82 countries where the U.N.

operates, which is two and a

half times the number of acutely

food insecure people that existed

before the pandemic hit.

And so this is creating, like we

talked about, these rippling

effects in terms of initially it

was fertilizer cost, which means

less food is being produced


Then there was the acute crisis of

getting food out of the Ukraine.

And now it’s less planted acres

and less yield getting out of

those acres, which

we said was going to start to

happen in the back half of this


And if you look at the price,

you know, a good proxy for this is

the price for corn.

We’re at near record highs

for the last couple of years in

terms of corn pricing.

The twenty twenty three futures

pricing for next December for corn

is at six twenty a bushel.

You know, and it kind of

peaked out right around the

middle part of the the Ukraine

crisis in

April at six seventy three.

So we’re getting right back to that

high point.

And so this is a major

problem that’s brewing.

And as I highlighted at the

beginning of our talk today,

which I show in the presentation

for the Lavoro transaction

I talked about earlier.

We have done an incredible job

building a resilient.

A food supply and

excellent global supply chains

to feed people around the world

going back 30 years,

and we’ve been able to steadily

decrease the number of people that

are food insecure or facing

famine and famine in the UN

definition is less than twelve

hundred calories per day on

average for a year.

And so we went from like a billion

people around the world facing

famine about 30 years

ago and got that number all the way

down to 600 million.

And then in the last two and a half,

three years, it’s shot back up

to 800 million.

And now the UN thinks it’s going to

shoot up even more.

So we may even be retracing our way

all the way back 30 years

because of the crises that have


The region around Ukraine

and the resulting impact on

fertilizer availability, fertilizer

pricing and so on.

And as I mentioned a few weeks ago,

many ammonia fertilizer

plants, which is nitrogen fertilizer,

the main kind of component

of fertilizer in Europe are being

shut down because they run on

natural gas.

And so government agencies

and the local producers are

turning those plants off to make

more natural gas available for


Would you describe this, Freiburg,

as because we are seeing

the EU, you know, they remember they

made that decision.

This is why South America is so

important. But sorry, go ahead.

Yeah, no, it makes no sense.

Would you describe this, though,

because the EU was also at the

same time the UN was,

you know, highlighting these

concerns, the EU was also praising

the massive progress we made from

the Russia and the Ukraine,

Russia and Ukraine, allowing

fertilizer, allowing exports and

this resiliency being we got we

got wheat moving.

And then we got some fertilizer

exports moving.

So two steps forward, one step

back would be how you describe this


Yeah, nat gas prices are still

elevated. Right.

And nat gas availability in Europe

is obviously significantly

restricted. Will we get through it?

Will we get through it?

Do you think we can we can manage

this? Yeah, look, I don’t know how

many look at this. There’s some

number of people, some number of

10s of millions, maybe hundreds of

millions of people who are going to

starve between here and there that

otherwise weren’t going to be

starving. By the way, there’s always,

you know, some hundreds of millions,

as I mentioned, of people around the

world that are starving under 1200

calories a day.

And that number climbing some

incremental amount, that’s an

incremental 300, 400 million

people that didn’t need to starve.

And that’s a condition we’re now

going to be facing.

And so people like, hey, yeah,

people are still eating.

You know, there’s still food around

the world.

We don’t pay much attention

to these third world countries, we

don’t pay much attention to these

underdeveloped nations because we

don’t have press coverage there.

And when people are on the streets

and unable to eat, it doesn’t

seem to make everyday mainstream

media coverage.

But it is happening.

And statistically, it is a massive


Yeah, well, we’re doing we’re doing

a great job of covering Kanye and

Kim, but yeah, we maybe get some

reporters to cover the people


We’ve covered and I appreciate you

guys giving me a chance to talk

about it, because I think it’s

super important.

So, yeah, I mean, you know, I think

that’s part of this show is

at its best. I think we’re

highlighting things that other

people are ignoring.

Listen, I just want to say on this

Ukraine situation, and this applies

to this episode as well as all the

previous ones. I don’t want to be

right about this issue, just like

I’m sure Freeberg doesn’t want to be

right about famine coming true.

We don’t want these things to


OK, if I could choose an outcome

right now, I would say be great

if the Russian army collapsed

because of its morale problem,

tucked its tail between its legs,

went back to Moscow.

And then the Ukrainians had the

good sense to

respect the rights of the Russian

speakers living in the Donbass and

Crimea. And this whole thing

basically tamped down

and basically was over.

OK, but look, I think there’s

an equal and opposite chance that

that doesn’t happen.

That certainly could happen.

OK, but I think there’s an equal

and opposite chance that instead

what happens is that we climb

the escalatory ladder that

Putin, I think we are backing him

into a corner.

Everybody says that he cannot

survive the loss of this war.

And yet we’re not willing to give

him an off ramp.

So what choice does he have but

to escalate?

So what does that mean?

It could mean a full mobilization

of that country.

It could mean they resort, if

they can’t achieve their aims

by conventional weapons, maybe they

resort to unconventional weapons.

We don’t know.

This seems like a highly volatile,

risky situation.

And I just think that,

you know, we, the United States of

America, need to be thinking very

clearly about what is in

our interest, because all I see

is an identification.

We’re so interested in helping

and identifying with the Ukrainians

that we’ve lost sight of an American

interest that’s separate and

independent of Ukraine’s desire

for self-determination.

I can understand and respect

their nationalism and their

patriotism, but we are a different

nation. We better think really

carefully about our interests here.

Yeah, and I think, David, sometimes

you’re misinterpreted as this is a

partisan issue for you.

You’re a dove.

You’re David the Dove.

I have dubbed you David the Dove.

You are a dove, not a hawk.

You want peace.

Listen, I believe that if America

is going to risk war

with a nuclear-armed power, there

better be a vital interest at stake.

Otherwise, we should find every

diplomatic off-ramp we can.

So do you feel optimistic

about our ability to navigate,

Chamath, the Ukraine situation,

the war in Ukraine, famine,

supply disruption, energy?

Do you think we’ll get through all

this? Are you optimistic?

I think that rates are going to go

somewhere between four and a half

to five percent.

I think Stan Druckenmiller is


And I’ve said this, I don’t know,

I’m now ad nauseum, so I’ll just

keep saying it.

But I think everybody has

consistently been wrong

and they have wanted inflation

to be a transitory

phenomenon that goes away.

And they’ve been consistently wrong.

Even in our group chat, we see

these forecasts.

They’ve been utterly consistently


So rates are going to go higher

than people expect.

It’ll stay around longer

than people want.

This will have an impact to the


That impact in 2024,

2025 will not be that great.

So that’s one thing.

If you want to focus on Ukraine for

a second, there’s something that I

think we should focus on, which

I read this interesting article

about Russian mothers.

And, you know, in the 1980s,

when Russia was at war with

Afghanistan, there

were these bodies that were sent

home to Russia.

And these mothers got very, very

upset and they protested.

And then.

In 2000,

early 2000s, I think there was

there was a nuclear submarine

that basically sank, got shot

and sank.

And then Russian mothers protested

in the Chechen war.

They are a

group of individuals

in Russia that.

Have enormous

organizing power, it turns out.

And they, you know,

they they really can tell

what the real temperature is on

the ground.

What Putin has done so far

is that he’s largely recruited

people from, you know,

the Spartan communities inside

of central Russia and used

third party contractors.

So he’s minimized the risk of

the real cohort of the Russian

population who really stand,

you know, fervently against what’s

going on.

So until you see that happening,

those guys have a long way

to go. And I think that this thing

is going to drag on for a really

long time.

So it’s a paid army.

Therefore, it’s obscuring the

impact on actual citizens in


It’s half paid, but the other half

are from places where their

organizing power is limited.

And I think that that was Putin’s,

you know, calculation

seeing what has happened before.

Again, sort of like the tip of the

spear of these Russian mothers.

And we’re not seeing that.


that means that the ability for

him to

manage perception inside

of Russia.

Is pretty apparently pretty

greater than people expected.

Yeah, greater than people expected.

So this is going to go on for as

long for much longer

than people think.

So I would just.

Prepare for this inevitable

outcome and just kind of, you know,

manage another year of slogging it

through a choppy waters might

be one way to look at this.

And I think that’s a very good way.

I think we’re in a very volley

choppy market for the foreseeable



And therein lies some

opportunities and

also maybe some discipline in

various markets.

One thing to just keep in mind where

most people feel these rate hikes

is in the 30 year fixed mortgage.

Right. This is where most Americans

are going to feel it.

And if you look at the chart,

you know, like this is a big jump up

from our absolutely free

money environment that most Americans

were feeling doing,

you know,

you know, what do they call it when

you take out equity on your mortgage,

like a second mortgage or a

credit line, credit line,

most people have credit.


People were, you know, experiencing a

lot of free money and upgrading their

kitchens and taking money out of their

homes, yada yada.

But when you look at it historically,

you know, even at 6% or even if it

goes to 7% for mortgages,

it’s a lot less than we our parents

experienced and we experienced for the

first half of our adult lives.

So I think it’s surmountable.

And this number you don’t think is

going to get up to above 10%.

Right. The 30 year fixed.

You don’t see that happening.

So I think it’s manageable, which is

going to be choppy.

All right. Listen, Saks didn’t get to

promote it, but he has a wonderful film

at the Toronto Toronto Film Festival

about Dolly.

And he is doing an awesome

Dolly experience with the

AI that paints pictures.

And so we’re just going to insert into

the end of the program, the beautiful

work he’s doing there and his Dolly

film is supposed to be excellent.

It’s the second film David is

producing after Thank You for Smoking.

So congratulations to our

own little Scorsese

for the sultan of science, the

dictator and

the David the Dove.

I’m the world’s greatest moderator,

Jason Calacanis, and we’ll see you

next time.

Bye bye.

Love you guys. Bye bye.

All right, so I’m at the Dolly Land

exhibit here at the St.

Regis. The St.

Regis Hotel was a very important

hotel in Dolly’s life.

He actually lived in the penthouse

of the St. Regis in New York.

And the St.

Regis Hotel has very graciously

agreed to host this exhibition for

us. And this exhibition

is it’s basically a

rendering of

Dolly’s studio or what Dolly’s

studio might look like.

And those works of art are actually

generated by GPT-3,

the so-called Dolly Engine.

So thanks to the OpenAI team

and Sam Altman for giving us access

to Dolly, D-A-L-L-E.

And so fans can just come

here and they can use these

tablets to enter, you know,

what art they want to create.

They can just enter terms and

the, you know, the engine

will spit out art that

is made not obviously by Salvador

Dali, but it’s in the style

of Salvador Dali.

So I thought it’s a very cool way to

commemorate the film.

We are premiering at the Toronto

International Film Festival.

This weekend, this is an independent

movie I’ve had in development for

something like over a decade.

And the great

actor, Academy Award winning actor

Ben Kingsley plays Dolly

and gives a phenomenal performance.

So we’re excited to

premiere this movie, show it to the

world for the first time this


All right. Thanks for watching.


And instead, we open source it to

the fans and they’ve just gone

crazy with it.

Love you, Wes.

I’m queen of Kinwab.

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 useless.

It’s like this like sexual tension

that they just need to release.

What you’re about to be

what you’re about to be.

What you’re about to be.

What you’re about to be.

We need to get merch.

Besties are gone.