All-In with Chamath, Jason, Sacks & Friedberg - E103: Tech layoffs surge, big tech freezes hiring, optimizing for profits, election preview & more

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What the ffff, what are you wearing, Jason?

What? Oh, Uber had a big week, so this is the Uber-Montclair crossover hat.

Oh, look at that.

And I also bought a Montclair shirt.

You bought that, or I sent it to you? Oh, what? You got the watch and the mug?

Oh, you don’t know about the Apple-Montclair watch?

Or the commemorative mug?

Or the new tack?

You don’t know about the new neck tats that are coming from Montclair?

Oh my god.

So good.

Let’s just say somebody got their beak wet.

I’m not saying that I got a $100,000 sponsorship,

but we don’t have a rule in the agreement about logo placement, do we?

Listen, J. Cal, if anyone was willing to sponsor you,

every square inch of your clothing would be covered in ads like a race car driver.

It is. Look.

You’d be like wearing a jumpsuit every day.

You know, Montclair sponsorships are great.

This is $5 plus $17 of shipping from France on Etsy.

I’m ready to go.

How was everyone’s week? What did you guys do this week?

Just busy, working, trying to be helpful where I can.

And that’ll be the extent of my comments today.

How is Market Street this time of year?

Look, there’s all sorts of wild reports.

I’ve gotten all sorts of inbound from people asking me if I’m like

leaving Kraft Ventures to do something at Twitter.

No, it’s not true.

Jason and I are just pitching in and helping out

while Elon establishes his permanent team at that company.

Elon’s the CEO.

He’s running it.

He’s the decider.

He’s making the decisions.

And some of us are just kind of helping out in any way we can.

And that’s really the extent of it.

It’s a, you know, very much part-time thing.

We’re just helping a friend.

But it’s been like blown up by the media into something much more than it actually is.

It is 100% accurate.

I am still doing my day job, podcasting, investing in 100 companies a year,

just helping out on the margins.

That’s it. The end.

I do want to try talking about one issue that’s already public

because it’s already been tweeted.

So Elon had a tweet this morning about how there’s now like an advertiser boycott going on.

And this falls on the heels of a bunch of reports that came out over the last couple of days

that supposedly there’s been a big influx of like racist tweets.

And Jason and I actually saw what was really going on, which was it’s all not true.

I mean, what happened is that within hours of Elon taking over the company on Friday,

there was a 4chan attack where basically people from this message board

created bots to post hundreds of thousands of spam messages that contained

racist words and epithets.

And within hours, this has been detected.

And Yoel, who runs the trust and safety implementation,

he met with me and Jason and Elon directed him to shut it down.

And Yoel actually posted a tweet somewhere about it.

That’s the only reason I feel comfortable talking about it is because you already posted

the tweet somewhere, but maybe people haven’t seen it or they haven’t connected all the dots here.

But what’s really, I think, unfair about this is that as you’ve seen,

it’s not like your feed was all of a sudden filled with racist things.

These were spam accounts or bot accounts that were posting to zero followers.

They generally have zero followers, or if they do have followers,

it’s other bot accounts, right?

So they’re posting racist tweets into the ether, so to speak.

It’s not degrading anyone’s experience.

It was shut down promptly.

But then what happens is these activist groups, they’re monitoring the fire hose, right?

And so they publish a report saying that racist tweets have gone up 500%

since Elon took over Twitter.

The truth is Elon hasn’t even had a chance to change anything about the content moderation


He’s posted that, like, guys, I haven’t changed anything about content moderation.

Whatever the rules are, they’re the same rules that existed prior to him taking over.

And this is just an organized operation by people who want to create that report.

So then these activist groups basically publish this report, they feed it to news outlets,

and then somebody then takes those reports and then feeds them to advertisers,

and you get a boycott.

But I think the point here is that Elon didn’t do this.

This is being manufactured by people who are not operating in good faith.

They’re trying to manufacture an incident that they can then use to hurt the company.

Yeah, and it was thwarted immediately and fixed.

Have you guys seen episode 333 of the Lex Friedman podcast?

He interviews Andrej Karpathy, who is really, I mean, one of the great minds of our of our

time, particularly around AI and ML.

And the question that Lex asked, which Andrej expounded on, which I think is really interesting

is, what is the next generation of bots look like?

And I think where the problem gets very hard for all platforms, so this is not a Twitter

specific discussion, is that you can now generate such real lifelike human images that

are unique.

And you can also generate high quality text to things like GPT-3 that’s also, you know,

that can essentially push the boundaries of, you know, a low level Turing test.

I think the real problem over time for bots, for spam, for coordinated attacks on any platform,

is that when you use these tools, you’re going to have to become very sophisticated

in how you try to detect them and then to block them.

It’s a really interesting discussion between, you know, two pretty meaningfully smart people.

Karpathy was the head of autopilot at Tesla, right?

Autopilot Vision.


So he’s really smart.


I have no doubt that Elon is going to do a much better job stopping bots on Twitter once

he has a chance to do it, because he’s got this amazing team of AI engineers, and he’s

just going to be more focused on it.

You know what I like the most about what I heard this week is the idea that you can do

either micropayments or subscription to third party content providers, because I think so

much of my news feed is delivered to me through the Twitter app, and then I click on an article,

and then it’s like a paywall, or it’s some sort of difficulty in kind of accessing the content.

Having some integration there or some ability to kind of make a micro purchase to read an article

is going to be, I think, a super feature.

The other thing that I would love Twitter to experiment with is if you have a micropayments

model to publishers, it would be great if you could publish content without a byline,

a la The Economist and see what that does to information quality.


You know, if you do not get any credit to your individual name for writing stuff,

but instead, it goes to the masthead publication, whatever it is, the Times, the post,

I think it could have a really important behavior change in how journalists cover the news.

It’s worth experimenting with, at least.

And if you’re paying them enough money, I think that you could probably demand that

Facebook could probably demand that today, you know, strip the byline away.

And just it just says New York Times, just like today.

It just says The Economist.

Yeah, it is a The Economist is a very polarizing gig in journalism.

For that reason, there are going to be actually a lot of journalists who would prefer to have

their byline taken off.

One of the problems with journalism today is even if you’re doing reporting in good faith

Chamath, and you put your byline on there, harassment, you know, threats, etc, can become

very acute if you’re just covering certain topics.

And so I actually think a lot of, you know, writers and journalists would opt into this,

they might prefer it.

I think they should, because I think the two ends of the spectrum are better than this,

you know, gross middle that we have the end of this.

One end of the spectrum is you have the New York Times, The Washington Post and The Economist

with no byline and no attribution to reporters.

The other end is if you want to build a brand that’s based on your name, go start a sub stack.

And I think that there’s a very good balance there.

And The New York Times could syndicate that as well.

But if you separate the two, all of a sudden, the news becomes more likely to be truthful

news versus, you know, well disguised opinion.

The other issue is, you know, for readers, if you do choose to do a no byline publication,

you’re really going to need time to build trust and for people to understand what you’re doing,

because they will think you’re taking the byline off in order to pursue a certain agenda, right.

So that is the the that is the suspicion that can build up.

The Economist has been able to do this over decades with trusted reporting.


And sub stack proves that you can have no reputation whatsoever.

And if you’re publishing great content, you can build a great business from scratch.

So, you know, you don’t need to you don’t need to pay your dues,

quote unquote, by getting a byline at The New York Times to be a clever writer.

You can start that business today and get paid.

So I think The New York Times should just focus on being The New York Times.

And sub stack should focus on individual people.

And I think if you could clean up the middle, that would be much better for all of us.

Anyways, I’m excited for you guys to help out and pitch in.

I hope you guys do some good with it.

I’d love to come back and use Twitter more often.

Can we talk about the reporting that happened

with the two guys that trolled the journalists and pretended to be fired employees?

Because I actually thought that was such an interesting

moment this week that all the journalists immediately parroted it because it fed their


But there was no fact checking done.

There was no reporting done.

And then several of them, including I think Deirdre Bosa from CNBC,

came out and publicly apologized for that report.

Folks listening aren’t familiar with what happened.

These two guys came out, they pretended to be fired Twitter employees on Monday,

walked out with a box.

Oh, what’s funny, I woke up and they were like, Hey, we just got fired.

It’s terrible.

Life is awful.

No, it’s even worse than a wife.

You know, the guy’s name was one guy’s name is Rahul Ligma.

And the other guy’s name was like Mike Johnson.

So the whole thing was Ligma Johnson.

So I now here’s what’s so funny about due diligence.

I read this story without giving away that punchline to my kids.

All my kids immediately started howling.

They’re like, Dad, if you say these two names are Ligma Johnson.

And I was like, Oh my God.

And so, you know, when, when like, you know, preteens can figure this out,

but the journalism industry could not.

It’s kind of a very telling side.

Freeberg made the key observation, which is they didn’t figure it out

because they didn’t want to because it fit their narrative.

So they don’t fact check things that fit their narrative.

This was my point about journalism.

It just, it was so poignant to me this week when this happened,

particularly as it relates to Twitter and the importance of call it open journalism

or citizen journalism and the integrity of kind of, you know,

of the voices that we all kind of trust as our kind of journalistic authorities

that these guys came out and they were conned right outside Twitter’s offices

into telling a story that fit their sensational narrative.

And it was really a kind of poignant moment for me.

Would you remember that story?

I think it was originally in Rolling Stone.

And then Rachel Maddow amplified it where it was in Oklahoma city,

where supposedly all these MAGA Republicans were eating horse paste

because Trump told them to.

And they were in, this is basically, I thought it was like a COVID therapy.

And then they were going to the emergency rooms of all the hospitals.

And then they were turning away heart attack victims

because there were so many of these people going to the emergency room.

Anyway, it all turned out to be like a made up story, like a hoax,

but the media reported it because the story was too good, right?

It just, it fit too many of their preconceptions,

to me, there’s also one, there’s another vector sex, which is live coverage is,

you know, you really have to be careful because when doing live,

people will call in and say, Oh, they’re at the scene of an accident.

And then they will do a baba booey or whatever, you know, kind of charades.

And so without fact checking, and without saying, Hey, we haven’t confirmed this yet.

But these two employees are claiming this.

People want to get real time coverage.

It’s fine to do real time coverage.

I think everybody in the audience has to understand so much credit.

What about the editor?

There was a picture and it said Ligma Johnson.

No, that is so lazy.

Why are you covering for these people?

I’m not covering.

I’m just trying to explain it.

No, you’re missing.

Let me unpack the whole point.

Let me unpack the whole point.

There’s also you interrupted me.

Well, here’s the thing.

There is a different standard for live news coverage.

And then there we’ve ripped out fact checking from a lot of these publications

and basic fact checking and a little bit of time.

I’m explaining why they make this mistake.

I’m not protecting them.

You want to know why?

The reason they make it, that’s part of it.

But they’ve also ripped out fact checking.

And then they are in such a race to get the clicks on social media.

No, no.

Here’s what’s going on.

If the story fits their priors, they run with it immediately.

And they don’t do any fact checking because they don’t want to know that it’s not true.

That’s what’s going on.

There is an element of that.

They will fact check a story if it’s a narrative they don’t like, because they’re going to make

they’re going to try and make sure it’s not true.

Yeah, that’s true of both sides.

And they’ll use proxies as well.

There’s only one mainstream media.

This is the mainstream media.

Who’s the alternative?


What’s the alternative, Substack?

Fox is the number one news network.

The alternative to the mainstream media is the Substack journalists.

You think Substack journalists do this?

Tell me the writer on Substack who behaves this way.

There’s a lot of different ones there.

Who got fooled?

What Substack writer got fooled by Ligma Johnson?

No, seriously.

Glenn Greenwald, Matt Taibbi.

I’m not defending it.

I’m explaining.

Matt Taibbi got fooled by Ligma Johnson.

I don’t think so.

I’m not defending it.

Don’t make me defend Ligma.

I’m not defending Ligma.

You’re both sidesing it.

I’m not both sidesing it.

I’m telling you what is happening in journalism today.

They have ripped out fact checking and they are in a race to beat each other because the

first person to get the story up gets the clicks.

That’s the dysfunctional thing.

They tried to create a story when there was no story there.

They went and camped out.

They went and camped out outside of an office, mid-market street.

And they said, hey, there’s this sensational thing happening.

And there was no sensational thing happening.


And so the little drop that fell into their laps, the little thing that fell into their

laps became the story.

Because that’s the story they wanted to see created.

There was no story beforehand that there were all these people being fired, walking out

with boxes.

And then they said, let’s go send live TV producers down there.

They sent the live TV producers down there and then the story was manifest.

They did the same thing in New York at Bear Stearns.

There was no story to cover.

When they had other major layoffs at Bear Stearns and stuff like that during the financial


Of course, they sent people to do live coverage there.

Not defending it.

I’m just explaining to you what’s going on in the background as well with live TV and

the gutting of newsrooms and having no fact checking.

A lot of these stories go out.

But what about the copy?

Years ago, they used to have my 11 year olds and 10 year old copy editors are better copy

editors than these adults at these.

It’s crazy.

Incredible publications.

My kids started howling.

They were like, Dad, do you understand what you just said?

It’ll lick my jaw.

I mean, come on.

This is like prepubescent humor that these people fell for.

It’s ridiculous.

It’s embarrassing.

It’s certainly embarrassing.

Yeah, it is embarrassing.

And this connects with the 4chan board.

It’s the same problem.

This is a grievance industrial complex, right?

They’re manufacturing grievances.

It’s funny in the case of Ligma Johnson.

It’s not funny in the case of the 4chan board.

But these are people who are inventing stories because there’s a certain area to manipulate

media because they know it’s so easy to manipulate the media.


Anyways, big shout out to Rahul Ligma.

That was a great start.

Well played, sir.

Also happens to be a huge fan of the All In podcast, apparently.

Well played, sir.

He’s welcome on as a bestie guestie anytime he wants.

Oh, no.

Well played.

Definitely not, please.

Well played.

All right, we should talk about layoffs in tech.

Lyft, 13%.

Riff, 700 employees like yesterday.

Stripe, 14%.

Riff, 1000 employees.

Opendoor Chime, Dapper Labs, all hundreds of employees.

Opendoor, the most significant there, 550.


Dapper, 22%.

And Twitter.

We’ll see what the riff winds up being.

But that’s occurring as we’re taping here.


And then Jason, Apple did a pause.

Amazon did a pause.


And Google and Facebook have.

Yeah, maybe trying, maybe signaling a pause, but haven’t.

They’ve been hiring, like, absolutely at a crazy, crazy pace.

And we’ll pull up the chart here.

It’s instructive to look at Facebook and Google because they have not slowed down

by any stretch of the imagination.

Just by the raw numbers.

This all started to peak in June and now is starting up again.

So there’s a website,, that’s been tracking all these layoffs.

You can see the number of layoffs.

These are kind of major layoffs.

And the number of employees impacted been pretty consistent in the third quarter.

It started to die down in September.

From the peak in May and June.

And now this is going to be picking up, right?

Yeah, it feels like this is the double dip we were talking about.

I think this is the beginning.

This is not even unpack it.

Well, I think that we had if you take a very balanced view of what happened this week.

You have to start, I think, with the Federal Reserve.

And really what they said is rates will probably be higher than all of you think.

And they’ll be higher for longer than all of you want.

And again, without debating whether that’s going to come to pass or not.

The thing that you can do is you can build a little sensitivity model to understand the

mathematical implication of it.

And basically what it means is that the dollar that’s right in front of you

is now meaningfully more important than the dollar that’s far, far away from you.

So let’s just assume that the Fed funds rate goes to five and a half percent or so.

Even five, let’s go to the optimists and say it’s only going to go to five.

Tech companies have to achieve 500 basis points above that minimum.

So we all have to generate 10 to 11% returns for us to be on a risk adjusted basis

better than a government bond.

The problem with that is all of a sudden, you know, if you’re trying to generate cash,

even three or four years from now, it’s not worth that much.

You need to generate dollars today.

And so, you know, they are really reprioritizing the value of short-term profits.

And that’s going to affect how companies get money, the cost of capital.

So how much dilution you have to take.

So I think this is what companies are now bearing down for.

They’re realizing, oh man, I need to get my cost structure way in line.

It is way better now.

Just think about this contrast.

It’s way better to grow at 20% and be profitable than it is to grow at 100%

and burn money because it’s not clear where that second company is going to get the incremental

dollars they need for growth.

And that’s just a mathematical realization when rates are 5% risk free rates are 5%.

So I think this is this is that moment where you see that pivot from pivot growth to profit.

Yeah, yeah, we can talk.

We’ve been talking about it for six months.

But this is this is this is how it is manifest in Silicon Valley companies is

of scale is through layoffs and cost reductions and cost savings.

So the investments in future growth are reduced.

And the timeline to drive greater profits is improved.

I think what if what Elon is going to do a Twitter or what is reported.

So this is nothing to do with anything anyone told me.

Just what I’ve read in the reporting is accurate that he’s going to cut so deep.

He’s going to cut 30 40 50% potentially of the employee base.

It really sets a new standard for how profitable a tech company can get.

And again, I’ll give credit to a Twitter poster named post market who I didn’t give credit to

a few weeks ago, when I read this tweet, which I think was a good one, which was that Elon’s

really going to show everyone just how profitable these tech companies can be just how lean they

can be run.

And you know, when you’re doing a 10% riff or a 13% riff, you may or may not even be getting

to profitability with that riff.

When you cut 30 40 50% deep, and you can actually turn a real profit on a business and enterprise

scale business, like a Twitter or like many other enterprise software companies that are

out there right now.

It really kind of sets a new standard that a lot of folks might then end up saying, you

know what, maybe we should go deeper.

And there could be the case that private equity firms take a look at this.

And there’s a lot of these distressed mid cap and small cap software companies out there

that private equity firms now realize, wow, you don’t actually need 50% of the workforce

in order to keep the product running and to drive to profitability.

And you could see a bit of a flurry of buyout activity as more folks come in, and maybe

try and mimic the Elon playbook.

So you know, that’s one kind of prediction I think may arise if Elon is successful in

making Twitter a much more profitable enterprise, it could set a new model that catalyzes a

lot of other M&A activity, a lot of other buyout activity of these distressed small

and mid cap companies by by other actors.

Can I build on what you’re saying?

Nick, could you please just throw up that tweet that I sent just for all of these guys

to look at because I think it’s incredible.

So to your point, this is an incredible slide.

This is an incredible slide.

And essentially what it shows for those folks that are not watching this on YouTube is it

essentially shows the private software universe, and then the public software universe at

different levels of valuation.

So as an example, right now, there are 15 companies, private companies that are valued

greater than $10 billion.

And there are 40 public ones that are valued greater than 10 billion.

There are 50 companies between, you know, more than 5 billion, but only 60 that are

public that are valued more than five.

And here’s what’s crazy.

There are 400 companies who have an average valuation of 3 billion.

And then there are already 70 companies in the public markets where they have a billion

dollars of next 12 months of revenue.

And it just goes to show you to your point, Freeberg, if these folks have to generate

an 11% hurdle rate, their cost of capital is 11%.

The companies on the left will have to go through a lot of very difficult cost cutting,

potentially headcount reductions, you know, repricing of the product, all kinds of things.

And many of them have, yeah.

No, none of them have.

Oh, of these?

And many of these are on the layoff tracker.

Yeah, on the left, right.

400, there’s almost 500 companies here that have to do an enormous amount of work so that

they have a chance to be on the right hand side of this chart.

The point is that you didn’t have to do this when rates were zero, there was just

an abundance of free money and risk seeking and duration that is now out of the market.

Jamal, I think there’s also a story that of the 200 companies that are software,

public software companies that you see on the right, some number of them will need to

go private in order to do the restructuring that the market is demanding that they do

in order to get rightly valued.

And to your point, it will happen at meaningfully lower valuations

than where they probably went public or their last round, which will put you guys as you

guys enormous pressure.

Yeah, if you guys look at these 200 companies on the right, how many of them do you think

go private over the next 18 months to get restructured?

Allah, what Elon is showing everyone is possible at Twitter.

18 is 18 months is hard to predict.

But to your point, freeberg, I think if you look at the number of them that are unprofitable,

at least half of them will have difficulty and about so I think about two thirds of these

companies really have no line of sight to profitability in the next two to three years.

And again, if you if you layer in this cost of capital argument,

all of those companies, David will have to raise money at very egregious terms in order to keep

themselves going as a public business, in which case their alternative is to go private in a PE


So it’s probably at least half these businesses.

I mean, it’s a lot.

You think there’s 100 PE deals to be done?


100 by Wow, sex.

What do you think?

Because you know, these businesses and the models, I mean, some of them, it’s hard to

get profitable if you’re scaling SAS business, right?

Like, you have to get to a certain scale before it’s possible.

Well, I don’t I don’t that’s like a very specific question of like, how many of them are gonna get

acquired by PE firms versus going public or going private after being public?

It’s that’s like a very specific question.

I think the larger point is just that it feels to me like the economy is headed off a cliff

right now.

I mean, I can tell you within our larger portfolio of companies, like I can see the trajectory.

So after Q1 board meetings, I would say about two thirds of portfolio companies were hitting

their numbers and one third were missing.

And it still appeared to be like problems related to those specific companies, not a

macro trend.

I would say after Q2 board meetings, two thirds were missing and one third were hitting their


And you could start to feel, OK, maybe there’s like a macro trend here.

And I would say after Q3 board meetings, like now, the entire portfolio is reforecasting.

Maybe there’s like a handful of companies here or there that aren’t if you’re one of

those, congratulations.

But like, even the best companies in our portfolio now are seeing major headwinds.

And this is just, I think, an economy wide slowdown.

Do you think there’s restructuring possible?

I mean, can these companies?

Yeah, because let me just ask in the public markets, do you think those public companies

can get restructured as public companies in order to?

Yeah, it just takes the will.

Yes, of course.

It just takes the will.

No, it’s expensive.

I don’t even think it’s will.

I think it’s just expensive.

Look at Coinbase as an example.

Like, look, take Coinbase versus Carvana, right?

These are both businesses that issued convertible debt sort of right before things got very,

very hard.

And if you look at where their convertible debt trades, it’s trading basically at an

implied yield of about 12 or 13%, both companies.

Now, one is probably, you know, a legitimate bankruptcy risk, which is Carvana.

That’s what the market would think.

Whereas the other one, you know, I think it has a very fortified balance sheet and could

weather the storm, Coinbase.

But unfortunately, in a moment where, you know, rates are, again, the risk free rate

goes to five, five and a half, our cost of capital to do business goes to 10 or 11.

These guys have to pay 12 or 13%.

My gosh, it’s really, really dilutive to be in business right now.

So it just goes to show you that you can stay public.

But if you want to get incremental money to cover your burn, the only way you can do it

without really, you know, blowing up your cap table and doing a massive recap will be

through convertible debt.

But it has a huge overhang and you risk turning the keys over to the debt holders of the company.

So the alternative for that business is to go into the hands of private equity and get

out of the spotlight of these public markets.

But public private equity is very smart.

And the thing that’s happened to them is they can’t raise debt.


So what do you think they do?

They just have to pay 50% less than what they would be willing to pay before because they

have to write, you know, 100% equity check.

So there is no free lunch anymore, I think is the big is the big point to point out anywhere

in the market right now.

I think one of the things I’m most concerned about or would be is I was talking with a

friend who works at a private, you know, unicorn software company.

And we talked about the numbers of the business.

And I was like, Oh, that company is probably worth x.

And I gave him a number.

And then I asked him how much money they’ve raised, and they’ve raised more than x.

So I was like, dude, your options are worthless.

Like, you know, this is a real problem, I think that’s probably going to become very


For scaled unicorn software companies, what happens to these businesses sacks in the market?

You know, as they kind of need another round, but the value of the company is now less than

the total cash that they’ve raised that all is sitting as preferred stock.

Listen, it’s survival of the quickest, those who are most willing to adapt the most quickly

are going to survive and the ones that are stubborn and refuse to accept the new regime,

the market regime are going to die.

We showed that chart.

Remember that chart from Sequoia months ago on this podcast?

Remember that where it basically showed what happens if you’re a company that doesn’t cut

burn until the very end, then you’re still gonna run out of money and die.

But if you make the cut right away, quickly, you have enough runway to weather the storm.

And I think that what we’ve seen is, you know, at my firm craft, yeah, this is exactly it.

Yeah, we showed this months ago.

We’ve been begging our founders to embrace this.

We did a portfolio, a review with our entire set of founders of our portfolio companies.

We did one in February, when we felt the markets were changing.

And we did another one in May, and we showed the slide.

And this is the most important thing for founders to internalize

is you have to make the changes quickly.

You know, one way for them to think about it is let’s say you’re a unicorn company, okay?

And you raised at the peak, let’s say second half of 2021,

you raised $100 million at a billion dollar valuation.

And let’s say you’ve got 50 million left in the bank, right?

So you’ve burned 50 million.

A lot of these founders are thinking that 50 million they’ve got left is only 5% dilution.

But that’s what it was historically.

If you were to raise a new round today, you might only be valued at 250.

So that 50 million you have left is actually 20% dilution.

And that’s if you could even raise, which might be very, very hard.

The most important thing founders can do is forget about

the historical terms on which you raise that money.

Forget about how much money you were burning in the past.

Just think about how much money you have in the bank today.

Impute evaluation to it.

So you really internalize how much dilution that money represents,

and then create a new plan moving forward to preserve that cash as long as possible.

Can I say something else quickly on top of this?

I think that’s really good advice.

The thing that again, people should do is you should just build

a little spreadsheet for yourself to understand what the alternative financing

options are for people who are in the business of investing.

So David, to your point, the current three-month T-bill rate is 4%.

You know, you can buy munis now between 4% and 5% that are triple tax advantaged, right?

You can buy high-quality corporate bonds that are 6%, 7%, 8%.

And so by stocks that are that have a dividend yield of 5% of growth,

growing market leading growing, and so all of a sudden dividend yield.


And so all of a sudden, like turning around and giving it to a company where

there is no end in sight in terms of it doesn’t get you to profitability

is a really, really hard thing to do.

I was talking to an entrepreneur, David Soloff, just yesterday.

And he said it really well.

He’s like, listen, you know, I’m not a macroeconomist.

I’m not trying to forecast, but he’s like what I understood yesterday.

This is David talking about the Fed as an entrepreneur.

The angle of attack has changed.

The Fed has said this is not going to be some triangle sawtooth.

It’s not going to go up sharply and then come back down sharply,

which is what we would all want if we wanted things to get back to normal sooner.

The angle of attack is now a little bit slower,

which means it’s going to take longer to get where we need to be.

And then we’re going to stay there for a lot longer than we want.

And when you roll those two things together, a lot of companies may run out of money.

And so if you can’t get to default alive,

you have to look at your cost structure and figure out how to right size this thing because

the cost of capital is just going to be really, really expensive.

And this was the Fed’s goal, right?

They wanted to take away this free capital.

They want to slow the economy down.

And it seems like they’re making progress.

They did the 75 basis point hike this week, but we’re adding jobs to the economy,

we have more job openings, and we had 2.6% GDP growth.

So I guess my question to the everybody here is,

what is the Fed going to have to do?

Or can they stop this consumer and this growth?

It’s very strange, right?

Paolo Paolo said he’d rather overcorrect and break things because he has a toolbox

to fix the broken bones, but he doesn’t have a toolbox to fix if they undercorrect

and they have rampant inflation.

I mean, not more explicit, you can’t get Jason.

So he’s going to take rates until demand is destroyed and enough demand is destroyed,

such that inflation is tamed.

But that has huge implications to all of us because we all have to do our job,

trying to build a company, trying to raise money, trying to invest money.

It’s just getting much, much, much harder than I even thought.

So like, you know, for me, I’m like, wow,

I thought that we could get through the worst of this by mid 23.

But now you have to plan for the worst, which means,

okay, now I’m thinking that men rates could be higher for much longer,

which means, you know, we could be in this market till early 25.

And you may say, hey, that’s way too conservative.

Yeah, but you have to plan for conservatism in this point.

So how do I invest money right now?

Honestly, I’m like, hmm, I should just put more into T bills.

Isn’t that crazy?

If a company’s like H math can have another 10 15 20 million bucks?

I’m like, wow, I mean, I don’t think that that gets you anywhere.

And oh, by the way, that 10 or $20 million, I can generate 4%.

What a tough trade off, right?

For well, for somebody who has access to private markets,

which should be high growth companies to take the guaranteed for over the 50 x 25 x 10 x,

whatever we’re trying to bet on here.

Yeah, it’s not it’s not just the guaranteed for but if you want to take tech risk,

then you could go buy the corporate bonds of some high quality companies for the 10 or 11%.

So you take moderate risk.

So you’re also competing with that not to zero risk.

Can you explain that for the listeners what that corporate debt is and why it,

you know, pays more?

Sure, there are there are, you know, high quality public companies,

tech companies that have bonds, and that’s corporate debt.

And they obviously have to pay a higher rate than what the Treasury pays,

because the Treasury is is risk free, and corporations could default.

So there is some risk to it.

It’s not zero risk.

But, you know, it’s like, if you’re willing to take tech risk,

then why wouldn’t you buy a bond at 10%, meaning the equity always has to beat

that threshold return.

But But hey, can we just go back to the jobs report for a second?

I mean, the US government could default, but it’s considered the least likely to default

of all issuers of debt in the world.

And that’s why I said,

they control the printing press.

Yeah, that’s why people call it the risk free rate, because it is the least risky.

The US can always repay its debt, because the debt is denominated in dollars,

and the Treasury can always at the end of the day, print more money,

that would just be monetizing the debt.

Other countries that owe money in dollars, and obviously don’t control the US Mint,

they can’t do that.

So they could actually default.

But since we’re the world’s reserve currency, we’re never going to default.

However, the dollars that you get paid back

by the US government might be worth a lot less in the future because of inflation.

And that’s the real risk you have to think about.

But there’s no default risk, right?

Whereas with corporate debt, there is.

But let’s just go back to this, the jobs picture for a second.

Jason, you asked about this.

So there is news this morning that we added 261,000 jobs in October.

And obviously, given that there’s an election in a few days,

then the administration is eager to point to this.

But if you dig a little deeper in the report, I just posted the link there,

you see in the raw numbers that there’s actually 328,000 fewer employed Americans.

And the number of unemployed Americans actually increased 306,000.

And the labor force participation rate declined for the third

consecutive month to 62.2%.

So I don’t really understand how all these numbers add up.

But the point is the data is very mixed.

And there’s definitely a negativity in there.

And this feels to me like the last gasp of the bull market,

where there’s this residual job creation.

But you look at just what’s happened in the last week, where it’s stripe cutting.

I mean, Stripe’s probably the single highest quality.

I think it’s probably the most valuable private company in Silicon Valley.


No, SpaceX is.


Well, SpaceX, OK.

But like software, pure software company, they had a 14% cut.

You’re starting to see now the rifts really start to pile up.

So I think we’re at the beginning now of a long cycle of the unemployment rate going up.

I mean, it just feels like the economy is slowing so fast.

The markets are, you know, they’ve been puking now for six months.

It just feels like this is the beginning of a like really serious recession.

Yet we had GDP growth.

Yet we had job openings.

Remember, we had two quarters.

We had two quarters of net negative GDP growth.

This is when we had the debate about what a recession is.

It was true that if you looked at growth in nominal terms, it appeared to be strong,

and then it was net negative once you subtracted the inflation rate.

You know, we said several months ago, my prediction was a double-dip recession,

where you had this shallow technical recession.

Then it bounced back in Q3.

But now I think we’re headed into the second part of it, which is the real recession,

a recession characterized by joblessness.

And you’re starting to see economists say we’re going to go from

3.7% unemployment rate to, say, 5% or 6% unemployment next year.

So I think we’re just beginning to see the job cuts start to add up.

I think this is what Powell meant, which is, you know, he’ll take it as far as it takes,

and then he can fix it on the back end by reintroducing,

you know, quantitative easing and reintroducing lower interest rates to stimulate demand.

But there is a result.

What are the odds he gets this right?

It seems to me that the Fed has a habit of reacting too slowly.

They were too slow to react to inflation.

My guess is that they’ll be too slow to react to the recession.

So we’ll end up with a period of rates being higher than they should too long.

And then they will correct, they’ll drop rates, but that could be two years from now.

And meanwhile, we could be in a pretty deep recession.

I think you’re probably right.

Here are the two charts for you to look at.

The GDP by quarter, and then after that, the labor participation rate.

So there’s your GDP, q1 q2 being negative q3 bouncing back, we’ll see what happens in q4.

You know, here’s your Fed force participation rate for labor, as we discussed,

the thing with the labor participation rate that we’re still not sort of like truly factoring in

is like, you know, we had a million Americans die because of COVID.

And, you know, starting in that Trump presidency, we lost like seven or 8 million immigrants.

So those 8 million people have a huge effect on this number.

Yeah, right.

And it’s not properly really factored in.

Because if, if, if you see that at the start of the Trump presidency,

it’s just it just fell off a cliff, basically.

And you also have people who retired early, that was a big trend.

And this all peaked in 2000.

Labor participation hitting that like 67 68%, I think is the peak.

And just slowly going down as boomers retire early, because they made so much on their 401ks

and homes.

And then you’re right.

Chamath, we’ve had negative, we’ve really cut immigration the last whatever, five, six years.

I think there’s an element in here that’s missing on how much people individually are

finding other ways to earn income.

That doesn’t qualify and show up in the labor force numbers.

People have set up Etsy stores.

Shopify stores have tripled since COVID.

People are making more money on YouTube on Instagram on TikTok than ever before.

There’s a whole new class of work that revolves around the individual

creating their own business creating their own income stream.

That’s simply taken off and has taken off.

It was it was kind of a trend pre COVID.

But it really took off during COVID.

And there’s an element of this that’s really more about the transition of how people work

and how they earn.

That isn’t reflected in these numbers.

I don’t think that the idea that everyone should go be an employee at a company is necessarily

the right way to think about labor going forward.

The amount of money that individuals are earning is probably the better way to frame this up

going forward and really thinking about the earning power and the economic health of this


This is something important you’re bringing up here.

Gig workers are about 9% of the workforce.

And Uber and Dara had they grew over 70% this year.

But I think the big number that I watched for was drivers are making $36 an hour in

the United States working for Uber.

So you’re exactly right.

People are finding other options, whether it’s DoorDash, Uber.

And that doesn’t qualify in labor force, right?

Because they’re no, it does.

Independent contractors are counted.

Yeah, they are counted.

That’s based on my preliminary research.

If somebody wants to fact check us, that’d be great.

But my understanding is independent contractors, which is what gig workers are classified under

are counted in labor participation.

I don’t know how they’re counted.

So we’ll look that up and figure that out.

There was a story in BBC that the Bank of England has now warned that the UK is facing

its longest recession since records began.

Some of this is getting to be fear porn.


But look, here’s what I think is scary about going into a recession is number one, you

don’t really know how long it’s going to take to get out.

We know the average recession lasts about 18 months.

But the truth is once it starts, you just don’t know.

And the second thing is you don’t really know who’s been stress tested.

People claim that they can weather the storm.

But the truth is that there’s no way to truly simulate a stress test.

They claim they can.

But the only way is to really subject an institution to that pressure and that stress.

And then you see if they come out the other side.

So that’s the issue.

As you’re just going into this, there’s a lot of unknown unknowns.

And this is why I would just urge founders to be cautious is because if the recession

ends up being shallower and shorter than people expect, great, you’ll be surprised

to the upside.

But if the recession ends up being deeper and longer than expected, you don’t want to

go out of business.

You want to be protected against that.

So again, we’ve been saying this since February and May.

But again, I just reiterate, I think it really makes sense for founders to be conservative,

prioritize your survival above all else.

This recession probably will last about two years.

You want to make sure you survive it.

And to Chamath’s point, if you survive it with lower growth, that’s fine.

You can keep growing on the other end of this thing.

But if you go out of business because you grew too fast, then you’re not going to get

the chance to fix that problem when the recession is over.

I just don’t see anybody rewarding hyper growth that is burning a ton of cash where you have

to be back in market every year because it’s just very hard to feel comfortable that the

conditions on the field aren’t going to be drastically different a year from now, right?

It’s not like we know that it’s going to be better or worse.

And I think that that uncertainty is actually really bad for companies.

So to your point, it’s just like a lot of folks have tried to shy away, David, from

actually revisiting their valuations.

They’ve done these complicated converts and they’ve tried to basically, you know, it’s

I think it’s sort of like managing their ego or the board’s ego.

And I think like the next shoe to drop has to be these founders and these boards just

saying, OK, let’s just take the hard medicine.

What’s the real market clearing price and valuation?

Let’s get a third party to price it and let’s get new fresh equity and then move forward.

Because if you don’t do that and you wait until everybody’s trying to do it, then it’s

going to be a really tough scenario.

So better to your point, you know, this is why I like Stripe.

It’s so smart, better to cut now.

Again, it’s always hard to let people go, but it’s better to do that now than 18 months

from now, because you just have no idea how much more expensive or hard it’s going to

be then.

And who’s going to even be in the business of lending money or investing money in 18


And, you know, that that sounds pretty crazy.

But it’s like, I think that that’s that’s the moment that we’re in.

To your point, Friedberg, I did a little research here.

And according to the Fed of St. Louis, if you counted casual workers, informal workers,

over doing over 20 hours a week of informal work, aka gig work, you would increase labor

participation between a half point and a point if you counted all of them, maybe even slightly

more than two percentage points higher.

So probably about a point seems like a realistic way to look at labor participation.

And of the eight points, or maybe now the six or seven points to 10%, it would then

account for 10 to 20% of the 10% drop in labor participation.

It’s just alarming statistics, because if most people have most of their personal net

worth tied up in their home asset, and their home values are declining or going to decline.

And we’re seeing this dramatic spike in consumer credit in the US, it paints a really ugly

picture for the next two years.

Wow, guys, I’m just looking at I’m just looking at the markets today, get labs down 15% snowflakes

down 13%.

Monday’s down 14% down 30%.

In one day, a Yelp is down 17%.

These are open door is down 16%.

So it’s just a horror.

Oh my gosh, the Cloud Computing Index WCLD has hit a new low for the year.

It’s down to 23 bucks.

I think the previous low was 25 is down almost 8% today.

And this is on a day in which the NASDAQ is down less than 1%.

So the point is,

People are rotating out of growth stocks.

Yeah, it’s just brutal.

And so, listen, if you’re a startup founder, you got to realize these are like some of

the highest quality public.

Twilio is down 40% today.

Twilio is down 37% in a day today.


But guys, this is this is just math.

You know, it’s not a judgment on any of these companies.

It’s just pure math.

This is why I think you have to be utterly unemotional in this moment.

And if you’re if you’re a CEO, running a company, particularly a SaaS business,

you have to really figure out how to how to right size your cost basis and make this

money last profitable industrial companies are up.

Bill Gurley had a tweet a tweet about this a few months ago about how the biggest mistake

people make in riffs is they just do like a tepid riff, like a 10% ish riff, and they

have to come back and they do it again and again.

This is what I think the the Elon action this week really sets a standard.

He shows the entirety of Silicon Valley, that you can cut deep and you can turn a profit

and you can do it fast.

And it could set a new standard for how folks are managing this.

Jack Welch used to in his management principles, recommend dropping the bottom 10% of people

every year.

And so you know, the 10 13% cuts don’t really pass muster as a public market investor kind

of looks at the the management across these different companies to turn a profit.

They’re going to say the folks that are making the deepest cuts, the fastest are the ones

that are going to get valued.

It’s unfortunate.

And it’s a difficult circumstance for everyone in Silicon Valley to deal with from the employees

to the investors to the public and private shareholders.

It’s really brutal.

One quick question for you guys.

It’s really just this kind of market motivation that’s underway right now.

Here’s the chart.

And my question for you is when do Google and Facebook stop this?

I mean, if you look at the number of employees being added, it is truly extraordinary.

Here’s the chart.

And this includes the latest quarter.

So they are not turning off hiring yet.

What do you think?

Hold on, didn’t they announce a hiring freeze?

They announced that they were at Google, they announced that they were going to hold people

accountable to better performance, and they were going to go do more with less, and then

they added more people.

Facebook said they would do a hiring freeze today.


Facebook said it would do a hiring freeze.

And they added jobs.

Well, whatever.

They added jobs last quarter.


Well, you’re right.

They just announced a hiring freeze.

You look at Apple, Apple just announced in non R&D functions, a hiring freeze.

This is Apple, like the most valuable, most profitable company in the world.

So if Apple basically is putting the brakes on non-engineering hiring, that tells you

something about how fast the economy is slowing down.

I think that was a huge signal.


The point Freeberg makes is so correct, which is, if you’re doing a RIF, obviously there’s

a reason why, but I think we’re seeing too many RIFs where the details of the RIF and

the magnitude of the RIF don’t match up with what the objective of the RIF is.

The objective of the RIF for a lot of these companies should be to get them cash flow

positive, or at least to put them on a runway or trajectory where they can get cash flow

positive with their existing cash on the balance sheet, right?

They won’t need to raise money again.

And we’re seeing a lot of companies where they don’t achieve that.

And they have to come back again and again and hit it again.

And that creates more turmoil for the company.

And it’s more unfair for the employees.

By the way, sex, to that point, I’ll just say how deep these companies are cutting and

how quickly management is expressing to their shareholders, how they’re going to turn a

profit becomes a signal for those shareholders on whether or not they want to stay in that


And the companies that are doing it fast and are doing a deep, the investors and the shareholders

say you do actually have a path that makes sense here, I’m going to stay in the stock

cash today versus cash in the future.

Charles, let me ask you a question in terms of strategy for one of these companies, let’s

say fate, the Facebook Corporation, or perhaps even Google, or Apple, even if they were to

cut their expenses, which might take obviously a riff.

And then because their stock prices are so depressed right now, maybe even a mid cap

one like a Twilio or an Uber or an Airbnb, they were cut costs and then start buying

back their shares, which some companies have been doing.

What would that do in terms of the markets appreciation of those stocks or management


I think it’s hard to tell.

I think that if you have not lost investor trust, I think it would be really well rewarded.

If you have become unreliable and undisciplined, even those cuts, I think would be met with

some amount of excitement, but probably not a broad based support.

So, you know, it then it just goes to narrative, meaning if Google did it, I think that people

really trust Sundar and Ruth.

And I think the stock would go bonkers.

They would they would probably move very quickly into the echelon of Apple and Apple is sort

of a first among equals, like they’re just they’re just in a different class unto themselves.

Facebook, I think, is a little bit harder because I think folks have gotten burned.

And, you know, they would have to make some really, really deep cuts.

But then, you know, where do you do it?

You can’t capitulate on this meta strategy.

But then the other part is where you make all the money.

And so you have this huge morale issue that you have to manage.

So it’s just a really hard game to play.

Just one more thought on the RIF stuff.

I think one thought experiment for founders is to think about what was your plan at the

end of 2019?

Why do I say that?

Because 2020 and 2021 were two of the most distorted years ever in the history of financial

markets and the economy because we had COVID and then we had the reaction to COVID.


And so you saw there was this, you know, Zoom’s market cap hit 100 billion.

All the e-commerce companies were doing extremely well.

You know, you had all this money printing, you know, you had zero interest rates and

so on.

You had SaaS companies hitting all time highs at the end of 2021.

So we lived through this incredibly distorted time.

So as a thought experiment, go look at what your plan for 2020 was supposed to be when

you created it at the end of 2019.

Because that was the last time that you were thinking without any distortions, you know,

that were then created.

And I think if you were to go back and look at your 2020 plan, again, created at the end

of 2019, you’d probably see that you could get by with half the headcount you have now

because probably you doubled your headcount during the last two years during these heady,

heady times.

And yet, I think founders start thinking, oh, I can’t go back to operating, you know,

I can’t operate at half the level of headcount.

But you were, you were operating with half the level of headcount by definition at some

earlier point.

I also think sometimes I think what founders say is what will people think if I cut 50%?

Meaning all of a sudden the perceived success of my business would be different.

And I think that this is where you have to realize, no.

Like there’s a lot of ego tied up in these things, which slows people down from doing

the thing that they need to do.

It’s a really it’s a really hard to do.

I mean, look at Airbnb as an example.

I mean, they did this ginormous riff during COVID because they had no choice.

I mean, their their revenue went essentially to zero.

And now the business is incredibly strong.

It’s throwing off massive amounts of free cash flow.

And the stock market seems to really love what Airbnb has done.

And a similar story over at Uber in terms of having done significant riffs and probably could

do significant ones going forward.

But Jacob, let’s just be clear.

Airbnb is still down almost 75% off its high.


So when you say the stock market love it, so they’re up today 3%.

So meaning they’re not down 30% in one day.

But they have gone down with the rest of the market.

They have gone down with the rest of the market.

But it feels like the business, I’m talking about the business fundamentals when you’re

throwing off almost a billion dollars of free cash flow.

Yeah, now you’re going to start people are going to perceive that business maybe as of

this cohort, the flight to safety, right?

Or same thing with Uber throwing off free cash flow.

Now, I think a lot of these names are going to I don’t own Airbnb right now, but I do on Uber.

I think the people throwing off the free cash flow are going to look pretty attractive

and be able to buy their stock back maybe.

All right, everybody, let’s talk about the midterms.

A lot of big senate races and obviously governors, Pennsylvania, Georgia, Arizona,

Wisconsin, Ohio, all really important races.

Sax, what do you think?

Well, it looks to me like there’s gonna be a Republican wave.

There was an interesting article actually on CNN where they it’s called five scary numbers for


And what they point to is that Biden right now has a 42% approval rating.

61% of the American people say he hasn’t focused on the key problems.

So this is called the out of touch index.

51% say the economy is no one issue compared to only 15% for abortion.

And then 78% say we’re on the wrong track.

I don’t think I’ve seen a right track, wrong track index that was so negative.

And 75% of the country says we’re in a recession.

So when you look at polling numbers like that, it must translate, I think, into a Republican


And you have now real clear politics currently has the GOP gaining four senate seats.

So winning in Arizona, Nevada, Georgia, and New Hampshire, that’s a big change from just

a couple of weeks ago and winning 31 house seats.

So this is kind of what it’s looking like right now.

But look, the margin is still within the margin of error on the polling.

So Nate Silver has pointed out that within one standard deviation, you could either have

a Republican wave or you could have basically the Republicans fizzle out.

So it’s going to be very close.

But ultimately, I think this breaks Republican.

Yeah, the to me, the way that I’ve, I’m looking at it right now is that it seems like most

scenarios, the Republicans will have the majority in the house.

And the real question is what happens in the Senate.

It’s really, really kind of a coin flip.

And that’s going to be really interesting to see.

So, you know, things where I thought would break Republican in the Senate, like

Pennsylvania are now back to almost the, you know, a statistical dead heat.

So it’s a really interesting moment, actually, it’s, but most scenarios, David, I think you’d

agree is that the Republicans win the house.

And then there’s a non there’s a plurality of scenarios where they also win the Senate,

the house will almost certainly go Republican.

But I think the Senate now the official percentages are 55% likely to tip Republican.

But I, I just think that in a wave year like this, where the wrong track sentiment is so

high, I think all these races that are a dead heat, they’re more likely to break in one

direction, as opposed to like a random distribution, which is why I think you could just as easily

end up with, you know, instead of it being a 51 49 Senate, it could be 55 45.

Because all these things could break the same way.

So right now, so I would slightly disagree in Pennsylvania, I think Oz has improved as a

candidate Fetterman did that debate.

And since he suffered that stroke, he kind of came across as somebody

how do we feel about that?

That I, I had very, very hard to watch that happen.

And yeah,

I mean, the guy, the guy has suffered a stroke, and it’s sad, but he, you know, he doesn’t

present as someone who can be a senator right now, I think

what does the science say about that?

Like, are we as a society?

Is this a good idea to have somebody post stroke be in office?

I’m not picking any political side here.

I’m just talking about the medical issue.

Oz is actually doing the right thing right now, which is he’s not actually focusing on

that issue, because it’s so obvious, he doesn’t want to be seen as beating up on Fetterman.

And instead, he’s focusing on the issues.

And actually, Fetterman’s issues are very unpopular in a state like Pennsylvania.

So I actually think for both reasons, Oz is going to win that I think Fetterman’s manifestly


But also, I think his positions are fairly unpopular.

So I think Pennsylvania will will will almost certainly tip.

So let me pull up the chart here, just so people can see Ohio’s going Republican.

And then Arizona, I think is really the interesting one where Blake Masters is now tied after

being behind Mark Kelly throughout this campaign.

He is now tied in Newport.

So popular, your guy is really unpopular.

And now he’s tied.

It’s popular, Jake.

It’s the Peter, he was he was doing really poorly, I think, because I think, listen,

I think that I think that Arizona is probably gonna be the closest race in the country.

I think it’s gonna be a nail biter.

But I think Blake’s gonna pull that out.

Saks, what do you think are the biggest policy shifts that take place in this country?

host this predicted redway?

Is there anything that changes?

So just, you know, talk to folks about what’s on the docket from a legislative point of

view, going into the next Congress, with all these new candidates,

the reality is we have a separation of powers in this country, and you’re going to have

divided government, the republicans will will control Congress, the democrats will control

the presidency.

And so as a result, you’re going to be largely in a gridlock situation.

But gridlock may be a lot better than what we’ve had over the last couple of years.

So, you know, you’ve had basically this orgy of spending and money printing, and I think

that’s going to stop, obviously.

The other thing that’s going to happen is republicans may not be able to pass much legislation,

but they’re gonna be able to do investigations.

And there’s a lot of questions that need to be answered, I think, about still about COVID,

you know, these lockdown policies that we had started at the top at NIH, why did they happen,

we need to start having accountability for some of these horrible decisions that were

made during COVID.

And there’s been no willingness in Washington to hold anyone accountable, at a minimum,

they need to have some congressional investigations and find out why we pursued such bad policies

over the last couple of years.

By the way, did you see did you see what happened this week where the CDC, you know, after this

entire opioid epidemic, and all of these lawsuits, the CDC came out and actually said, Hey, listen,

we need to really make sure that we’re getting access, putting opioids in the hands of Americans

who are really suffering with pain management and whatnot.

And I didn’t read the article to really understand the details.

But I just thought it was an incredible headline where it’s like, it’s just it’s so counter to

the narrative of what we’ve been told is happening, which is like, you know, over prescription and


If we learned anything during COVID is to question every organization, everybody and to really

collect your own information.

While, you know, looking at these organizations we trusted over time, I know I look at the

world differently now that you couldn’t say COVID was possibly a lab leak without having

your podcast taken down or being banned on YouTube.

And now ProPublica has done an investigation.

And they’re saying along with Vanity Fair, and they’re going to win a Pulitzer for this,

I bet that this conspiracy theory from two years ago, is probably actually the leading

theory and that the Wuhan lab lab was showing, if you didn’t see it, reporting an incident

in late November of last year before COVID broke 2019.

It’s really, it’s really incredible.

There was an article in the Atlantic that came out over the past week called let’s declare

a pandemic amnesty.

No, and let’s do an investigation.


So basically, yes, all the experts who told us Jason that we weren’t allowed to have an

opinion because we weren’t expert enough, that if we raise any questions about the origin

of the virus, that it might have come from a lab, that that basically needs to be censored.

The people who said we have to do lockdowns and implement all these authoritarian tactics.

Now they’re saying that they need an amnesty.

And what that really means, no one’s looking, no one’s looking to criminally prosecute them.

What we’re looking to do is have some accountability around the public policy.

What they want is they want to pull the expert card to say that they’re the only ones who

get to have an opinion and make a decision.

But then when it all goes horribly awry, they basically want to be completely insulated

and unaccountable from their decisions.

No way, no way.

We’re not going to give you full investigation.

We’re in alignment on this.

Can I just hold on, I just want to say sex, we’re in alignment on this for a rare moment

of peace on this podcast.

The same thing after 911 shouldn’t all Americans understand what happened after 911 and what

the failures were in our intelligence just so we can get better.

I’m not picking a political horse here.

But it’s kind of crazy that you could people said to our podcast and other people who were

questioning it, forget about what political party you’re in just want to understand how

the world works.

What are the chances that this breaks out in the one or two places where they’re studying

the coronavirus that you have a lab leak?

It was so obvious to everybody.

The other reason why you need to have accountability for this is that there is still a long tail,

especially around the damage that we did to our kids educationally.

Yes, and now and now the over prescription of stimulants.

And so if you don’t depression answers, you can’t go after these problems like there was

a there was the like, stimulant prescription is now the single biggest epidemic in children.

It is now twice as prescribed as contraceptives and asthma drugs.

And why Chamath?

Why are we doing this to get them to score higher on a test to be more attentive in school?

Well, it’s actually this negative feedback loop where these children were miseducated.

During COVID, it had huge psychological and academic damage to them.

Our test scores have fallen off of a cliff relative to how we used to do relative to

other countries.

I think the teachers unions have found a way to try to explain it to basically shield

themselves from any sort of critique.

And so the loop and then part of that loop is then to look at a bunch of kids that are

underperforming in school.

And instead of saying, well, maybe these lockdowns and masking and all of these things that we

implemented, actually had a huge impact.

They say, you know, you’re misbehaving.

So let’s put you on a stimulant.

Yeah, it’s crazy.

We’re in that loop right now.

Just so you guys know, the data is outrageous.

Twice as many prescriptions for stimulants as the sum of contraceptives and asthma drugs

for all American kids.

Yeah, it’s not that suddenly everybody’s got ADHD.

It’s and we failed them.

We failed our children.

And we’re gonna use stimulants to have them catch up.

We know, but we should be doing summer schools, after school programs, weekends, whatever.

We failed them because of our response to COVID.

That is why we need answers to all that stuff.

Because you need to link these things together to have some real accountability.


Here is the just so we have the people see the numbers.

Here’s the 538 poll of how Joe Biden’s popularity has switched.

This is 654 days into his presidency started out really strong 54% and now a little rebound

since the summer.

Obviously, that dip started with the economy.

It’s the economy stupid.

And if we go down a little bit on the same page, and you zoom in on the left there, you

can see compared to Donald Trump, he started out much more popular than Donald Trump day

by day.

And now he’s just as unpopular as Donald Trump was at this point in his presidency.

Well, look, I mean, look, the setup is really interesting for 2024.

Because it’s probably going to be the case that we’re in the middle of a recession going

into that election cycle.

Maybe we’ll be sort of like getting ourselves out of it, but there’ll be a lot of economic

damage, high unemployment.

And, you know, typically, folks in power will have to sort of be held accountable for that.

It’s a really interesting setup that both Gavin Newsom and Ron DeSantis have to figure

out now and navigate if they’re going to get the nomination on each side.

And breaking news today, Saks would love to get your thoughts on this.

Axios says, and we’ll go to Science Corner next, that Trump’s going to announce on November

14, that he is running for president.

Look, I kind of have the Joe Rogan philosophy on this, which is why give it oxygen?

Let’s just wait and see.

There’s certainly no need to talk about it before it happens.

You know, we’re not even past this election yet.

But, but hey, I want to go back to the Biden popularity, because I think part of the issue

here is, what are the arguments that Biden is making to the country about why people

should vote Democratic?

And he gave another speech on Wednesday night, where he basically claimed that if you vote

for a different party, that that is a threat to democracy.

In other words, the perpetuation of single party rule is what you must do if you care

about democracy.

That is a sales pitch that’s not going to appeal to anybody outside of the viewers of


It’s just not.

He’s not talking about the issues that really matter to the country.

You know, what the country wants to know is that he’s focused on the economy.

He’s focused on inflation.

He’s focused on crime.

He’s focused on the schools and fixing this learning loss that Chamath was just talking


He’s not doing those things.

Instead, he’s basically saying that the Democrats should be kept in power forever, because there

was a riot at the Capitol on January 6.

And look, that was a stain on the country.

Okay, it was terrible that that happened.


That is not a reason.

Hold on a second.

That is not a reason to keep Democrats in power forever.

And actually, there’s a liberal guy, a liberal Democrat named Josh Barrow, who wrote a pretty

good blog about this.

And what he said is, the message is that there’s only one party contesting this election that

is committed to democracy, the Democrats, and therefore only one real choice available.

If voters reject Democrats’ agenda or their record on issues including inflation, crime,

and immigration, they have no recourse to the ballot box.

They simply must vote for Democrats anyway.

And that argument is just not flying.

And actually, he’s a Democrat who is pointing this out.

But I don’t think that Democrats are getting the message on this.

But I think they will after this election, and they’re gonna have to find a new sales

pitch to the country.

Well, you know, and he does have a good sales pitch, doesn’t he, Chamath, with these major

bipartisan wins.

He had the infrastructure deal got done, the technology bill, and the chips.

You got gas prices going down.

The problem—

You got GDP growth.

You got job growth.

The problem is that those things happened, frankly, too early in his presidency, and

things are getting materially worse.

So I just sent you a link.

Can you just throw this up here for a second?

You know, Jason, you mentioned this cheaper gas thing.

But the reality is, if you look at this, we have now depleted our strategic oil reserve

by almost 50%.


So we are running out of oil that we can introduce into the market at effectively zero cost

to bring the price down.

And because we’ve lost our relationships with folks like Saudi Arabia, there’s no way to

influence them in order to produce more.

In fact, they’re gonna cut supply so that they can control the prices that they have

which— that they can sell into the market.

And so now what are we left with?

Well, the only three places where you can have incremental supply of energy, which the

country still needs, is from Russia, Iran, and Venezuela.

And so, you know, all of these things, Jason, I think, come back and really put Biden in

a tough place because, as Sak says, he does have to answer to all of these things because

these are his decisions.

Look, I still believe in the Democrats.

You know, I am hoping— I gave a million bucks to the Senate PAC trying to sort of

tip the Senate.

I really think it’s important that we have a split government because I’ve kind of— I

gave up on the House.

I think it’s clear that the Republicans are going to win, but the Senate is still— is

still up for grabs.

And the reason is because I think that we need to sort of have stasis so that nothing

bad happens between now and 2024 because I think the economic conditions on the ground

are going to be bad in and of themselves.

And then the last—

Free burqa.

Sorry, and then just the one last thing I’ll say is the instructive thing that I think

we should look at is what happened in Germany because what happened in Germany is really


When the economy turns and inflation is out of control and energy is out of control, what

they basically did was they sidelined the European Central Bank.

They stepped in with their own balance sheet and said, you know what, we’re going to

nationalize assets.

And I know that this sounds crazy to say, but if it can happen in a place like Germany,

I know most people would say it’ll never happen in America, but I’m not so sure.

And I think that you want to make sure that there’s a split government so that these

things are never possible.

And so hopefully there’s some, you know, common ground in a Democratic Senate and a

Republican House, and we just kind of get through 24 and see where the chips land.

And I still think it’s going to be DeSantis versus Newsom.

Friedberg, any final thoughts here on politics in relation—

My first observation is that I think it’s funny that Chamath and Sachs are funding opposite

sides of the electoral cycle.

Yeah, why don’t you just guys just give the money to me and Friedberg to get a plane?

I could think of other ways for you guys to use that money.

But David and I may have cancelled each other out.

You’re right.

I mean, so far, Peter Thiel made the better trade.

It looks like the Thiel wave in the Senate.

So look, I would say my very broad statement is democracies evolve in a cyclical nature

over time, right?

You often see swings from one political party to the other.

And it’s just the nature that once someone’s been in office, they form the new establishment.

And then folks on the next election cycle want to vote against that establishment because

there are things that they want that they aren’t being given today.

And therefore, the democracy forces a change from what is the current establishment back

to the other side.

And generally, political parties seem to kind of adopt whatever the other side is.

And that’s how the cyclical evolution of democracy seems to play out.

The recent trend that has been more alarming, which I think we can kind of take pause to

notice is the rise of populism, where populism is this really kind of vehement, diehard opposition

to elitism and the establishments that everyone feels kept down by and everyone feels taken

advantage of by.

And the rise of Trump, the rise of Bolsonaro, the rise of Boris Johnson, and I would argue

even the rise of AOC, Bernie Sanders and Elizabeth Warren, all similarly speak to the crying

voice of the democratic populations that they want to see these establishments taken


They don’t feel like they’re fair.

They don’t feel like they’re just.

They don’t feel like the institutions that oversee us and are meant to service us are

servicing us.

And so there was this big rise.

The problem is like a normal pendulum would swing back and forth between one side and

the other.

With the rise of populism, you get such a strong push of that pendulum, it can knock

through a wall.

And I think we saw that on January 6.

And I think it gave a lot of people pause.

We saw the motion of Brexit knocking through a wall.

And we saw these kind of very radical outcomes.

And then the cost of those outcomes blow up in our face.

And as a result, I think we’re seeing a bit of a receding of the tides right now away

from populism.

During this current electoral cycle, where folks are saying, you know what, maybe we

just need to have some sort of an establishment so I can feel safe and secure, less than the

volatile volatility that I’ve experienced of late.

Look, I think you look at the economic mess we’re in, okay, populist did not cause that,

okay, populist did not cause $10 trillion of money printing, it was modern monetary


And the experts, the Fed, who did that, it wasn’t populist, who created the great financial

crisis of 2008, that caused the Zerp.

And we’re still living with all the downstream effects of that.

It was the experts on Wall Street, who said they could manage all these derivatives and

the collateralized mortgage obligations and all that stuff that they lost control over.

I would argue that the CDC are the experts, yeah.

The CDC are the experts that caused that.

And on COVID, it was not populist who caused the horrible handling of that pandemic, even

though they were blamed for it.

Remember, we were told it was a pandemic of the unvaccinated, then it turns out the vaccine

doesn’t stop it.

It was not populist who caused the reaction to the pandemic.

It was the experts, the CDC, and Fauci, and people like that who shut down our economy,

who caused the learning loss.

It was those experts.

So, Freeberg, listen, you may not like this populist wave that we have in the country,

and I get that, but it’s in reaction to something real, which is the failure of this expert


And if you want to stop having this populist wave rise up, we need to start having experts

in position of power who actually know what they’re doing.

Well, I don’t have any opposition to the populist wave.

I’m making the observation that the effects of some of the populist movements have started

to become too volatile for people to feel like they should continue forward with that

electoral path.

That was my observation.

Okay, I’m not kind of criticizing the populist movement.

I’m just saying that events like January 6, and the conditions in the UK, for example,

are making people say, wait a second, maybe I need to take pause on the extreme.

The bond market basically fired Liz Truss.

I mean, she’s not a populist.

And Bolsonaro in Brazil, he actually just lost, and there was this big narrative that

somehow he was going to not relinquish power, and he just announced that he will relinquish


So, some of the stuff that is about how populists pose this great danger, I think, is threat

inflation, and that the threat is magnified by elites who want to stay in power.

And the truth of the matter is, we need accountability for the people in power.

And when they set the wrong policies and decisions, they need to be replaced.

No more no more unaccountability.

Yeah, I mean, 100% just just my personal belief 100% agree accountability is what’s lacking

most across all of these institutions.

100% agree.

Accountability, maybe competence, and also transparency and accountability.

Like, I think that’s what the public wants.

I mean, there’s no measured by you want to hear there’s no modern second, hold on.

There’s no way to perfectly react to the pandemic.

But in your mistakes, owning them and explaining them would be much better than trying to

obscurify it and asking for amnesty Chamath.

You’re not if you want to hear an incredibly interesting interview.

Because it’s very thought provoking of a modern progressive, but with a very different mindset,

or sorry, you know, maybe you don’t want to call him a progressive, but is the

president of El Salvador, Naib Bukele.

And he did this incredible interview with Tucker Carlson on Fox News.

I encourage everybody to watch it on both sides of the political spectrum.

That man is impressive.

Did we just get an admission that Chamath watches Tucker?

I watched that interview.

You watched the Tucker?

Oh, my Lord.

Jason’s head’s exploding.

You know, because I try not to be a complete ignoramus.

He’s an entertainer.

I like to watch things on both sides.

But that interview is incredible.

He is unbelievably impressive.

And it’s a, it double clicks into, you know, the skepticism that smart people like him,

the outsider class has with the insider expert class in a nutshell, if you want to see it,

I would encourage you to watch this interview because it’s incredible.

Incredible, really, really.

Jason, the peasants with pitchforks are rising up against this elite class who’s put themselves up,

they’ve set themselves up as Lords, they want exclusive control over their blue checks.

And we’re about to overturn this establishment, because it is corrupt.

And it is incompetent.

It would be great if the people who work for us were confident and owned and were transparent.

You know, I think that’s why people are opting out of this is they don’t feel

that there’s a level of competence in these institutions, nor ownership,

and transparency.

And it really is frustrating, whether it’s education, or it’s health, or,

you know, any of these topics we’ve talked about here on the show,

let’s go to science corner, and we can wrap.

What do you got free bark for us to mock,

I think we were going to cover the Facebook meta announcement that their AI research team

had generated the physical structure of 617 million proteins from these metagenomic data

sets. And so remember, alpha fold made this big announcement that they had

highly accurate predictions of protein structure, the three dimensional shape of proteins.

And remember, proteins are kind of the machines of biology that do everything from catalysis to

enzymes where they break stuff down. And they’re like, you know,

they have all this structure that allows them to do specific physical things.

And proteins are coded in DNA, every three letters of DNA codes for an amino acid,

a string of amino acids makes a protein.

And so, you know, we have about a million species,

where we’ve sequenced the entire genome of those species, only about 3000 animals, by the way,

including humans, half a million from bacterial species, and then a bunch of viruses and other

stuff, but but call it about a million species that we’ve sequenced. And so, you know, earlier

this year, Google’s alpha fold project published the 3d structure of 200 million proteins that

they had derived from the whole genome databases that existed, where we’ve gone through and figured

out what’s the full DNA sequence of all these different species. Now, when you look at the DNA

in the environment around us, you were just to take the DNA out, it turns out that we have seen

very little of that DNA, the vast majority of DNA that you would find in a teaspoon of soil,

for example, we’ve never classified, it’s not part of a species that we’ve actually built the

whole genome around, we may not even know what species that DNA is from. And so when you take

a teaspoon of soil, you’ll get about 100 billion microorganisms in that soil from about a million

unique species. But you don’t see those species because the way DNA sequencing or shotgun

sequencing works, is DNA is chopped up into little 250 base pair likes little 250 strands,

and those 250 letters are read at a time. And then statistically, bioinformatics puts together

all of that little DNA segments and tries to create long strands of DNA to figure out what

the genes are, or what the whole genome is. And so shotgun sequencing gives us kind of a snapshot of

the DNA. But until we’ve done the hard work of figuring out the whole genome, we don’t know what

species that DNA comes from. So when you take a sample of soil, or you take a sample of human poop,

and you sequence it, or even a teaspoon of ocean water, and you just sequence the DNA in it,

you get all of these little segments of DNA that we’ve never seen before. And you can string them

together statistically, because you get lots and lots of copies of them. And you can figure out

the overlap. And then you can create these genes. And a gene is a segment of DNA that codes for a

protein. And those genes make up the meta genome, or the combination of all the genes that we find

in a piece of the environment. And that meta genome comes from millions of species that we’ve

never seen before. So what alpha what they did at meta is they took all of those genes that we pull

out of the soil, or we pull out of the ocean, and they picked a bunch of random samples. And they

then predicted the physical structure of the proteins from just those genes, without knowing

what organism they came from. And this gives us a whole new universe of proteins that we’ve never

classified before, or never seen before. Now, I will just kind of speak a little bit critically

about it. Number one, they didn’t do what alpha fold did. What alpha fold did is they took 3d

structures from typically x ray crystallography, then they took the DNA code, and they built

machine learn models to figure out the 3d structure from the DNA code. What these guys did at meta is

they took the 3d structures and the code, and they basically did a fill in the blank, they found all

the meta genome data out of these samples, and a lot of it was missing. And they filled in the

missing blanks using kind of common protein structure that existed out there in the wild

that we already knew from the alpha fold data. And so they kind of did a fill in the blank.

And as a result, it allowed them to very quickly build these 3d models versus doing the hard and

rigorous work that alpha fold had to do. So they claim that it was 60 times faster, but it’s actually

an entirely different technique. And the second thing is that they represent that only about a

third of it is high quality, meaning only about a third of the proteins that they’ve created

structure for are really useful or that could be kind of applied in terms of this is the real

representation. Now, why is this interesting and important proteins can form the basis of new

medicines. So you know, we can find proteins in the soil, a genomes in the soil and proteins in

the soil that can kill certain fungal pathogens that can kill bacteria, and those can be turned

into fungicides, they can be turned into antibiotics, we can find proteins that bind to

specific things, we can find proteins that fix nitrogen from the atmosphere. And those proteins

can be turned into new types of fertilizer. So you know, searching through this universe of proteins

that exists in the metagenome will allow us to find new molecules to do new and interesting things

with in the applied engineering world. And I will say like, this is what would the output of these

be is what everybody’s going to be thinking, antibiotics, fertilizers, I mean, the idea of

the metagenome is rather than start with the species and then take the genes out of it,

just go get the genes, the genes are already there, they’re in this, they’re in the ocean,

they’re in the soil. And there’s millions of genes, hundreds of millions, billions of genes

that we’ve never seen before. Therefore, there’s billions of proteins. Now we could randomly create

proteins. But the number of proteins that could exist is more than the number of atoms in the

universe. Because remember, there’s 20 amino acids. So 20 to the 200th power or 20 to the 300th power

or 20 to the 1000th power, meaning how many different combinations of amino acids can you

make? That’s more than there are atoms in the universe. So the best place to start is what

evolution has already given us all the proteins that exist in the environment. So let’s go find

those proteins in the environment. And then let’s figure out what do we think they can be used for?

Can they be used in industrial applications? In medicine? Can they be doing them in material

science? You’re saying correct material science. And so you know, a lot of drug discovery,

mines proteins, it tries to find proteins and figure out what can these proteins be used for.

And now we have all these new data sets of proteins that are being generated from these metagenomes.

And so it’s amazing. I mean, you know, look at the world around you look everywhere up and down on

the walls on the ground below you. There are billions of species of organisms that we’ve

never classified before that are making billions of unique proteins that we’ve never classified

before. And any one of them could unlock an amazing commercial opportunity for industry. So

and for medicine and for human health. That’s what’s really exciting about this ability to

kind of mine the metagenome. Silly question for you. Or maybe not silly. We have gotten

the precursors to DNA for meteorites. If I understand correctly, what do they call them

nucleobases? You clay cassettes? Yeah. Yeah. I mean, etc. Like things that exist in DNA

that are precursors. We’ve never had DNA from space, obviously, but we could at some point

start to find DNA out there in space. And this could have an even crazier impact on what we built

here. Is that the next card to turn over after we know what’s here? No, I wouldn’t say so. Like,

I think, look, if there’s DNA that’s coming to us for meteorites, call it a couple 100 genes,

you could pick up a piece of soil and find over a billion genes in that piece of soil,

right? So we have far more to mine here on earth. And the low cost of DNA sequencing and shotgun

sequencing, coupled with bioinformatics, where we take all that. So just to give you guys a sense,

when you take a teaspoon of soil, and you get the DNA out and you read the DNA out of it,

sequence the DNA, that’s potentially 10s of gigabytes of data. And then you could do that

millions of times over. And then you statistically can find genes, and then statistically estimate

what they physically look like what those proteins look like. And then you can start to build models

around which ones do we want to try and use for drug applications? Which ones do we want? So

there’s so much work to do it just in terms of what we have here on earth. And the tools are

getting so cheap and so available. There are labs that are all over the world starting to kind of

spring up to do this work. It’s super exciting. traffic. It’s kind of, you know, just to put two

ideas together. I’ve said before, like the two big investable themes that I’m orienting my

organization around is this one is that the marginal cost of energy goes to zero. And the

second is that the marginal cost of compute goes to zero. And the second one is really about shifting

compute to more parallelism on GPUs and ASICs and FPGAs. But that’s why all of this stuff is

possible. The fact that, you know, meta can do this, and Google can do alpha fold is largely

because the cost of all of this stuff is, you know, trivial for these kinds of companies. So

it’s really exciting. It’s going to move science, in my opinion, out of this in vivo in vitro

experimentation model into silica. And so those who can actually build learning machines will solve

some of the most important biological problems. So I, I’m a real believer in this stuff. I think

it’s super exciting. When do you think this stuff actually hits Friedberg our life? That’s always

when people talk about these discoveries? Yeah, a lot of people don’t realize it. But so many

molecules that that are used in agriculture, like fungicides to kill fungus in the fields,

those are derived from this sort of work. A lot of antibiotics, a lot of medicines are already

derived from mining genomes, finding new proteins, and seeing what those proteins can do. Because

these proteins didn’t evolve in the environment randomly, they evolved to do something. And in

many cases, we can take that thing that they do and then harness it into a product. And that’s

what’s so exciting. And this this affects everything material science. You know, agriculture,

human health, it’s, it’s a food, it’s really profound. Awesome. All right, everybody, there

you have it. That’s another all in podcast in the can. By the way, so many so many of freeberg

stands were afraid Jekyll that you and I were gonna make some joke. And we didn’t know we didn’t.

And so for all these stands, I just I hope you guys can exhale. Take a deep breath, man. Have

some, you know, eggless mayo and enjoy your weekend. Enjoy your week. Bye bye, everybody.

See you next time. Love you besties. Love you guys.

Love you.