Hi, I’m Connie Loizos. And this is Alex Gove. And this is Strictly VC Download.
Hi, everyone. Happy holidays. As is always the case, we’ve waited too late in the day to put
this podcast together. So we’re just going to skip straight to two quick conversations that
we had this week, and we hope you will enjoy. One of the chats is with serial entrepreneur
and investor Fabrice Grinda, whose firm is currently the most active venture firm in the
world, somewhat shockingly. The other is with Bradley Tusk, a former political operative turned
venture capitalist and philanthropist who always has an interesting take on what’s happening at
the intersection of regulation and technology. We will not be pumping out another podcast before
the end of this year. So we want to wish you all very happy holidays and to thank those of you who
take the time to listen to us blather on here most weeks. We really do appreciate you so much.
And now on to our first conversation with Fabrice Grinda. But first, a word from our sponsor.
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Yesterday, we had the chance to catch up with Fabrice Grinda, a serial entrepreneur who co-founded
the giant free classifieds site OLX, which is now owned by Process, though he’s also well known for
giving up most of his earthly possessions a decade ago ahead of turning 40. As he told the New York
Times several years later, it was clarifying ditching his McLaren, selling his Bedford,
New York estate, and getting rid of his Manhattan Pied-a-terre to travel the world with just a
suitcase, staying with friends and families, focusing on what was meaningful. In fact,
he quickly came to realize that one of the things that mean the most to him is working with
startups. So soon after, he created FJ Labs with fellow entrepreneur Jose Martin, and they’ve been
on a tear apparently ever since. Indeed, though FJ Labs debut fund was relatively small, it raised
$50 million in 2016 from a single limited partner. Grinda says that FJ Labs is now backed by a wide
array of investors and that it has invested in a stunning 900 companies around the world by writing
them checks of between $250,000 and $500,000, for a stake of typically 1% to 3% in each.
And yet, Grinda suggests the firm could pick up the pace in 2023, now that the market has cooled,
and founders are more interested in FJ Labs’ biggest promise to them, which is that it will
help them to secure follow-on funding, come hell or high water, through the firm’s connections.
While that promise was probably less interesting in a world awash with capital,
it has likely become more compelling as investors pull back and founders find themselves facing
fewer options. In the meantime, the global view of Grinda, whose portfolio companies
are scattered around the globe, is useful to understand, so we asked him about a variety of
things. We talked, for example, about how FJ Labs avoids investing in nearly identical companies
when it’s investing in so many of them. He said that, in fact, his firm will invest in the same
idea in different geographies, but it will clear the decision with a founder first, to ensure there
are no problems down the road. He also said that FJ Labs won’t avoid a crowded area of investment,
but that it will wait to pick which startup to choose. As he told me, the firm may not take a
call when a company is in the pre-seed or seed stage, or even A stage, if there are seven other
companies doing the same thing. He said, you know what, we’re not comfortable making the bet now,
because if we make a bet now, it’s our horse in the race forever. We also asked Grinda why it’s
FJ Labs’ policy not to take board seats. After all, this year has seen a number of companies
flounder, at least in part because of the inexperience of its founders. And aren’t VCs
supposed to keep founders on the straight and narrow? Here, Grinda said he thinks most people
are good-intentioned and trustworthy, so he doesn’t really focus on protecting the downside.
He also said that having a board seat is of little help if a founder is providing information that is
just flat-out wrong. We also asked about valuations, fatality rates, and one hidden threat
to startups. On the valuation front, he said it is the season of extension rounds, that even with
substantial growth, startups are largely having to turn to inside investors to seal up rounds
that are flat. He also said to expect a wave of fatalities six to nine months from now,
when a lot of startups that raised during good times finally run out of money.
Last, we talked about a problem hiding in plain sight, which is credit lines. A lot of startups
turned to credit facilities extended by banks so that they could grow faster. Now, with interest
rates rising and banks feeling skittish, those credit facilities could turn deadly. Here is
Grinda with more. The issue is more the credit lines that you – depending on the business you’re in, you should totally use that, first of all. If you’re a lender, for instance, you do factoring,
you’re not going to be lending off balance sheet. That is not scalable, right? As you grow your
loan book, you would need infinite equity capital, which would delete you to zero.
So what usually happens if you’re a lending business is first you land off balance sheet,
then you get some family offices, then you get some hedge funds, then eventually you get a bank line
of credit, and it gets cheaper and cheaper in scales. The issue is in a rising rate environment,
in an environment where the underlying credit scores, the models that you use are not as
successful as you think they are, those lines could get pulled and your business could be at risk.
So I think a lot of the fintech companies that are dependent on these credit lines
may see them pulled and may be at existential risk as a result. But it’s not because they took on
more debt. It’s more because I think the credit lines they use, the debt they use might be revoked.
Number two, inventory-based businesses, so the DTC type businesses, again, you don’t want to be
using equity to buy inventory. You use credit, you use debt. And it makes sense, right? As long as
you have a viable business model, people will give you debt to finance your inventory. But again,
the cost of that debt is going up because the interest rates are going up. And because the
underwriters, the banks are becoming more careful, they may decrease your line, they may call it,
in which case your ability to grow is basically shrunken. So companies that depended on debts to
grow quickly, I think are going to be seeing themselves extremely constrained. So I think a
lot of the fintechs that depended on debt and a lot of the DTC businesses that depended on debt
are going to have a hard time on a go-forward basis, not because they took too much of that,
but just because the debt is now more expensive and less easily available.
That’s bad news for some startups, but Grindr will be ready for whatever comes next.
He’s feeling itinerant again, he told us yesterday, and he’s recharging for the new year,
not by shedding his possessions this time around, but rather by taking a long,
cold walk to think about things, unencumbered by the tech in which he’s immersed every day.
I’m heading to the edge of Antarctica, and I’m walking to the South Pole.
It’s going to take me weeks. I’m pulling my food, my tent, my sleeping bag.
So why? Because I love flow states, because we live in a hyper-connected world where
it’s a real privilege to be in a position to not be checking emails, not be talking to anyone,
not be checking WhatsApp or news, and be alone with your thoughts. It’s going to be meditative,
reflective, disconnected, in what I think is going to be a productive and beautiful way,
while being physically challenging.
And now our interview with Bradley Tusk, the CEO and co-founder of Tusk Ventures.
Bradley, we always love talking to you. Thanks for hopping on here this morning with us.
There’s a lot to talk about. You always make these annual predictions that I think are
interesting and oftentimes prove to be correct in retrospect. I just thought what’s not on here
is anything about social media. And just because it’s in the news right now, and I’d written last
night about how Elon Musk had kicked some people off of Twitter, and actually some StrictlyVC
readers were a little irritated with me thinking that I’m over-indexing on Musk lately. But of
course, it’s hard as a journalist not to be following what happens on Twitter, which has
been this utility, this public forum for so long and now feels very different. But just wondering,
you use Twitter, although I don’t think super heavily. Do you have any thoughts about what’s
happening on that platform? Yeah, a few things. One is, I think what Musk did is consistent with
things that we’re seeing across the cultural zeitgeist right now, which is now that we have
this world with 24-7 media coverage, social media activity, the people who really, really need
attention and can’t get enough of it just have to keep doing more and more outrageous things to try
to get it. So we saw that with Donald Trump. We saw that with Kanye West. And I think the main
reason why Musk bought Twitter is so people will be talking about him just as we are right now.
So from that standpoint, I suspect he’s achieved his goal. What worries me for him a little bit is
when you look at the market cap of Tesla, for example, it is significantly higher than
Toyota, Ford, General Motors, companies that sell a lot more cars, right? And look, Tesla makes a
great car and they’re growing and it’s okay to kind of lean into the future. But the differential
between what they probably should be valued at and what they are valued at is that Elon Musk
hype and pixie dust, right? He manages to create such an image of being so far in the future and
so much better than everyone else that really drives retail investment in the stock. And the
same thing with SpaceX, while that’s still a private company, I saw a piece yesterday saying
that it’s now valued at $140 billion. There’s no way SpaceX could be able to have revenue or very
little like at $140 billion. So his genius in some ways is that he manages to create this perception
that what he’s doing is so innovative and so unique and that only he can do it, that it drives
tremendous amounts of value and investment towards his companies. I think he’s taking a really big
risk with Twitter because every time he does something really high profile in public, he puts
that reputation on the line, right? And he’s taken over Twitter. No one has really ever figured out
how to make it a successful business. And now it’s on his hands. And so far, the ideas that he’s put
out there don’t sound that new or interesting to me, right? It feels like variations of things that
people have already done before in different ways. And so if he does not succeed with Twitter,
the question is, does it have a ripple effect to puncture the balloon for Tesla and SpaceX
and all those other projects? He may have paid $44 billion for Twitter, but ultimately this
could cost him $100 billion or more if there’s a risk that Tesla and SpaceX and other companies
that he owns lose value because he’s exposed to being a mere mortal. Do you see any opportunities
to come out of what’s happening there? We covered on TechCrunch today a startup that was created by
some former Twitter employees that are addressing Black Twitter, which is a huge cultural phenomenon
that was very early on the platform on Twitter. Just wondering if VCs are saying, okay, this is
a little bit of a disaster here, but there are… Not really, because if that were the case,
then Truth Social should have really worked, right? Because there’s unquestionably a huge
audience on Twitter of Trump supporters and very, very right-wing people. And in theory,
they should be able to take all of their business, move it to Trump’s platform,
and it should be wildly succeeding, and it hasn’t so far. So the notion of, oh,
if we just move this Black Twitter or journalism Twitter, whatever it is, onto another platform,
that will just pick up all the traffic and do well, that doesn’t seem to be the case.
One, because there’s fall off, but two, because there’s just not a great revenue model for all
of this to begin with, right? And then to make matters worse for them, I still think that there
is a risk eventually that Section 230 of the Telecommunications Decency Act does get changed
or repealed. As others may know, 230 exempts platforms from liability from the content posted
by the user. So, Kanye, I could defame you on Twitter, you could sue me personally,
but you couldn’t sue Twitter. And as a result, Twitter, Facebook, all the platforms,
their real economic incentive is to move towards negative and toxic content, because as much as
we hate it, that drives eyeballs, that drives clicks, and that’s what drives advertising rates
and revenue. And so effectively, the lack of liability by the platforms is creating a world
where the internet has to be as toxic and awful as possible. And so if you were to repeal Section
230, it’d be a lot like what happened with the tobacco companies in the 1980s, where all of a
sudden they were vulnerable to litigation, started receiving these multi, multi-billion dollar
judgments. And as a result, they felt real economic pain and had to finally get a hold
of content moderation, because it was costing them more money than otherwise. Right now,
Facebook will pay the little fines that it gets from the FCC, because ultimately they make so
much money driven by negative content, repealing Section 230 would change that.
I’m reminded that when we talked a year ago, you had talked about potentially working on a social
media platform for religion. Yeah, I did. It launched and failed spectacularly or quickly.
Spectacularly would mean that people even noticed it. We built the platform. It launched in January.
It was not nearly good enough. It got very little usership. We tried a few different pivots.
None of them worked, and I shut it down in June.
Radley, I understand your point about how Twitter and other social media platforms could face a lot
of penalties in the US, but there’s also Europe, and it seems like Twitter is potentially running
afoul of some elements of the GDPR. To what extent do you follow what’s going on in Europe and the
GDPR? I think the EU has really been a leader in big tech regulation. They are moving now
towards eliminating the liability protections for the platforms like Facebook. They’ve already
enacted a national, continent-wide privacy framework known as GDPR. Their antitrust
efforts are a lot stronger. They’ve really done a lot more to protect consumers,
and that has not happened in the US. Now, we do see in individual states efforts to do that.
California passed a law called the CCPA, and that does provide a privacy framework for California
residents specifically, but only for California residents. Other states, Texas and others,
are starting to take up the issue as well. We’re seeing it piecemeal, but the reality is
this is a federal issue. It’s something that the US government ought to get its act together
and work on. One final piece, which is we’re in Internet 2.0 right now, and we still have all of
these problems of a completely toxic web and no privacy protections, and companies becoming way
too big with no real ability to break them up through antitrust laws. What happens when we get
to Web 3.0, right? It seems to me that every good thing about the Internet and every bad thing about
the Internet is going to be 10 times worse, and if we can’t get the basic protections in place that
we should have had long ago for Web 2.0 or Internet 2.0, it’s terrifying to think what Web 3.0 is
going to be like.
Speaking of what’s coming down the pipe, you have a number of predictions for what’s going
to happen next year on healthcare and the gig economy and fintech, but I was curious that
you didn’t have anything on artificial intelligence and chat GPT, and I’m wondering
how you see that impacting not only social media platforms, but also…
Everything, right. So, a few things. So, one is I didn’t include it almost deliberately because,
look, we should have had a basic GDPR-type framework in the US for 10 years now. We still
don’t have one. It’s going to be a long time before there’s any real attempt to regulate artificial
intelligence. So, if the predictions were policy battles in 2023, I don’t think anyone’s even going
to take it up. I wrote a paper back in January on how to regulate the metaverse in the sense of
trying to get a conversation started and to get regulators and legislators thinking about it.
I sent it around to all the mayors and governors and members of Congress that I know,
and people figured, hey, why don’t you just bill on this thing? It’ll get some attention for you.
And I got nowhere with it. It was way too complex. So, I think from a regulatory policy standpoint,
we’ll see nothing around AI for at least the next year, if not the next couple of years.
At the same time, though, I think society will see a lot. I mean, I was joking around with my son,
who’s 13 last night, like, what percentage of his classmates are going to start submitting
their school papers just copied and pasted from chat GPT, right? College application essays.
When I was a senior in high school, I had, I guess, a legal side business where I was
getting money from people to write their college essays for them. I think I would
have been out of business right now because you don’t need to pay someone like me anymore.
So, I think that you’re going to see cultural impacts and changes, and then eventually that
leads to regulatory changes. But I think that given how complex this issue is,
and given how unsophisticated most regulators are, it’s going to be a while.
I mean, on the one hand, I get it. Like, there needs to be more to regulate. But
obviously, Musk and Sam Altman, who I’m interviewing in a couple of weeks,
have been talking about the need for this for a long time, and now it’s suddenly very obvious.
All right. Also, it’s very funny that you were writing essays as a high school senior. That’s
so on brand. Exactly. It was entrepreneurial. It was a little bit on the edge. Hopefully,
it worked out for them. Although, one guy that I remember, like, a year or two ago,
I saw his name. I hadn’t thought about him in 25 years because he went to prison. So,
whatever I did for him did not work. And also, our 15-year-old is very focused already on chat
GPT. He’d heard about it. I was going to talk to him about it when he came home from school,
but I think on the day that it was released, like 10 days ago, he was talking about it,
and this week, it was helping him to understand some science concepts,
he said. So, hopefully, they’re using it as a positive, too.
So, speaking of regulations, you obviously made an early fortune by advising Uber,
and you talk about this a little bit in your predictions, but the U.S. Department of Labor,
there’s a proposal that could upend rules for gig workers, lower the bar for classifying
employees as contractors. What do you think some of the ripple effects would be if this is enacted?
Yeah. So, look, I think that just to give a little context here, President Biden was
strongly supported by organized labor in 2020. He’s been a union politician his whole career.
The opportunity to organize the gig economy is really the biggest thing the private sector labor
has had in decades. And so, as we’ve seen with AB5 and everything else, the unions have gone
after this issue over and over again, but they’ve done it at a state level. With Biden in office,
they’re now proposing a rule for the Department of Labor that would effectively make it much
easier to classify Uber drivers, DoorDash delivery people, Instacart shoppers, whatever it is,
as full-time employees as opposed to independent contractors. The states would still have to reach
those individual determinations as well, but the federal rule will make it a lot easier for
blue states to classify the Ubers of the world as W-2 companies, and it’d be harder for Uber
to stop it. So, if that were to all take place, and I think it probably will, what you’re looking
at is revival of state legislation and action on this issue. So, this was one of the most prominent
tech issues from, say, 2016 to 2019, culminating in AB5, which was a law passed in Sacramento
that basically said everyone in the sharing economy is now a full-time employee. That was
done because it has to organize labor. There was then Prop 22, which was a ballot referendum
sponsored by Uber and Lyft and all the companies that then overturned AB5, and then the issue went
away for two reasons. One, COVID came and it just got put on the back burner, and two, because the
voters responded so significantly from voting for Prop 22 and overturning AB5, it sent a message to
politicians all over the country that, look, voters don’t care that much about this issue,
and to the extent that they do, they don’t want you making their Uber ride more expensive, right?
So, as a result, politicians backed off of this, and we haven’t seen that much legislative activity
in the past few years. By Biden proposing this rule, he re-engages all of it again.
Right. Also, obviously, the biggest story of the last month is FTX’s blow-up. You’ve done a little
bit of crypto investing, I think. People have been talking about regulation for so long. This
seems like it’s the moment. What do you anticipate happening here?
Yeah. So, we’re on Coinbase, we’re on Circle. We’ve done some crypto investment,
not heavily in crypto, but definitely have some exposure to it. So, when the FTX blow-up started
happening, my take was, okay, this is what’s going to really lead to a lot of very harsh
crypto regulation that would be bad for the sector, because Gary Gensler, who’s the head of
the SEC, has been pushing for this for a long time. It hasn’t happened yet, because crypto
is very popular among a lot of actual real people, but FTX would give him the cover to move very
aggressively against the industry as a whole. In a weird way, since then, as the story gets
crazier and crazier, and just more and more like Sam Beckman Freed was just sort of a criminal
mastermind who was defrauding people out of tens of billions of dollars and not really something
specifically related to crypto, per se, it actually shifts the argument again from, hey,
we’ve got to fix this whole industry, it’s out of control, to this person was out of control, and I
think he’s going to go to jail for 20 years or something like that. But it’s almost gotten so
extreme that it’s actually helping again. But look, a lot of the legitimate platforms in crypto,
the Coinbases of the world, the Paxos of the world, and whatever role they play,
they want smart regulation that tells them what the rules are. Here’s what you can do,
here’s what you can’t do. And there’s really just been an absence of any type of guidance at all
by the SEC. That’s why you saw legislation introduced in the US Senate in 2022,
that was bipartisan, Loomis in Wyoming, and Gillibrand in New York, that would have moved
jurisdiction of regulating crypto to the CFTC, which everyone felt like would be a more friendly
regulator. So I think one way or another, we’re going to see more crypto regulation coming in the
next 12 months. I also think that New York has something called a BitLicense, which all the
platforms hate, but you have to have it in order to do trading in New York. There’s a lot of rumors
that California is going to move towards a similar process, and the New York BitLicense
needs a lot of reform. So hopefully whatever California does will be a better system than
New York’s. But I think you’re going to start to see regulation both at the state level and
more at the federal level too. Just as a VC, how sympathetic or not are you to FTX investors? On
the one hand, it seems really egregious that there was not a board there. On the other hand,
this guy was lying through his teeth. Although I would think with a financial business,
you’d have some way of verifying that the metrics you’re being given were not made of thin air.
Yeah, I mean, I think it was just reflective of the moment that we were in, in mid-2020
till the end of 2021, where it was just insane. And founders had all of the leverage. I would
be on calls in crypto or any other sector, quite frankly, where I’d be on a first-time call with
a founder. And then I’d be told, if you’re interested in this deal, you have to submit
a term sheet today. It’s like, what? I haven’t even looked at the data yet. I don’t know whether
I want to invest in this company. But a lot of VCs felt a lot of pressure and they’ve deployed
a lot of capital. There’s a lot of FOMO in this industry. And people, even funds as legendary
Sequoia, threw money at things that clearly, had they done more diligence, might have shown
otherwise. And so look, I don’t feel that much sympathy because we’re professional investors.
We’re supposed to be able to have the discipline to not deploy capital unless we’ve done our
research and done our diligence. Now look, I understand that I’ve got a little bit of unfair
advantage because in my tiny little niche of venture capital, at the intersection of technology
and regulation, we’re the only ones that do it. So I’ve got a monopoly, which gives us a little
more leverage and a little more deal flow. But with that said, we were definitely in a period
of rational exuberance, as Al Greenspan would have put it. And there was a lot of substandard
behavior by VCs in really not doing the work they needed to do to protect their LPs, and they’re
paying the price for it.
Briley, also, just before we let you go, I wanted to ask,
what types of clients are you seeing right now that you didn’t before? What’s changing
on a policy level that’s causing people to come reach out to you?
Yeah, so the first thing is climate. So one of the real accomplishments of the
Biden administration, in my view, is that they were able to secure hundreds of billions of
dollars in new funding for climate innovation, climate tech, that was both in the federal
infrastructure bill that passed last year, and then it was the big component of the Inflation
Reduction Act as well, even though climate has nothing to do with inflation. And what that does
is it provides a lot of money and a lot of certainty because it’s over a 10-year period
that this sector will now really be able to develop, and not just on the dime of VCs or
research institutions, but on the federal government itself. And that should really
propel the industry forward. It’s still very complicated because, look, if you invest in a
CPG product, you can analyze it fairly simply, right? Is the product good enough? Is the
founder good enough? Is the marketing good enough? Is this going to work or not? And you can make a
bet and get an answer relatively quickly. With climate, it’s a much deeper technical component,
so it’s not quite as easy to evaluate it, but I think you’re going to see a lot more activity.
And look, I mean, if you just look at the failure of the COP26 conference in Ethiopia,
we’re never going to solve climate change through conservation, through human beings
changing their behavior to emit less. The only way we’re going to solve it is through technology.
And to me, we’re going to reach that one and a half to two degrees Celsius increase.
But if carbon capture really could work and we could remove carbon from the atmosphere and store
it deep underground, that could solve the entire problem. And so I think that this is the moment
where the tech sector can really step up and literally save the planet.
Bradley, one of your predictions has to do with drugs and the Biden administration potentially
removing cannabis as a schedule one drug, which you point out is why most cannabis-related
business activities are illegal. Once this changes, you speculate that perhaps consumer
giants like Unilever or Kraft or Philip Morris could jump into the space. Is that realistic
to think that these big brands would move into that area?
Look, big brands are in alcohol all of the time. Cannabis, many people would argue,
is a less harmful substance than alcohol. We’ve got this real disconnect between the
states and the federal government where cannabis is legal recreationally and medicinally. More
than half the states, probably closer to two-thirds at this point, and yet it’s on
schedule one at the DEA. What that means is the DEA has a list of categories that they put drugs
into and the penalties associated with them. And schedule one is the harshest, and things
like heroin and meth and cocaine are on there. But cannabis is on there too, which really doesn’t
make a lot of sense, especially as states keep legalizing it entirely. And so President Biden
said, let’s remove this from schedule one. Once that happens, then all of a sudden all
kinds of interstate commerce that so far has not been allowed will open up. So you’ll be
able to have real banking, trucking of flour across state lines, advertising. So all of the
things that a normal, really big company, a Kraft, a Unilever, an Anheuser-Busch, a Philip Morris
might engage in, they can’t really do under the current system. But once the federal restrictions
are loosened, then all of a sudden it opens up for them. And one reason why we’ve never made
a cannabis investment is every time that we see a company in it, I ask the same question, which is,
how are they going to compete with Unilever? Why would Unilever choose to buy them as opposed to
just burying them? And most of the time, the answer is they can’t. And so you’re really just
racing against the clock to hope that the federal government doesn’t actually do the right thing,
and that keeps the big players out of the market. But I think that’s changing. I think once cannabis
goes off schedule one, I don’t know if it happens in six months or in two years, but look, when
there’s money to be made and it’s legal, big companies get into the game. I think that’s
what’s going to happen here. And I think a lot of cannabis startups that were highly valued or
overvalued or traded at really high multiples on the Canadian stock exchange are going to feel a
lot of pain. One topic that you also tackle is healthcare, specifically digital healthcare,
and also the access or lack of access that women have to abortion drugs. And I understand you have
an investment in the space, Mayday Health. Could you tell us a little bit about it?
Yeah. So it’s a nonprofit. It’s not actually an investment. We’ve looked at companies that
do tell abortion. And the reason we were never able to move towards an investment, even though
we like the idea and the societal benefit of it, is you want to invest in things that people are
using all the time, right? DoorDash or Uber or Facebook, whatever it is. Women are half the
population. Some subset of women do have an abortion. It’s really important that they have
the right to do so, but they typically have it if they do once or twice in their lives.
It’s not a repeat product. So as an investment, it never really made sense to us. But when Amy
Coney Bryant was confirmed to the Supreme Court, even before the Dobbs decision was handed down,
it seemed pretty clear to me that Roe was going to be overturned. And the question I started to
ask myself is, why is this different than all of the other telemedicine stuff that we invest in,
in terms of how a doctor and a patient could interact? So for example, Roman, which is a
company that we’re investors in, they provide different types of medication to men, Viagra
being the primary one. And basically, what does it entail? It’s a conversation through some
technological device between a patient and a doctor or medical professional, and then it is
medication being sent in the mail to somebody. And I was thinking, how could that really be stopped
if you tried to do that around abortion? When they did the Silk Road for the dark web, the main
learning they took away from it was, you can mail people MDMA in the US mail and regular white
envelopes all day long and never get caught. It’s basically impossible. So my thought was, yeah,
it might not be legal in Alabama, in Utah, in Tennessee, whatever it is, but they can’t monitor
everyone’s keystrokes, and they can’t monitor everything in the US mail. And as a result,
isn’t there still a way to get women access to abortion pills? And so along with some other
people in tech and VC space, we were able to create a nonprofit called Mayday Health.
And it’s an educational nonprofit that shows women in red states, how they can continue getting
action to abortion medication. We show them where the different providers are from telemedicine. We
show them how to set up mail forwarding so that the providers can send it to a place where it’s
still legal in another blue state. And then the mail gets forwarded to the home of the woman in
the red state. We show them what their legal options and resources could be. And it’s worked
really well. Traffic has been incredibly high. And it’s working because now you’re seeing states like
South Carolina, Texas start proposing explicit bans on importation of abortion pills in that state.
And it’s a really open question because the FDA has said, no, we have approved these. These are
federally approved drugs. You can’t tell people that they can’t take them. The states are saying
that this will eventually get resolved in the courts like everything does. And I have to assume
that if the makeup of the court stays the same, we’ll probably lose eventually, but that could
be five years from now. And so if between now and then we can help women get access to the
medication they need, we should do so. And when you look at the other alternatives, like bringing
women from a red state to a blue state to get an abortion, that’s not scalable. The only thing
that’s really scalable is technology. I have a 16 year old daughter. If we lived in a red state and
she got pregnant, she couldn’t tell us. She would not have the wherewithal to figure out how to get
to a blue state to get an abortion, even if Planned Parenthood was facilitating it. What she knows how
to do, find things on the internet and buy things on the internet. And she would find Mayday and
through that she would find the different providers and she would be able to get it.
And so if we want to reach younger women and really the most vulnerable women, this is the
best way to do so. It’s the only scalable way to do so. They’ll probably be in a little bit of
legal limbo. We’re working in 2023 to pass laws in the blue states to provide explicit protection
to medical providers who engage in this so that they can’t be sued civilly or prosecuted criminally
by the Southern states that are opposing abortion. It’s all still a little up in the air,
but to me, this is one of the best uses of technology to preserve people’s rights and
we’re excited to do so. Bradley, speaking of your philanthropic work, you also, I noticed today,
published something on Fast Company about how effective altruism can move past Sam Bankman
Freed. Can you lay out for listeners who may not know what is effective altruism and what is your
proposal here? So effective altruism is really just the concept of how do we get the maximum
value, the maximum ROI for every penny donated to charity? I certainly love the arts. Is it as
important as a child in Africa getting malaria pills or a mosquito net so they don’t die from
it? No, of course it isn’t right. So effective altruism says, where can we do the greatest
amount of good with the money that we have? It’s been a very popular concept, especially in Silicon
Valley and in the tech community. Sam Bankman Freed was a fan of effective altruism and started
pledging tremendous amounts of money to the movement that got him a lot of notoriety,
gave him a lot of influence in it. And then of course, like everything with him, it was nonsense.
And that gives the effective altruism movement a black eye. My proposal is as we think about how
to shift it from the SBF hangover into something else, one thing we’re doing out of my foundation
on hunger is we fund and run bills in states to pass laws that do things like mandate universal
school meals, breakfast after the bowel, expanded SNAP for seniors. And so far we’ve run bills in
24 states. We’ve passed the legislation in 19 of them, 12 million more people as a result now have
access to food on a regular basis. And $4 million approximately of my money in these campaigns has
unlocked about a billion and a half in new government money for hunger programs. That’s a 400x return.
And so my argument is nothing can scale like government. I was Mike Bloomberg’s campaign
manager when he ran for mayor. His thesis was, yes, I’m an incredibly wealthy person and I do
plan to give all the money away, but it’s still really a pittance compared to what I could do if
I run the city of New York. And he was absolutely right. And the societal impact that Mike had
as mayor was exponentially greater than what he could have ever had as a philanthropist.
And so to me, if you really want to maximize philanthropic dollars, find issues like hunger
where for not a lot of money, you can start passing bills in states, in cities that really
have widespread returns. I think about if I’d given that $4 million instead to a food bank,
it would help a lot of people. There’d be absolutely nothing wrong with it, but it wouldn’t
be 12 million people. It wouldn’t even be 1.2 million people, right? It would be a fraction
of that. And so to me, if the point of effect of altruism is to generate the most good with
the resources you have, one thing they have not done yet is look at how do we leverage government?
How do we leverage legislation to do that? As my proposal is that the movement start
looking at that approach.
Bradley, you actually had introduced me to Vivek Ramaswamy years ago, the founder of Roivin. And
I saw that he moved recently back home to, well, close to his home. I think he grew up in Cincinnati
and he just moved to Dublin, which is a suburb outside of Columbus. And it sounds like he is
positioning himself to run for political office. Obviously, J.D. Vance is now Senator-elect
in Ohio. I think I’ve asked you this before, but I do wonder, do you have any political aspirations?
No. I think I’d be a good elected official in the sense that I would be
good at doing the job. When I was the deputy governor of Illinois, my boss,
the guy that most people have heard of because he went to jail, Rob Blagojevich,
wouldn’t come to the office for a month at a clip. So I did get to run the state of Illinois,
the budget, the operations, legislation, the policy, the communications,
but I’m not particularly good looking. I’m not particularly charismatic.
And also, look, people who run for office really, really, really need the validation
and affirmation that comes with it. And oftentimes they can’t achieve it in other ways.
And so they’re willing to do whatever it takes. And look, running for office is hard. It’s
demeaning. It’s brutal in many ways, but this is the way that they can get the psychological
benefit they need. I’ve been lucky enough to have success in other areas. So I get the affirmation
that I need. I get the validation that I need. I don’t have to become an elected official to do it.
Look, if there was ever another 9-11 type situation and there was a need for a Mike
Bloomberg type to run and that person could win because of the extreme situation, might that
interest me? Sure. But the only elected job I’d ever want to hold would be mayor of New York.
And I think the odds of that ever happening are exceptionally low, pretty much zero.
Well, I have to argue with your point about not being a…
You’ve got our vote.
Thank you. All right. Fortunately, you’re not residents, but we’ll get to the rest of that.
It’s a small problem. Anyway, Bradley, thanks for talking to us. Always fun to catch up. And
happy holidays and happy new year.
Happy holidays to you guys, too. And thanks so much for having me.