All-In with Chamath, Jason, Sacks & Friedberg - E117: Did Stripe miss its window? Plus: VC market update, AI comes for SaaS, Trump's savvy move

Episode Date: February 25, 2023

(0:00) Bestie intro: Jason's Japan trip! (1:04) Stripe's precarious situation: Did it miss its window? Breaking down its $4B tax bill, slowing growth curve, enterprise vs SMB customers, scalability issues, and more (23:07) Lessons for founders: How ZIRP can skew CAC and LTV calculations, burn multiple (29:40) VC market update: ZIRP mistakes, VC as a "must-have" asset class for LPs, how the 2021 vintage can be saved (39:05) AI's outsized impact on SaaS and real-world businesses (55:16) Advice from Steve Jobs on customer-first product development, Section 230 update (1:00:29) Trump's savvy visit to East Palestine and 2024 strategy, Biden's visit to Ukraine, China's position (1:14:24) Tinfoil hat corner (1:23:25) Bestie wrap up! Follow the besties: https://twitter.com/chamath https://linktr.ee/calacanis https://twitter.com/DavidSacks https://twitter.com/friedberg Follow the pod: https://twitter.com/theallinpod https://linktr.ee/allinpodcast Intro Music Credit: https://rb.gy/tppkzl https://twitter.com/yung_spielburg Intro Video Credit: https://twitter.com/TheZachEffect Referenced in the show: https://www.theinformation.com/articles/inside-stripes-55-billion-pitch-to-investors https://www.theinformation.com/articles/the-private-tech-company-that-let-employee-stock-grants-evaporate https://techcrunch.com/2013/09/11/zuckerberg-says-he-was-too-afraid-of-taking-facebook-public https://sacks.substack.com/p/enterprises-vs-smbs-whos-the-better-customer-for-b2b-saas-startups-9a0d4efe69e9 https://sacks.substack.com/p/the-burn-multiple-51a7e43cb200 https://twitter.com/tylertringas/status/1627449217294958592 https://chamathreads.substack.com/p/higher-rates-will-lead-to-the-next https://twitter.com/Jason/status/1628851245644644352 https://signalvnoise.com/posts/3497-you-know-one-of-the-things-that-really-hurt https://www.scotusblog.com/2023/02/not-like-the-nine-greatest-experts-on-the-internet-justices-seem-leery-of-broad-ruling-on-section-230 https://www.whitehouse.gov/briefing-room/statements-releases/2023/02/20/on-the-record-press-call-by-senior-administration-officials-on-president-bidens-trip-to-ukraine https://www.washingtonpost.com/politics/2023/02/20/secrecy-security-biden-trip-to-kyiv https://www.yahoo.com/news/joe-biden-makes-surprise-visit-095627966.html https://twitter.com/nytimes/status/1626984889449959430 https://www.nytimes.com/interactive/2023/02/23/world/russia-ukraine-geopolitics.html https://www.bbc.com/news/world-europe-26079957 https://openai.com/blog/how-should-ai-systems-behave

Check out what time is it over there? Well, we started at 8 a.m. So now it's 8.28. It's 8.28. I'm going to be out on the slope side, 11. So I'll be out there skiing. I'm in Naseko, in Japan. Take a quick flight to Sapporo, and then you drive two hours into the mountain. It's a yesterday, a CATSKID. There's an abandoned ski map.

That's my two. By the way, in honor of you, I grabbed a Sapporo from the fridge today. Oh, very nice. This week's episode brought to you by. So they drive from the fridge today. Oh, very nice. Yeah. This week's episode brought to you by. So they drive the cat ski up and then you ski down and it's all fresh track. So it's literally an abandoned ski resort, you know, during the financial crisis here. I just asked you what time it was.

That's all I asked you. It's cold, small talk. It's cold banter. I thought you might be interested in your bestie's life, but apparently not. We open source into the fans and they've just gone crazy with me. Love you guys. Let's get to the show. Everybody wants to hear the show. A lot of news going on in our industry. There's been a big discussion about our issues

and stock options, both the cost of these things. And then there's another issue of people staying private for too long. If you remember, for folks listening, Airbnb Uber famously took over 10 years to go public. People like Bill Gurley wrote about this. Hey, you should get public. When the window is open, obviously, the window is closed right now or largely closed. Stripe now, people are speculating they missed their window. They have a $4 billion tax bill due

to cover expiring employee RSUs. Those are restricted stock units and at the same time four square a company from the web 2.0 area this is you know 10 15 years ago when they were very popular check-in software mobile location app they are going to let their previous employees stock option grants expire according to the information they issued these options in 2016 seven-year window before expiration more than 100 form employees will be impacted. And some of them are the very early team members, and this employee stock option problem is becoming acute because, hey, people waited to go public. Basically, what happens is you grant an RSU, which is effectively W2 income when it's realized

with an expiration date. But that expiration date forces you to be public so that RSU can be exchanged for value, and that's like a 10-year window. So then these guys have to go in and modify that date and push it out by another four, five, six years, or whatever. That is a deemed event by the IRS that then creates withholding tax issues.

So you then have to withhold tax on behalf of the employees. And so that collective number is the four billion that Stripe is trying to raise. According to a leaked pitch deck, Stripe implied they needed 2.3 billion in capital by the end of Q1 2023. They're working with Goldman Sachs, to raise a few billion at a $55 billion valuation. That's down 42% from the peak of 95 billion in 2021. One wonders if they had gone public

what their valuation would be right now. Can we just say real quick, why this matters? Jacob, like, yes. So anyway, why does it matter, Chema? Yeah, why does this all matter? Why do we care? Thank you, that's where we're getting to. I posted a link. it matter, Chama. Yeah, why does this all matter? Why do we care? Thank you. That's where we're getting to.

I posted a link. This is a 2013 interview that Zach did with Michael Errington of TechCrunch. And if you go all the way back, the apprehension to go public was one thing that we really anchored to a lot at Facebook in the early days and at the time I don't know if you guys remember but there is these arcane laws Around the number of shareholders that you could have and I think the issue specifically was that after 500 shareholders You have to publicly release your financials and so we did all kinds of things to make sure we never hit the 500 cap and And so we did all kinds of things to make sure we never hit the 500 cap and

We tried to push the IPO data as far out as possible because we thought that it would keep people more focused and then in 2010 or 11 I told this story a couple times one of the things that I was advocating for pretty aggressively was trying to launch a mobile operating system to compete with iOS and Android. And we had put together all this work and brought in Intel and AT&T and all these people. And it came down to the fact that we needed a couple billion dollars to float this thing. And we didn't have that money. So the only solution to that would have been to go public, but it wasn't the right moment in time and Zuck wasn't comfortable with it.

A year after going public, one of the things that he said publicly in this tech branch thing was, wow, I should have just gone public sooner. It wasn't nearly the bad thing that I thought it was going to be. And when you look subsequently at how much money they've spent in AR and VR, spending half a quarters of that cash could have given them the chance to disrupt Android and iOS in 2010 and 11, which in hindsight is obviously a no brainer bet, right? So even though I think we at Facebook were the ones to really put this in the water table

about not going public, I think a lot of startups should have gone back to first principles to really question whether waiting as long as possible actually makes sense. So I was curious about the Stripe situation. So I asked my team to do a little bit of work on how would you value this thing if it were going public. And the interesting thing about Stripe is that it operates in a really transparent

middleman business. So what's interesting about Stripe is that so many of the people in the ecosystem are public. And so what that means is you can build a pretty accurate mosaic of how well or not well that business is doing by interpolating all the other data from all of these other companies that are public and are forced to report. And so there's like a couple of really interesting things that jump off this page. And so the first thing that we did was we looked at what is the future profitability look like,

acts of growth. What's interesting is that you look at companies like Visa and Mastercard that are doing quite well and have done really well for a long time. You look at this outlier in Adyen. Adyen is probably the most obvious competitor to Stripe. The thing that is demonstrated here is how incredibly profitable this business is, and how much operating leverage they have, which means that their op-x is relatively constrained. Because in terms of the X and Y axis here, just so people who are

listening can understand the chart. Sure. So if you take the market cap on the X axis and divide it by their sales estimate, you get a multiple of the enterprise value to their sales. Got it. And if you look at the 2024 estimated EBITDA margin that they're forecasting, X up their long-term sales cager, what you start to get a sense of is the operating leverage that this business has. And so all of this basically nets out to three interesting takeaways. When Stripe got underwritten at 96 billion dollars, it's this data point right here where you see your striped previous round.

5X enterprise value to divided by 2024. Divide it over their long-term EBITDA exactly by their sales assessment. And then if you look at the $55 billion valuation, it's down. So what it looks like it's happening is appropriately so, people are doing the right thing, which is they're re-rating the stock, right? By approximately 50-60%. But what's interesting is not where they are in terms of where they used to be, but the interesting thing is where they are relative to their most obvious competitor, Adyen. So Nick, please bring up the next one.

So this is where things get really interesting because we looked at what was adyen and what was Stripes GMV per employee a couple of years ago before all hell broke loose in the private funding markets. And what you see is they were pretty equivalent businesses and they had roughly the same amount of employees. But this crazy thing happened, which is that if you look at the gray bar, this is the number of employees that Stripe has, it went crazy from a little over 2000 to almost 8,000.

So a four X in 24 months, they had it's 6,000 people, just pause for a second on that. 6,000 people in 24 months and 700 days or so. Right. Three people a day. And if you do the same calculation for Adyen, it shows that they a little bit less than group by about 75%. And then if you look at the growth of GMV and you impute how productive is each employee,

basically, this is the story of what's happened to Stripe in Adyen, which is that Adyen has found operating leverage. So they've found and maintained incredible profitability. And Stripe has added an enormous number of employees. Now, the question is why? Right? So it turns out that these guys at the top line are growing roughly the same except Audien actually takes meaningfully less on a per transaction basis than Striped does. And the reason is that Audien services these large head customers think big, bulky folks that have huge amounts of transactions and so as a result have pricing power. And Striped has some of those customers as well.

In fact, they just announced that they're going to process a large portion of Amazon's payment volume. But what's happened at the same time is that those kinds of deals aren't necessarily that profitable. And so you have to hire a lot more people to build a lot more feature so that you can generate revenue from the long tail of customers, all of these SMBs. And this is the tail of these two companies, which is that Stripe has some head customers, but many, many, many tail customers. Audien has mostly head customers, fewer tail customers.

And so the leverage in the business is that Audien has most of these employees in Europe, where the cost of these folks is much, much cheaper and they have less than half the number. And so as both of these companies continue to grow, you have one that has maintained and frankly, raised their long-term profit projections because they see it in the business, even at lower transaction costs, and Stripe, which is having a little bit more trouble. So I thought it was a really interesting expose. The takeaway for me is that if you were sitting inside the company and obviously hindsight is 2020, the most profitable thing they could have done from an enterprise value perspective would probably have been to go public in 2018, 2019 because they could have raised max

value at max valuation, cleaned out all these options issues and have a huge balance sheet of cash with which to do stuff, whether it's acquisitions or other things. Because the thing that I struggle with is, is there going to be long-term profitability in all of these tail products?

Because if you look in the SaaS ecosystem and SaaS and the ball, do you? There's companies building all this other stuff and these point products are probably pretty good too. SATs, what do you think about adgen going after the fat part of the long tail and then striped going after the long tail, having many more customers?

Well, I think they're both viable strategies. And I mean, I've actually written about this. I wrote a blog some time ago called Enterprises versus SMBs, who's the better customer for B2B SaaS companies. And I think the sort of old school traditional view is that enterprises were always the best customers because they have the biggest budgets that translates into the biggest annual contract values or ACVs.

This provides the highest ROI on sales efforts. Now you can make a sales driven distribution strategy pencil in the first place. The prospects are easy to identify it. After all, if you're going after the Fortune 500, you can just make a sales-driven distribution strategy pencil in the first place. The prospects are easy to identify it. After all, if you're going after the Fortune 500, you can just make a list of the 500 companies. I think the traditional gold standard was the head, like you're saying, Jason, the enterprise. However, I think in recent years, it's become more popular to pursue the Stripe strategy of the more SMB. Why is that more popular to pursue the stripe strategy of the sort of more SMB. Why is that more popular?

Well, because first of all, the SMBs are more early adopters. So when you're a startup, it's way easier to satisfy their standards to satisfy their needs, their needs are less complicated. You don't have to have SOC2 compliance to everything else. If you saw... There are more risk-taking, right? Yeah, if you solve an immediate pain point for them, they'll just buy it. Whereas I think enterprises are more late adopters, they tend to be more skeptical of

new software categories. Yeah, I think in addition to that, the SMB sales cycle is really quick. I'd say typically one to two months, you can close a deal. The sale itself is simpler. Like I said, the product requirements are simpler. And the low end of the market tends to be the most underserved part. So it's great to play where the incumbents are not.

That's a traditional strategy is you go after the low end of the market that's been overlooked or ignored. And that's what Stripe has done here too, is no one was really serving these developers. So I don't think it's a good strategy too, and the truth is it's not one or the other. I think you just have to pick, you know, what's your battles that you wanna fight?

And some starts to go after enterprises and some will go after SMBs. And it really comes down, I think, to founder market fit. I think founders were better at sales, probably skew more towards an enterprise strategy, whereas if you're more of a product founder, you go after S&Bs. Brian Summary. Over time, SACs, for a company to thrive over long periods of time, do you have to service

both? Or do you think you can stay in one of those things and grow indefinitely? Well, what I've seen is that if you start the low end of the market with S&Bs, over time, you can move up market. Because what happens is that as your product gets more and more sophisticated, and your company and your ability to execute and deliver gets more sophisticated, you can move up market because what happens is that as your product gets more more sophisticated and your company and your ability to execute and deliver gets more sophisticated, you can start satisfying the needs of bigger and bigger companies. So you start SMB, then you go mid-market, then you eventually get to enterprises. I think if you start with enterprises, it's very hard to go down market because it's a

lot easier to add requirements to your product than to actually strip Complexity of a product that's actually surprisingly difficult to do so I think it's I think either strategy can work Either you start the low end and move up market. That's the classic click Kristen sin innovators to the limit type thing or You you just start the top and you stay at the top it makes sense It's just I mean adding 10 people a day over two years That's a large number of people to add to a company Well in fairness to Stripe they were very honest about this and they were like we overestimated got confident and we over hired And they found that all the coordination cost to Saxus point became too high That's exactly what the call is in said in their memo

So I think that they're trying to Course correct and get back to this. I think the point that I'm making unemotionally I don't own Stripe nor Adyen and I don't have a horse in this race, is more that in this market specifically in these middlemen, highly transparent middlemen markets, it's very difficult to hide the cheese, meaning the ability to get to an extremely precise valuation model is pretty easy. You know, this was half a day's work that we did, and the point is all this data is out there. And so it means that if you're going to go public as a company like this, you have to

be quite thoughtful about how outside and folks will value you because the terminal buyer is very, very sophisticated and pretty smart about how to think about spaces like this. Freeberg, when you look at this, it kind of dovetails with the Getfit, Brad Gersner, Elon at Twitter doing more with last employees. Zuckerberg, again, says he is getting rid of managers. He's asking managers to sacks his discussion about the layers of management that got added and added where high performers would have five people put under them, ten people put under them.

Is it going to be, are you impressed with how quickly the industry is responding to this new environment or are they not responding fast enough in terms of head count revenue? Because now we're looking at revenue per plane. This has never looked at that. It's been a decade since we looked at that.

This is a little bit of a different situation where it's about the scalability of a business. When I look at the value that a business has created, you start first with, can you make a product, can you sell the product, do people want to buy the product, and then can you make money selling it? Then there's this metric that a lot of people use, which is LTV to CAC, which is the lifetime value of acquiring a new customer, divided is LTV to CAC, which is the lifetime value of acquiring a new customer,

divided by the cost to acquire that customer. But I think you can generalize that ratio to talk about business performance more broadly, which is capital deployed, which is typically what CAC is used in terms of growth on the denominator. And then capital returned over time, which can be the numerator.

And so, you can kind of think about that LTV to CAC ratio being something more broadly defined as something like ROIC or what have you. The question for the scalability of any business is, does that ratio, whether it's LTV to CAC or ROIC return on invested capital, does it get bigger or smaller? Does it increase or decrease? Does that ratio increase or decrease as you get bigger,

as you spend more money, as you deploy more money? If it's getting smaller, then mathematically, you can resolve pretty quickly to the asymptotic valuation that that business will achieve, or the asymptotic revenue that that business will achieve. And that's a very scary kind of circumstance when a business that's tracking that metric starts to see that metric shrink.

If that metric is growing, then you have a hyperbolic moment and you can build platforms and add products and invest very heavily and take lots of risk and take lots of bets. When it's going the wrong way, you have two options. Number one is you have to make a change or a pivot in the business to get it to go the other way.

Or number two is you have to take advantage of that moment before the market finds out about that moment. Because as soon as the market realizes that that ratio is going the wrong way, your valuation multiple, what you're worth as a multiple of revenue or profit, shrinks dramatically. Because then the market can also see that asymptote now come. So I think it's very often the case that one should,

you know, as a board member as an investor, urge entrepreneurs, CEOs, founders, managers to think, really clearly about that metric. What's the right way to define the denominator and define the numerator in our business, and define that ratio over time, and as soon as it starts tracking the wrong way, you have a moment.

You can either fix it, or you gotta go sell the business or go public and raise capital before the market catches on in your valuation shrinks. So I think what Jamal is highlighting. So when I see what Jamal's showing in this data and talking about this shrinking valuation issue for Stripe, it really, I think highlights this important point,

this broad point, this broadpoint, which is, did they miss the window? Did they miss the moment where suddenly, you know, the shrinkage is causing, you know, an asymptotic outcome for this business that it makes investors a little bit like, well, I'm not as excited about that because it's not, there's no longer as much upside. And it might be time to kind of devalue the company. And did they miss the moment to go public raise a bunch of capital you know to to go and try new things and hopefully pivot into a way so i don't know enough about the business but that's my broad assessment of this this thing about that space we talk to one of our friends at our poker game who runs a large consumer facing business and i don't know if you were there for that conversation of rebirth freeberg, but I was. You were there. Yeah. And one of the interesting things he said is we are at a level of scale

where we just bid these guys against each other and these things tend to now be lost leaders for them, which is to say effectively that cost structure becomes really important. So your CAC becomes very important because your LTVs are capped, right? And the LTVs are capped because these companies have enough negotiating leverage to say, well, if you want my business, here's the cost of doing this business, which makes a ton of sense if you're any large pervader of services that require payment processing infrastructure. So one of the interesting dynamics, I think we're learning in this market is how it's really not a market, right?

There are segments and there's embedded profitability in each segment. So to your point free bird, this is the sum of at least three or four different LTV to CAC ratios. Right. The tail looks very different, which is why you have to build a ton of features. And the head just wants pure play and it's all about cost first. Because all of these guys want to pick up every nickel and dime that's on the floor because for them, on billions of transactions, is meaningful to them. It's an EPS, mis-or-beat for them, which has huge implications to their stock. This is a market that I think is going to be really fascinating to uncover and peel back the layers of over the next few years.

By the way, we haven't even talked about what Stripe does as a business. I know we have a diverse audience that doesn't all come from tech. So Stripe will process your transactions, but they were the first people to make it as simple as putting a snippet of code into your app to process a payment. They can be, it would be a mastercard in those other places. They charge you a percentage of each transaction. So to Trematz point, these larger, and so Dev's developers five, 10 years ago love this because they can instantly add payments, right? It's sort of abstracted the whole thing, just the same way Cloud Computing does, right? and so Dev's developers five, 10 years ago love this because they can instantly at payments, right?

It's sort of abstracted the whole thing, just the same way Cloud Computing does, right? Storage at S3, et cetera. So you can kind of think about it that way, but a large whale in the system, Chimoff, which you said Adyen has a lot of whales, not a lot of long tail, strike because it's developer friendly and a snippet of code, they have this huge long tail.

Anybody can do strike. In fact, people who are using things like Substack or Patreon, I believe, they can just drop in their Stripe account. So people now, businesses of one have a Stripe account. They just drop it in there. So for me, that seems like a huge potential in the future because some of those could become the whales in the system. And the long tail gives Stripe a lot of pricing power

because there's no way for any one of those entities to have enough leverage to tell Stripe, I don't want to pay 2.9 plus 20 or 30 cents of transaction. Whereas if you go to the head, I think Adian is charging like 1.3 or 4%. So it's a wholly different market. And the pricing as a result is totally different. Yeah. It's interesting to me, and the pricing as a result is totally different. Yeah. It's interesting to me, SACs, that we now are getting down to,

you know, brass tax here. We're analyzing these money printing businesses and saying, what is the ultimate value of this 10, 20 years from now? Tremoth and I got a front row seat to that because there's a natural audience to every single service. For AOL, it was 30 million paid, subs a month. At, I think the peak was 30 bucks a month, people were paying to them off. So at the time, 2499. So you start looking at those

numbers, a billion dollars a month almost, and it was a fixed cost business. But then boom, you just hit a ceiling and competition emerged in the case of broadband. And then that business just slowly deprecated over time. So, Zach, what does this moment tell you for founders, a lot of the listeners here, and capital allocators, in terms of assessing businesses for the last, and this will pivot into our next story, the last couple of years,

if you were first time fund manager, you were investing in 2019 to 2021, high valuations, those funds are they ever going to be able to throw a profit and then people were investing in those based on momentum, logo chasing. This is now back to you know sharpening your pencils, build girly style investing. Yeah, I've talked about it before, there's nothing new here. When you're in a boom, the only three things that matter are growth, growth, and growth. And when you're in a downturn, the three things that matter are growth, burn, and margins. It's not that growth stops mattering.

It's just that people also care about burn and margins. And the companies that fare the worst are the ones that have inefficient growth. That basically have burned a lot of money to grow. They have low or negative gross margins. They are burning way too much money. The burn multiple doesn't make sense. Basically the ratio of money burnt to net new ARR that they're adding, those companies get called out

when all the Sun you have regime change like we're seeing now. CAC is one of the early signs of this at Chimapu and I saw that member AOL was sending DVDs everywhere and CAC became $200 or $300 for every AOL subscriber and then they were playing this funny accounting amount of you remember this Chimap where they were saying, hey, the LTV is like five years for an AOL. They were looking back at that number, not for a broad bank coming. And so like, we could totally spend pretty $300 on TV ads to get a dial up customer at $24 a month and boy, did that whips on them.

I'm listening to everybody talk here. I'm just like, wow, keep your eye on the CAC folks. The customer acquisition cost, how much you get, you spend to get a new AOL, Netflix, or SaaS product, or a Stripe customer is critically important. We look really closely at CAC payback. How many months does it take to payback the cost of acquiring a customer? We don't look at that exclusively though because what expenses go into CAC is highly dependent on your accounting.

Unpack that for a second because there's the money you spend on a Facebook ad or a LinkedIn ad or any other great platform for driving customers to sign up for it. Like, explaining, yeah, then you want to make money. So you spend money on an ad or you spend money on a salesperson, obviously that goes into CAQ, but then what about sales operation headcount? Does that go in?

Is that offset counter? Is that sales headcount? Is that customer acquisition or something else? So there's a lot of like subtle accounting decisions that have a big impact on that number. Well, this is why this is why I've always recommended just looking at burn multiple. What I really want to know is how much money is this start up burning in relation to how much revenue is adding. Does it look the ratio of those two days? So it's not a high burned 100. Yeah, so this one I spent $300,000 and we burned $100,000

and then we added $100,000 in new customers, ARR. So that's one X. So that you have on your chart here, burn multiple of one to 1.5 or under one is amazing or great. But if you burn 200,000 and add 100,000. I warned founders going into this year do not have a burn multiple greater than two because there's just so many headwinds right now that what

happens is if you end up missing your revenue forecast, your burn multiple is going to look terrible. It could shoot up to 3, 4, 5 and up. So it's better to have some cushion by going into the year being super efficient. On the converse side, Friedberg, if your lifetime value of a customer is incorrect, which we're seeing now with people canceling SaaS products or reducing the number of seats, or in cloud computing people are now saying,

hey, maybe I should take myself out of the cloud and host my own servers or some of my own servers and reducing their cloud bill. Cloud growth is sl is slowing at Azure across the board. Amazon Web Services, etc., it's still growing but it's slowing the growth. So that LTV, if you get that wrong, that can whipsaw you as well. Yeah. Yeah, I mean LTV, which is like what do you make over time from a customer or however you want to assess it, over time from a customer or however you want to assess it, a market deployment.

It should be on kind of net cash, meaning like how much profit do I pull back into my bank accounts at the end of the day? After paying third parties and internal people. And where a lot of people, I think in models I've seen on, you know, what's the lifetime value of a customer. They kind of take either revenue or just the simplified gross profit number. But the reality is if you're scaling the number of engineers you need, because you have many

more customers and you've got customer service calls, and you've got to do custom deployments with your customers, all of that kind of adds up to additional cost. And some of these businesses, you see that, the SaaS companies, for example, that all have gotten their multiples hammered. It's because the microscope has come out at this point, to some degree, set aside general macroeconomic factors that are driving some of the multiple compression. But as the microscope has come out, it turns out that the efficiency of the business is not what everyone hoped and dreamed a SaaS business might be.

That the efficiency of the business maybe looks a little bit more like either a services business or there's a big kind of scaling hardware component that the margin that you actually make for every dollar of revenue generate fundamentally is smaller than what you think it is. You have to add people to support and ops and new servers and all this stuff you're highlighting. A lot of that's excluded. And then it doesn't take, you don't realize all that when you're small or when you're medium and growing, you realize that when you're bigger. And when you're bigger, you're like, oh, wow, how do we get these costs out? Well, if we cut these costs, customer quality would decline, customers would churn, all this bad stuff would happen. So yeah,

that LTV number is generally not right. And that's why I say it's much more about kind of a true ROIC calculation, which is how much capital am I deploying? And it's not just being deployed in marketing dollars, it's being deployed in other ways. And then how much capital am I making back? Net profit over time. And I think that's the right way to always analyze a business

generally, but like particularly in businesses where it's easy to obfuscate either of those numbers and they could see like it's an extraordinary business, you can get hurt when you get bigger or when you're scaling. And in a market like this where you're trying to go public, it's like, whoa, that really hurt. So I think that's a lot of what we're seeing. Let's talk about the other side of the table, Chimoff.

We've been living through a zero interest rate hallucination. Basically, people were growth growth, logo, logo, logo, whatever. When they're making these bats, capital allocators now, we're back to breast tax. Okay, what's the margin? What's the lifetime value? And is this actually real? Is there a real business here or is this just a grand hallucination? That hallucination exists not only on the founder side, but on the capital allocator side. This week we had an interesting semi-viral thread on Twitter. Somebody named Tyler Tringas. He's an early-stage investor. I don't know who that is, but he did a thread predicting a 16z just to pick out

one firm was a zero interest rate phenomenon, an incredible machine to accumulate AUM assets under management. And so what we thought was just writ large on the capital allocator side of this grand hallucination of zero interest rates. I mean, I think it's a little unfair. I think this has written more just to try to generate views and clicks because you have to see the underlying return data to really have a sense of knowing. Is it, I think it's fair to say a couple of things that there was probably two and a

half or three years of capital raised in the industry That's going to get really put under pressure And the reason is that there is not a lot of time diversity in that money meaning people got it And they put it into the ground right away and one of the principles of Having a more predictable return set of returns over time, is that you leverage time, right? So if you had $100 and you wanted to have a diversified stream of returns, you're much better off spending a dollar a month

for 100 months versus $10 a month for 10 months. So just that thing will cause a lot of impact and headwinds for a lot of the capital in 2021 and 2022. Then the other thing you have to keep in mind is that over many cycles where we've had high rates and low rates and medium rates, our industry typically returns a dollar 60 for every dollar it raises. And that's over many cycles. And so if you believe that we're gonna revert to the mean, out of the trillion dollars we've raised, maybe we'll return 1.6 trillion. Now that sounds good, except the problem is that 1.6 trillion is marked at five and a half trillion.

So you're gonna have to give back. So there's a lot of pain.'re going to have to give back a lot of pain. You're going to have to give back a lot of paper profits in order to get back to that 1.6 and be okay with it. And the question is, what has happened in decision making in the meantime, meaning how many people did you hire? How many deals did you do that you regret? And then how does it change your psychology and how you treat the next investment that comes over the desk? Can you Separate yourself from these bad losses and not be on tilt and make a good decision Hmm, so you had a terrible two-day session like Phil Helm you've did last week losing three hundred fifty thousand dollars

Can you play the next week and not be on tilt and start to build back your stack and 30,000 a night for 10 nights or 10 of the next 20 set 15 sessions or whatever it is. Sack you had a rebuttal or something you wanted to add to this. No, not earlier a bottle. I mean, look, I think if you're going to be intellectually honest about it, I think that 2021's again, it is get a likely be not a great vintage for VC. Why? Because the valuations were just, yeah, the valuations were just really high. for VC. Why? Because the valuations were just, yeah, the valuations were just really high. They've come down by what, at least 50% on average, maybe more. More. Maybe more. 50% now, but you still have more medicine to take, I think, when you look at some of the businesses.

A lot of these companies are growing into their valuation. Look, I think for any given set of companies, for any portfolio, the most important thing is what's in the portfolio. So if in 2021 you had the founding of the next Google or whatever, that effect is gonna swamp the effect of price levels in that year because of the power law. Again, the number one most important thing is just what's in that portfolio, what's in that basket?

The second most important thing is the entry prices. And obviously if the entry prices are twice as high in a given year, then they are. Every other year, and twice as high as what the exit multiples are going to be in 10 years, when that portfolio becomes liquid, that's going to hurt the returns. We won't know which of these effects predominates until five years from now. we see more. Yeah. I mean, when I saw that tweet thread, I thought, maybe this is an issue for some venture firms, but we're not going to see even the inklings of it for another five or seven years.

Takes a while, yeah. That's a problem that may manifest itself in year 10 and between now and then any firm that it has a good track record of returning capital, or frankly has a good brand and good marks, will still raise an inordinate amount of money because this is an asset class that I still think on the margins is a more of a must-have asset allocation than on the margins I just rather ignore it. Because it is the future of how GDP will get created.

And so everybody kind of has to pay attention. Imagine if in 2021, the, you know, the next great mega outcomes in AI were created, right? Because those founders were just slightly ahead of the curves. You know, they were like a couple of years ahead of the curve. If those create, you know, the next whatever trillion dollar companies, Google, Apple, then the fact that price levels were two X, what they should have been, won't matter. What'll really matter is the distribution. There'll be a bunch of ad portfolios, there'll be some really incredible ones. And that's the way it always is with venture. The thing to keep in mind is in 21 and 22 rates were still effectively too low. And I think we did

this analysis, Nick, you can throw up that thing, but it's not correlated with big outcomes, those vintage years. 2023 is the first vintage year where we're actually starting to see high enough rates that have historically generated that kind of return. And so I do agree with you, David. I just think it's shifted out by a couple of years. 23, 24, 25, those can be some real power law years, I think, because we're gonna have just based

on what the Fed is saying, five and a half percent interest rates for the foreseeable future, which is, it's a huge, it's a huge number. That's a huge, I'll tell you what that is. I'll tell you what that is. You know what it is, though, Chimoff, I think, to build on your point, and FreeBreg,

I'll bring you in on after this. It creates an environment in which discipline on all sides of the table, boards, management teams, investors, rank and file, everybody has to be focused. Everybody has to have sharp and swords. That little bit of headwind is the ability to raise capital being harder, is building more reserve and more resilience and grit in this set of founders. It's kind of like parenting in a way like if you are too

permissive, you give too many options, kids are in discipline. And now this group of entrepreneurs, I'm seeing who having given up my lord are they becoming animals in terms of like pure samurai in terms of how they're running these businesses. Anything that's not efficient, projects that were the third or fourth most important project cut cut cut. now it's taking a 18 months free bird to maybe get disciplined but maybe you could speak to the next three years and the opportunity for investing in this cohort because man that last cohort is going to be really really challenged and they'll probably do 6% returns just like your money market account can do right now five or six or what bonds can do.

But this next group, man, we're seeing dog and entrepreneurs who are focused on reality and there is no hallucination now that this is going to be easy. There is no grand illusion here. What are you seeing in the market? The market average return in venture in early stage investing is going to be 6%. Remember, it's not evenly distributed. So 80% of funds could end up having net negative real returns and 20% make money and then there'll be a very few that will make real money.

And that's the nature of having a very know, a very kind of low average return on the industry is there may be a lot of wipeouts on the investor class. Folks that have only had one or two funds and then just got blown up in the cycle. I think there's two groups of companies out there. One is companies that obviously have been funded and are doing stuff and are active businesses and they've raised money in the past and that that's where there's gonna be really ugly times. I've mentioned this in the past, but I do think that there's a significant number of these companies

that if they were to be truly valued on first principles in private markets today, they'll get valued as a value that's less than their preferred equity, which means that there's a difficult restructuring needed in the company, and not everyone's gonna be willing to embrace that. So that's what's gonna trigger a difficult restructuring needed in the company and not everyone's going to be willing to embrace that. So that's what's going to trigger a lot of the wipeouts in the market. It's not like the businesses are value lists. It's that the capital structure makes it difficult to refund them to fund them and continue their operations. Now for all the new businesses as you highlight, man, there's so much extraordinary leverage out there.

You know, left and right. I think we talked about this maybe a year ago that there was a big bubble coming in AI. But I mean, left and right, nearly every market, every segment, you won't see a pitch stack, but doesn't have those two letters in it. Right. I mean, I'm sure you guys find the effect. It does feel, it is hard not to feel like you're a little bit of a lemming. If you buy into the AI stuff, but I will say that the use cases we're seeing are really

pretty incredible. Totally. I didn't feel this way with the last couple of waves, like the whole web three thing, never totally made sense, and crypto always felt a little bit speculative, like kind of unsure. But the AI thing seems like it's going to deliver real value. And I'm seeing like already three major enterprise use cases. Number one is just auto summaries.

Like being able to summarize very quickly a thousand articles or a meeting, you know, spinning out a like a summary of what just happened in a meeting. And it could break it down between a recap and action items. It just does all the work for you. The second thing is in app customer service, kind of like a copilot, but there's no reason contact customer's sport anymore because you can just ask the AI inside the app and like,

why would you have a contact support? Yeah, I would get it right and they'll be faster, right? That's something where it's so narrow. The AI is like a power user. So narrow sacks, yeah, they'll get it right. It's like a power user who's sitting next to you is your copilot and is making you much more effective in the app.

And then the third thing we're already seeing is auto-complete for everything. I mean, it is like bonkers how, you know how you get like little type-head suggestions in the email, but it's like two or three words. The AI is going to be able to do type-ahead for any content type, paraphrase of time, To do lists, tables.

It's bonkers. You see it in Google, you see it in Google Sheets now, like if you type, you know, equal sum, it's like, oh, here's what the seven most likely things to happen next are. In which case, it's kind of like you use the chest.com app. I don't know if you've used it with like the heads up display where it's showing you the different moves and this is a book move versus this is not a book move. Go ahead. Let me make a prediction. All of the things that you guys said, I think are incredible consumer surplus business opportunities, which means that the ultimate winner is us. And we're going

to be concerned for the visa. The consumer, no, the consumer. Incredibly, incredibly productive. And more leveraged in how we spend our time, which will allow us to do all kinds of other interesting things all the time that we save. That I think is almost now a certainty. The problem with consumer surplus businesses is oftentimes there is no money made in the funding of them. And really where the money is made is in enabling it. So for example, so far what I would say is there's very little money that has been made in AI. There's been an enormous amount of money that's been made by Nvidia. And the reason is because they are the pick and shovel provider into the industry.

And so that's an example. AMD I think can also benefit. So the silicon players seem pretty obvious here. Maybe some of the cloud players, the problem is the cloud players are trapped inside of other big companies with many other business models. But I just want to put out there that I think David, you're right that the consumer 100% wins. But economically, it's not clear to me that there is a winner that is venture fundable. Well, hold on a second. economically, it's not clear to me that there is a winner that is venture fundable.

Well, hold on a second. Yeah. The Levi Strausses of the world, right, in the Gold Rush. The people that made the picks and shovels in the jeans are sure to make money. Yeah. And the people that pan for gold is much more speculative and harder to see right now. Yeah, a couple of points on that. So, well, I think, I think you have a point that, so I mentioned three use cases. I think you have a point that I mentioned three use cases.

I think are killer use cases that we're already seeing demos of today. When you look at them, you're like, okay, this has real applicability. I mean, the AI is going to be, it's going to powerfully change our work lives. I'm just focused on enterprise. Now, I don't know who benefits economically from that. That functionality that I mentioned, I think, is likely to be pretty commoditized pretty soon, but it's gonna be incorporated into lots of different apps in ways that are hard to predict right now.

I think that this AI revolution is gonna do for SAS, what mobile did for a lot of the Web 1.0 companies, where for a lot of these Web 1 companies, they were either disrupted by mobile or they are turbocharged by mobile. So you think about Facebook, it successfully made the transition and mobile made its business so much better because people are just using it a lot more on their mobile devices. There are a lot of other businesses that just kind of fell by the wayside because they just

couldn't make the adaptation from desktop to mobile computing. I think AI is going to be like that for SAS, where there's going to be a lot of SAS products or just absolutely. I think you're 100% right. If you're 100%. If you can incorporate the AI into your SAS product, put in a co-pilot, put in autocomplete,

and all sorts of other forms of value that we're just scratching the surface of, you're going to be able to deliver so much more business value. But if you're not able to do that, and somebody else can, then you're going to get disrupted. Look at some of these enterprise spaces. Like take something like APM, right? Like application performance management.

That's an entire ecosystem of enterprise companies. It's probably $10, $15, $20 billion of collective market cap. And I'm just going to say something, not to defend anybody, but like that can mostly be automated by AI. Those are simple heuristics that can be embedded in a way that's completely novel, where this code library just gets dropped in and all of this stuff happens relatively automatically now. So there are all kinds of other sectors to your point that get crushed. Then the question is, who provides that layer now for free in their existing SaaS toolkit

or their product that now all of a sudden captures more value as a result. And they can sell it for pennies because it's incremental to them in terms of their margin and revenue. I think you're right, hardware wins. I think cloud wins big because if you keep adding to these models and once 10, 20% better,

people are gonna be willing to pay for that. But then when you think about consumers, whether they're enterprise or actual consumers, I believe Shmop, this stuff is going to provide so much value that people are going to take their wallets out and be more than willing to spend for it. It's more valuable than Netflix description. I disagree. Okay, I'm going to take those side of it. Imagine you take your videos of you learning to ski and you put it into an AI coach and

it's like, here's how to, and it just draws on it. Here's how to be a better steer. This is going to blow people's minds. And you'll be more than willing to spend $25 a month on that. And the reason is because we've spent now two decades. And that's a lot of muscle memory to unwind, of people that have been consistently given more for less.

And I think that we shouldn't underestimate the expectations we've all collectively created by building software tools that have that inherent deflationary aspect to them. And so I just think that it's a very high, high bar. I still think there are subscription services to be built. I don't disagree with you there, Jason. I just think that in general, though,

the de facto business model that we've created in tech is more for less. And we've used technology to give us operating leverage to create margin structures that other companies couldn't copy. And I still don't, and I think that AI accelerates that, not changes it. I think it's going to be the opposite. If you look at Netflix, if you look at Disney, they've been raising prices, providing more value.

I think that this is gonna provide so much value that the incremental 10 bucks a month, five bucks a month per employee, is gonna payoff so much that this could be a slack or like some presentations offer. There are a lot of people who are making PowerPoint, AI PowerPoints where it makes you a new debt, or a Figma with AI.

These things are gonna be so powerful. People are like, it's totally worth an extra 100 bucks a month because I can get rid of another employee. This one employee can now do the work of three. Fuck it, man, I'll give you a thousand dollars to inflation. That's a really good A model. If you just added the LTV of that company,

the software company is gonna make more money. I'm just saying it's deflationary, that's deflationary. Okay, it's deflationary on the entire economy, but that's software company that figures out how you can fire two accountants and keep one and make them as good as, you know, three. Yeah, your company is able to charge more than the software. Right, you're selling consumer surplus. Okay, I think we're in agreement.

Freeberg, sell them a sounds. You want to try them in on this? You still with us? Sell them a sounds. Get the technology drives prices down. Well, technology is about doing more with less, right? It's about doing more with less, right? It's about doing more with less. And the AI helps you do so much more with the same amount of time or less time.

I think your whole point about Disney and Netflix, et cetera, is because they aren't, you know, innovating on either side and so in order to drive earnings growth, they're having to raise prices. But that doesn't speak to the benefit of technology. They're innovating massively. They're adding massive features to their products and massive new shows. I mean, I think there's pricing power in this AI thing. That's just my belief. I could be more. It's not about leverage. Yeah. I mean, look, I think your point, like so, my general rule of thumb thumb on technology is the technology creator, the technology company should generally be capturing about one third of the value that they deliver to the customer.

unpack that why, what do you come up with that? So, I mean, it's just kind of where, for example, yeah. Yeah, so like, let's say that you, as a food delivery company, you have to pay a human ten bucks deliver food from you. Now, let's say I run a robot, my amortized cost of running that robot is two bucks. So it's eight bucks cheaper or call it $1. So it's $9 cheaper. I should charge you four bucks. Because four bucks is super competitive

with the existing market. And it'll keep me competitive against the other automation companies that are gonna start to emerge. It's just kind of how market dynamics end up working out. If you charge too much, you're going to invite people to come in and compete with you. If you're technology commoditized, remember, all technology commoditizes over time. And if you don't charge enough, you're not going to make enough money to be able to reinvest

in scaling your business and doing more kind of interesting things as a platform. So, you know, generally AI provides more leverage to SACS' point. If I can build an application, I don't know if you guys have seen these incredible UI apps that are built in AI now, where I can say, with a prompt, hey, make me... Yeah, we talked about it two weeks ago, yeah. Right, it made me a dog walking app interface and it builds like the three steps of the dog walking app and gives you a bunch of options and you can pick the one you want. I would typically have to pay a design firm $50,000

to do that work for me. So if it be AI is doing it automatically, I should be paying, let's say $15,000 for that product, for that capability, the margin on that is 100%. Try 50 margins. Right, whatever it is, very low. And the margin on that's 100%,

whereas the margin on paying people to do design work as a design firm is very, you know Not a great margin. You're having to pay people this stuff You know why we're having that we're working it out in our heads right now one group of us is talking about comparing AI software and AI services to the existing software stack and then on the other side of the discussion We're comparing it to the humans who are currently doing that work Imagine the 6% that two brokers get you know, doing the sale of a million dollar home in that 60,000.

An AI could negotiate that and find you a better home and sell your home for the optimal price. For less than that 60,000, what would you be willing to pay for that, right? And the same thing with the designer of the logo. I don't think that's how it's going to play out exactly, Jake Al, because to completely eliminate a job function, you have to do 100% of it. And you have to do it 100% of the job function as well as we're better than the human. Whereas I think as opposed to a model where you solve the human and the loop, but they're much more productive because they're working with an AI. They're augmented. It's more the Iron Man performance. It's more the Iron Man model.

So I think that's more effective. Yeah, so I think if there's a job reduction, it would be more of the case where they've got a team of five accountants and they go to two or three because now they're just much more productive. I don't think they go to zero. That's my sense anyway. I look at outsourcing as a possible corollary to this. You remember when you moved the accountants to Manila where the knowledge workers there

and it knocked out half the price to theirs or the price whatever it was. This just feels like that on steroids to me. If you have a business model like Infosys or Tata or one of these things that's levered utilization rate, this is the most obvious way to basically add many potentially percentage points, if not tens of percentage points of utilization to your business. That's all money, free money for you, right? Because now you'll have fewer people. They'll be more utilized and they'll have more leverage because they'll be using a bot or some AI agent to help them write code, write unit tests, all that typical stuff that right now you outsource.

And even if you pay a marginal cost, you add the labor arbitrage technology arbitrage. Now all of a sudden these businesses look really, really interesting. Yeah. I think that's my right. Because we support definitely gets revolutionized, right? Because the initial, the first line of defense

is gonna be the AI using text to voice, and it can choose what language it wants to output to, what accent. So you'll never know that you'll think you're talking to someone locally. Literally, you'll be in 50 languages with the right answer, and you don't need to build up that entire group. I mean, this, I think we're underestimating in some ways. Yeah, but that's gonna happen here. But my point is, I think that a lot of the customer support inquiries

just go away because the help the assistant gets built into the tool directly. So you never really get the point of it. Yeah, it's the point of it. As you go. Yeah, like why don't you, you know, if you can just ask it. People do that right now on YouTube. If you just type the question into YouTube and you find the video, that takes five minutes, but you're saying this is gonna take 15 seconds,

because it's gonna be right there. I think what SAC said before is hugely important. When you think about how AI touches non-technology businesses, what he said is the boundary condition, which I think is right, I think he nailed this, which is, the boundary condition for AI to replace a human is where the threshold error rate of that AI is the same or less than the human. If you look at very complicated markets, where does regulatory capture rear its ugly head,

it's in allowing humans to be error prone and you can't do anything about it. Take healthcare. If you go into a hospital, there's a certain error rate in every surgery, right? There's a certain error rate in the things that happen. But there's probably a whole bunch of ways in which that entire infrastructure can be made much, much better with AI, right? A robot that does laser guided precision surgery, characterizing tumors 100% accuracy, so you always get 100% of the cancer out when you go and get surgeries done. All these things are possible now. And all of a sudden, you take these error rates that can be high as high as 20 or 30%.

So for example, breast cancer surgeries, the dirty secret of our healthcare industry is that has a 30% error rate. You know, that can and should go to zero. And now all of a sudden, so these highly regulated markets, I think, can become much, much more efficient and leveraged and pass that consumer surplus on to people. In that case, it's healthfulness, which I think is a big deal. Is it so interesting? I did my pretty new vote, scan. Yeah, incredible. I mean, I got all the videos, I got all the loops. I went to the one down didn't have to go. I didn't have to go. I didn't have to go. I didn't have to go. I didn't have to go.

I didn't have to go. I didn't have to go. I didn't have to go. I didn't have to go. I didn't have to go. I didn't have to go. I didn't have to go. I didn't have to go.

I didn't have to go. I didn't have to go. I didn't have to go. I didn't have to go. I didn't have to go. I didn't have to go. I didn't have to go. I didn't have to go.

I didn't have to go. I didn't have to go. I didn't have to go. I didn't have to go. I didn't have to go. I didn't have to go. I's a little growth here. But let's see in two or three years, just monitor it. And I'm like, oh my god, I'm so grateful. If this thing gets down to like 500 bucks, which it obviously will, or 1000 bucks, and everybody's doing it, and then all that data's in there. And then the AI is looking at it like you're saying. I mean, the AI detection was the AI able to tell the doctor how foolish it you were.

No, you're not supposed to eat for 24 hours. So they didn't get an accurate reading on behalf of BS. Oh, yeah. There's your call to open, everybody. Yeah, I, here's a really important clip for founders. Play the Steve Jobs clip. This is super important when looking at web 3 versus AI to the sexist point. You've got to start with the customer experience and work backwards to the technology.

You can't start with the technology and try to figure out where you're going to try to sell it. And I've made this mistake probably more than anybody else in this room. And I've got the scar tissue to prove it. And I know that it's the case. And as we have tried to come up with a strategy and a vision for Apple, it started with what incredible benefits can we give to the customer? Where can we take the customer?

not Not starting with let's sit down with the engineers and and Figure out what awesome technology we have and then how are we going to market that? And I think that's the right path to take can I ask you guys a question? I sometimes that go down these rabbit holes. I'll watch hours and hours of Steve Jobs clips. What do you think makes him so calm? Doesn't he just strike you as incredibly calm and comfortable with himself and just aware? I know what it is.

What is it? He was so much better and aesthetically building product than anybody else. When you think of that PC era of no taste, beige boxes, and everybody having no style and just no swagger, he was studying, you know, German design, Buddhism, tripping on acid, and like just understanding the universe at a level that gates and the other contemporaries weren't. They just weren't as transcendent

in understanding product design as he was. So it was like when you were saying you were playing poker with a bunch of four-year-olds or something, that's the analogy. He's just on a such a different level that he's watching people make, you know, AS400 and, you know, IBM, PS, whatever, just garbage computers, garbage operating systems.

And it's just like, the thing is like, if you look at any era, just the way that he communicates, there's just a level of calm. I don't know how to describe it. So, you understand what I'm trying to say? Like he just seems like he just sees through all the noise. Like he's seen through the matrix.

Like he's unplugged himself. Sacks is unimpressed. Okay, there you have it. No, I'm very impressed with Steve Jobs. I think he understood proctivalment better than anybody else. Yeah, clearly that's it. I mean, my favorite Steve Jobs passage is the one where he describes the John Scully disease.

Do you guys remember this? Yeah. No. Oh, here it is. You know, one of the things that really hurt Apple was after I left John Scully got a very serious disease. It's the disease of thinking that a really great idea is 90% of the work. And if you just tell all these other people, here's this great idea, then of course you can go off and make it happen.

And the problem with that is that there's just a tremendous amount of craftsmanship in between a great idea and a great product. Yeah. So true. Yeah, I mean, I tell people it's like a rugby scrum. You go, you know, you got to get a whole team to get the ball down the field. It's not like one person put the ball down the field. You know, they kind of maybe suggested a play, but once you're

on the field, everything changes. And everyone's involved in getting it down the field. That quotes where the name for craft ventures comes from. Oh, really? A little known fact. Yeah. I didn't know that. Yeah. Section 230, we talked about last week, the Gonzalez versus Google case, the Justice Assert, or arguments and plaintiffs, seemed to fare poorly. Quote from Scotus blog, Justice Elena Kagan suggested it, even if Section 230 is not well suited to address the current needs of today's internet, such as such a task was best left as we predicted last week, I think, sex you did best left to Congress, rather than the Supreme Court.

Quote, these are not like the nine greatest experts on the internet, Kagan observed, sexual dots. Yeah, I mean, this is just a, I think, really a quick update to what we talked about last week. The Justice heard oral arguments, they seem to be very skeptical of the plaintiff's arguments, even Justice Thomas, who has written the most skeptically in recent years about the broad immunity that tech companies enjoy intersection 230, seem surprisingly sympathetic to the theory that the nine-circuit court

ruled on, which is that Section 230 protects recommendations as well as the provider's algorithm treats content on its website similarly. So even the justice who I think was most likely to rein into 30 seemed to be more comfortable with what the defendant, which was Google was saying. So it looks to me like Google and Big tech are going to win this one any thoughts from no not really i think i want to know what you guys think about trump showing up with big max and water in east palestine i mean he is a he's a media genius he beat booted judge to

east palestine yeah that was i'm literally pull up my tweet i think this is the power we aren We are because Trump has been out of the public discourse, but he's a media. He's a media. He is a media saffon literally Biden is in Ukraine, Sabre rattling over air sirens that may or may not be true. They were fake. Who cares? No, it doesn't matter. We, we don't. We do. We do. We do. Actually, we address there.

Okay, because I don't need to be. Oh, no, second, I don't need to be there because Jake Sullivan just paid an oppressed conference and he was asked by a CBS news reporter if the US gave the Russians any kind of heads up that the president was going to be in Keith. And what Sullivan said, and I quote it is, we did notify the Russians that President Biden would be traveling to Kiev. We did so, some hours before his departure for defliction purposes. You know what defliction is? It's when the U.S. tries to avoid an accidental conflict. And you know, Putin is not crazy

enough to try and assassinate Biden. So the Russians were not attacking Kiev that day In fact, they haven't attacked Kiev as far as I know for weeks. So these aeratirons were basically just pure theater But the amazing thing is that if you don't know if you don't know that Biden orgustrated is my point people on your side Come on Jason. Don't be so gullible. It doesn't mean Biden pressed the button So don't also take it to the other tree. It was there. Who knows who went who who why the Simon off, but put it aside. This was a joint event between the Biden administration and the Zalinsky team. They organized it. The whole thing was choreographed. How do you how do that red carpet get there, Jason?

Was that an accident too? Okay, let's put that aside. I'm trying to get the win. It's accidental, I'll be in trouble. Let me give you your GOP. Let me give you your GOP win. Donald Trump is a subant and he went to America to the place that we were reporting on the under reported story.

People in East Palace line are being ignored and he comes there to help the people of America. I give you all credit. Your guy, Sacks, did the most amazing medium move in history. He went to middle America where people are suffering as opposed to a war that nobody wants to be in and spend all that money on. We won't spend money. You want to be out of time, but we will go spend billions in Ukraine, go. All right, you don't know what this remind me of and you may think this is a weird connection,

but it reminds me of the ending to the movie, Boys in the Hood. Do you remember what happens at the end of that movie? No, I haven't seen it in years, go. Okay, well it's 30 years old, but Ice Cube plays this character, Doboy, and his brother gets killed. And at the very end of the movie, he gives this speech to Cuba Gooding Jr.,

where he says, I turn on the TV, and there was all this shit about violence and a foreign land, and there was nothing on my brother getting killed. All this stuff about what's happening in foreign countries, nothing about what's happening here. And then I think the most memorable line was, either they don't know, don't show,

or they don't care what's going on in the hood. Right. So what's going on here is the people of East Palestine, Ohio, are being engulfed in a plume of carcinogens and toxins. And Biden is off, right, pursuing this crusade in Eastern Ukraine. And it's not just him. I'll, I'll dish out to Mitch McConnell as well. Mitch McConnell was on TV. Those are the Neocons of Ornil, yeah.

McConnell was on TV saying that the number one priority of the United States right now is defeating Russia in Ukraine. It's not helping the people of Ohio. It is not securing the border. It is not solving crime in our cities. It is not making our schools better. It's running off and basically supporting this war in Ukraine. So both these oxygenarians Biden and McConnell both, they either don't know, don't show

or they don't care what is happening in the United States or America. He's a genius. But it's not even genius. I mean, it's so obvious that you go there. It is so obvious. Nobody wants to be in a burger room. Nobody wants to be in a burger room. Nobody wants to be in a burger room.

And Biden didn't go there. It's not genius. It's obvious. Decentive didn't go there. Where's Decentive? He shouldn't have. He shouldn go there. Where's Desandes? He should have. He hasn't. He hasn't declared yet. He hasn't declared yet. Make a trip. Make a trip. I think the most senior democratic person that went over there was Josh Shapiro, who's the governor of Pennsylvania. He got there before Buttigieg.

What is going on in the way? I mean, and this, it's a never-ending war. And so, you know, this nobody wants to fight a never-ending war. ending war. This is what got Bush in trouble, right? Like this was the big critique. It's like we're spending all this money over in the Middle East on these conflicts. Well, you're talking about Bush senior. Yeah, so let's, let's, let's come back to this with Bush senior. I think actually it's a good analogy.

So the, with Bush senior, Bush actually, this is in 1991, he won the Iraq war. That was actually a stunning foreign policy success because he actually didn't go too far didn't go all the way on the road to back to add the way that his son george w bush with creating an epic disaster so bush forty one delivered a victory there any still lost

election why because he seemed out of touch he wasn't focused on domestic problems the american people want an american president to focus on American problems. And even if Biden delivers some sort of victory in Ukraine, if he ignores these festering problems at home, then he is, I think, vulnerable for this reelection. But I think the truth of the matter is that this war is going to turn out much worse

than the Iraq War did in 1991. Because in 91, we showed restraint and we knew what our vital interest was, and we kept our objectives limited, and we kept the timetable very short. What is Biden doing here? Biden won't tell us what the objective is, it's just whatever the Ukrainians want.

He won't tell us what the timetable is. It's basically for as long as it takes. And then meanwhile, this week, you had come all hours go to the munic summit declaring that the russians are guilty of crimes against humanity which that's something that we could have assessed after the war think about the incentives you're now giving the russian leadership before we said that we just want them to leave

when you accuse them of war crimes and implies that we're going to chasing them all the way to mosquot they're not going to end this war with it they can be put on trial at the hagg i mean this is highly inflammatory so you know this thing is not going in the right direction that was a thing i didn't like about by the speech over there is just he's escalating escalating escalating hate that we have to stop put in the i mean which you do he didn't bid another country, he didn't cause three

or four hundred thousand Russians have died according to reports, over a hundred thousand Ukrainians have died according to words, and either side is given the accurate number because they don't want to demoralize their constituents, but the amount of suffering going on here is extraordinary. And I think it should be the West who is going, send Macron, send somebody from Germany, send some group of people to then go to Ukraine and work this out. But you need to have Biden going to saber rattling. It was too much saber for me.

It is. It was lost. It was lost. Deescalation. We need deescalation in these situations, not saber. I agree with you. I agree with you Jason, but Biden is really panning himself into a corner here because before the war he refused to take NATO expansion off the table.

He refused to recognize the Russian interesting Crimea. And we gave no support to the Minsk Accords, which would have given some limited autonomy to the Russian speakers in the Donbass area. If we had just done those three things, there would have been no war. Biden refused to do that. He refuses to take my handspanchen off the table even today. So he has nothing to do that. He refuses to take my whole expansion off the table even today. So he has nothing to compromise with. He is dug in.

And the problem we have now is that it's a loose, loose scenario. If the Ukrainians keep doing poorly because right now it looks like they're on the back foot, what does the United States gonna do? We're gonna let them lose this war, or are we gonna keep giving them more aid and step in? It looks to me like Biden now is invested in his whole presidency in this and he can't just let them lose this war or are we gonna keep giving them more aid and step in it looks to me like Biden now He is invested his whole presidency in this and he can't just let them lose which means more escalation from us

huge mistake and on the Russian side if the Russians lose Then they have an incentive to use nuclear weapons to rescue the situation So it seems to me that both scenarios here are really bad and we don't really have a good way out of this. We're looking for some sort of magical Goldilocks scenario where the Russians sort of lose, but not enough to use nukes. The administration has not given us a clear picture of what victory looks like here. That's actually reasonably achievable in a reasonable time frame timeframe at a reasonable cost. What do we think, uh, a freeberg of Xi Jinping making overtures and, hey, maybe we should work towards peace. If you follow the money, he wants cheap oil. He wants this thing to end and he wants

the West to be buying goods from China. The West wants to sell a bunch of armaments. The military industrial complex is absolutely in delight of replenishing all of these weapons And perhaps a little cynical the follow the money concept But what we should take on the chessboard of Xi Jinping is gonna visit Putin before Biden does and he wants to build bridges and we want to save our battle. What are your thoughts? If any getting like like, I mean, China buys energy from Russia today, they buy oil. That it's a very cheap price.

So if I'm China, I want this to last longer, don't I? Like, why would I want to end this? And then have Russia's markets open up? Because if their markets open up, the markets normalize to market prices, right now they're getting a discount. So I think rather, they certainly don't want things to escalate.

The question is how quickly do they want them to de-escalate? So if I'm China, I'm kind of probably playing a little bit of a middle line here. I just, I obviously don't want to see a big hot war. China's got its own domestic problems right now. They seem pretty significant and existential. And having access to cheap energy seems like a benefit. Obviously, if there was significant conflict and escalation, a conflict, that would be

very bad for an economic perspective for China. So they're probably somewhere in the middle, like a slow resolution, let's say. I don't know. I mean, this is pure speculation. This is just me. But Europe. Sacks or Trimoff, Europe isn't going to buy Putin's oil anytime soon, right? They're now going to buy.

But he's able to sell it to China and he's able to sell it to India and the rest of the world. There was actually an article in today's New York Times about how the West may be unified about Ukraine, but the rest of the world is not. The article was saying something that Chris the West said for a while, which is we actually don't have the whole world with us at all. The Bricks countries are not with us. The emerging world, the whole Southern hemisphere

bases not with us. They would like the US to play a more constructive role in finding a peace deal, not like you said Jason Saberaddling or escalating. So the rest of the world is not happy with us and this is why the Russian sanctions have not been effective. I think the Russian economies had like a 3-4% hit. It is not the collapse that was predicted because there are enough other countries willing to do business with them. Would this have happened to them off if Trump was president?

And how would Trump have handled it? Do you think, just game theory here, I'm just curious. Because Trump almost won, right? And if Trump had won, what would this look like? Would Putin have gone in there if Trump was president? And how would Trump have handled it? Because Trump seems to think, I would have just told him, don't do this, and they wouldn't have done it. I mean, this is the most obvious compliment I can give him. I think that he is

exceptionally pragmatic on being anti-war and I think that that is one of the most positive characteristics that he showed. He was really the only president, I think, in modern history, right? Saxi Poo that hasn't gotten us in broled in a new wars Yeah, it is the best part of him. Yeah, he's been incredibly incredibly consistent So I suspect that there would have been some kind of a deal. I know that sounds so Ridiculous to say, but there would have been a deal Actually agree he's a deal maker Jason

He went to North Korea he went to North Korea and met with He'll shake hands with anybody exactly He would have fired all of the the deep state blob that started to position Anything towards a conflict. So I think he would have shut the door so ferociously on Ukraine and NATO and anybody that crossed that line He would have tarred and feathered publicly And I think the end result would have been that Putin could have found an off-ramp well before he invaded.

Probably. Yes, I agree. And Trump blamed Germany for all this, right? He called it... Well, Trump very early asked the question, why are we spending all this money to defend Germany when Germany has this big pipeline deal with Russia. It doesn't seem like they need our protection. They should have paid for it themselves.

But I think there's a separate point that Tremothus made that is a really good point, which is Trump's instinctual resistance to what the deep state wants. And he actually said it this week, he gave a two-minute televised statement that was all over Twitter, where he basically made the argument that listen to reason why we're in this war is because the military industrial complex and the foreign policy establishment they basically courted this conflict and they are working at odds with the interest of the american people

it's actually a fairly radical critique i don't think a major presidential candidate has run against the military industrial complex the way that he is now positioning himself. And let me tell you this, I've said it before, he's not my preferred candidate, but if this war spirals out of control, either it turns into an even bigger conflict that draws us in or it turns into a big recession, because I don't think we've seen the last of the supply shocks from this war.

If we get a recession that Trump can, I think lay at the feet of this war, he's positioning himself to take advantage of this, could be a silver bullet for him. I don't think he has any other way of winning, but if this turns into a big mess, Trump is positioning himself. Tint foil hat sacks.

You have your tin foil hat there? Put it on for a second. I want to talk to tin foil sacks. Tin foil hat sacks. Let's put them, the tin foil hat's on here. Do you think Putin is escalating this as a way to position Trump to where Putin says, he could say this during the election. Like, listen, I would love to talk to Trump.

And what if Trump goes and talks to Putin or does a phone call with him? So your theory is wait, so your theory is that Putin is that. He's not that scary. Okay. So so your theory is that Putin's escalating this into potentially a nuclear war to get Trump reelected. That's your theory. And I'm the terrible tim.

I'm just tinfoil-hatting it. The reason why- Now that this has occurred, no, no, now that this has occurred, not that he did the- You're the one who doesn't to follow that territory, my friend. You're the one who didn't foil-hat territory. Ten-foil-hat corner at the end.

Putin, the reason why- Not that he started the war for it, that he would end the war to give Trump a win. How's he going to end the war for Trump? What are you talking about? During the election, he does a call with Trump and he says, you know, I talked to Trump about this and I'd love to do some negotiations with Trump. I've always had appreciation for his ability to help negotiate things.

I would love, I would feel better about negotiating with Trump who hasn't stayed or rattled and told everybody in the world that I have to be that there isn't regime change. So I don't really see how you come up with these conspiracy theories and then attribute them to me and call me the tinfoil hack guy. But it's a joke. It's a joke. I know you said this is silver bullet. No, it's a silver bullet.

You said it's a silver bullet. It's a silver bullet. Yeah, if this war was off the rails and the economy goes off the rails because of this war he trump right now is positioning himself to take advantage of that fact and uh... to say this is too far into a sentence a pass it's a critical things about the war skeptical i would say things about the war this week so it's not just trump but look the thing you have to understand about this war is it's existential for pun it's existential this yes He cannot back off. And it's extracurricular for us. Yeah.

Yeah. And that's why Obama said back in 2014 that the Russians have escalatory dominance. They will always climb the escalatory ladder all the way up to Nukes if they have to. And the sooner we recognize that fact, the better off we're going to be. I think the good news is that we are speech that he did. We kind of find it. I didn't see the speech was it good? We just talked about it. It was two minutes. It was fabulous.

Sox just mentioned it. The crazy thing is it sounded a lot like what we were talking on this podcast, which is he talked about all these generals that retired Victoria Nulin. He called out Victoria Nulin by name. By name. By name. He really did explain to the audience this because I didn't see this because I'm on a different time zone and it must have broken when I was asleep or. Well, that's a two-minute video in which he, like I said, he attacked the military industrial complex and the foreign policy establishment for creating this war. And he mentioned Victoria, Newland by name. Let me tell you something. Newland is gonna be... It's gonna be a very popular message. Yes, but it is very popular. Newland is the Fauci of this situation. Okay. The same way that Fauci was supposed to be protecting us from viruses.

And then finally, get a function research. Victoria, now we got a label. Let me tell you, Victoria, COVID-19 misinformation. Victoria, Newland was supposed to be our chief diplomat with respect to Russia and Eastern Europe. And what did she do instead? She ginned up this conflict. How? Ginned up. We backed in insurrection in Ukraine in 2014. Jason, if you didn't like the insurrection of January 6th, let me tell you, you aren't going to like the insurrection that she staged in Ukraine because they brought these Ukrainian

far right nationalists as the Muslim. And that is what Ukraine did. Also bring big Macs. Did he bring big max? Did he bring big max with them? Did you say he brought big max to his power sign? He worked fast food to them. Yeah. He showed up with you. You're ignoring what Zach said, but no, no, I got it. I am not disagree with him. I think if you want to ever watch the the roots of this conflict, never be positive. Nobody wants to be in a forever war. Yeah. Let me explain why he mentioned Victoria Newland. He mentioned her because she was the State Department official

who was responsible for backing this insurrection of a democratically elected leader in Ukraine in 2014 named Yennecovitch. Okay. Yenneovych was trying to, was doing a balancing act between Ukrainian nationalists and Russia, and it was a very delicate balancing act, and we basically toppled him. And ever since then, the relations with the Russians over Ukraine have been headed south.

If you're wondering why Putin sees Crimea, it was in direct retaliation for the coup that we backed in Ukraine in 2014 retaliation for the coup that we backed in Ukraine in 2014. This is the origin of the conflict. And if you want to understand where this comes from, you have to go back to this. And the fact that Trump is willing to talk about is pretty incredible. I think that the good news for us is I think that heading into June and the debt fiasco that's looming, I think we're going to, and I think this will help a lot, get distracted with domestic

issues. In the sense that it'll take some heat off of escalating all of this foreign adventureism. You know, it's such a scene like this is such a scene from Wagged the Dog. Every time there's something inside the United States that we should really focus on, we have this Wagged the Dog moment where we get distracted by some adventurism abroad and we forget and we lose sight. So we have this East Palestine thing right now. In June, we're going to have to come back to terms with this dead-sewing issue, which is a huge one. How are we going to resolve it. It's not clear.

Just this week, the federal reserve basically said, hey folks, we're taking rates to five and a half plus and they're going to stay there. That seems like no news. People just seem to digest it and move on. It's really incredible how we just find, we are like, what is it, Jason, the dog that chased the bumper and got the car whatever yeah you you caught the bumper in we got plenty of big problems here in the United States plenty of big problems

and i don't know that wag the dog works anymore because i think the american people want like i said they want an american president to focus first and foremost on american problems and even remember bush senior in ninety one one that warrants still lost re-elected still lost so i don't think wagon the dog works anymore. It works for some short period of time, especially while the media are portraying this. And to your point, Peter, the air raid theater, that's eventually the people smart enough. You're so right. So that issue, think about Bush. Bush came off of the Persian Gulf War

with like a 91 or 2% approval rating. I mean, we've never seen anything like it, but he violated a simple tenant of his domestic policy, which is read my lips, no new taxes, boom lost. And it was not even close in the end. So I think you're right. I think people really care about the economy. Go Nikki Haley. And do how much debt do we want to go into over foreign wars?

The only thing I ever liked about Trump was his policy of not starting wars and not getting into them. And Americans want to focus on our balance. I'm a balance sheet voter right now. I'm voting based on who is going to be fiscally responsible. I mean, Freeburger, the same vote here, I think. We've got to be real careful in how we handle china because you had blinkin on all the sunday shows basically denouncing them expressing outrage that they might support the russians acting

shocked shock that they could do that we don't even have the ability anymore to understand that other countries do things in their own interest and we can accept that and instead we act as if foreign policy should be conducted according to this morality play that we've created. And if you don't do what we think is right, then we're gonna get expressed all this outrage and condemnation at you.

And somehow, that's gonna get you to violate your own interests. That's not the way the world works. And what we're doing right now, what we're doing right now is pushing China and Russia together into a new axis block. This is very foolish, very foolish. Even during the cold war, okay, we work to keep Russia and China apart. And whatever you think of those regimes today,

they were much worse back then. Remember, the Soviets, you had a Stalinist regime, the Chinese had Mao. Those were the two of the three biggest mass murderers of the 20th century. And Nixon and Kissinger still went to China and shook Mao's hand and toasted him because it was important to keep China and the Soviet Union divided. And what are we doing today? We are basically pushing them together with all of this condemnation and outrage. It is not a smart strategy. Can't disagree. We need to be building bridges with India.

That's a key, key relationship. And China. I don't know why we're not figuring out What we have about India? This is poisoning our relationship with India India is the biggest democracy in the world and our relations with them have gone south Since this war because they have a friendship with Russia that goes back around I mean with either see Biden go to India and start building some bridges there. Yeah, I agree I can't disagree. Jacob, how's your fundraising going for launch run four? Oh, thanks for asking. That's a great question.

You know, we're doing that public, 506C public fundraising thing. And so I did a bunch of webinars. And without doing a single in-person meeting, $51 million in requests came in just to a type form, basically a form online. And now we're going to be starting in the next month. I very good back from Japan, actually meeting with the big LPs in the world and I wanna make a trip to the Middle East

and just go all around the world and meet all the big fun. So thanks for asking. I think it's gonna change everything. Good for you. Good for you. I mean, you imagine $52 million in commitments before actually doing the actual tour.

That's awesome. Just out of the gate, and my last one was $44, and so I think this 506C, like I can be public about the fact that we're raising a fund, and so it's just absolutely amazing. Well congrats, and I have one question for you. Yes, go ahead. Can you be replaced with an AI? The world's greatest moderator. I mean, it's not going to make great jokes, not for now.

And you know what, I had an interesting point about management fees and these funds, just to circle back. Did you know, this is what I heard, that benchmark during that worst vintage, you know, after, I think, the great financial crisis, or maybe it was the dot-com, it was either of those, they took their management fees, because that fund was so, you know, challenged. They deployed the management fees because that fund was so challenged. They deployed the management fees into primary investing, or I'm sorry, into follow-on investing on their winners to regain the results.

Can you imagine in this market a VC who deployed capital in 2020-2021 saying, you know what, we've got these management fees, millions of dollars in the future to pay for managing these. Instead of taking that money, I'm going to put that into the companies for my launch fund three-chim off. I had a couple of opportunities and I was like, you know what, I'm going to take some of the management fees and invest in some of those existing companies to try to goose the returns for my LPs.

And so we're at 104% or 103% invested in the capital just by just taking a couple of hundred grand off of the management fees. And I'm like, well, this is a really interesting track of you. Like, why am I playing for the management fees? Where am I playing for the mouic? I'm paying for the mouic, right? I mean, you should be. Jason, by the way, it's not true that the AI can't tell jokes. Our friend, Billy tweeted how the AI told a joke in the style of Jerry Seinfeld, then he asked it's a tele joke and the style Dave Sierpell and it refused. So the AI can tell a joke if it wants to. It's racist. But no, only clean jokes. Oh, I see. It doesn't

work blue. I guess. I don't think every, I don't think Dave Chappelle has to be blue But it would not tell us about Wow, I mean we gotta get Sam He's an icon of plastic like he would be it Sam would be in the Are all in 52 well by the way actually he's got a shot there after our last episode In which we were raising concerns about the AI bias, they published a blog post saying that the day after if bias has occurred, it is a bug not a feature and they are trying to be even handed. So I'm glad they have announced that and that's their standard and we're going to hold

them to that standard, but I'm glad to see. Well, that has to be public about it. Like this. Yeah. Yeah. I mean, I read the blog post. It seemed reasonable. It's great they're addressing it. And I also think they're now doing embedded citation.

So somebody tweeted at me after we had the whole discussion about credit. And when they were doing facts, they're now saying, and they haven't been announcement about this yet. But they were saying, according to this source, the following, according to this source. So they're starting to source in the copy that's being written. So that's a big step. And then I was talking to Adam D'Angelo about Po, which is an amazing app. You should try it. I think it's the best one out there right now of all the chats. Po is an app based on the core data set. And I asked a question about the trip to Japan and the Seco and this

and that. And it was extraordinary how well done the answer was with bullets. And I asked the questions about the trip to Japan and Asako and this and that. And it was extraordinary how well done the answer was with bullets. And then I asked them online, Hey, what about citations back to the original core questions? And he said, yes, we're going to be adding that. So then I was thinking, wow, if you add to the core of corpus, and then they link back to your answer, that's awesome for me as a person who's answered hundreds of questions on coreora to build my reputation. So I think Quora is, for me, I think Quora could be the Google. I think Quora's got a better

data set. And if they play that right, I think they could be better than ChatGbD. And they said, you have to be... You're saying, Po is based on the Quora data set. Data set. Po, it will answer questions like the best answers on Quora. Is that what you're saying? Yeah. That's gonna be interesting. Basically, is using Quora as the primary data set. I'm sure it's using the rest of the web too and Wikipedia and everything. I think, I don't know why they're calling it Po. I think they should just do Quora, Chatbot or whatever. Yeah. But just try it. It's called Po. We download it. You can use it today. You don't know why I'm excited about that? Because you got a little tasty pooh. You got a little

slice? Yeah. I got a little slice? I got a little slice of Kora. Oh, good for you. Well, I mean, Kora was always like, are they ever going to make money? Or are they just going to build this incredible data set and do nothing with it, yeah? What did I say?

I said AI is going to be to basically sass what mobile was to web 1.0. You'll either get disruptor or you get turbocharged by it. It's going to be, I think Cora is the number one player in AI going for it. I know that sounds crazy, but the fact that, and I think Reddit also has this same potential. If Reddit had a chatbot,

because think about how many times people do a search and YouTube is the other one, where they say, what's the best sci-fi movie of the year or which directors make the best screenplays or whatever, and then they put the word Reddit at the end, or they put the word Cora at the end and then they put the word red at the end or they put the word core at the end or they put the word YouTube at the end to just narrow down the corpus of where to find the answer. I've worked with you.

I've known D'Angelo for 17 years now. Smart Cat. He was the CTO Facebook when I worked there. The single smartest and best. Single smartest person I worked with and And then separately, one of the most absolute, genuinely best human beings in the world. Can we get him out? Is he not a good public speaker or something?

Cause I never hear him talk. I like to get him out all in summit. Maybe Angel is just so superb on every dimension. We should get him on, actually, just, cause I didn't know he was working on AI. He has a lot of interesting thoughts about, you know, social networking platforms. And he's on the board of open AI.

Oh, okay, that's interesting. Oh, get him on the pod, or maybe it won't sum it. 2023, all right, everybody. He'll definitely make the anti-establishment list. Definitely anti-establishment, yeah. Okay, so for the Sultan of sneaking out, he left and the dictator. And what do you wanna be referred to now?

Passages, the peace pass, the peace maker. There you are. And the saxophists on the world's undisputed, greatest moderator on the number one podcast in the world for now until the AI replaces you. Yeah, I trained the AI to replace you, sax. Ukraine, UK, and UK and Biden, Biden, Biden. No, Nikki Haley, no, stop making Nikki Haley happen. Dan, the data set has been up. All right, everybody, see you next time. Love you guys. Love you besties, bye-bye.

We'll let your winners ride. Bring man David Sack. I'm going on, we're in. And it said we open source it to the fans. And they've just gone crazy with it. Love you, West. I squee a can of wine. I'm going all in. What, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, Oh man, my hamlet is actually a meaty ass place. We should all just get a room and just have one big hug or two because they're all just just like this like sexual tension but we just need to release that out.

What, you're the beef! What, you're the beer of beef! What? We need to get my cheese already. I'm going on, Leigh! I'm going on, Leigh! I'm going all the same.