Lex Fridman Podcast - #161 – Jason Calacanis: Startups, Angel Investing, Capitalism, and Friendship

Starting point is 00:00:00 The following is a conversation with Jason Colicanas, who's an entrepreneur, investor, author of Angel, how to invest in technology startups, and as many people may know, he's a fun, brilliant, long time podcast host of this week in startups, and co-host of the All-In podcast with Chimath Palhaapatia, David Sachs, and David Friedberg, who all happen to be poker buddies and self-proclaimed besties. The result is always a great listen to to both the love and the heated disagreements. Quick mention of our sponsors, Brave Browser, Lynne Oad, Linux Virtual Machines, 4-Sigmatic Mushroom Coffee, and Rev Speech Detect Service.

Starting point is 00:00:47 Click the sponsor links to get a discount and to support this podcast. As a side note, let me say that I've been learning a lot about real-world finance in the past few months. To give you a bit of context on the side, I've studied trading from an algorithmic trading perspective as a machine learning and a game theory problem often on for a few years in undergrad and grad school. I found the distributed, complex system aspect of finance and economics in general fascinating. But now I find even more fascinating the human side of the whole thing, ideas of greed, power, freedom, and truth. Wall Street Bets, Robin Hood, and the whole beautiful

Starting point is 00:01:26 mess around this topic allows us to have great conversations about human nature and the systems that underlie the rise and follow civilizations. If you enjoy this thing, subscribe on YouTube, review it on Apple Podcasts, follow on Spotify, support on Patreon, connect with me on Twitter and Lex Friedman. As usual, I'll do a few minutes of ads now and no ads in the middle. I try to make these interesting, but I give you time stamps, so if you skip, please still check out the sponsors by clicking the links in the description. It's the best way to support this podcast. This show is sponsored by

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Starting point is 00:05:15 slash week sale, I guess, as it ends on February 23rd. So hurry up, go to foursigmatic.com slashlex. This show is also sponsored by Rev and Rev.ai, which is by many metrics the best speech to text AI engine in the world. Rev in general is a company that does captioning and transcription of audio by humans and by AI. I've been using their service for a couple of years and I'm planning to use Rev to add more captions and transcripts to some of the previous

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Starting point is 00:06:12 a service. You can check out how well Rev.ai performs in a 7-day free trial at Rev.ai-slashlex. That's an awesome URL. That's Rev.ai-slash likes to tap into the world's most accurate BJAI. And now, here's my conversation with Jason Colicanas. I have a million things to talk to you about, but we do happen to be living through what I would think of as a historic event in terms of its impact, in terms of almost philosophically thinking about the role of people and how they can fight power with this whole Wall Street bets in GameStop situation.

Starting point is 00:07:14 I was wondering, you've covered in your amazing online podcast, you guys have been having fascinating battles over this whole situation. I was wondering if you could tell maybe from your perspective, as it's unrolling, the saga of Wall Street Best in GameStop, what are some interesting insights that you have about this whole set of events? In full disclosure, I was an angel investor in Robinhood

Starting point is 00:07:40 before they launched. And when I met the founder of Vlad and his partner, you know, they pitched me at a bar, not too far from where we are right now in Palo Alto called Antonio's Nuthouse. And my friend, Deo, it's a really good story. My friend, Deo had asked me to speak at his founder's institute, which is kind of like an accelerator for people who are thinking about starting a company. And so I gave a talk and then he said, hey, let's go to Antonio's nut house and we'll meet Elon for a drink. And so Elon met us for a drink there.

Starting point is 00:08:10 And it's the divest of dive bars. Like you'll take a beer and- A lot of the image of all of this. You have no Elon. It's on the floor. I'm a crappy bar. Yeah, I mean, it is the worst bar in the peninsula. Like just garbage on the floor and and cheap beer and warm beer and you'll pick up your pine glass

Starting point is 00:08:30 and be lipstick on it. It's brutal. Classy. Not your lipstick. You understand? Somebody else is lipstick. And so we're sitting there and Vlad walks up with his partner and he says, you're Jason Calacanis and I said, tell me about your startup.

Starting point is 00:08:45 He said, how do you know I have a startup? I said, you recognize me. And I mean, that's the only way. And he goes, is that Elon Musk? And I said, yeah, see Elon, come say hi. And he came over and said, hi, I said, tell me what you do. He said, well, I'm a quant. And I said, what's that?

Starting point is 00:08:58 And he said quantitative analysis. And I was like, oh, yeah, yeah, I know about that. That's like, you guys make algorithms and then try to beat the market, right? And he said, yeah, I was like, so you're yeah, I know about that. That's like, you guys make algorithms and then try to beat the market, right? He's like, yeah, I was like, so you're gonna pitch me on a startup and you're gonna sell your algorithm to other people. And if it was so good,

Starting point is 00:09:12 why wouldn't you just use it yourself and print money? He's like, yeah, yeah, no, no, that's not our business. Our business is, we're gonna create an app to get millennials to trade stocks. And he's like, hmm, you do realize there's no retail investors anymore. Like the Dockcom crash plus the 2008 financial crisis eliminated any individuals belief in participating in the stock market.

Starting point is 00:09:31 And he said, that's the opportunity. I said, okay, I like it. Tell me more. He said, well, we're going to get these millennials to trade. I said, the same ones who live in their mom's basements and take Uber and Lyft and are on their parents have no money, got screwed and you know went 250K into debt for school and now can't get a job. Those people and he's like, yeah, I'm like, okay, they have no interest in their future, but they're

Starting point is 00:09:55 going to trade stocks. He said, yeah, that's the opportunity. I was like, how are you going to make money? And he said, well, that's the best part. It's going to be free. And I said, so your idea is to get a group of people who have no interest in saving for their future to trade and your business model is free. And I said, yes, I said, I'm in. Because in almost all cases, the crazy outlandish ideas that nobody believes in are the ones that have the greatest returns. I mean, Uber, I introduced to about 25 investors and three of us said, yes.

Starting point is 00:10:23 So you know, a full 12% of the community who saw that deal decided to do it. So your sense about this idea being good had to do with the fact that this guy was just crazy and ambitious and bold thinking, or was it that there was something here in allowing a much larger magnitude of people to be able to be investors?

Starting point is 00:10:43 Yeah, the way to do really well as an angel investor or just in technology or in life is to not say what could go wrong but to say what could go right. And then to just imagine for a moment, if it does work, what would the world look like? And so when Elon was investing in Tesla and some other guys were running it and he was trying to save the company.

Starting point is 00:11:05 You know, it wasn't, is this going to work? It was almost positively not going to work. It was, and he knew that. But if it does work, what does the world look like? And so that's really what you're looking for is not the chances of success, but if it does succeed, does succeed, what would that look like? And you, that's what the world needs more people doing. And so when you look at Robinhood, it was like, well, if he does succeed, what would

Starting point is 00:11:32 the world look like? And now we've seen what it looks like. You have a generation who are so financially sophisticated that they know how to do puts and calls and shorts and research at a level that dominated the hedge fund industry. So let's pause for a second. These traders sitting there on a subreddit in a discord server are able to do analysis and research and then act in unison to say, we're going to beat in the Robinhood sense,

Starting point is 00:12:03 you know, this group of sophisticated insiders who have more access and more access to capital, but we will figure out how to solve this problem. And most things don't work, it's like the Wikipedia, like there's no way the Wikipedia would ever work, except it did, right? You're like, how is this ever gonna work?

Starting point is 00:12:24 You're not paying anybody, but it's both the largest corpus of an encyclopedia ever. So I think Robinhood actually succeeded. And then what we saw was this system and a lot of the systems in our society, whether it's the political system, the constitution of the United States education, higher education, we sure involved in. And then even the financial system, we have not stress tested and stress tested it. And we don't actually know all the edge cases and how it works. So Trump was able to just really put this crazy stress test. Like, is the democracy going to hold? Are we going to break this two or three, you know, 200 some on your old experiment?

Starting point is 00:13:04 And then we looked at the financial markets and it turns out there were more people shorting the stock than stocks were and shares were available. I don't know how that's possible. And then I'm trying to uncover, where could I see a list of people who have shorted the stock and it's like, you can't, but we can tell you sort of how many every two weeks or maybe twice a week, we can create a report. Maybe we know. I was surprised that nobody knows

Starting point is 00:13:25 the list of people who are shorted and you guys are trying to figure that out. Yeah, there's no transparency on a lot of these systems. And if you call to try to short a stock, like it's almost like they'll tell you on the phone, like let me see, I think I might know a guy who has shares to loan out. So it's like, am I calling to like try to find

Starting point is 00:13:40 like a 73 Mustang Grande and you know, gold, you know, you're going to call around. It's like, shouldn't this be like on a ledger somewhere and be completely transparent? So now we're seeing those things. And I think the investigations will make it super clear. But of course, in a vacuum without information, there are so many investors in these startups that conflicts can start to appear. And then you know how it is with people in conspiracy, there is the mind starts to wander. And so in some cases, there is actually a conspiracy. And then in other cases, people's mind will fill in

Starting point is 00:14:12 like, oh my, there's some grand conspiracy here. I can tell you Robin Hood's only goal is to get more people to trade stocks and to democratize it even more. And they apparently were on the brink of, you know, seizing as an entity if they didn't get more money to cover all these trades. They were on the brink and they raised $3.5 billion or something like that in a week. In some sense, Robinhood enabled the magic of this distributed system of Wall Street

Starting point is 00:14:40 bets. You said Wikipedia, which is another, which is probably one of my favorite websites and one of my favorite examples of like a distributed system, somehow coming together in a way, just like you said at that crappy bar, you, I would have guessed it would never work, but if it does work, it changes everything and did. And Robin Hood in that same way,

Starting point is 00:15:01 probably enabled, or was one of the major enablers of Wall Street bets of giving power, like empowering young kids to learn about how this whole messy financial system works and take on the big elite centralized players. Yes, and you know, it's very easy when these companies get big. One thing that's changed is the footprint of these startups and the velocity at which they grow. So something like Airbnb is another perfect example of something that should really not work in practice, but it does. Like, I'm gonna rent my couch or my extra room to somebody like a serial killer or I'm gonna stay in somebody's house like a serial killer's house and you know it's

Starting point is 00:15:43 like it really sounds scary, but it actually works. And it has not destroyed the hotel business. It has added. So the best startups induce a market to exist. If you look at Uber or Airbnb, people replace their cars, and Uber was not competing ultimately with taxis. They were competing

Starting point is 00:16:06 with car ownership, public transportation, walking, or just not going out. And then you look at Airbnb, a lot of people who stay in an Airbnb would not be taking a trip to Kyoto. If not for the fact that they could get a $75 beautiful room with great reviews in Kyoto for three weeks. It inspires people and it manifests a market because the product is so transcendent, right? And I think that's one of the things that Robin Hood did. You can't learn how to do this options trading and puts and calls and all this sophistication stuff unless you actually do it. It's just too hard to learn, except in practice, just like poker.

Starting point is 00:16:43 If you want to learn how to play poker or guitar or tennis or skiing, like you could talk about it, you can watch YouTube videos, but at a certain point, you gotta get on the mountain. At a certain point, you gotta put some chips in the pot.

Starting point is 00:16:55 And it's gonna be painful. Like poker's gonna be painful. You can lose a lot of money. And that's why you should play at the small tables first. And even in trading, like you look at people who were doing this crazy trading and game stop, a company that's worth, you know, maybe a couple billion dollars,

Starting point is 00:17:08 but certainly not tens of billions of dollars. Of course, the people who are throwing their money in last are gonna lose it. I think everybody knew that. And so it was a momentum play, and you know, they're betting against the hedge funds. So I think it's good for people to learn and become financially literate

Starting point is 00:17:23 and just always understand the concept of the risk of ruin. The good news is for a young person, the risk of ruin might be like they lose $5,000 or something and then they have to build their stack back up. But that's really the only thing I am concerned about is there are people who will play poker or blackjack or sports betting or whatever it is and lose control. Just like there might be people who try alcohol

Starting point is 00:17:46 and lose control, but we can't build a system based upon limiting the average person's behavior based upon somebody who can't control, their ability to drink, two glasses of wine instead of 20. How does this whole thing end? Probably in tears. For who? Who's crying?

Starting point is 00:18:04 Is everybody crying? Who's crying? Is everybody crying? Who's crying when? So I think there were some of the hedge funds that were crying initially. That maybe some of the Wall Street bets people who bought last would be crying. And then eventually there's probably another set of hedge funds or even the Wall Street bets mob.

Starting point is 00:18:19 And you know, that army, some of them might have broke ranks and then shorted the stock. So nobody knows. So everybody has to be aware of and then shorted the stock. So nobody knows. So everybody has to be aware of what's happening in the game. So if Wall Street Bets said, hey, let's squeeze these hedge funds because they have too much short interest.

Starting point is 00:18:32 Let's all buy the stock. Then some of them might have said, okay, you know, it's at $200, $300. Maybe I'll join the short movement now that they've covered. And they could have shorted, they're been like double agents. So people have to understand like this stuff is gnarly and it's a it's a free for all. I mean, it is a literal free for all.

Starting point is 00:18:50 There's a kind of morality like a big statement that Wall Street bets made in terms of like the elites can't just push us around, they can't bully around. But at the same time, you know, they're also interested in making money, right? Yeah. Is it is What's your sense? You said that some of the people in the Wall Street best might have broken off and shorted the stock. Are they more interested? There was an emergent morality that emerged and said,

Starting point is 00:19:16 like, we're not going to put up with the centralized leads. But is that going to continue? Are they going to fight the power structures that are bad for society? Or are they going to now like, I mean, are they ultimately going to introduce more chaos and going to damage the economy and damage the world? Or are they going to continue being the good guys and fighting the, the, the, the evils that manipulate the market? What's your sense? You know, it, it really feels like the Dark Knight series of films where like some people just want to see

Starting point is 00:19:48 the world burn. Yeah. I think there is a contingent of people who just literally want to see chaos. Yeah. Like, you know that contingent on some of these, you know, forums who just want to create chaos, right? So there's certainly that chaos contingent,

Starting point is 00:20:01 but I think overall what the arc will show is a group of people getting massively educated. You see it in crypto as well. There was like a three year period where all of these failed entrepreneurs who I knew who couldn't build companies were then coming back to me after their companies has failed or after they gave up or couldn't clear market raising money

Starting point is 00:20:22 with the venture capital community and they were doing ICOs. And I was like, I met you before, right? I'm like, yeah, yeah, no, I'm doing an ICO now. I'm like, okay, where's your company at? And they're like, here's a white paper. And I was like, this white paper with spelling errors in it that says, you're going to destroy Airbnb because everybody's apartment is going to be on an immutable ledger. Yeah. Like, wouldn't that be better in a regular database that was private and not public? Like, why does it need to be on an immutable ledger? So you can't change.

Starting point is 00:20:50 I'm like, not changing the database as a feature. That's, that does not seem like a good feature. And they couldn't explain it. They're like, well, just people are interested in ICOs. And there was that ICO, Mania. And what it showed was there was a global appetite for risk. People want to try new things. This is one of the great things about the human spirit

Starting point is 00:21:08 is one of the great things about capitalism. And one of the things that concerns me most about where society is the sort of socialism, communism, entrepreneurship is bad, technology is bad, and polarization of wealth, and people getting rich is a bad thing. When I grew up, I'm 50 now. But when I was a Gen Xer growing up, we kind of maybe too much idolized Bill Gates and people

Starting point is 00:21:30 who were doing interesting things in the world. We thought capitalism was a force for good. I still believe capitalism is a force for good because when a group of people build a product or service that changes the world and it gets globally distributed, whether it's Tesla or SpaceX or Google or Airbnb or Uber or Robinhood, everybody gets to benefit from that product or service having to compete. And if you look at the places where there's no competition

Starting point is 00:21:56 like public education or less, you know, established colleges and something like that, less competition for accreditation degrees, like things tend to get a little weird, don't they? And people tend to be protected, and that's not good. You need competition. Does it mean that people shouldn't have global healthcare, it doesn't mean that we shouldn't have a safety net,

Starting point is 00:22:19 but we need to keep capitalism vibrant, especially because China has now co-opted capitalism and created their own version of capitalism, which is communism with capitalism. It's like this weird operating system. Like, we still wanna keep communism so we can take any of your gains at any time. Yes.

Starting point is 00:22:36 But we'd like you to be entrepreneurial. And then you have somebody like, you know, you know, the founder of Alibaba, Jack Ma, who disappears for a couple of weeks. Who's that? Jack was like, who's Jack Ma? He kind of disappears for a couple of weeks, and then he comes back and he's really sorry about the things he said, and then he disappears again, and like, you know, we have to be very

Starting point is 00:22:58 careful if China wins capitalism. This is going to be an existential threat for humanity. The Chinese are no joke. I mean, they are seriously focused and they are picking the winners. It's a very weird system because it is, in fact, I don't know what you call it, like communism capitalism is such overloaded terms,

Starting point is 00:23:19 but they do encourage entrepreneurship, and they do a good job of it. Oh, yes. But then they're like, they're like the surveillance thing and they're controlling things in a way. Yeah. It's weird because it seems to work really well for them in the short term.

Starting point is 00:23:37 Yes, it's definitely got short term benefits. So the question is like, what, what, how that gets distorted and becomes worse and worse, which your potentially might be. And I think on, you know, the entrepreneurial spirit, which you have Apothecist, all centered around the entrepreneurial spirit,

Starting point is 00:23:56 is one of the magical things that makes this country great. I don't know if money is deeply tied into that. I do get bothered by people, you know, treating the word billionaires if it's a bad word. Yeah. But in general, like all the hard things, all the difficult things we're going through in this country, it seems like the way out

Starting point is 00:24:17 is going to be making the entrepreneur, the hero of society, of like letting that young kid with a big dream and the gust to take the big wrist and build something totally new make giving them a chance and whatever that involves I don't think it's about taxes. I don't think it's about like regulation all that stuff. It's about us and just public discourse saying that that, that girl, they're bad asses. Like, encourage them to do it. We have to have people buy in to the fact that they have that opportunity. And I think one of the problems in society is there's a group of people who actually

Starting point is 00:24:57 don't believe that they can succeed or they don't believe even more preneciously that other people can. And that's the group of people that I think are highly vocal, but a small group of people, which are generally people of incredible privilege, rich parents, white, city dwellers, liberals, they kind of look and say poor people cannot change in a lot. And they're battling in their minds to protect poor people.

Starting point is 00:25:23 But they have this very weird patriarchal kind of approach to it, which is they think that they're not capable of changing their lot in life. And they're like, it's not possible. And then once in a while, I'll tweet something where I say, you know, it's really incredible that every piece of knowledge you could possibly want is now available for free on YouTube. And every course from MIT and Harvard and Stanford is available on edX or Coursera and all that information is there freely available. And you can take the lectures. This is amazing. And then people will be like, yeah, but people don't have access to it. I'm like, they do. It's free.

Starting point is 00:25:57 Here's the link. And they're like, yeah, but they don't have internet. And I'm like, here's the chart of internet penetration in America. Like, and they're like, well, poor people don't have internet. And I'm like, really? Find me any downtrodden person without a smartphone with a high speed connection. That capitalism provided for $12 a month or $15 a month. Like, it's very hard to find that. And we have it so well in this country. And there's so much opportunity.

Starting point is 00:26:24 But people don't believe it. And that's actually one in this country, and there's so much opportunity, but people don't believe it, and that's actually one of the problems. See, the average American still watches four or five hours of television a day. And often I meet people and they're like, I need a technical co-founder, and I, you know, but all I need is a million dollars, and I'm like, okay, well, what is your skill?

Starting point is 00:26:38 And they don't have a skill. And I'm like, well, are you a designer? No, are your product manager? No, are you a developer? No, are your sales executive? No. Okay, what are you? I was like, well, are you a designer? No, are your product manager? No, are you a developer? No, are your sales executive? No. Okay, what are you? I was like, well, I have an idea.

Starting point is 00:26:49 Well, as my friend Sam Harris, I think your friend as well, says like, everybody has like a million ideas an hour. Like, you don't really get credit for those. Even when you're asleep, your idea is spewing ideas. Like zero credit for your ideas. It's all about execution. And we're seeing. You have to believe that you yourself can be the core of that execution.

Starting point is 00:27:07 You yourself can build the thing and every no matter what your circumstances are. I mean, we could talk about like structural racism and all those kinds of things that push down. But from the individual perspective, when you just like are coaching or giving advice to an individual, you can literally change the world. I mean, Wall Street bets as an indication of that in the financial space that you yourself can change the world. That's why this country is amazing. Still the best country in the world, right?

Starting point is 00:27:32 I mean, it still is amazing, the opportunity provided to people, all this educational experiences online. And the ability, what I tell young people who are looking for advice, I say, you know, the skill you need to refine is the ability to learn new skills. Like Like if you become good at learning a new skill and Tim Ferriss, uh, friend of mine is really pioneered this. Like he can get to 60 or 70% of like the knowledge in a skill in some incredibly short period of time. Now I'm not saying

Starting point is 00:28:01 he's going to become a virtual oh so drummer or a great basketball player, but Tim and I were on vacation together in like a group vacation in Italy, and there was a basketball court. And I said, let's go shoot some hoops. I've never shoot shop before. And I was like, okay, come on, I'll teach you. And Tim is fabulously uncoordinated. People don't know this.

Starting point is 00:28:19 Like he tried to dribble a basket ball and do a layup. And it looked like he had a blindfold on. I mean, you've never seen something less elegant than Tim Ferrars doing a layup in basketball. And then he watched me do it three or four times. And I watched him study me. And I listened, I've been playing basketball in Brooklyn since I was a kid.

Starting point is 00:28:41 I got a couple of moves. And he was just taking notes and taking notes and taking notes. And by the end of a couple of hours of doing this, I could just watch him checking his form and figuring it out. That's every skill in the world now. And what I tell people is like, I'm like, did you watch Game of Thrones?

Starting point is 00:28:57 And they're like, yeah, watch Breaking Bad? Like, yeah, I'm like, okay, that's about 400 hours. Yeah. How about you don't watch the next two and you put that 400 hours into learning how to be a graphic designer, a UX person, a developer, whatever it is, and learn how to add skills. And that's what I did my whole life. I was a kid from Brooklyn, went to school that night, but I was very quick to get to maybe 50% of the knowledge base of graphic design or being a writer or being a sales executive,

Starting point is 00:29:25 whatever it was, a developer even. And I was just good enough to not have people be able to bullshit me like when I hired them. And that was a big unlock. When you know enough that people can't snow you, that's a really good one. And look at yourself, like you figured out how to set up an entire podcast, people don't know this,

Starting point is 00:29:41 but you don't have a team around you. I have a team of like five, six people working on my podcast. We see even knowing enough about to set this up, you would then be able to hire a team. Correct. And you'll be able to call them on their bullshit if they're not doing a good job.

Starting point is 00:29:54 And that's really important. And I don't know that much about this whole thing, but I know enough to be able to then see who knows this stuff and not. You're absolutely right. And the process of learning how to learn is essential there because I did martial arts,

Starting point is 00:30:09 jiu-jitsu and so on. And it's so funny to watch. I did take one though, yeah. Definitely, no, it was awesome. It's funny that there's some people that do an activity for years, because just sort of elaborates something you were saying about hours.

Starting point is 00:30:22 It's not always the amount of hours. It's the quality that you put in. Yes, deliberate practice versus just doing some behavior. I mean, literally I've been playing chess and trying to get that going again and for watching Queens Gambit and I got test.com. Of course. And I realized I was just playing

Starting point is 00:30:37 and I'm not getting better and then I was like, oh wait, there's a little analysis feature here in chess.com. We'll show you your blunders and mistakes. And I'm like, oh, I'm spending no time reviewing my losses in chess. And I just want to play the next game. I should really review these losses and figure out what mistakes I made. And when I started doing that, I was like, oh, I'm getting better. Right. So some deliberate practice really.

Starting point is 00:30:57 And if you want to take it all the way, Magnus Carlson, shout out to the guy, he has an app, but as a few other coaching apps where you like focus on the end game You focus drilling a particular it's you basically don't play the game at all You're just focused on drilling the different Astax the opening yeah, and there's different kinds of puzzles So you can really make it into a deliberate practice not to make this episode sponsored by chess.com, but they literally have puzzles. Yeah, so like, oh, and it's $100 a year for this product. And I just thought to myself, this is capitalism.

Starting point is 00:31:29 They don't need to charge you $100 an hour for a lesson. They can charge you $100 and they've created the ability for you to play chess 24 hours a day against opponents who are perfectly matched against you based on your rating. And they analyze every game and they have puzzles and they have puzzles and they have tutorials and they've got everything else. It's like just think about how much value is being provided to society because of capitalism

Starting point is 00:31:54 and because competition. If you want things to get better and you want to step up your game, just make it slightly competitive. It is one of these things in human existence that is so powerful. I don't know, do you see the Michael Jordan documentary The Last Dance? Like half of it. Yeah, I'm still working through it.

Starting point is 00:32:11 He's so competitive and petty. It's so inspiring that all he cares about is just winning to the level of which he literally, there's like this running meme, I took that personally and I took that person. I don't know if you've seen the images of him sitting smoking a cigar looking at like an iPad or a video clip, and it's like, I took that personally. And you can make a super cut of every time he took something personally, he literally

Starting point is 00:32:34 takes everything personally to give himself that competitive motivation to win. That's capitalism. And when people are competing, man, look at what Elon did to the space of cars. Like every, they were literally laughing at him in the first 10 years, electric cars, ha ha, that company will go out of business. And now every single company is like, we're going fully electric by 2035. And he kicked their asses so brutally that they had no choice, but then to step up their game. And that's what we want, right?

Starting point is 00:33:08 And this virus and this pandemic, I think the great thing that will come out of this horrible experience that we've all had is psychologically, death, learning, just so many bad things occurred, the economy, people losing their jobs. But we also got to see the human spirit with these mRNA vaccines. And just how if we took out some of the regulation and people were super motivated, we might actually be able to eliminate all pandemics from ever happening again.

Starting point is 00:33:39 And before that, Bill Gates was banging his fist and Jeff Skull was doing the movie contagion. I mean, for two decades, people have been banging their fists. We have to be prepared for this. And everybody's like, yeah, whatever, Yolo, it's not going to happen. And now it's happened. And people are like, we need to be able to destroy every, you know, pandemic and virus before it happens.

Starting point is 00:33:59 And you're, you're listening, you know, a lot more about science than I do. But these M-R-M-R-N-A has been around for a while. We've just never gotten aggressive about doing it. And then you think about challenge trials. I don't know if you've been following this, but they're doing challenge trials now in the UK this month, where they're introducing COVID into healthy young patients and then giving them the vaccine or, you know, and that is against all, yeah, rules and regulations about, you know, do no harm. But then you think about it. We kind of celebrate people jumping out of planes

Starting point is 00:34:32 and we got that one guy, Alex Honnell, just climbing up mountains without a rope and they give him a North Star, you know, back page ad and an endorsement deal. And we celebrate that. We celebrate people surfing with sharks. We celebrate people doing deep welding. We pay them extra go 200 feet underground and weld stuff.

Starting point is 00:34:52 And people do dangerous stuff all day long. Astronauts. But we will soldiers, firefighters. But we won't let people get paid to do a challenge trial. Yeah, we're weirdly risk averse in certain areas that are completely don't make any sense. It doesn't mean, and this is where the world needs to be. We could have said these thousand people, young people who we know are in all likelihood, not going to have a bad outcome, but there's a possibility.

Starting point is 00:35:18 There's a possibility, but it's very low. And it's certainly lower than riding a motorcycle. Right. It's lower than riding a motorcycle. People riding motorcycles everywhere. We have ads from motorcycles. We could have just said to those thousand people, we'll give you a million dollars each to do this.

Starting point is 00:35:31 Okay, there's your billion dollars. We're printing trillions of dollars of money to deal with this. If we had just done a thousand people for a million dollars each to do a challenge trial in March, April, May, when they had the MRNA vaccines ready. We could have deployed the vaccines in the summer. We would have been done with this. We would have been over by now. So we get to challenge all of the thinking. I think that's what

Starting point is 00:35:53 the great pause did. It's letting everybody challenge that thinking is, why do we have that rule? Okay, yeah, we don't want to have people,, give up their organs for money. Like we obviously understand, but there's a reasonable discussion about, well, maybe there's a level of risk in a global pandemic. I mean, we fought the Nazis, right? We defeated the Nazis. That took a lot of deaths to do that, but we had to kill that evil. This is another evil which we must fight. And it's going to result in, it's already resulting in thousands of people dying a day, but we could have actually stopped it earlier if we just had a reasonable discussion. This is why podcasting is our respect, what you do. And this is why intelligent people

Starting point is 00:36:33 are so drawn to podcast because you and I can expand on this and not cancel each other over this very suggestion. When I make this suggestion that our challenge trials are reasonable or not. If I were to do that on Twitter, they'd be like, oh, Cali-Kannis wants to give poor people Corona virus in order to save rich people's like, no, I didn't say that. But you and I could have a reasonable discussion about our challenge trials, something we should consider in a acute situation where millions of people are going to lose their lives. All right, so that's an example of capitalism competition working really well. There's one of the, to me, sad thing to see about coronavirus is that, for example, testing

Starting point is 00:37:14 at scale should have, it seems obvious. I was a little clueless about it, but because I thought there's no way you can have, like, antigen tests at hundreds of millions, like order hundreds of millions of them and make them cheap. But actually, I realized recently that there have been available since about like May, yeah, you were able to in Korea and Finland, well, over the place, you could have done mass manufacturer. So there, there's a little bit of a failure of, of capitalism to step up.

Starting point is 00:37:43 Yeah. And I don't know if you agree with this, but it seems that the blame is to be placed at the regulators and the various institutions. Chrony capitalism and all likelihood is what stopped it here in America. I mean, I had friends who had imported them from other countries.

Starting point is 00:38:01 The testing kits and you've probably been to parties where people had these kind of testing kits from other countries. And we're sitting here and they're just approving them now really in February, month 11 of the pandemic in America, we're gonna have testing online, really. I mean, even if these tests were 80% effective and they're 95% effective, mass producing them,

Starting point is 00:38:21 we should have sent them in every postal, anybody with a post office box should have, you know, with the mailing address, should have had 10 of them put in their mailing address, just for free from the government. And then everybody would be testing and we would have contained it. We don't have tests in Tracy in the United States. All the countries that are on the other side of COVID did it by having testing, tracing, and closing their borders and masks. That's the combination that works. The problem with coronavirus is while a lot of institutions did not behave their best, it's also the case that there's a lot of uncertainty. So I tend to give a little bit of a pass

Starting point is 00:38:58 to everybody involved for the uncertainty. We were all... I give them that until June. I wonder how history will remember this whole period. I'd love to ask you because you were an early investor in Robin Hoods and you sort of, you're in a very nice place of being a huge supporter of the sort of Wall Street bets, kind of distributed power of the people. And at the same time, because of you being an investor, like intellectually giving a chance to Robin Hood in this kind of chaotic time of conversations to think about like, well, what did they do right?

Starting point is 00:39:37 What did they do wrong? So you have a kind of a balance you on the whole thing, which is really nice. Is there, we've talked about what Robinhood did right, I think. Can you sort of steal man, trimothas arguments of what Robinhood did wrong in the last few days? Yeah, I mean, their communication is always the number one issue with these startups, right? And if you, you have to get ahead of any problem and you have to put all the bad news out immediately. And in the case of Robinhood, it seems,

Starting point is 00:40:09 based on what, you know, it's been in the papers and what Robinhood said publicly, is that they had this kind of liquidity crisis, right? Where they were being, because of these exchanges, telling them you have to put up this amount of money and collateral and them being pinned at number one in the app store, there were so many people trying to buy five shares of this stock, five shares of this

Starting point is 00:40:28 meme stock that it kind of broke their system. And then the people who clear the trades for them, they said, you got to put up a billion dollars, two billion dollars, three billion dollars. We can't do that overnight. And I think that they were an uncomfortable situation of like going on TV and saying, we have a liquidity crisis. Like, that could be like a run on the bag. Everybody then logs in at the same time to Robin who tries to sell every share of the own, who's afraid that the whole thing's going to collapse,

Starting point is 00:40:52 right? So I think there was this kind of like, black swan event. And they probably didn't communicate it all that well at the center of that. This is really interesting. Maybe you can comment on the nature of communication, uh, Vlad, the CEO, the guy you met at the bar, I think at the center of the communication. Right? Yep. So Elon is an example of a guy who also is at the center of the communication for his particular set of companies. And that, you know, on Twitter, seems to be a really powerful way to communicate. And there was something, this is me saying it, there was something about

Starting point is 00:41:25 Vlad that sounded like he's hiding stuff. As opposed to Elon, it doesn't sound like he's hiding stuff. It could be the nature, the beat, the timing of the conversation. Same thing with Mark Zuckerberg. Mark Zuckerberg, for some reason, often sounds like he's hiding something. And then there's like Jack Dorsey is much less so. And I don't know what that is about the COs that makes you trust them and not. Might be the point in time, like in terms of escape velocity. You know, there might be non-disclosures in place that we're not aware of, where they're not allowed to talk about certain relationships. I see. And that results like in Vlad in this case, and that results in you being like

Starting point is 00:42:11 acting weird and nervous and nervous. Or nervous. Yeah, it could just be the person is nervous. You know, so it's really hard to be building one of these companies and you're at scale and, you know, oh my lord, the entire thing's coming apart and you're the most hated person for that day. You know how the rage cycle works and the media is just so crazy when they get their hooks into something. I saw it happen with Uber, we saw it happen with Facebook. And even Tesla, you know, there were times when people did stupid things with autopilot

Starting point is 00:42:39 and it's like, okay, somebody's watching a movie and sleeping in their car or leaving the driver's seat against all the rules of autopilot, and somehow Tesla's responsible for that. It's like, we have people who stand on top of their motorcycles and drive down the road on a motorcycle, and we don't blame Yamaha for or Harley Davidson for some idiots standing on the seat of their motorcycle on a highway going 60 miles an hour. We just say that person's an idiot. But when new technology comes out, miles an hour. We just say that person's an idiot. But when new technology comes out, we blame the technology, not the person operating it. And if you are going to operate, we basically vilify and indemnize. I think that's that is part of it. Like when the person at I remember

Starting point is 00:43:16 Airbnb, we always thought, what if somebody trashes your apartment and then sure enough, a bunch of methads rented this poor woman's apartment, she left all of her stuff in it. And then a bunch of methads had a drug woman's apartment. She left all of her stuff in it, and then a bunch of methads had a drug party, destroyed her apartment, ripped up all her photos, and went crazy. And we knew that day would happen, but nobody remembers it now,

Starting point is 00:43:34 but it was the number one story on every news channel, because wow, that's an exciting story. And I just thought to myself, I wonder if there are any parties in hotel rooms where the hotel rooms being trashed and people are doing drugs and on and crazy things. It's like, yes, that's basically every hotel in Los Angeles right now is being destroyed by some rock band.

Starting point is 00:43:54 That's throwing a TV out the window. Like we expected in a hotel. We just didn't expect it in somebody's house with Airbnb and then Airbnb created rules around. You can't rent an Airbnb for a party and they learn. So, I think there's a learning curve with these companies and they do get to scale at a level that is unprecedented. It used to take decades for a company to become an international phenomenon.

Starting point is 00:44:15 Now, it happens in two, three, four years. I mean, look at Clubhouse. This thing went from being a private beta six months ago to being the number one app in Germany and in Japan and here. Like just like that, boom. And it's because there's an ecosystem that has never existed, the App Store. Then there's payments online. And then everybody has a super computer in their pocket. When we, the thing people got wrong about entrepreneurship technology and business, you know, over the last couple decades was just how big the market was and then how quickly you could, you know, achieve

Starting point is 00:44:53 relevancy in these markets. We thought the market was like the 60 million homes with broadband and originally it was like maybe 10 or 20. And it became 60 million. Then I was like, okay, well, how many hours are you at your desktop computer? Well, like probably at our computers for five hours a day, 10 hours a day at work, three hours a day on our own. And then I was like, yeah, nobody's on their desktop computer. Everybody's on their mobile phone. And oh, and by the way, they have it with them. So the people with mobile phones are now using this high speed device

Starting point is 00:45:19 with an app store, with their credit card in it. And the early days of the internet, people were scared to put their credit card on the internet. That was considered a really dumb thing to do. If you put your credit card on the internet, you're gonna lose all your money. They're gonna hack you, whatever. And now, it's just amazing to me how quickly

Starting point is 00:45:36 when a company hits, how quickly it can get to a million subscribers or 10 million or a billion users. And there's all these networks, like social networks that allow the spread of the viral spread of like a new startup, a new company, a new app. To be announced, a meeting, a podcast, right? Yeah. A single thing, a single meme could change the world.

Starting point is 00:45:58 Speaking of clubhouse, I mean, I just want to, we're saying so many interesting things, but there was a magical moment with Vlad Nieland on clubhouse Yes, is there do you have thoughts about that interaction Which felt like so many aspects of this whole situation feels like totally novel surreal like it's defining World is terror it is like a billionaire, the richest human on earth is interviewing the person at the center of one of the most interesting mass scale,

Starting point is 00:46:35 like power battles in finance ever. Yeah, perhaps it's, by the way, seven movies have been sold. And two weeks, just think about how fast things are moving like this thing happens. Yeah. Like people had the idea to short the stock six months ago. They start doing their research. They build an army. They execute the trade. The system goes down.

Starting point is 00:46:58 Robinhood raises three and a half billion dollars in four days. Elon is interviewing them on Clubhouse on Sunday after the Wednesday had happened. And now here we are, it's 10 days later. Doesn't it feel like it's been 10 months? Yeah. It's been 10 days, Lex. It's been 10 days. 10 days.

Starting point is 00:47:15 There's like a new president, all these things that everyone forgot. Like what? There was an insurrection, by the way, we also have that revolution at the Capitol where a bunch of crazy people who have guns and at the Capitol where a bunch of crazy people who have guns and body armor and then a bunch of them who are just yo-lo-ing in cosplay took over the Capitol. Well, so in the other more dramatic thing to me is that was one month ago. That was one month and the president of the United States got banned from every major social

Starting point is 00:47:42 network. from every major social network, and which I think I'm still deeply troubled by, is parlor being removed from AWS. That changed the way, that changed a lot of things, as somebody who's an aspiring entrepreneur, that changed the way I see the world. That little, maybe I'm being over-dramatic, but... No, you're not.

Starting point is 00:48:02 I think you're paranoid for a reason. You're paranoid for a very good reason, which is as big as these companies can become, they are beholden to the mob. And if the mob says, hey, this person needs to be canceled, they're going to get canceled because you can't lose your entire audience. You can lose your whole customer base and you can lose all your employees. I think what's interesting about your fear about parlor and AWS taking off is we went from being like,

Starting point is 00:48:27 a social network, which is the software layer, and then we went to like the infrastructure layer, and they'll even go after like Cloudflare, which is a CDN provider, right? They're just like, a plumbing, it's like sort of like the telephone. So we're basically holding everybody responsible on the whole chain of events here. What that's going to do is, you know, I'm not a huge believer in crypto, but distributed

Starting point is 00:48:51 computing, where nobody in decentralized and distributed computing platforms and open standards, podcasting is an open standard. The web is an open standard. FTP was an open standard, but Twitter and Facebook are closed. What's going to happen is we will see a group of individuals create peer-to-peer networks for social media where nobody can control it. And the same for cloud computing, where there's a crypto project where everybody will, and I invested in a company that tried to do this and got sold and didn't work out,

Starting point is 00:49:27 but take your hard drive on your computer at home, you give a terabyte of your 10 terabyte drive over to the cloud, and then everybody else does their terabyte. And then all of a sudden you've got this virtual cloud and anybody can store stuff on it, and it's all encrypted, and then nobody can stop it. And that could be tweets, it could be videos, and so this idea that YouTube will be able to tell people, kick people

Starting point is 00:49:49 off because they're skeptics of, I don't know, the pandemic or the vaccine or they've, you know, they'll make things that are more censorship resistant. I think that'll be the reaction to all of this. Well, this is my question for you going back to that crappy bar and people pitching you. Is there, like with clubhouse, do you see competitors? Do you think it's possible that another, perhaps more decentralized or another kind of social media will emerge that will take on Twitter and Facebook and might be able to replace them?

Starting point is 00:50:20 If you look at the whole landscape, Clubhouse and everything else, do you think some other company might emerge? They'll be 10 versions of Clubhouse. We looked at social network and we thought, Friendster was it. Like, Friendster was so good, nobody would be able to compete with that, it was growing so quickly. And then MySpace was a juggernaut

Starting point is 00:50:37 and they hit 100 million in revenue and 100 million users. And it was like, well, that's game over. And then Facebook and LinkedIn and Snapchat and FriendFeed and countless others, you know. So it's usually 20 people who will win in a category and 80% of the category will be owned by the top two with three players. But will those players change, do you think?

Starting point is 00:50:58 What's your sense of... Oh yeah, for sure. I mean, if Facebook had and bought Instagram, it would be a company into Client right now. People would be shorting the stock, right? Facebook peaked and then was sort of heading down. And Instagram saved them and WhatsApp saved them. So, you know, that's another kind of weird moment in history that they were able to accumulate that much power and solidate that much power. Instagram should have never sold to them. That should have gone public. They had just raised money from Sequoia and they had raised $50

Starting point is 00:51:22 million at a $500 million valuation and they didn't need to sell. And that was a big mistake to sell. They should have kept going and they should have took on Facebook and if Instagram was a standalone company right now, I'd be worth 500 million. Do you think? Cockage billion. Yeah.

Starting point is 00:51:36 Do you think Facebook, my bike clubhouse has been? Oh, they'll probably copy it. I mean, Zuckerberg has no moral compass or ethics or anything. I mean, he's a morater. I mean, he basically copied Snapchat seven times. Yeah. Like he did poke and he just kept trying and trying and trying. And as a part of the reason why the WhatsApp founders

Starting point is 00:51:54 and the Instagram founders left is they found Zuckerberg so distasteful in terms of his ability to copy. What do you think makes a great leader in that sense? Because, okay, so when I look at Zuckerberg, it's a great executor. Is he a great executor? I don't think he makes a great leader in that sense? Because, okay, so when I look at Zuckerberg, it's a great executor. Is the great executor. But I don't think he's a grand leader. I was bullish on, I was excited

Starting point is 00:52:11 by Facebook in the very early days. I thought it was an exciting opportunity to connect people and stuff started going wrong in certain kinds of ways. And again, maybe it's our human nature, but I attribute a lot of that to the leadership. Absolutely. I mean, the guy started it because he was unable to ask girls if they were single and on a date. I mean, that was his explicit.

Starting point is 00:52:32 It could be a good motivator. That could be a good. Well, I mean, the motivation of 18, 19-year-old men is pretty clear. He was just trying to hit no game. Yeah, no game. And he needed to know who was single. So he could at least have a shot at getting a date. So creepy, hello, creepy, yeah.

Starting point is 00:52:50 He, I think, was so obsessed with engagement and winning. And he's kind of like one of those friends you have who's just really good at playing a video game. But maybe doesn't see the bigger picture in life. And I mean, there's a reason why everybody who worked for him hates him and doesn't talk to him anymore and then actively derides him. Like, it's so many. The people who sold WhatsApp to him, then backed other projects like Telegram and said horrible things about him on the way out. These are the people he made billionaires. And they really don't like him.

Starting point is 00:53:20 So I think there is something that he does that does not breed loyalty, but he's very successful in his focus, which is growth is all that matters. He's a morater. And taking friction at a product and processes is the playbook of Silicon Valley for the last decade or two. So whatever the friction is, that's all the truth. You're saying, I was like, you're speaking so fast that I almost forget that you're dropping bombs, but so removing the removing friction and you're saying Facebook is exceptionally good.

Starting point is 00:53:46 He was the best at it. I mean at Uber, they were like, we're going to take out tipping. We're going to take out the need for you to take out your credit card and do payment. It's just going to be in your wallet. You got picked up. You leave. That's it. And I was like, we should have tipping and they're like, it adds a step and we're trying to have no steps. You put your address in, you click the button, and then you do nothing else. And so we've been obsessed here in Silicon Valley is how many clicks can we take out of the process? I guess Amazon is incredible at that as well.

Starting point is 00:54:14 Absolutely. One click was the start of it. And then you look at club houses. In example, you open club house, and you see rooms, you click on it, you're listening. So in one click, you're listening. And then in one click, if you raise your hand, you get invited, and you say, it, you're listening. So in one click, you're listening. And then in one click, if you raise your hand, you get invited and you say, yes, you're speaking. So it's two clicks to speak, one click to listen. I mean, the only way they could make that app work even faster

Starting point is 00:54:35 is if you opened it up and your microphone was turned on. And you, which is kind of scary, but that is the next evolution. And what happens when you go that fast is you get unintended consequences. And so this is why Facebook has had more fines than any company in the history of Silicon Valley, just giant fines for doing stuff like this. And one of them was, I don't know if you remember when they created groups or if you have a group for your podcast, but you know,

Starting point is 00:54:58 you can just add people to a group without their permission. And there was this famous case when they first came out with it, somebody created a Nambla fake group, national man love boy association or whatever, like how to feel the association. And they added Zuckerberg, Mike Arrington, myself, and like 20 other famous people in Silicon Valley. And I was like, and then somebody takes a screenshot of it and they're like, you're in Nambla. And I'm like, no,, Facebook and then Zuckerberg's response was, well, if your friends put you in that Namla group, you should get new friends and it was like, you got put in there too.

Starting point is 00:55:30 Yeah. And then the sad part about it was there were a group of young men who were gay and who were in college and there was a gay choir in their college and the person who was coordinating their Facebook group added them. So Zuckerberg, it wasn't enough for Zuckerberg to make it so anybody could add anybody to any group because it will grow faster.

Starting point is 00:55:50 Let alone you have to confirm you want to be added to the group. What it also did was posted it on their walls to increase engagement. And what they inadvertently did was they outed a bunch of 18, 19 year olds in college to their families because they joined the gay men's choir at some college. And this is the kind of way, you know, this is where Silicon Valley needs to check itself and to do better. You have to really think, well, there is my incentive to grow faster. And then there's what's right for society and for the individual. Yeah, think it through. Think it through. It's sometimes very difficult. This is where vision is required to

Starting point is 00:56:26 anticipate the unintended consequences. It seems like Mark Zuckerberg is not very good at that. You've talked to so many great leaders in this world privately and publicly. What do you think makes a great leader of these tech companies? Do you have an example, Elon, to you, a great leader? He's also a controversial one, right? There's a love and hate, a controversial in the sense that there is, and I know a lot of people work with him for him, that there's also a love, hate, relationship, the hate comes from the fact that they get pushed,

Starting point is 00:57:03 extremely hard. It's a very competitive environment, but it's a positive one because there's a vision that's underlying, similar to the Steve Jobs thing. It has to do with the back to our Michael Jordan discussion as well, that there seems to be the demons involved in tension and just anxiety, all those kinds of things. If you want to do great things, there will be some suffering and you know, there'll be some pain and it's not easy if you want to change the world. And then some people have this expectation that it's going to be easy. And what you'll typically find for any great leader who's trying to do something super ambitious. Like if you want to be like, if you're a rich guy and you start

Starting point is 00:57:50 like a restaurant and you don't care about making money and people have made restaurants before like, you could be high fives and everybody could love you or whatever. But if you want to change the world, you want to do something hard driving, there's going to be sacrifice involved. And so the problem is people are looking at something that is an Olympic caliber sport or a Navy SEALS-like effort. In other words, an effort that requires massive sacrifice. We would not look at somebody who wins a gold medal, like Michael Phelps and say, oh my God, he had to get up at 4 a.m. every day and he had to swim and he had to do an ice bath. Oh my God, that poor guy he suffered, he was tortured. He people were super mean to him.

Starting point is 00:58:28 They put him in an ice bath. It was like, no, he wanted to be the greatest swimmer of all time. And he knew what the sacrifice entailed. And then what happens in work and business is that people conflate like, oh, well, I went to work to make a living to pay my bills versus Michael Phelps approach to getting gold medals or Michael Jordan or pick the person Elon or Jeff Bezos. And when you look at the reviews of like a place like Amazon, there was this incredible story in the New York Times where people were, I don't know if you remember it, this is

Starting point is 00:58:59 the worst place you could ever work, Amazon. And they, we talked to 200 people. And they all told us, they all described for us in the New York Times a culture of cutthroatness and brutality that has never before been seen. And then you see all these people who work for base us for 24 years from when they graduated with their MBAs until today. And they've never left the company. And they are right or die forever. And what you're seeing there is, there is a mismatch of people going to work in an extreme sport,

Starting point is 00:59:31 or an extreme endeavor who should not do that. There are people who should go out into the rice fields and pick rice. And then there's another group of people who are samurai and who wield a sword and who take on missions that are dangerous. But if you're a rice picker and that's what you do, and you feel safe just getting a couple of grains of rice,

Starting point is 00:59:54 put them in a basket, cleaning it, and then whatever. That's valid work, no big deal. I'm not deriding it, I am sort of. But that is one group and then there's people who are samurai. And you cannot conflate the two. You cannot compare the two. And that's what is happening right now in business. Whenever you see these stories about this person

Starting point is 01:00:13 at this company is like a tyrant and they're so horrible and they yelled at somebody. Like if you're in the field and you're taking the beach at Normandy and it's D day or you know, you gotta take the hill or you gotta wacko, some have been laudin' and you're the Navy SEAL Normandy and it's D-Day or you got to take the hill or you got a wacko psalm have been laudin' and you're the Navy SEALs and like a rudder, a roadward gets knocked off the back of the black hawk.

Starting point is 01:00:32 Like this is serious shit. Like don't do it if you're not serious. And if you're not serious about changing the world, why would you go work for Bezos? Why would you go work for Elon Musk? Don't do it. Don't go work there. This is, let me just sit back and enjoy the beauty of, uh, all of that,

Starting point is 01:00:50 that that's music to my ears, but I'm not sure what to do with it because, uh, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it to do great things, you have to, I always admired people that lose their shit a little bit because they're so passionate. And, and, you know, you know, and apologize and all those kinds of things. But like, there's a tension, there's a drama to the creative process when, especially in the early startup, you know, you're not, this is not like the work life balance idea that doesn't even apply balance. Ridiculous. It's ridiculous concept.

Starting point is 01:01:31 Like the idea that there's like work life balance in a startup is ridiculous. If you're looking for work life balance, do not go to a startup or any kind of ambitious company. There is a series of places you can work in the world where you do not need to do anything more than what's put in front of you. And you just put the round peg in the round hall and the square peg in the square hall and you go home. And you get your little bits and grains of rice and you go heat them up and eat them.

Starting point is 01:02:03 That's it. And there's this other thing, which is the extreme pursuit of changing the world and sacrificing. And we have a generation of people, or multi-generations of people who are soft. They're just soft. I mean, what is the big struggle we've had to deal with in America in our lifetimes, like 9-11?

Starting point is 01:02:21 And we didn't have the Vietnam War and then we had this like weird Iraq wars and Middle East wars that were kind of like a small number of people went and we didn't have the Vietnam War and then we had this like weird Iraq wars and Middle East wars that were Kind of like a small number of people went and we sent drones like we have not had to sacrifice Gen Xers, you know, maybe the talent of boomers experienced the Vietnam War regrettably But you know, we've had a couple of generations now three, I guess that just haven't had to suffer Yeah, and so we're soft as Americans we're soft and then you look at people in China and we're like, oh my god, these poor Chinese people are living in these tiny cramped apartments. Like they were living in like essentially lean twos in northern China with no running

Starting point is 01:02:56 water or like one spiket of ice cold water for the entire village. Like they're thrilled to be joining the middle class. Even if it's the bottom of the middle class, right? They've taken hundreds of millions of people in China and moved them into the middle class. And we're like, oh my God, these people are suffering. It's like, you know, they're up to $4 an hour, $3 or $4 an hour in the factories there. And they were just two decades ago at, you know,

Starting point is 01:03:18 I don't know, it was probably 50 cents an hour. Something crazy like that. And now they've improved the quality of life there so much, just like America did 200 years ago or 100 years ago. They've improved it so much in China that now they're getting out price for factories from Vietnam, Sri Lanka, Pakistan, India, and people are moving and people in China are moving the factories out of China into other countries. Yeah.

Starting point is 01:03:44 Because the Chinese are now outsourcing to Vietnam and other countries. So this is the way of the world. People move up and they get a better lot in life for their families. And just in America, we've gotten soft. And there's a generation, how do people die in America now?

Starting point is 01:03:57 Suicide, obesity, heart attacks, anxiety. I mean, we're suffering from things that if you told people a hundred years ago that the number of the top ways Americans would die would be overeating and suicide, they'd be like, what? You're literally killing yourself or eating yourself to death.

Starting point is 01:04:16 That's what's happening in America. And when everybody, not everybody, unmasked as a large number of people who have become softer and softer, capitalism creates an environment where there's people that still step up amidst that with a big dream and challenge the conventions and that human spirit just arrives above that, the Elon's example, that Jeff Bezos example, and they push the limits of those of human beings that are willing to step up. And I think about how to create a company that amidst all of this softness still creates

Starting point is 01:04:55 a revolution. It doesn't seem trivial. It seems like how do you build a culture that's once healthy but but also unhealthy in the way that no limit pursuit is? It's all top down. Everybody just, I mean, you asked earlier what leadership wasn't in every answer to the question. I think what leaders do is they set the example.

Starting point is 01:05:17 They set the bar. And if you look at someone like Elon, we're personal friends for 20 years. And he is indefatigable. Like, I mean, the guy has a stamina that is just phenomenal. Like, he does not get tired. He works relentlessly. And he sets that standard for the rest of the team.

Starting point is 01:05:36 And I think, you know, Bezos is very sharp and likes to debate stuff and his very, you know, and jobs was just incredible at design and figuring out how to bridge that gap. So they just, leaders set the standard. They set the standard. And you know that your time is over as a leader when you can't set the standard. And that's when you have to pass the baton, right? And Bezos did that. And Bezos now is saying, you know what, I'm 57, I'm the richest guy on the planet, depending on the week. And I would like to do some other challenges, but I don't want to grind it out at Amazon

Starting point is 01:06:09 for another 25 years. I want to do other things. And so he passed the baton. And that's the healthy thing to do in that regard. I do think there is a time period in which you can run that hot. And then at a certain point, you have to then change.

Starting point is 01:06:21 Just like an athlete might go to be a coach, right? And you or a commentator. And so, you know, being an entrepreneur is brutal. It's, you know, seven days a week, 12 hours a day, anybody who says anything differently is kidding themselves. You're gonna have to sacrifice. If you, and this competition, and America has to fight,

Starting point is 01:06:40 if America does not win capitalism and China does, it is literally the end of the human species. It's over for humanity. Right now, everything has been going really well in terms of the number of people living in poverty is plummeting. Life spans have been rising. Science is booming. The economy is booming. All these things are incredible. The one thing that's kind of stagnant right now is the number of people living in democracy versus under authoritarian rule.

Starting point is 01:07:10 It's flat. So when you look at all Steve Pinkers charts and he's really excited, there's one you're going to see that's flat. And I think we peaked with 53 or 54% of people on the planet earth being in a democracy. And now it's going below 50. And it's because some of the democratic, you know, Western countries don't have the population growth of some of the communist and

Starting point is 01:07:29 socialist countries and authoritarian countries. And we have to make sure that we're, we win capitalism. We must win economically. That is the battlefield. The battlefield is science, technology, and money, and economy, finance. That's the battlefield. China wins, authoritarian wins. And at any time Xi Jinping can pull Jack Ma into a room and say, it's time for you to be reeducated. Or they can put three or four million people, weagers into prison camps and say, you know what? This religious thing, that's counter to what is productive for us.

Starting point is 01:08:04 Therefore, we're going to shave your heads, and we're going to have you literally pick cotton in the fields. They have weagers with no sense of any kind of arc of history in the fields picking cotton as slaves in what can only be described by every humanitarian organization as a concentration camp. And every Jewish person I know takes great offense when somebody uses the Holocaust as a metaphor, except in the case of the Weggers right now. And every Jewish person I've talked to has said to me, that is a Holocaust.

Starting point is 01:08:34 That is millions of people going to genocide because of their religious beliefs. And I'm an atheist, but if people want to believe a certain religion, fine. But you know, China's approach is we need to win capitalism so bad. We need to win on the global stage so bad. We can't have any of this religious stuff going on here. That is a distraction from winning and beating America.

Starting point is 01:08:55 And then in America, the people who are going to make us win are the entrepreneurs. And the scientists and the technology in our education system and finance. And we're vilifying those things. It's pretty dark. It's dark, but I still believe that the vilification is just in the space of Twitter and the space of ideas. I think that's probably a good entrepreneur's win-out in the end. They don't believe that and they'll build get the Ross. Some of them do actually in their darkest moments. I can tell you that they turn off their Twitter accounts and

Starting point is 01:09:22 they I've had to sit down with a number of entrepreneurs and say, turn off Twitter. This is not healthy for you. This is not a healthy pursuit because don't read the comments. If you do, it's like a full contact sport. You should just take it as like professional wrestling or something, but stay focused on building companies and, you know, advancing the human species through science and technology. I mean, as you're describing you posted this week in startups for many episodes 11 years almost 1200 now 1200

Starting point is 01:09:52 Yeah, so you've talked to some of the great leaders in business in general. Is there a common? thing that you see or Really relationship with the parents like Like just finding a great entrepreneur. I will show me the trauma. Their dad was like, you're not good enough. In the teenage years, is that truly, is there something? There is definitely something to do. A hardship at some point in the life kind of thing.

Starting point is 01:10:18 Yeah, I think so. I mean, and there's definitely something with immigrant parents that is a bit of a stereotype out here, but I've heard from many investors, that's like, they're, oh, did your parents immigrants? And did they beat into you that you have to succeed and you feel the need to succeed because they suffered to get you to this country?

Starting point is 01:10:36 Like, there is an archetype there that I hear, when I started investing, I heard from a lot of people, it's like, yeah, you want to find those immigrant founders who are coming out of Stanford because they had to fight to get there and their parents had to fight, right? So I was like, two huge fights and there's so much at stake.

Starting point is 01:10:51 As opposed to somebody who's fifth generation and like had everything handed to them and they were legacy and got into schools for free. But I think in general, the ability to get people to join you on that journey is so critical. So you have to be charismatic, and it doesn't mean like you're an extrovert. There are introverts who are super charismatic.

Starting point is 01:11:11 And there are soft spoken people. They don't have to be like super vivacious or rambunctious people. They could be just quite assassins, but you need to be able to get people to come on the journey with you. You have to be that storyteller, and you have to have that passion,

Starting point is 01:11:24 and then you have to transfer that enthusiasm to investors, the press, to customers, to all the stakeholders. And if your enthusiastic about it and you're engaged, then it's easier for people to come on that journey. And that's why people really start to think about, well, what is the purpose of what I'm doing? And it sounds corny. And I, when I first heard that, I was like, it's kind of corny, but then I read this book by I've kind of his name Rick something He wrote the purpose driven church and he had spoken out of Ted or something and everybody went crazy about it And he's like a church should have one purpose one single thing they do and like his church

Starting point is 01:12:01 Which was like one of these mega churches in San Diego Just wanted to do education For this specific country and that's all they did. And they just, they benchmarked this. I think it's very important to have a purpose and a mission, not everything, but a specific purpose of some kind of joy that you want to put into the world, you want to solve some kind of big, hard problem,

Starting point is 01:12:21 and then everybody knows why you're coming to work every day. And then for the founder, when you're coming to work every day. And then for the founder, when you dread going to work that day and you don't feel like stopping that problem anymore, that's the that's the tell. And a lot of times I meet young founders, I'm like, why are you doing this? And they're like, well, I was looking for an idea. And this is the one I came up with because I think I'll make a lot of money. And it's like, you're going to quit. You're going to get to month nine or 10 of this and you're going to run out of money or like your CTO is going to quit. You're going to get to 9 or 10 of this, and you're going to run out of money, or your CTO is going to quit, then your CFO is going to quit,

Starting point is 01:12:48 and you're going to lose your biggest customer, and you're just going to say this is not worth it. You know? And if using Bezos or Elon as examples, they just needed to see the world change in very specific ways. And Steve Jobs, they needed to see the world change in very specific ways. And Steve Jobs, you know, they needed to see a change. And it doesn't matter if they made money or they were losing or winning,

Starting point is 01:13:10 they just went to work every day and they had to change it. It's almost like they didn't have a choice. No choice. You know, it makes his sound like his torture, his whole journey, but he can't have these having been a witness to it. Um, you know, just as friends for that long, I have never seen an entrepreneur suffer more than him. And he's been public about that like you do not want to be me.

Starting point is 01:13:32 He has suffered for those companies. He has suffered to get them where they are. It has not been easy. Can you second analyze Elon in that aspect? Like, is there, is it just he can't help it? He must see the change that he hopes for in the world. He's just incredibly hard working, and he's very talented as well.

Starting point is 01:13:51 And I don't think people understand that. He actually is a really brilliant engineer. At the end of the day, he actually knows what he's doing and he asked the right questions. I mean, people were kind of aghast that he was asking Vlad such good questions, and they're like, oh my God, he belongs the best questions. I mean, people were kind of a gas that he was asking Vlad such good questions. And they're like, oh my God, Elon's the best journalist on the planet.

Starting point is 01:14:08 And it was like, that's what he does. And anybody who knows Elon knows he has great questions. I mean, I used to have dinner in LA. And my book agent also was Sam Harris's agent, Sam and I met through John Brockman. And we became friends because we lived near each other. And I was friends with Elon.

Starting point is 01:14:26 And then I used to invite them to vote dinner in Brentwood because one lived in Belar, one lived in Santa Monica, and I lived in Brentwood. And we would go to this place, Papone, this Italian restaurant. And every Tuesday, for years, we would just, the three of us, every other Tuesday or so, we'd have dinner. And I'd sit there and Sam wanted to know about AI and Elon's talking about artificial intelligence because he's in the board of deep mind. Elon wanted to know about atheism and meditation

Starting point is 01:14:50 and all the other stuff that, Sam was an expert on, I got to sit there and just listen to these two guys talk. And they have both piercing intelligences. But Elon, he goes straight to the gut. Like the questions that Nolan Jr. wants to hear is like just the basic stuff that, like why the hell are you doing it this way when the obvious solution is like much easier or this or that, like why haven't you tried this?

Starting point is 01:15:17 He figured things out. I mean, he's a problem solver. I mean, and that's another thing, like I think the great entrepreneurs can look at a problem with very fresh eyes, almost consistently. The Bezos described that as day one thinking, right? Just pretend this is day one every day. And then other people use the term first principles. But it basically means when you see a problem, pause for a second, and really think through

Starting point is 01:15:42 what is the best possible solution here? What are some alternative solutions and get from everybody? Like, how do we solve this problem? And what people do sometimes, they get in a rut, when they just come to work and they just go through the email, they do whatever they did the day before, they don't think, why are we doing this? And is there a better way to do it? Now, you can get so obsessive about that that you can over engineer stuff and you can

Starting point is 01:16:02 never actually ship a product. So there have to be some pragmatism and some goals and some dates associated with that, but it is a very cool thing to really think like, I wonder if we actually made the batteries ourselves, what that would look like, or I wonder if we could get to two-day shipping, you know, or, why don't we do same-day shipping? Like, you need to have somebody who's willing to say, you know what, fuck it. Let's set a crazy audacious goal. Uh, two day shipping of any product anywhere in the United States. And once you throw the gauntlet down like that,

Starting point is 01:16:31 now everybody knows they're rowing in the right direction. Two day shipping, Amazon Prime. And that's what people didn't realize about Amazon. The business wasn't shipping of those products. It was getting you to sign up for Amazon Prime. They have, you know, hundreds of millions of people doing Amazon Prime for 10 bucks a month. I think globally it's probably cheaper, but that was the driver of that business, it was all of those people because they would, you're an Amazon Prime subscriber.

Starting point is 01:16:56 Do you know how much you pay? No. Exactly. It started at $50. I think that even had like $40, $50, $60 was like the testing in the early days. And now it's, I think $149, $12. Wow I think that even had like 40, 50, 60 dollars was like the testing in the early days. And now it's I think $149, $12, $13 a month. If you pay for the year, I think it goes down to 10 bucks a month, 120. And you're like, wow. And you're like, yeah, you're paying $13 a month for the privilege of shopping at Amazon. But you would, you say it's

Starting point is 01:17:20 the greatest thing in the world because anything I need, you know, if you forgot a microphone or a cable goes bad or a camera goes bad, you get it here, you know, you say it's the greatest thing in the world because anything I need, you know, if you forgot a microphone or a cable goes bad or a camera goes bad, you get it here, you know, within a day or less. Yeah, it's pretty amazing. You've already been dropping bombs, incredible advice on startups in general, but let me maybe go straight in and ask, is there advice for somebody

Starting point is 01:17:41 that wants to go big, to build the big startup to help them succeed? Yeah, it's very similar to the advice I give to investors because now I teach angel investing because there's so many people who want to invest. And so I wrote a book on that angel and that I do a course called angel university that I teach six times a year. And then I have a syndicate called the syndicate.com where I invest in companies. There's 6,500 people who are members of that. So largest syndicate in the world. In fact, the first deal we ever did was calm.com. The meditation app, we put $370,000 into it

Starting point is 01:18:10 when it was a $5 million product. A $5 million company, so we bought six or seven percent of the company. It's now with two billion. So you can do the math on that. We still own five percent. Oh, yeah, it was six years ago. So probably maybe 20, 15, 2014.

Starting point is 01:18:24 And nobody else would invest in comp. But Sam Harris was the reason I did, because I asked Sam, tell me about meditation and he's explaining it to me, and I said, what do I do? You have to have a mantra. How does it work? Exactly.

Starting point is 01:18:36 I know positive. I just go to UCLA and talk to Diana Winston, and there's this whole project there. And UCLA does meditation. So yeah, there's a mindful institute. Like teaching people to be to to Hish meditation and they're doing PTSD and I'm doing brain scans on the other and I was like oh and then I talked to the UCLA People and they're like it's real you're like we we taught Phil Jackson and Kobe Bryant and Shaquille O'Neal did

Starting point is 01:18:59 You know, that's how they won their championships. They meditated and I was like Hmm if UCLA is doing it Sam says is cool. Well, fuck it. I'll put money into that, that's how they won their championships. They meditated. And I was like, hmm, if you see L.A. is doing it, Sam says is cool. Well, fuck it. I'll put money into that. And that's the second biggest investment in my career after Uber and it will, well, no likelihood become the biggest. I mean, this between Uber, Robinhood and calm. And long story short, when I'm teaching people to angel invest, there's really two things that you cannot, cannot fake. One is a product that is built really well. So if you look at Calm, Robin Hood, Uber, Tesla, Amazon, these products are transcendent. They're well constructed. This craftsmanship to them, they're great products. So you're saying not fundamentally like the idea about the execution of the actual craftsmanship

Starting point is 01:19:42 of the construction. The actual product is amazing. Then there's customers. And that every business has ultimately a customer. And that customer, if they are in fact delighted by that product, that's the magic. Because you need a team to build the product and then you need customers to use the product.

Starting point is 01:20:05 Really, those three vectors are undeniable. Now, you can have great teams that build a bad product, doesn't happen too often, or you get customers who don't like the product, but generally speaking, a great team will build a great product, or a good product that iterate, and then eventually delight customers.

Starting point is 01:20:26 And so most people say the team is the most important, but there's a lot of smart people out there. And let's assume that you can raise money for your idea or you have money or you can just convince people to do it for free. If you make a great product and it connects with users, that's the magic. You look at Clubhouse, it's actually a really well-designed product. And that product is connecting with customers. And if you were to talk to the customers or look at the product, you would see a well-contructed product and a delighted customer. And you can tell the delighted customer by just the amount of time they use it.

Starting point is 01:20:57 That's called engagement. It's the fancy word for how much they use it. And Snapchat, when that was going around, and they were trying to raise money, they had a fraction of the number of users. But the top maybe third were opening the app every hour. And nobody had ever seen that before. People were using Facebook a couple of times a day, the top users, but nobody had ever seen people using it every day for a hundred days in a row, every hour. And I was like, what's going on here?

Starting point is 01:21:27 I was like, oh, the ephemeral messaging, and then the streaks, they had created these streaks between people where, you know, every day, and then people would be like on vacation. Like I just have to open my street and keep my street with Lex that we chatted every day going. And so they had this like addictive nature to it. And that's why Clubhouse was able to garner

Starting point is 01:21:42 so much investment, is the number of hours people were using it every month was just unbelievably off the charts. Some of that is execution, but some of it is the weird magic of the product market fit. Yeah. So there's something in the clubhouse. There's still a mystery to me because I also use discord voice. There's an intimacy to voice. Oh, for sure. You have people's, yeah, tent.

Starting point is 01:22:07 It's, it's, it's, well, it, but like the video gets in the way actually in a weird way. There's a privacy when you just use voice. People are not taking showers now, Lex. I mean, we're in a pandemic and people just are all out of bed. And the hair thing, nobody's getting hair cut. Nobody's hair is good.

Starting point is 01:22:21 Nobody's getting hair cut. So people are wearing gym clothes. I mean, Zoom is just horrific to be on Zoom for five hours a day. It is exhausting. Well, it does make me wonder what the, what, once we emerge from the pandemic or their product market fit, how that evolves with, with clubhouse and all those kinds of things. Yeah, the clubhouse is a beneficiary of the pandemic for sure. When do you think the pandemic, when do you think deaths will be under,

Starting point is 01:22:48 let's say 200 a day and we'll have 200 million people on the other side of this? Because that's kind of what it takes, right? You gotta get to 150, 200 million people on the other side in America. I haven't, you know, I personally stopped deeply thinking about this because I've been frustrated for so long that you checked out. I almost checked out

Starting point is 01:23:06 because it psychologically allows me to carry on because I thought for many months now that testing used to be done at scale. And it still hasn't gotten done. And it has so we gave up basically on testing. We gave up. Because we're in we're all sitting there waiting for vaccine to come along. The distribution of the vaccine is not, you know, it's struggling from the same kind of things as the testing. It's going to take quite a bit of time. So if everything goes great, meaning there's not a second strand of the virus that's going to create a second major wave, that I am cynical enough to think that

Starting point is 01:23:47 it won't be until mid-summer that we start opening back up. Yeah, I think it's going to be May, June. I'm a little bit earlier than you. I've been tracking it. Like 1.5 million shots at an arms a day, I think this vaccine's been undersold. I mean, it's a miracle. Not one person who was in the trials died, who took it, and only one went to the hospital, and they weren't even put on a ventilator.

Starting point is 01:24:08 And the hospitalizations are plummeting, and we're at 10% now in the United States. At the pace, we're going at 1.5 a day. I think when the Johnson and Johnson one comes out next month, it'll be 3 million a day, maybe 2 and a half. And we already have 100 million people who have likely had it. So I've been doing the math. I think we're like 60 days away. February of March, yes.

Starting point is 01:24:27 Sometimes in April, I think anybody's gonna be able to get a shot. And the number of deaths is gonna go below 200 a day. And once that happens, I think people have had enough of this. They're just gonna go yolo. Yolo. But see, the crucial piece for me

Starting point is 01:24:42 that I've been focusing on is the social media aspect of how the it's not just about the reality of deaths, it's about the state of the collective intelligence of the human species which is determined by our communication on social media. So we can be collectively afraid, the fear can spread or it could be yolo can spread or it could be like all different kinds of misinformation and of course during the election year the politics influences our perception of what is true and not. But you know, having real, rigorous, nuanced conversation about this kind of stuff is the way is the way out of this. And that's where social media really comes in because social media drives division where

Starting point is 01:25:31 the people form tribes and so on. It feels like it's honestly a technology problem. People say it's a human problem, but it just feels like I believe people are good. Technology can enable them to be thoughtful and we talked earlier about you know the magic of Silicon Valley and then maybe going too far with the Facebook groups example where you know you take out all that friction. What happened was we used to have something called our cron reverse chronological order. That's how you consume defeat. So any kind of social feed like Twitter was in reverse chronological order. The's how you consume defeat. So any kind of social feed, like Twitter, was in reverse chronological order. The newest thing was up top and you

Starting point is 01:26:08 just work your way backwards. And so it gave this like really fresh feeling. And then a guy named Dave Moran and the team over at Facebook realized, you know, there are some things that got a lot of attention two hours ago. And the stuff since then has not been as important. But if you missed that, there was a really good tweet where there was a really good update. Like somebody had a baby. That's, that's kind of, can we get the baby one at the top? And it was like, well, how would we do that?

Starting point is 01:26:35 How would we know that that's the important one? It's like, well, let's put a like button on it. And let's see how many comments there are. So if it gets a lot of likes or comments or retweets, let's show those first and then we'll kind of mix in the most recent stuff. And so when you're on Twitter and then when Facebook did that, Facebook became so addicting because Facebook was on what has got the most engagement put that first. So every time you open up Facebook at the dopamine head. And then what happens when you see the Bart Mitzvah photo or, you

Starting point is 01:27:04 know, the enraging story about some injusticeah photo or, you know, the in raging story about some injustice in the world, you retweet it, you write a comment, you share it on your wall. And thus this addiction to the outrageous, the outlandish, the inspiring occurred. And it used to be like inspiring stuff, puppies or some heartwarming story. And then it got dark. And then people started to realize, if I want to show up on the top of my friends' feeds, if I say something controversial or I'm outraged, I get to the top.

Starting point is 01:27:35 And then that's when outrage culture came in. And then that's when cancel culture came in. Everybody started to realize if I try to cancel that person for being a racist or a sexist or a horrible human being or whatever they did that's wrong I get to the top of the feed and we all collectively started playing a very weird video game Which is how outrage can we all be and to get to the top of the list and then of course with Trump He realized it and he's like, okay. Yeah, I'm just gonna make fun of a celebrity and I get more retweets Okay, I'm gonna make fun of Ros O'Donnell for being overweight or something.

Starting point is 01:28:07 And he just starts attacking people. Yeah. And people like, oh my God, what did he say? And he copied that from Howard Stern. Because he was in New York and he used to be on Howard Stern. Howard Stern took over all the dialogue in the 80s and 90s because he was outrageous. And then Trump did that. And then social media incorporated that into the operating system.

Starting point is 01:28:24 It became the actual device of social media was the ding ding ding ding ding. We've got something incredible for you. Every salivates like Pavlogs dog, you know, oh my God, I can be outraged. That's what's got to be undone. And the only way for that to be undone is these things can't be billions of people where the most outrageous thing that happened in the world today in the last five minutes is now in front of you. And that's why people have anxiety. They don't sleep and they dooms grow all night.

Starting point is 01:28:52 It's because the human mind was not meant to process this much suffering, pain, anger. And that's why we have all this mental health issues. Also, you know, young girls or even adults watching other people post their private jets and their vacations and, you know, YOLO adventures on their Instagram. To the point at which young people are now faking, being on private jets to put on their Instagram and creating like this crazy FOMO around their Instagrams. Like, now we wonder why people are unhappy. Like, if you think everybody's on a private jet

Starting point is 01:29:27 going to some Michelin star restaurant or whatever the coolest thing in the world is today, like going to the Grammys, going to whatever Coachella burning man, like you're like, oh, but I'm home. I'm in my house, and I'm not at burning man. I'm getting inadequate. Exactly. This whole system is creating the wrong set of incentives.

Starting point is 01:29:48 I tend to believe it's possible to still have extremely high engagement and create a successful profitable business while encouraging personal growth, like encouraging people to be the best version of themselves. I just think we haven't. We got the first generation of social networks. I think a new generation needs to be the best version of those. I just think we haven't. We got the first generation of social networks. I think a new generation needs to be built. Is that your plan for a business to do? Well, I have a longer term plan in terms of a bit ambition, which is I believe in being able to have deep connection between human and AI systems, like partners, friends.

Starting point is 01:30:24 connection between human and AI systems, like partners, friends. There is a connection to there with social media. I do think AI has a strong role to play in representing us, in guiding us, in how we consume social media. So this algorithm that controls the feed for Facebook is a somewhat centralized algorithm. But instead to give more power to the people individuals toward each one of us have our own algorithm. Bring your own algorithm. Bring your own algorithm.

Starting point is 01:30:54 Instead of bringing your own algorithm. Well, I mean, if you thought about it, if we came and said, I want, when I look at my Twitter feed, I would like to see the people with who are the most helpful in the world generous kind intelligent considered. You know, commenting on things that I don't already know about because I want to open my world view. That could be a beautiful thing for society. And actually, Jack was talking about potentially on Twitter, letting people bring their own algorithm and sort their feeds themselves. This would be a wonderful thing. I think it's one of the reasons Clubhouse is resonated

Starting point is 01:31:30 is it's such a diverse group of people that I've been able to drop in on conversations with people who are nothing like me. And listen in and hear conversations that I wouldn't normally be privy to. And I, everybody's like, oh, come join as a speaker. I want to do a room with you. I get asked every day, can we do a room?

Starting point is 01:31:48 Can we do a room? Ask an angel investor, talk about startups. And I'm like, my usage of clubhouse is going on my Peloton treadmill, putting clubhouse on, taking the room and just listening. It's so delightful for me as a podcaster, where my job is to talk, to sit back, and just put in a couple of miles and play chess,

Starting point is 01:32:08 and listen to a clubhouse discussion. That is about relationships, or some fashion or hip hop, or whatever it is, that I'm not part of. I just sit there and I listen, and you learn. It's like such a delightful, I always think about these kids who go to college, and I always spend so jealous of these, these highly kids they go, and they think about these kids who go to college, and I always spend so jealous of these,

Starting point is 01:32:25 I have the kids they go and they're like, I gotta go to class and I'm like, I would just love to sit there and listen to Professor Lex talk. You know, like, what a privilege to sit there and let somebody else drive and talk and listen and learn. Yeah, that's the beauty of podcasting, but of course, clubhouse creates a whole nother experience where it's conversations is different.

Starting point is 01:32:44 I think it's gonna be the in between. I like it as a, you release your podcast, podcasting, but of course, clubhouse creates a whole nother experience for its conversations. It's different. I think it's going to be the in between. I like it as a, you release your podcast like you and I are going to release this podcast, right? And then at some point I'll have you on my pod when you want your startup. And then some point somebody's going to be like, you and I will run it. And I ran into you. I saw you were on clubhouse the other night.

Starting point is 01:33:01 And I was busy, but I was almost going to click on you and say, let's start a room together. But you and I will start a room together with Eric Weinstein or somebody or Sam Harris will jump in, or you'll all, and we'll have a different experience, which would just shoot the shit. And it'll act as like a fabric and a little filler between the tent pole podcasts.

Starting point is 01:33:20 Right, like you and Eric, you've done three, I think, with Eric? Yeah, it was your four. I haven't released the four, too. Okay, so I'm a watchdog three, because I really thought you're you way and him, like giving you advice is very interesting dynamic. And that was very interesting dynamic.

Starting point is 01:33:35 And I find him like a fascinating cat. We know everybody in common except we've never met. It's very weird because you know, you think about the social graph in the real world. This is why I think augmented reality is gonna be Such an amazing product. I just have one killer feature. I want for augmented reality We wear our glasses and when I look at you above your head

Starting point is 01:33:57 I see the relationships we have and the things we've done together. Yes, right? So I see oh you both know Sam Harris or you had Elon on the podcast on this date. Or you and I were both that burning man in 2016. So the most meaningful element of our connection to network. Correct. And then because we would discover that through small talk, but imagine you're like at a party and you look and it just people glow. Yeah.

Starting point is 01:34:23 And you just see a glow around a person and like green means you have some financial relationship, blue means you have some friendship one, yellow means, you have friendship one, blue means you know nothing about each other, you have no connections. You're like, wow, these blue people have no connection to. These people, that one's glowing red. We know seven or more people in common. And those are the seven people.

Starting point is 01:34:42 Oh, we should go talk about how we know each other. Yeah. That could, and that's sort of happened with Facebook member or my space where you were like, oh, you know that person, friend of a friend. Yeah. But that's what this is going to be. ARs like this is why I think if Apple figures out AR or Snapchat and they just have those glasses, you know, forget about VR. It's just nauseating and whatever, but AR where you put the glasses on, you see the real world, but you augmented. You make, just like you were saying, you make a frictionless, a very low friction to make a deep human connection because you have all the basic elements that are already.

Starting point is 01:35:17 Now think about the unintended consequences of what I just described. It could get creepier and weird. The privacy thing. I mean, people will opt, there's a thing. People, your privacy is an illusion. Like, all this information is there. And then people are more than willing to give up privacy in exchange for some value. You know, it's a value trade.

Starting point is 01:35:40 And giving, if my Tesla, when I'm driving in the direction of my house, just starts the navigation and saves me three clicks and that friction's gone, I'm willing to give Tesla my location and my home address, right? I'm not willing to give Zuckerberg anything because I'm trust him, but you get the idea. I mean, it will be that way with like DNA and other things.

Starting point is 01:35:59 At some point, we'll just be like, yeah, just take my DNA. Like, I don't, yeah, sure. People can look and see that I'm a mental midget and my IQ is like lower than, I don't wanna bring the bell curve up or whatever, but you could figure out like, if we all put our DNA in a sequenced online

Starting point is 01:36:14 and they're like, oh yeah, you know, Lex has got 10 more IQ points than J-Cowl. And you know, Sam's got 10 more than Lex and all of a sudden people are like, oh, bed down a shape about it. But what if they, we did that and they were like, and by the way, you also all three of you are going to get Parkinson's unless you do X, Y and Z unless you eat more blueberries or whatever we figure out.

Starting point is 01:36:32 They're going to accept it pretty quickly. That's brave new world. Brave new world. I have to ask you, you're just saying you're one of the world experts in investing in startups. saying you're one of the world experts in investing in startups, VC and so on. From the perspective of the startup, I was always kind of skeptical of raising money. It feels like people do it too quickly, too easily, but I don't know what the hell I'm talking about. When is the, when should a startup raise money

Starting point is 01:37:05 and from the perspective of the investor, when should the investor invest in the startup? Like, is there a timing thing here? Is there a, what, yeah, what? It's a very important question because the venture capital community is only going to fund, you know, sub one percent of enterprise has started in the United States every year.

Starting point is 01:37:26 Like maybe 10 basis points of them, like one in a thousand. And the reason is, it's jet fuel. You only want to take that money if you really want to build something big and you want to build it fast. And when you put jet fuel behind a startup, as we've seen with other rockets, things can blow up and people can die. It's not people literally dying, but the business can go up and smoke. Right? Like rockets get blown up all the time. It's pzx as part of their ambitious plans.

Starting point is 01:37:54 And startups, seven out of 10 startups we invest in, go to zero. Now, if you were to start the business and only build it off customer revenue and use your own money and go nice and slow and grow 10% a year, the chances of you blowing up the rocket are very low because you're riding a bicycle. You can go a little faster, but the bicycle can only go so fast. And once you start taking that money, the way venture capital is constructed, as in the mix of like MIT or Harvard's endowments is, you know, we're going to put some money into safe things and then we're going to have these really binary things over here. And they probably put 5% in venture capital.

Starting point is 01:38:38 Traditionally, it's grown to 20% just as a function of how successful it's been. So you know, the Harvard's of the world and MIT's probably won five or 10% in venture, but it's grown to 25% because companies like Airbnb and Uber have grown so big in Tesla. But the goal is, in these venture funds, we're going to invest in 30 names and one or two of them are going to return three times the capital we've deployed. So it's a $300 million fund and this 30 names, they each got 10 million.

Starting point is 01:39:07 That means one of the 10 million is going to return the fund plus. So that means it has to grow 30X and then 60X to double the fund. And you're really supposed to be doing three times cash on cash. So that $300 million fund's expectation is in 10 years to return $900 million. Triple Triple the person's money as opposed to the stock market, which doubles

Starting point is 01:39:28 your money in the same period. So you're supposed to do 25% annualized returns in order to triple the money. And maybe I have an outlying chance of four or five times the money, which does happen sometimes when you have an outlier and your portfolio like Uber or Facebook was. And what that means is the venture capitalist behavior in the game they're playing is different than you as the founder. You as the founder, you may really care about this. And it dying really matters to you. And then you got a venture capitalist is like, we're betting on 30 names. We need two of them to hit it out of the park, maybe three. And nothing else is meaningful. So now you start thinking about the game theory there.

Starting point is 01:40:06 You're dealing with money that is coming in that only cares about you going 100x. Yes. It's a whole different ball game. Whereas if you build off revenue, you don't have to do that. And if you look at a company like com.com, we invested a five million.

Starting point is 01:40:23 The next round they did was 250. They were so capital-efficient that they grew from $10,000 a month in revenue to millions of dollars a month in revenue over those four years since we invested and they didn't raise money in between. Wow. It was unbelievable. And I've only seen this happen three or four times. So this capital efficient meaning based on customer revenue alone, plus some small amount of fundraising,

Starting point is 01:40:46 you're able to go, like how hard is it to do that? It takes extreme product market fit. You have to have a great price for your product that has a great margin. Yeah, and if you're doing something in hardware, it's probably impossible because it's super capital-intensive. So it's probably gotta be a software business. Software business is taking a lot more.

Starting point is 01:41:06 Do venture capitals get in the way at all of the business or do it's possible to get out of the way? Yeah, if you get young venture capitalists who are starting their career, they're very nervous and scared because they're putting all these bets. And then there's a very weird thing that happens. The bad news comes first. So companies that don't work out go out of business immediately.

Starting point is 01:41:29 So if it's not going to be calm or Robin Hood or Uber, those take seven, you know you have one of those great successes, somewhere in your five, six, seven, eight as an investor. What is the first five years like? First five years, you feel like an idiot. Because you, let's say you make these 10 bets. In year two, two or three of them come back and they don't have product market fit and they're out of money. And they say can we have more money? You say no, we have to go get it from somebody else because you have to prove that there's still a market for it. We may keep our

Starting point is 01:41:58 pro rata, we may put a little bit into maintainer percentage ownership, but we're not going to give you another big chunk of money. Yes. And that company dies. So now you've got 10 million, boom, 10 million up and smoke. So this is called the J curve, where your performance goes down and that it's only in years, four or five and six, it starts going up. And what you're seeing right now is the people who started, like I did in 2000, you know, just about 11, 12 years ago in 2009, I started investing.

Starting point is 01:42:25 We all look like geniuses. Why? We're at the end of the cycle. We invested after when the stock market was on the floor, after the financial crisis, and it's gone straight up since. So everybody, there's a couple of little blips in there, but generally speaking, there hasn't been like a major crash with the exception of the pandemic crash, but that bounced right back. And so, you know, it takes a decade to figure out if you're good at it. And then if the market crashes again, everybody feels like an idiot again, the cycle starts

Starting point is 01:42:51 again. So you are now, as a founder, you are now inserting yourself into that casino. And now you've got all these other forces pushing and pulling. And you're growing, let's say your company was growing 50%. You feel like, wow, I'm successful. I made a million dollars last, wow, I'm successful. I made a million dollars last year and now I'm doing a million and a half. And the first thing that VCs is going to say is, how do we triple?

Starting point is 01:43:11 We're growing too slow. See, but that's like you said, beautifully. It's a rocket fuel. It's in the sense it's a kind of motivation. It's a drive. I mean, it's a positive. So if you want that. If you want that, if you want to go to Navy SEAL school,

Starting point is 01:43:27 you're gonna be in pain and they're gonna put that hose in your face while you're underwater, with your hands tied behind your back in the pool and you're gonna be choking, and you may have to do CPR on you. And like every couple of years, tragically, somebody dies in Navy SEAL school.

Starting point is 01:43:40 Yeah, well, it doesn't mean we're getting rid of the Navy SEAL. That's rocky. If you die, if you die, I don't know if you know David Goggins is by any chance. I do. I mean, I doesn't mean we're getting really the Navy SEAL. That's rocky. If he dies, he dies. I don't know if you know David Goggins is by any chance. I do. I mean, I don't know him personally, but oh my Lord.

Starting point is 01:43:49 So I'm running 48 miles together with him in person in a month. I'm doing a ultra marathon. With him and probably other stuff because he enjoys just breaking people and making them cry. Oh my God, I'm so jelly. So I, well, I offered, we agreed a while ago to do a podcast and he's like, Oh, yeah, come, we'll do it this day. And it's in the Bay Area. I don't know where the hell he is, but we're doing

Starting point is 01:44:15 it. And I don't think I'm supposed to say where it is. It's not anywhere close to anywhere of this. It's in the middle of nowhere. But he seems to be in a bunch of different locations. Like he, he's an organ or a bunch of different locations like he is an Oregon or something like that. What does he do for outside of writing books and being inspiration? Does he actually train people or like no? He's just he's full-time insane like he fights forest fires like for a few months a year Wow, he has a farm like unpaid labor like he you know There's a bunch of people who are

Starting point is 01:44:46 like him, like Navy Seals and so on, that kind of make a career out of motivational speaking. All that stuff. He's not interested in that. He's literally interested in just doing hard shit all the time. Breaking himself. Breaking himself. He seems like he wants to break himself. And that book is amazing. And the the audiobooks amazing when he's talking about how fatty was and how he just had to go and keep running and his legs are broken and he's just super pain and he just goes through it. It's really inspiring. He's a spine thing also. Are you going to videotape yourself doing this? Yeah. I can't wait to see you get destroyed. Yeah, well, this is going to be so entertaining for the Lex audience.

Starting point is 01:45:27 The pain, but the other inspiring thing is he's happily married. Oh, good. And there's a partnership there that's, you know, everybody finds that this attention as a push and pull that's beautiful, I think. But in speaking of beautiful push and pull, how about that transition? Here we go.

Starting point is 01:45:48 You and Shemaah, he's a friend of yours. Bestie, we're besties. Yeah. Yeah, good for, I mean, he's very few people in my life. Him, Elon, David Sacks, John Brockman's, very few people have supported me as much as those folks. I mean, I'm a huge debt. So he's also a co-host on the All-in podcast.

Starting point is 01:46:06 We taped episode 21 today. Oh, today. Yeah. Every Friday now, they want to do every Friday. They're addicted like me and you are to podcasts. So you're going to release it when? It's probably released as we're sitting here. As we're, oh, okay.

Starting point is 01:46:17 Beautiful. I can't wait. Special guest on it. We had Dremon Green from the Warriors. Oh, wow. So we had our first guest. Awesome. Yeah, so it's really funny. Because he plays poker with us and we had our first guest. Awesome. Yeah. So it's really funny

Starting point is 01:46:25 because he plays poker with us and we're all besties. So, yeah. Beautiful. So you guys went pretty heated. Yes, we did. I guess each other versus Rob on Rob. Yes. Maybe those are two things I want to ask. Yeah. First on the actual Rob in a discussion and the Wall Street Best discussion. Can you steal man his argument? What was the nature of the disagreement? Where? So, yeah, what is the little, because I don't think it's as big as a space

Starting point is 01:46:52 as it came off as sounding. So, what is the nature of the disagreement? He felt that Robin Hood turned off trading because the hedge funds told them to and that they were bowing down to the pressure of the hedge funds. That's not true, but in a vacuum of information, you know what happens to people's minds, conspiracy theories abound, and sometimes there is a conspiracy theory, and sometimes there's just the appearance of impropriety or a bunch of related things.

Starting point is 01:47:24 Like when you look at the Trump situation with Russia, like, was Trump trying to coordinate appearance of impropriety or a bunch of related things. When you look at the Trump situation with Russia, was Trump trying to coordinate with Russia or the Russians just screwing with a bunch of neophyte, idiotic dipshits, Donald Trump Jr., who don't know any better. And they don't know that you shouldn't meet with the Russians. And if you do meet with the Russians,

Starting point is 01:47:44 you are probably a useful idiot. You probably meet with the Russians. And if you do meet with the Russians, you are probably a useful idiot. You probably should tell the FBI like, they're just a bunch of idiots in all likelihood. Who knows? And there's a vacuum of information. And there's a vacuum of information. We don't know. And the Russians are trying to compromise everybody. So would you call it a conspiracy or would you call it an attempted, you know, conspiracy? There was no conspiracy here. What it was was Robin Hood needed to raise billions of dollars to say solvent in all likelihood. And they weren't allowed to talk about it.

Starting point is 01:48:14 So they were forced into not talking about it in all likelihood and had to come up with that money or shut down. And then what got me upset with Chamath and we had a talk afterwards that people don't know about. I'll talk about it here for the first time. On Sunday, we had to have a little, we had to air it out. Yeah, in episode after you guys sound like you've had a private, you've made a... We had a private discussion, just one on one.

Starting point is 01:48:38 And we said, listen, we love each other, we're besties, we've always been there for each other. What happened here? And what happened there is, I'm fiercely loyal to my folks, whether it's Chimath or Travis from Uber or Sacks or whoever. I'm just a loyal guy. Yes. And I'm always right or die with my founders.

Starting point is 01:48:54 If I invest in them, even if they make a mistake and Uber made plenty of mistakes, I always went on CNBC on my podcast and said, hey, we're gonna fix these things. I'm in touch with the team. Mistakes were made. We're going to solve them. This is a group of people with great intent

Starting point is 01:49:09 who want to make the world a better place. And you know what? I was hated for a period of time with Uber. I was hated for it last week with Robinhood. I got a lot of blowback. But I think in both of those cases, eventually, I was right. Uber's doing great stuff in the world.

Starting point is 01:49:23 Robinhood's doing great stuff in the world. And I like to be loyal to my investments and my partners to just, I feel like if you invest and you're on the team, you know, you have really three choices. You either fight for your team, you can go silent or you can throw your team under the bus. And I've watched investors throw the team that they invested in that made them a bunch of money under the bus, not acceptable to me. And being quiet is not acceptable to me.

Starting point is 01:49:45 So I always asked the founder, do you want me to, is it okay if I go out and defend you publicly? If they say yes, I do it. And then beautiful, by the way, because what else do we have in this world if not friendship? Loyalty means everything. I grew up in Brooklyn where if you were not loyal and you, you know, and you were not loyal to your crew, then you were a Ronin. You were, you know, out there on your own flailing and

Starting point is 01:50:07 the, trust me, you do not want to be on your own in 1970s, 80s Brooklyn, Manhattan. You need to have a crew with you. I've gotten into, you know, you don't want to get into a fight with 10 guys and be alone or just be with you need a crew to survive. So I just learned or early in my dad owned a bar, just drilled into me being loyal. And so for whatever reason, I'm a bulldog when it comes to loyalty. And Shemoth came out and said, you know, these guys need to go to jail and there's scumbags,

Starting point is 01:50:32 and I'm trying to defend them, and I'm in a position where I can't defend them because I don't have complete information. There is no complete information. And it's in the heat of the moment, and then it becomes the number one story. And it's my number three investment. And Tremoth has a competing company, so far.

Starting point is 01:50:49 And he's killing my guys. And then I started killing his guys. And then all of a sudden, we're like, wait a second, we're best friends. And we're swinging our swords at each other. And we're a group of the seven samurai who fight together. When did we turn on each other and we're a group of the seven samurai who fight together. When did we turn on each other? And then everybody else is on the pod, the two David's, you know, both on the spectrum of bed, the little ass burgers or whatever. No offense, like, I'm not saying, you know, there is a, you know, you might be somewhere. Not a coincidence, yeah.

Starting point is 01:51:24 It might not be coincidence anyway. We upgraded the two Davids firmware. We're going to upgrade your firmware after this. I'll give you a, yeah, you, you're on the 1.5. You have the three emotions now. Or should we add four? No, no, no, no. You want to go with joy?

Starting point is 01:51:34 I'm not with the 2.0. You're on the 2.0. You got the joy. How's it working out? The joy chip. Difficult. It's difficult. You'll get there.

Starting point is 01:51:41 Just let it happen, Lex. Just let the, let the joy happen. So anyway, we just talked about it offline and we decided like listen, we didn't pregame that episode and I would happen to be skiing with my family. I'd taken the first vacation since goddamn pandemic started

Starting point is 01:51:58 and I was having a wonderful time and then this whole thing blows up. I'm coming off the mountain, just having a great time with my daughter skiing and then I'm mixing it up with him. He had a short fuse about it because he was triggered. He told me because he really feels like he's fighting to defend the every man. And I was like, that's what my team's doing. That's why they need the company Robinhood. We're on the same side here. And then over time, we've started to see the explanation come out. And, you know, people who are friends are going to have disagreements. In the podcast, it happened

Starting point is 01:52:30 to happen very publicly. And we didn't know it was going to become the number one story in the world. If Trump still had his Twitter handle, this would not have been a story. Trump would have said something about GameStop and he would have co-opted the entire conversation. So in a way, going back to our censorship discussion, I might actually be in favor of Trump being censored, only because, only because how delightful has it been since January 20th that we can all focus on something other than him. Yeah.

Starting point is 01:53:02 He was exhausting. I mean, the amount of cycles he took on our process was the, uh, and now this is a little bit more of a distributed like this. Everybody gets a chance to be the number one new story. Everybody gets a chance to, to discuss it. But so on a scale of one to 10, how much do you love, uh, Jamath? Oh, it's 11. I mean, I love Jamath. I mean, we played cars last night. We're besties. And, you know, I would. I mean, I love your mouth. I mean, we played cards last night. We're besties. And, you know, I would, I would, I would literally jump

Starting point is 01:53:28 in front of a bullet for him. Yeah, I mean, what's the lesson in that discussion? Because it was super, I wouldn't, I think the love was felt and the respect was felt throughout, even when you guys are going pretty vicious on each other. Is there a lesson to be learned? Do you regret any of that conversation? No, I mean, I think he, he, he told me that he regretted some of the things he said.

Starting point is 01:53:46 He said, publicly on the podcast, like I said, I was a little hot. I may have said things in the heat of the moment, but I don't live with too much regret because I always think about intent. And it's one of the new, new ones that intent have been totally lost. The idea that we could have any of kind of a nuanced discussion about things seems to have been forgotten. And the fact that people don't look at people's intent, if you hurt somebody's feelings or you disrespect somebody or you do something mean or whatever, I was like at the intent.

Starting point is 01:54:16 You know, and I've had people attack me and I look at the intent and I'm like, that person feels bad about themselves or maybe I said something and I insulted them and that's why they're blowbacks there. So I always try to think, what's the intent of the person? And then almost universally, you talk to somebody and you find out you ascribe some crazy intent that's not there.

Starting point is 01:54:38 And they're like, oh yeah, you know what happened? I got in a fight with my spouse and I didn't sleep last night and I felt a lot of anxiety about my business and I just snapped and said something about you. And it's like, oh, okay. I literally had somebody on Twitter this past summer. I had said something.

Starting point is 01:54:55 I was complaining about a New York Times journalist and something I thought was wrong. This person was a fan of that journalist. And they went. I kid you not onto my social media account, found a picture I'd taken about how blue the sky was one day. They reverse image search, the tree line, found the tree line on Google image search somehow with a reverse image search, found an old listing that some broker had listed on their website of my house and then posted my home address, the value of my home, and docks me on Twitter.

Starting point is 01:55:31 And I'm like, what is going on here? So I call the person and I look them up and they work in private equity in Boston. And I look and I'm like, this person works in, this is July 4th, week. So and when I look at them like this person works in in July, fourth week. So, and I, when I look at the person's LinkedIn, we have seven people in common. So going back to the air commons, they're gonna be like, I'm like,

Starting point is 01:55:52 okay, this person literally just docks me. I asked him to take it down. They told me they won't take it down. And then I look at it. So then I DM him back on Instagram, on Twitter, and I said, by the way, your boss, Susan, and I know seven people in common. And these are the seven people.

Starting point is 01:56:08 Here's a screenshot. What is she going to think when I call her on Monday and you've doxed me? Here's my phone number if you'd like to talk. He calls me. I said, what's going on? Why would you do this? He's like, well, I really pissed off

Starting point is 01:56:21 about what you said about this person. I was like, you understand I've had like two or three stalkers, like anybody who's high profile like I am, like, or medium profile, you're going to have weird things happen. You literally put my home address, you put my family at risk. What if I put your home address? Yeah. On my, I have 400,000 followers or 300,000 followers.

Starting point is 01:56:37 You have like 300. What if I post your address? He said, well, I wish you wouldn't do that. I was like, well, I asked you kindly to take my address down. And I said, are you married? Do you, I said, I said, well, I wish you wouldn't do that. I was like, well, I asked you kindly to take my address down. And I said, are you married? I said, I said, how old are you? You like 25 or something?

Starting point is 01:56:50 He's like, no, I'm 42. I was like, you're 42 years old. I said, are you married? You have kids. He's like, yeah, I just had a baby like six months ago. I'm like, you're home with your wife. It's July 4th weekend. You're doxing Jason Caliganis,

Starting point is 01:57:03 because you're upset at me because I said something about a New York Times writer. He said yeah, this is the biggest mistake of my life. I said I tell you what let's forget it ever happened. And he wrote me back and he said I just wanted to thank you for how you handled it. My wife said I'm a complete fucking moron and Living says to me and even my wife says a complete fuckingon. And I'm really sorry, blah, blah, blah, blah. And I wrote her back. I said, I wrote her back.

Starting point is 01:57:29 And I said, my wife says the same thing to me all the time. So I belong to the club. It's the only five. This, this, this, this, this, but intent, nuance, it matters, right? And the person could be having a bad day and they do something stupid, they regret.

Starting point is 01:57:40 And what am I going to do? Cancel the guy? No. Or if I had called this boss, he would have been fired immediately. Yeah. And then I got to live with this guy, got fired. And he's got a kid.

Starting point is 01:57:50 And what is this personal destruction? Why are we doing this to each other? Life's hard enough. Life's hard, right? Like just getting through the day's hard. Yeah, and that little bit of empathy, thinking about the intent of the person, allows you to then sort of deescalate this kind of conversation

Starting point is 01:58:06 that social media wants to escalate. Yes. Social media wants to. Yeah. If this, in my younger years, I would have retweeted the guys home class and my address and would have called his boss and tried to get him fired or whatever. And it's like, now I'm just like, what, why are we attacking each other?

Starting point is 01:58:24 Why if it's so hard? I mean, this is what, why are we attacking each other? Life is so hard. I mean, this is what the pandemic, I think we should make everybody realize, it's like, look at how hard it is. Life is hard. And then just think about all the people suffering right now who are at home, the single mom or dad with two or three kids at home in public school.

Starting point is 01:58:39 Maybe they've been laid off, and their kids aren't learning, and they're in a tiny apartment. I mean, this has been brutal for a lot of people. Not to mention people losing loved ones or maybe some people got corona and now their lungs are still not right. Can I ask you about love? Oh, sure. I'm feeling it, you know, like we're an hour or two here. Lexi. Yeah, you feel like we could become bestie. We're good. We're good. We got a bromance go in your legs.

Starting point is 01:59:05 I feel it too. I don't know if it's Eric Weinstein level, but I feel like it's close. Yeah, I'm feeling a love. But we talked about the, this music to my ears, your whole rant on the Olympic nature of a startup. Is there a role, like what role does love family friendship

Starting point is 01:59:29 play in that brutal pursuit of excellence that is building a startup building a company or building any creating anything new in this world? Such a great question and and totally unprepared for it. Because I know we would ever ask me about that. So I think it's why you've you've got quite a following on your podcast is that you're able to ask these questions. And I could tell one story because, you know, I don't talk about like trying not to talk about relationship with you, a lot, that often because, you know, he's so famous now. I mean, when we met, I used to go out to parties with him and people like, oh my god, you're Jason Calkhazard.

Starting point is 02:00:08 Yeah, and like who's your friend? I'm like, what's my friend Elon? And they'd be like, why did he do a rocket ship? But he's told this story publicly, so I can tell it. And it would never talk about anything that he has in order to talk to about publicly, especially since he saw a high profile, but it was a pretty funny moment.

Starting point is 02:00:22 There was a moment in time when when Tesla almost went out of business. And you've probably heard the story many times, but it was during the financial crisis. And they were running out of money. And they said, you know, let's go get a stake. And we're in LA and we drove to Boa and I had my orange Tesla Roadster. And he had his P1 or P2, like the red one that I think is in space now. And we drove to the Valet and we had a stake together and we're sitting there and I said,

Starting point is 02:00:51 you know, I read the story and Gawker or whatever, you know, New York Times year, you only got like five weeks of money left in Tesla. He goes, it's not true. I was like, oh, thank God. He goes, we have two weeks. That's like, oh, God. I was like, well, what's. He goes, we have two weeks. That's my God. God. I was like, well, what's going on with the rocket ship company?

Starting point is 02:01:08 Yeah, you know, like, you know, I know you did the one last month and you don't you have one coming up. He's like, yeah, we got the third one coming up. I was like, well, how's that going? I was like, well, we blow that one up. There's no more SpaceX. I was like, so two weeks of money left in Tesla

Starting point is 02:01:23 and SpaceX, she blew up the first two rockets, she blew up the third SpaceX is over. He's like, so two weeks of money left in Tesla and SpaceX, she blew up the first two rockets, she blew up the third SpaceX's over. He's like, yeah, I was like, I can loan you a couple million dollars. I don't have like a ton. He's like, it's okay, our friend, beep, has loaned me some money. And Elon's been super public about this.

Starting point is 02:01:38 I would never tell the story unless he hadn't been able to, he was talking, he never said who it was. But somebody had loaned him money to keep him off load. He was functionally bankrupt. I mean, they had the equity in the companies, but the equity was quickly becoming worth zero and the financial crisis. And he's figuring out if he's going to go on vacation for Christmas or not, and he's

Starting point is 02:01:56 on the phone trying to save both companies. And I said, certainly, there must be some good news. And he takes that as BlackBerry to date this conversation through no iPhones. He takes us BlackBerry and he starts swiping and he says, don't tell anybody. This is what I'm building. And he shows me the Model S. And nobody knew that he was working on the Model S. We knew he was doing the roadster and was trying to save the company. And I looked at it and I was like, that's gorgeous. It was the clay models. So it was a full-size

Starting point is 02:02:30 clay model. So there's human being standing around a clay version of this tiny little blackberry picture. I'm scrolling through on the, remember that little pad or the ball of the black around scrolling through it. I'm like, this is fucking great. And I just said to him, it's like, what's the range gonna be? I said, well, I think we get 250 miles. I was like, 250 miles. I was like, yeah, I think it'd be the safest car ever. I said, what is it gonna cost?

Starting point is 02:02:51 He says, I think this could cost eventually $50, $60,000. I said, Elon, if you make that car, you'll change the goddamn world. You have to, this company must survive because the roadsters for like 2,000 people in the United States, this car is for every person in the United States. Every single person in the United States needs, we'll want this car if it's $50,000. And maybe some of the people who have 20 or 30,000 of cars won't be able to afford it,

Starting point is 02:03:19 but they'll all want it. It's gorgeous. And he said, you really think so? I said, yeah. So I got home and I talked to my wife, Jade, and I said, do you have the checkbook? She does all the finances and stuff like that. Pays, everything bills and whatever. And I said, yeah, don't tell anybody you love's making this great car. And I wrote two checks for $50,000.

Starting point is 02:03:38 And I just took out a piece of paper and I wrote, ee, comma, love the new car. I'll take two. I signed it. I kissed the two 50,000 hour checks, put them in the envelope, and I faddexed it to them for Monday delivery. And I said to Jade, that $100,000 is going to be gone in 48 hours because it will pay for one or two days a pair of long tests. So we just added like instead of two weeks of row, he's got 12 days. Yeah. And the checks don't cash, but then I read a story that he's closed the money, saved the company and like the next week or two. And a couple of months later, the checks get cashed. And I'm like, okay, three years later, I get an email,

Starting point is 02:04:23 your reservation number, it's from Tesla, your reservation number is 0,0000000001. And then five seconds later, your reservation number is 0,00073. And I forward the number one to Elon, I said, you know, I can't take number one, a signature number one, I can't take that, that's yours. And he's like, oh, I got five of them.

Starting point is 02:04:46 And besides you're the first person to water it. And I was the first person to get seen. It gave me to be Tyrion. And that I, I know it was a very, it was a beautiful moment. It was an incredible moment for both of us. And we talk about it sometimes, those moments in time.

Starting point is 02:04:58 And to your point about love, and you know, That's like the darkest moment, but one of the darkest moments in his life, probably, that that period of time. I think it was, I can tell you it was the darkest moments in his life probably that I think it was I can tell you is the darkest period of his life for sure. Yeah. And he's been very public about how dark that was and I think, you know, this is why I have great sympathy for the entrepreneurs of the world, like the suffering and the

Starting point is 02:05:15 pain. And when he talks about the suffering and the pain that all of these founders have felt and then we were throwing rocks at them and we're criticizing them as they try to change the world and save humanity. And in Tesla's case, I mean, they weren't, you know, they weren't like delivering pizza. I mean, they were trying to get us off of fossil fuels. Like this was a big, heavy mission to literally save the environment, the planet, humanity. And the way they shorted that stock and they attacked him, it was always perplexing

Starting point is 02:05:42 to me why any human being who is standing on God's green earth would want to throw rocks at the guy who is trying to stem the dam of global warming that is about to engulf all of us. How dare they throw rocks at that guy. There's so many people you throw rocks at. There's somebody who's making the jewel vaporizer. Throw rocks at that scumbag, no offense. But whoever's making the jewel things, and it's selling peanut collotto flavor to 12-year-olds, throw rocks at them.

Starting point is 02:06:16 Somebody's doing something abhorrent, but not E. I mean, and yeah, anyway, that car is up the road here, sitting under a cover with 20,000 miles on it in my garage. And then the roads, there are number 16s in the garage next to it. And every day I walked by the two of them and I got a warm feeling in my heart because I know he did it against all odds. Against all odds, he pulled it off. And it was that moment, that month in that two, that, it was jam, it was probably December, January, December of 2008, I think years, just 12 years ago, when you think about 13 years ago, it was dark. I mean, it was dark. And they, they almost had the same thing happen, you know, when the Model 3 production in June of two years,

Starting point is 02:07:02 three years ago. And I remember him just trying to get the model three out the door and the company almost crashed then. Most of these companies have, you know, these kind of moments. And I think friendship is you get what you give. You get what you give. And if you are there for people, you're going to feel so good about having done that. And then the the the reciprocation effect, which you'd probably know very well, is so great in the world that anytime you're kind to people, you build this incredible bond. And then what what are we at the end of the day, Lex? Besides a series of memories with the people we

Starting point is 02:07:40 love. That's all it is. It's just a series of memories and moments. It's just moments. Have you ever seen Blade Runner? Yes, of course. Do you remember what Rucker Harris says at the end, all of these memories gone like tears in the rain? I mean, that's our existence. It just all goes away at some point. It's just these drops of rain. Each of those memories is just like one snowflake or one drop of rain, and they're all lost at some point, but they're here now. And that's why we have to be there for each other. That's why I feel like what I do is so important in this world, and I get such great meaning

Starting point is 02:08:16 out of it, just being a friend, just having these conversations. What you're doing on your podcast, just talking to intelligent people and spreading the word and the disciple, the gospel about what they're saying and amplifying it. You're inspiring so many people. Every podcast, you get 500,000 people, a million people watch these videos and there's some kid in Sri Lanka or some little girl in Afghanistan who's going to stumble upon this on YouTube and they're going to change the world in the next century because it's not just about America.

Starting point is 02:08:46 Well, our story is almost over, right? Like we were the story of the last two or three hundred years. I hope it keeps going, but there's all these other places in the world, San Paulo and Africa, where people now have access to these videos. And somebody with this video and go, Elon did it. Oh, and that guy Jason was his friend and, oh, and Lex does those interviews with the end. Oh, yeah, I could do it too. Your little magical moment of love amidst the suffering with Elon, because you've talked about it, he'll have these ripple effects, especially think about it in case to come in new

Starting point is 02:09:19 entrepreneurs being born, new, more love being put out there in the more support through these rough times when your people are trying to create new things. I mean, that's a beautiful thing. That's a beautiful, I'm glad you think of friendship in this way. I'm deeply grateful that you're loyal. Every time you invest. The way you are.

Starting point is 02:09:42 Here's the thing, cost you nothing to make this investment either. The amount of time it takes to be bitter or angry, sitting at home, to be disappointed. You could just channel that same amount of energy into being loyal, loving, kind, and therefore people. It just only takes the intention, right? The water is gonna, those emotions are gonna flow, right? Like Sam would always tell me when I was struggling in my life and I talked to him, he'd say, you know, Jason, your brain is spewing all these ideas. Imagine you're standing, sitting by a river

Starting point is 02:10:15 and the river is all your ideas. You are not a slave to any one of these ideas to just whipping by like each of those little waves in the river, you can pick one of those ideas out and look at it and examine it and either keep it or throw it back in the river and let it go. And I was like, wow Sam, that was like of my entire friendship with Sam Harris. That was like the one moment where I was just like, oh my god, all my life.

Starting point is 02:10:37 I've wondered about all these thoughts in my head. In securities, you know, I'm poster syndrome. Yeah. Like I didn't go to MIT. You know, I'm post-or syndrome. Like, I didn't go to MIT. You know, I'm not the smartest guy, but somehow I made a career writing little 50K checks and now, you know, $3 million checks, but whatever, you know, little checks

Starting point is 02:10:56 and being a journalist and doing this little podcast and it's ended up to something. And I'm kind of, I'm proud of it. I'm 50 and I'm kind of proud of what I did. And I wake up every morning, I'm 50 and I'm proud of what I did. And I wake up every morning, I go retired, I say, I kinda like what I do. I kinda like having the conversation, writing the check, and then being on somebody's team.

Starting point is 02:11:14 And I got offered to be in these giant mega funds, and they said, Jason, you're in it, you invest in 60 companies a year, you know, 500 K at a time, you put 30 million dollars a year to work, come work with us, 500K at a time, you put 30 million dollars a year to work, come work with us, write one 50 million dollar check, and then you can go to Aspen and Cabo and go Chalet, not work. But why are you doing all this work? It's like, well, the 50 million

Starting point is 02:11:38 dollar check is like, it's like a formality. It's just like being an ATM, like the companies are already huge by that time. I really wanna meet the two people with the idea. I wanna meet them in year one. I wanna meet them on day zero. I wanna be the guy who wrote the first, second or third check. I wanna guy with the three thousandth check, the last check. It's fucking boring. I make that basic human connection

Starting point is 02:12:00 and also be there, be with me until the rough times, be with them with that first. I mean, the first early successes. I mean, that's a beautiful. So great. When a founder and that team get product market fit and you just know it's going to work, oh, man, Lex, it's when, when, calm would email me and they'd say,

Starting point is 02:12:22 we added, you know, the company's been growing and we're not going to go out of business. But we added some sleep stuff and then we added this other function and we have a streak now and we grew 10X and less, you know, three months and we're good. You know, I was like, oh, that's nice. That's real nice. It's like, it's a nice feeling when you go, well, because so many of them die, we talked about that Jake, really. Imagine it's like, it's like all these baby turtles going out to the ocean and the seagulls are ripping them to shreds and then their sharks are eating them, but then like a couple

Starting point is 02:12:57 of the turtles make it and they become wise old, hundred year old turtles. You know, and you're like, yeah, I remember when you catched, and like all of your brothers and sisters were ripped to shreds by the sea, and I was like, you made it into the water. And then you made it out to the deep water. I think it's a pretty great feeling. I think there's no better way to end it.

Starting point is 02:13:17 There it is. The talk of the cruelty of life, the suffering that is life, and the love amidst the suffering. Jason, I've been a fan of yours for a long time. You're one of the most special people in Silicon Valley. Thanks, Lex. And maybe you'll also call me in one of the rough times.

Starting point is 02:13:35 Oh, yeah. I'm sure there'll be many. There will be. Yeah, you know, there's one expression, nobody gets their alone. Nobody gets their alone. And anybody who thinks that they got their alone is delusional in kidding themselves.

Starting point is 02:13:47 And they will at some point wake up and realize, oh shit, there were a lot of people help me get here. I need to write a couple of gratitude letters. I got a gratitude letter the other day from a friend of mine who I helped. And I was one of the, you know about these gratitude letters people are writing? It turns out Martin Seligman and,

Starting point is 02:14:06 was there authentic happiness? Anyway, the guy who really studied happiness and joy turns out one of the greatest amplifiers of joy in your life is to thank somebody for doing something for you. Somebody who I had helped just wrote me a letter and I got in Christmas and I had the stack of Christmas cards and I hadn't opened them. It's the second week of letter and I got in Christmas and I had the stack of Christmas cards and I hadn't opened them and it's the second week of January and I was just getting to like the last stack and I opened it up and I almost missed it. It's an incredibly heartwarming letter about how meaningful like certain things I had done to help along the way and how he'd always appreciated my counsel and I like, well, this happened 25 years ago.

Starting point is 02:14:46 And you wrote this letter now. And it just hit me like a ton of bricks. I was just like, wow, you know, if you're hearing this, there's probably 10 people who are really instrumental in your lives and your lives. Go ahead and call them on the phone, write them an email, or even better, just write a letter and send it to, and just tell them you're thankful. And let me tell you something, the amplification of joy in your life will go 100x, 100x when you tell somebody you love them, and that you really appreciate them,

Starting point is 02:15:17 and that what they did for you was magical. So just, then you can look it up gratitude. Gratitude is like one of these incredible forces. Amen. I'm grateful for being on the spot I'm grateful Wasted all this time with me. I love it Thanks for listening to this conversation with Jason Kalakannis and thank you to our sponsors Brave browser

Starting point is 02:15:38 Linode Linux virtual machines four-sigmatic mushroom, and rev speech detects service. Click the sponsor links to get a discount if you support this podcast. And now let me leave you with some words from the man himself, Jason Colicanis. The number one reason a startup shuts down is not running out of money. The number one reason a startup fails is that the founder gives up. Thank you for listening, and hope to see you next time. Thank you.

Lex Fridman Podcast - #161 – Jason Calacanis: Startups, Angel Investing, Capitalism, and Friendship

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