All-In with Chamath, Jason, Sacks & Friedberg - E43: Innovative venture strategies, Zymergen's implosion, Square acquires Afterpay, future of fintech & more

Episode Date: August 6, 2021

Show Notes: 0:00 Big week for the besties: Friedberg's new raise, Sacks' new fund & more 16:30 Innovative venture strategies: internal mark ups, venture studios, deployment strategies 30:44 Zymergen's implosion: role of diligence, how to make deep tech sustainable, finding frauds 43:26 How personal risk impacts decision making on a grand scale, narratives and fundraising 59:12 Chamath & Jason share Theranos stories, Jason calling out frauds 1:07:36 Financial deplatforming, Square acquires Afterpay, Square's savvy move, fintech's future, Jack Dorsey's unique position of power 1:28:05 New Yung Spielburg banger: "Friedberg Index" 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: CNBC - Early Google exec got Larry Page’s backing to build a start-up factory focused on saving the planet https://www.cnbc.com/2021/07/30/david-friedbergs-alphabet-backed-production-board-raised-300-million.html Medium - Announcing Craft III: $1.1 Billion for SaaS and Marketplaces https://medium.com/craft-ventures/announcing-craft-iii-1-1-billion-for-saas-and-marketplaces-c3c34448db17 CNBC - Synthetic biology company Zymergen plunges 68% after saying product revenue will be ‘immaterial’ in 2022, removing CEO https://www.cnbc.com/2021/08/03/zymergen-zy-plunges-68percent-on-forecast-for-immaterial-revenue-in-2022.html Zymergen - Zymergen Provides Business Update https://www.globenewswire.com/news-release/2021/08/03/2274125/0/en/Zymergen-Provides-Business-Update.html Reuters - U.S. charges Nikola founder Trevor Milton with lying to investors https://www.reuters.com/business/autos-transportation/us-charges-nikola-founder-trevor-milton-with-lying-investors-2021-07-29 CNBC - Square to buy Australia’s Afterpay in $29 billion deal as ‘buy now, pay later’ trend takes off https://www.cnbc.com/2021/08/02/square-to-buy-australia-fintech-afterpay-amid-buy-now-pay-later-trend.html

He's optimizing the view. Now I'm optimizing for shade actually. Trying to get out of the. Oh, Christ, you look like a moron. I mean, this dipshit showed up. He showed up to my beach club yesterday. And it was basically like someone had taken a mummy

and then wrapped a mummy inside of a white sheet and then presented it in at this place. Oh, you'd be lathered in his like SPF 500. And so I let her one point, I said at one point, let's go for a walk. And this asshole had the nerve to grab his cell phone and a battery pack for the cell phone. I force him to leave the phone. He felt naked. Then I made him take off his shoes and socks.

And then I tried to get him to take a shirt off. We got almost all the way there. Yeah, that's that makes sense. Alright, everybody, here we go. Three, two, one. And we open source it to the pay-advance and it's just going to be easy with it. Love you guys, nice. Queen of the King of the King of the King of the King of the King of the King of the King. Hey everybody, welcome to everybody's favorite game show, guess who's not in Italy. With us today, David Sacks wearing sunglasses with the view of an ocean, clearly on a nautical vessel. And I am in an old apartment in the center of Florence.

And Chimoff is at his hideaway somewhere in the countryside. And Friedberg is in front of a abstract piece of art. Two people high on crystal meth, trying to break into a scar in San Francisco. I'm no longer a San Francisco resident. I'm proud and sad to say after 20 years of living the city, I have relocated still in a not to a non-descript location still in California, but you're in the Bay area. Enough said. So with us again, obviously, Raydman, the dictator, and back from a week off the queen of Kenwa, what, tell us, queen, you had a big week,

you had some nice ink come out, some press, about the production board raising some monster round, and you took the week off. Give us the feedback. What was it like taking a week off from the pod and now you're getting press and you're becoming a public figure? What's it been like for you the past week and tell everybody what went down with this new fund? You know, my strategy was to take a week off from the pod and then have the ratings go up and then I could quietly and nicely exit as a member of the cast, but unfortunately I've

been drawn, as Al Pacino said, just when I thought I was out, I am back in. So I missed you guys. I actually listened to the All In Pod for the first time ever. Last week, you guys did a great job. You've been complaining these other last 41 times without even listening to it. You know, I will say I listened to it while we're on it, but this was actually really interesting, because I've never actually lived in. What's big of you, you're actually listening while we're taping. We do it ourselves.

I hear the whole freaking thing in real life. So listening to it, I found it really entertaining. And I think I have a better appreciation. It's less about some of the points in fact that we make, which I've been pitching and complaining about the topics and where we go with the conversation and stuff, but it's just generally, just nice to hear everyone,

kind of shoot the shit. Anyway, good job. So you're saying you're a fan of the All in Pot? I might get a wet your beak mug from one of our our fan homes. I have one. I have to read it. I have to read it.

I use it. So, send me a whole gift basket from the kid who's paying for college based on our IP. That's all good. Good for you. No, so we announced our KBB funding last week too, which I have been running the production board for four years now, a little over four years.

It's been my primary vehicle where I've been primarily incubating new businesses and making some investments from the balance sheet. You know, we've raised several rounds of capital over the last few years. We've never talked about it publicly. We've never done press around it, but as you guys know, the primary reason for going public with it was really just to gain recruit interest in the work that we're doing. So we really want to see great people be made aware of the work we're doing at the production board and at each of our individual businesses.

So we could start to, you know, at least get folks knowledgeable and aware of us. So when we reach out and folks are interested in thinking about what else they might want to do with their careers and their lives, you know, we're hopefully there for them. So, you know, it was great. I mean, it's nice to kind of share what we're doing.

We also shared five of our businesses that we've incubated, several of which have been stealthed up until now, one of which, Jason, I think you've kind of referenced in the past our molecular beverage printing company, Cana, so that one's kind of starting to emerge a little bit more now after several years of R&D and work. So we're kind of making progress now.

And I'll hopefully have more to share over time in terms of what we're doing. But we're excited and it's great to have great investors. Yeah. It's a great piece in CNBC by Ari Levy. I guess you gave him, he's a great journalist by the way, like old school legit journalist. Yeah.

And I think, Pamela Podd, how did you pick Ari to be the vehicle for this to use a PR firm where you just decided I'm going to share it with this one person? We had a mutual person, his MPR who introduced us. I didn't want to go do a broad PR thing. So I was just kind of like, let's get, you know, I was going to do my, my medium post, which I wrote as like a blog post and that was the primary content. And then it was like, let's just find someone good who can kind of at least, you know,

push people to that content that can speak well to our business. And, you know, he was recommended. I've never met him before. A great guy. So, you know, we just wanted to kind of get least push people to that content that can speak well to our business. And he was recommended, I've never met him before, great guy. So, we just wanted to kind of get that one piece done. Anyway, he did a great job. He said, he, I think he's been on your show, right? What if you're, you're flinching. I think he's been on my show. He's been on this week and start ups, yeah.

And I see it when I used to go to CNBC, I would, you walk down at one market, used to go to that trim off too. And you walk down like a row of journalists. to go to that Chimoff too, and you walk down like a row of journalists, and as you go to get on set, I don't know if this time to you, Chimoff, one or two of the journals will intercept you and try to get a story. So he would always tell me, hey, I heard that Travis at Uber was there, so whatever. But great job on the Inc.

It's great to see you, you know, raise 300 million. There was a lot of references to Larry and Sergey and Google. Maybe you could tell us how much, who led the round, this $300 million round and what's Google's involvement? When I first started the production board, it was my, I had made personal investments with my own money and started some businesses with my own money.

And I had a series of dinners, conversations, Larry Page about like doing something together with Alphabet. I knew Larry from my Google days obviously and you know we ended up kind of after a bunch of conversations with folks at the level below kind of saying let's I didn't want to manage a fund and I didn't want to go work at Alphabet. So the idea was I would set up a holding company kind of a permanent company that like any business has a balance sheet with cash on it and can do stuff with that money. And Alphabet invested in the holding company. They put some cash in. This was four years ago. And they became a minority shareholder and had a board seat and I set up a board. And so that's the work. And then we've raised another round since then.

And then we just raised this brand we announced last week. And so our, you know, the round was, I think, I don't know if we announced, but it was kind of co-led by BlackRock. We had Morgan Stanley, Coke Industries, Bailey Gifford, Allen & Company, Fox Haven, Arrow Mark, just a bunch of really high quality long-term institutional investors. Alpha that put more money in. The Gates family office called Cascade has been an investor with us for a while. So they all put money in into the round. And you know, it's great because we can use that capital to build new businesses and support some of our existing businesses. So some of our businesses are really hard deep tech companies. We don't want

to have to go rush out and raise venture money or and we don't want to have an incentive to try and mark the asset up and you know, get a good mark on it. So really we can use some of our money now to support some of our businesses until they're ready to go commercial or until they're ready to raise outside capital if that makes sense for them, not always that makes sense. And so we have a lot of good to know. So you own and you own 100% of every business that comes out of here, then you find a management team as we discussed and then spin them out. Jamoff, what do you think of this venture studio approach, which has only really worked for Bill Gross from IDLAB and maybe John Borthwick

with beta works in New York. And I guess science may be worked as well with Dollar Shave Club. But here you have, I think Friedberg, a great entrepreneur as well doing this. What do you thoughts on this studio model going long in building companies in a studio system? Well, I think it means a lot of different things to different people. So I'm not sure, honestly, what Adventure Studio is, that's different in somebody else's view than what Freeberg is doing. But what I will say is,

the difference thing that he's doing, which I believe in, is you have to become extremely hyper-focused. I think that there was a moment where if you look at when IdealLab was really successful or when beta works was really successful, in the case of IDLAB's, they had a very specific prototypical web 1.0 business. Beta works had a very prototypical web 2.0 kind of social business. They all worked because these guys were experts in those things.

So I'm pretty bullish on what Friedberg's doing just because he's not trying to boil the ocean. He's being very specific around you know synthetic biology and I think that that is probably what got other people excited because then not only from Friedberg's execution capability which I really believe in but then now think about it if you're an investor. I don't want to put my money into something that all of a sudden looks like nine other things. Where all of a sudden it creates a lot of correlation that I didn't really know existed, especially when I'm investing hundreds of millions of dollars. That's a very big deal that a lot of investors have. And so when freeberg and very legitimately say, look, I'm explicitly focused

in this thing. And then he also said, and freeberg you may want to talk about this, and this is the only thing I'm going to focus on. It gives an investor a lot of confidence because it's like, here's a really smart guy who's done this before. He's going to stay in this swim line and do something really specific here, and now I can understand how it fits into the rest of my portfolio. So I think that there is a lot of value for investors in a bunch of different ways. So I don't know, I'm super excited. I appreciate that, but that's a lot. I mean, I think like one of the things that matter to me, Jason, and the way I kind of frame it, like a lot of people think, oh, venture studio, it's about how many things you

crank out. That's like why combinators model. For me, it's not about how many businesses you start. It's about absolute value creation. So you know, you have to do the things that you have the resourcing to do with the objective being to drive business value as a whole. So that means doing one thing, doing three things, doing five things. It's not about how many things, you know, whatever the right balance is. It's not about just cranking out businesses because each one of these things we have to

continue to be active and we need to continue to build. And when we start a business, we reserve a good chunk of the business as equity for the team that works on it. So it's not like we're 100% owners, right? We've got to get the right people. They've got to feel like an act like owners in that business with us. You wind up owning 50% or ballpark 40% what do you think? It actually varies quite a bit.

So without getting into too many details, I mean, when we start the business, we're the majority owner. And in many cases when we've brought in other investors, over time we get diluted down and become a minority owner. In many cases, when we've brought in other investors over time, we get diluted down to become a minority owner. So, 30% or something like that, like I think if you did the series A or something. But in many cases, we want to continuously fund some of these businesses because it may

not make sense to bring in outside investors. And we'll continue to be the majority owner. But we create an independent board. We make sure that the team feels like it's an independent business and we give them a lot of infrastructure and tooling, finance, HR, legal facilities, recruiting support, et cetera, and obviously templates for how to succeed

and playbooks and so on. So that's a lot of what I would call our platform value. Amazing. Another bestie housekeeping. Satsang. By the way, if it's access and investor and TPP. I don't know if you guys need that. I'm not necessarily wrong. So good job, Sacks. Good job, Sacks. Is that another unicorn for me?

Technically yes. Look at you. Well, in other news, Sacks, this is like the Victory Lap episode. This is like the victory lap episode. Sacks you announced you're closing $1.1 billion with a B in Crafts' third fund, and explicitly talking about focus to Chimaltz Point, explicit focus on marketplaces and SaaS. Maybe you could explain how long it took you to raise the $1.1 billion. I think the first fund was $300 million,

the second was $600 million, the second was 600 million. So you're basically doubling each time? Almost. The first one was 350 second fund was 510. This one is 1.12 billion. It's gonna be 612 million for venture, which is C Series A, Series B, and 510 for growth. And yeah, we are focused on SaaS and Marketplaces.

I kind of run the SaaS practice and my thesis is really the same as it was when I was doing Yammer, which is apply consumer growth tactics to enterprise software and make it go viral inside companies, sort of sell it bottom up through the average employee as opposed to top down through the CIO. And then the other GP in the fund, Jeff Flore, is a focus on marketplaces. He was the founder CEO of StubHub, which was one of the original e-commerce marketplaces

on the web. And so he leads a marketplace practice. And those are also, I would say along with staffs, marketplaces are the best kind of internet businesses to create. And so we've just decided to focus on those two areas and that's kind of enough for the world for us. And in related news, your project, Colin, which is a podcasting plus casual audio application

has been doing great in beta. And I'm proud to announce that we had a small allocation for our syndicate, the syndicate.com, which is my syndicate. And then the all in syndicate, which we created as a LARC, between those two syndicates, my syndicate had 900 requests to invest

over I think $7 million. We had a small $1 million allocation and we basically did a lottery so something like one in I don't know seven or six got in and then the all-in syndicate also filled up and then the all-in syndicate no carry no fees everybody gets a free ride thanks to David Sacks and that's our first all-in syndicate chipping away at my core business and eating my lunch. Thank you. And the all-in syndicate is going to be $250,000. So it's $250,000, $1,000 checks with no fee, no carry, and where the company is paying the administrative expense of that. We just want to let, you know, $250 of our listeners wet their beaks.

Yeah. So, and... is it open yet sex? Like can anyone download the app and use it yet? No, it's still in private beta. We're gonna open up soon You know, we'll certainly I was looking at it the other day. It's getting really tight I mean can I talk a little bit about it or do you not want to keep it? Yeah go for it. Yeah Well, I mean here's the here's the genius of it And I mean that's sincerely not just good to give you an allocation, but clubhouse, when you go to clubhouse, if you miss the great conversation,

it's gone. And clubhouse has really bad audio quality and the rooms or ech. And there's really, you know, there's clubs as a concept. But in call-in, everybody creates a show. Then the show is syndicated to an RSS feed like a podcast. So you can basically start your own podcast with no staff, no post-production.

You just talk and then it goes out to an RSS feed. So we're thinking David and I of doing like a post show after all in, like two days after, just to talk to the fans and do like a little private group thing. But it's kind of like a really nice overlap of podcasting. And yeah. Well, I was going to say it's basically long tail podcasting using social audio as the

gateway drug to long tail podcasting. Is the company worth four billion yet? Have we internally marked up the round four times? Like in Jason Harlow's, did we glove out? Let me get you some off in the conversation. What do you think of a venture firm making a seed investment at $100 million, then a billion, then at $4 billion for a product that is largely sideways? This is internal three bets and marking it up 10X and then 4X.

So 40X left over three rounds. What do we think of this? I think the best venture firms shouldn't give a shit about any company and I don't think that they really do. Because if they're very savvy, they should be doing exactly what Andrews and you've seen the articles about Tiger, you've seen all these other folks. The real question is maybe if you want, can you please explain what they're doing? And what they're doing is, to me, if you understand, the investing landscape makes a ton of sense,

which is technology used to be the small niche. And so, we used to only get, you know, when I started Social Capital, there was probably 25 to 30 billion dollars a year flowing into venture, just in 2011. Fast forward a decade, we have like 120 billion dollars a year going into tech, and it's going up like crazy. And if you're the best brands, you're going to get the overwhelming amount of interest from people

who want to get into the asset class as the asset class expands, right? So, if all of a sudden, you know, you decided to invest in private equity when private equity was going bonkers, you're not going to take as much of a shot on an emerging manager. You're going to want to take a shot on Blackstone or KKR, right? And that's what's allowed those folks, Carlisle, to scale AUM just unbelievably Blackstone, I think it's under management. Exactly. Half a trillion dollars now at Blackstone. Similarly, there are these indelible brands in venture. And when everybody realizes they need to be long tech, they jump in. Now, when they do

that, you have to understand who these people are. There are two things that matter. One, they are people like pension funds, and their hurdle rate, meaning, you know, what are they trying to do better than in terms of a rate of return, is in the low to mid-single digits. That's really important to know. 9% 10% even. Not even, not even. Not even. 5% 6%.

Okay. And then the second thing you need to know is that these guys have so much money that they would rather, when they spend an hour meeting with you, they'd rather give you a $50 million check than a $5 million check. A $5 million check just compounds their problems. So if you put these two things together, it makes a ton of sense for companies like Andrew Senn to now focus on the velocity of money. Raise a fund, put the money to work, raise a new fund in a very systematic way that everybody can understand and can predict.

So that end reason can tell their LPs on a calendar, guys, I'm going to be back to you in 18 months. Guys, I'm going to be back to you in a year and be able to scale the capital. And I think if you, if you look at it in that framework, it explains, and recent, it explains Excel, it explains Sequoia. And by the way, it's a brilliant strategy because these guys still make 2.5% on the money. They end up returning the market beta, meaning what the average market would do anyways plus a little bit of alpha, right? So they'll still do a little bit better than the market, which means they'll be able to raise money infinitely.

So if I'm using the public market or the venture market. So venture market, it does. It does. 20%. No, but that'll decay, right? So that'll decay down to the, to, to 10%, or 12%. But my point is, it's still better than the five or six percent of these pension funds and other folks need to earn. So today, the goal of every fund that's successful that has a brand, David's included, should be do good deals,

make sure you're in things that can work, and the thing that David has, which other folks know is David can help make things work when they're not necessarily obvious, but then pound the money in and then raise more money as fast as you can, because then it helps the investor, that's what they want, and they're happy to pay you,

and then for you, the GP, you start to make enormous fees and the whole cycle works. So for end-recent, I think that's the calculus. It's like, shit, if I can put 100 million in, that's 100 million less I have in my fund. Now I can go, I'm 100 million closer to raising the new fund. Okay. Now, the criticism has been, Friedberg, I'll go to you. It's bad hygiene for the same firm to mark up the same product three times. In this case, you know, what's in it?

Clubhouse. So is that a warning sign for you that it's a bubble or it's kind of the worst case I've heard is like marking up your own book, self-dealing, whatever. How do you look at that issue? Freeberg, and then I'll go to you sex. Well, if it were SpaceX, you would look like a genius. So, you know, I think we can criticize it until what's up or what's up. And Sequoia has done this many times where they've been the lead in multiple rounds in

the company and they have high conviction and the quality of a business and they don't want to bring other investors in. And when you have high conviction and you can continuously buy more the stock and buy more the company and be a bigger owner. And then it works out you look like a friggin genius and so I don't want to criticize the investing style of these guys. I mean time will tell if they made good bets or not as a whole. You can kind of make the case maybe that they're trying to be asset managers and drive assets under management up and gain more fees, but I think LPs are a little shrewder than that. I'll kind of take a smarter look at that. At the end of the day, the guys that are known for doing this like Sequoia and Founders Fund and others have had incredible returns by doing exactly this. So the strategy does work and you just have to do it

with the right businesses and that I think that will demonstrate the quality of your investing acumen. All right, Sacks, any further thoughts on that? The marking up your own book, is that something you plan on doing with this new fund and having the growth? And how would you look at, hey, Colin starts getting some traction.

Does that mean your growth fund is gonna go mark it up and take those shares? Or do you think that it's better hygiene to have the market price it? Well, I guess it just depends. I mean, the growth fund does give us the ability to double down at a later stage on our own early stage companies,

but you do have to be really sure when you do that because it certainly raises questions if you're wrong, right, that you wouldn't have with any other investment. So it just, it definitely raises the stakes. You have to be really certain, I guess. But you know, if Collins a big hit, do we go raise, you know, a growth round? Yeah. And now I think what we might do in that case because we incubated it is we'd let somebody

else lead the round and that we would participate So you have some third party setting the price Because we incubated the company and frankly that's what we did with the round that you just participated in is Craft participated, but we did not set the terms it was actually Goldcrest and Sequoia co-led the round with craft when When you incubate a company like that, let me ask another technical question because the audience last week or in the week before it really responded well to us talking about this as opposed to COVID and Delta variant, which we'll talk about at the end of the show. For those people, you can basically turn off the show at 50 minutes or 75 minutes when

we talk about the impact of the pandemic. But and I'm hoping you're thinking right now about who's not in Italy. I hope we'll get back to that again. When you incubate a company like that, who owns the original Founder Shares, Kraft, the organization, David Saxe, the individual came up with it? What's the inside baseball there? So it's sort of all the above. And we, meaning craft, have a deal with our LPs, that's called an LPA, Limited Partner Agreement.

And one of the things that was negotiated when I found a craft four years ago was the terms on which craft would incubate deals. And so, it's all predetermined what I get as a founder, what our funds get, what the OPs get, so there can be no argument about it later. And this is, I call it, well, we've actually done, now we have a few incubations in development.

You know, for me, it's really important to scratch that product itch. You know, I'm originally a product, and I love investing in helping companies, but occasionally about, I'd say, maybe once a year, I get a product idea that I think is worth developing. And so this gives us the ability to incubate it. So we did it a few years ago with a crypto company called Harbor. We ended up selling that company to Bitcoin, which just announced the largest acquisition of a crypto company Galaxy is acquiring it for something like 1.2 billion.

So anyway, so Harbor I think will work out once that deal closes and Collins the second one there's a couple of the things that are still You know, they're too early to talk about but But I think Colin will be the second one to launch. Shemoth has an LP and a lot of funds. What do you think when somebody comes to you and says, I want you in my LPA, my limited partner agreement, have the ability to incubate these companies? Is that a good trend, veteran? How do you think about it? I think it's great. I mean, I don't really push back on a single term in any LPA because I'm only doing it mostly to support people. And so whatever terms they want, they get from me and kind of just let them go and hope they get lucky.

I have a very different approach to these kinds of things because I'm not necessarily trying to compound my capital. I'm just there to enable folks and take 1% of the fund or sometimes a little bit more if I really have an asymmetric view on a specific thing that they're doing, but otherwise I just take 1% scientific and wish them the best and then try to support them. And that's all I'm trying to do. If I believe in how they're investing and the deals they've done, however they do it is fine with me. I want to go back to something which is, I actually think it's not a question of hygiene. It's really a question of governance because when you do these things

and you mark these companies up the real question, if a company stops working, is they tend to have too much money and then they tend to not have enough governance. The reason is because governance typically comes with board diversity and board diversity comes with more and different investors who have different puts and takes at an equipment point in time. That diversity is very helpful to keep everybody on the same page and to actually get a decent outcome when things aren't working as much. Now when things are working, obviously nobody cares.

Cause like you can just have Jim Kets on the board of WhatsApp with Yon and it's all kind of said and done. It's not much to the right. So as we're saying, when things are good, nobody complains, yeah. No, and this may be a good jumping off point for, we wanted to talk about Xymragin today.

Okay, so you want to forgive Xymragin which is just, look, I think there's all sorts of new models now with, with this sort of tech and the money going into tech, the venture capital exploding. There's all these innovative new models. And I think it's all for the good. A studio that I think is great is what Jack Abraham's done with the atomic, you know, they produced multiple unicorns out of there because Jack is just a phenomenal idea guy. He's like a 10x idea guy. So he then, as part of Atomic, comes up with the idea and then brings on an operating partner and that model works for them.

And then, he just partnered with Keith Rabboy on OpenStore and Keith decided to become the CEO and Keith is still a GP at Founders Fund. So, we're seeing like the blending of these models, you know, it used to be that you made the decision to become a VC and your career as a founder was just over, it was like this line that could never be crossed again. And now you're seeing the blurring of these lines. And look, I think it's good for everybody because frankly, when Keith or what I'm doing with Colin, we remind people that we're still founders and product people and not just semi-retired guys.

And frankly, it's good for what we do as investors. I mean, we saw it with Mike Spicer, who was a partner at Stutter Hill. He incubated, it started and was the original head of snowflake, which was a massive. And before that, this is his third. So, you know, he did peer storage, he did snowflake, I think he did lace works incredible. He's incredible. He's just incredible money.

And just just folks that don't know snowflake, you know, it's an enterprise software company, they make software. So he's a venture capitalist. He started software. So he's a venture capitalist. He started this company while working as a venture capitalist. They brought on a great CEO and some incredible guy later, Frank Flugman, who's a legend. And the company just went public last year, I think, or the year before, and they're worth $82 billion today. And so it really highlights it while this guy is still operating as a venture capitalist

and a GP, he's been able to generate incredible returns for his fund and build amazing businesses at the same time. I mean, Spicer is a perfect example because I have known him since like the early 2000s and at one point Spicer started this consumer company called Bix and I was like, we were like an investor, I was a small investor in Bix. And I think I had acquired by Yahoo. And it was always curious, because like Spicer was clearly the smartest one in the room.

And it's like, he was kind of grinding this consumer thing. And then he left Yahoo, went to Cedar Hill, and he basically said, you know what, fuck this, I'm going back to my roots. Because before that, he was a pretty traditional enterprise guy. And he just crushed it. It's kind of like Michael Jordan was finally like, ah, fuck baseball. I'm going back to basketball. And it's like Reed Hoffman and Daniel Bussary at Greylock, right? I mean, these guys are incredible operators, business builders,

and they continue to do that work while being partners in the venture. We have three directions we can go moving on. Zymorgin. Zymorgin is so interesting. I think we should do it. Okay. Let's do Zymargin, I agree. All right, so for people who don't know, Zymargin went public at $31 a share in April. Trade of size, $48 shortly after that. I had the CEO on my podcast, and I was confounded trying to understand the business. You had told me I had asked you for some questions, Frickberg, and you gave me some choice statements of what to ask. Which, can I say?

No, I don't think so. Okay, anyway, you gave me some choice questions. I didn't ask them exactly the way you said them. But here is the quote of what happened on Tuesday. As I imagine stated, the following. As I imagine recently became aware of issues with its commercial product pipeline that will impact the company's delivery timeline

and revenue projections. Accordingly, the company no longer expects product revenue in 2021 and expects product revenue to be immaterial in 2022. They also announced that the founding CEO, Josh Hoffman, who was on this week in startups to maybe a month ago, stepping down as CEO will be replaced and Zymridge and Stock then dropped 70% on the news. I don't know if this was a SPAC or not.

Softbank hyped them. It was a straight IPO in a Stoshrad 80% yesterday, 80% a day. After going public three months ago, yeah. So I think Freeberg a good way to start would be, what did they say they were gonna do, and then why has this happened? So, Zymergyn and a couple companies like them started around the same time, which is around 2014, 2013, 2012, that era, 2015 even. And the promise of these companies is truly to be, everyone wants to be this platform

for synthetic biology. And what that means is they can take cells. And in a smart way, edit the cells and get those cells to make things that humans need. And so you can kind of think about making materials like silk and leather and plastics. And you can think about making food, like egg proteins and milk proteins and so on. And you can think about making food, like egg proteins and milk proteins and so on.

And you can think about making industrial products, enzymes and things that might be used in laundry detergent and other applications. And so for years, we've gotten DNA sequencing cheaper. We now have DNA writing and editing cheaper. We've now got other tools to basically screen cell. So we have these, the set of tools where these synthetic biology platform companies popped up and said, you know, we're going to put all these tools together and build a platform for editing cells and doing a better job of making things. And we're going to get into all these markets. And Zymogen, when they first started, were like several other companies like them, a services business. So they would go to big partners like DuPont and say, hey, let us make a new

enzyme for you, pay us $25 million up front, and then we'll get a royalty on the backend when that product eventually goes to market. And they did that for years. They went after insecticidal products, they went after plastics and materials and all sorts of stuff. And as is the case with a lot of deep tech, it turns out it's really friggin hard. You know, these tools might be there, but like we saw with the clean tech era where everyone thought they could make oil from sugar cane 20 years ago using a same sort of approach to get the unit economics, meaning can you make the product cheap enough, it's really, really hard.

That means you've got to get these cells to be just perfect, and you've got to get the systems to be perfect. At the end of the day, they went through a lot of customers at Zymogen that paid them tens of millions of dollars, and Zymogen didn't have anything at the end of the day, they went through a lot of customers at Zymargin that paid them tens of millions of dollars. Zymargin didn't have anything at the end of the projects to say, here's something that works that you guys are willing to pay for that you're going to go take to market because it really wasn't that compelling. The unit economics weren't good enough and it didn't really have big breakthroughs for

any big industry. Zymargin, like other companies in the space, pivoted and said, you know what, we're going to now be a products company. We're going to make our own products instead of just being a services company. And as they started to get into that, they decided that their first big product would be this kind of, you know, plastic for cell phones or what have you, protective film. And in the meantime, what happened is it takes so much money to do all this R&D to run all these labs, to have all these robotic arms that they have that are moving test tubes around hundreds of people building and running these labs.

And so they've had to raise money. And in order to raise money, as you guys know, you have to kind of hype the story. You have to say, look, we're going to change the world. We're reinventing everything. We're using synthetic biology to rebuild everything. Yadda, Yadda. And the story resonates with me because I truly do believe that the potential is there. But the timing and the sequencing of these things is hard.

As is the case with a lot of deep tech companies, when you get too far ahead of the curve, and you start saying, I'm going to do X, Y, and Z, but you can really only do A, B, and C today. You raise money, saying, I'm worth billions of dollars, you raise hundreds of millions of dollars, and the hype has to keep stepping up. And they eventually got into the trap that a lot of companies got into, which is taking money from Softbank. And Softbank said, here's $ a lot of companies got into, which is taking money from SoftBank. And SoftBank said, here's $400 million at a $3 billion valuation a few years ago.

And they said, great, let's run at it. Let's be a products company. And they burnt through a lot of that money, and suddenly they didn't have any products to show because DeepTech is hard. It took a lot longer than anyone thought. And what will, we better try and craft a narrative and get public.

And so they did that. They got public. And a lot did that, they got public. And, you know, a lot of what they had been telling people was coming, what's coming, it's gonna be here soon, didn't really work. So they had to pivot the business, they had to become a products company, they kept telling folks they were gonna be X, Y, and Z

months away, and they were gonna be able to hit these targets on the product. And it turns out it was always a little bit further away, a little bit further away, and then boom, they have a big board review recently, and they look at the product pipeline, and they look at where they are, and they're like, oh, this really isn't gonna work,

and the whole thing, you know, falls apart, because everyone was banking on this massive return. And everyone missed the story, which is that they'd been doing this for many years, and had to eventually abandon and pivot away from their business, because no one was willing to pay them for it, so truly, they never found product market fit in their first them forward. So truly, they never found product market fit

in their first generation of their business, and they never found product market fit in the second generation of the business. And it's really worth taking a watchful eye based on this learning, which is just a fundamental basic premise for starting a company. Do you have product market fit,

and can you make money from your product? And if you can't answer those two things, there isn't a business. And then the third thing is how valuable of the company is a product? And if you can't answer those two things, there isn't a business. And then the third thing is how valuable the company is a function of how much you can grow. And so, you know, they really hadn't even gotten past phase one, and everyone kind of wanted to believe the hype. So it's a bit disappointing to see, but it's really going to impact the industry broadly, because now people are going to say a lot of synthetic biology companies are smoking mirrors,

and they're really not there yet, so a lot of folks in the industry are really concerned right now. So to dovetail this with the previous discussion, SACs, funding your own company, over funding of companies, we talked about, hey, if it goes well, like WhatsApp did, well, you're a genius. But if it doesn't go well and you get ahead of your skills, you don't have product market fit and you've raised a bunch of money,

then somebody becomes the bag holder. No, Jason, it's even bigger than that. It's not just that it happened just in the private markets. We then you had JP Morgan and Goldman Sachs take them public and then they raised another half a billion dollars in the public markets and then they shot the bet. Right. We see the same thing. This is the same week that Nikola's founder, who went out by SPAC and was going to compete with Tesla and Ford. There, he's now under indictment

for lying and selling shares also known as security fraud. Probably going to go to jail. I had him on the podcast. That was underwhelming. So, Saks, when we look at these, which is it? Should we, on a hygiene basis, be throttling these companies and have milestone-based financing, or is this the sign of a top in the market that people are able to go public, people are being given large amounts of money by SoftBank, and these things probably people should pump the brakes. Yeah, look, SoftBank is engaged in a style of investing that we would never engage in. It's absolutely antithetical to the way that we invest, right?

They're making $500 million seed investments in massively over value companies. We are, one of the reasons why we like SaaS and marketplace set craft is they're very milestone-based. I mean, if we invest before you have a functional product, it's going to be at a seed valuation, like a 10-cap, $10 million valuation, not in the billions, like Ximrogen. In order to do a Series A, by and large, we need to see some revenue. If we're going to do a growth round, we need to see more revenue and more customers.

So, you show incremental progress. We're engaged in milestone based investing where the amount of money you raise and the valuation, you're able to get scales with the amount of proof that you have delivered to investors about the company. And the crazy thing about these spectacular implosions, and they're usually around deep tech, is because these entrepreneurs can tell a story, and people just seem to suspend belief and don't demand any proof for years and years. So it was Theranos, it was Nikola and Nouds Imogen.

And I think by the way, deep tech is, it's not that we should dismiss technically difficult problems. We should engage and fund and build great businesses that are technically difficult. How much are we fund for how many months? Or quarters? Yeah, but what is the best practice here? Well, what's important is, what is the representation that's being made?

And I think there's only one hype man on planet earth that is good enough to pull this off And actually deliver the goods at the end of the day. It's probably Elon like because you know He funded these businesses that were deep tech businesses Tesla and SpaceX for many many years He was able to get investors excited. He funded them himself He funded himself for but remember most of the capital I mean he put in some capital but the vast majority billion No, no, Tesla. He put in 50 million and went bankrupt he went bankrupt he was living off a 200,000 dollar loan from a billionaire friend of ours.

Yeah, yeah, no, no, sorry, beep that part out. You're not allowed to say sorry sorry sorry. Sorry, sorry, sorry. Elon only self-funded the first couple hundred million in these companies. He delivered revenue very early on. You remember at Tesla he first developed the sports car, the roadster, and that was real money. 150,000 dollars.

He sold a hundred in advance, not dissimilar to Virgin Galactic's playbook. Right. And maybe that's an important lesson, right? Like in deep tech, you can't just say I'm going from zero to one with billions of dollars over decades, you know That's a government funded program or you can if it's your own and that's what say that's what brands and did I bade those when I showed up Richard had spent 1.1 or 1.2 billion of his own money and I thought I mean at some point It's that's that's getting the game. I mean bade those has been funding Blue Origin for 20 years, right? I think they take

Neckar and mosquito Island. If he if that doesn't work out, I mean, there was also quibi. It's another story. Yeah, quibi didn't even involve deep tech. It didn't require any scientific breakthrough. It just required some marketing proof that people were interested in that format. And they just just basically cats and burgl along with Meg Whitman, who was kind of a weird choice to be a co-founder, because she's more of like the late stage CEO

you bring on to take the company public once it's already working. She's not really like a founder person. So that's not a innovator. No, she's not. Yeah, exactly. But Katzenberg is though, right? Katzenberg's obviously very creative. He knows how to handle it.

He knows how to handle it. He knows how to handle it. So they came up with this idea to build a studio. They put a billion dollars into creating short, 10 minute videos. The problem was there was no proof that the market was wanted that format. They should have spent five or 10 million proving that the format made sense and then spent a billion dollars if it worked. And, you know, I just, I don't understand why founders or really investors kind of put up with these types of stories. Look, we work same thing.

There was not a shred of evidence that there was an economically viable model there and yet billions and billions of dollars went into that company before the buy-and-go. Well, it actually, and fairness. I disagree on that one too much because like we were a few years, was economic viable? It just wasn't a software business. They had great growth margins. It just wasn't scalable like software, exactly. There was no leverage in the model. It was just purely like go least something for X dollars and then sub-let it for X plus Y, you know, X plus Y dollars and it worked just, like, how do you scale that? And then they got ahead of their skis and did all sorts of crazy stuff

to get the tech valuation. Oh, hold on a second, but it's not like you can just go to the store and buy it off the shelf. Like, there's a tech valuation thing you can buy. Other people had to believe it as well. And those other people were also pretty credible smart people. Were they the later stage people?

Do you read the WeWork book? The later stage ones, I think we're like, we're like evading the thing that we're not saying, which is that as much as we all want to believe that we're all doing incredibly, incredibly diligent work, there are a lot of examples where belief trumps logic and even the smartest people just look past the obvious. And we just talked about four pretty obvious examples. In no world,

should a credible tech investor not be able to do a simple valuation or see a business model and brazenly believe a real estate business is a tech business. At the same time, there should be no world where, you know, your pitch something that is just so incredibly grandiose from a technical perspective and the reason you invest is actually because you don't understand it. Because if you did, you'd be more critical. That's fucking insane. Well, this is the thing.

But people are just spending these examples. These examples are usually sparing. Exactly that. Yes, this is the thing. But the people are just spending these examples. Exactly that. Yes, they're suspending display. I'm sorry. Greed. And they're not doing the basic tenants of investing, which is milestones, talking to the customer. These are blocking and tackling. I think it's more of a reason. It's greed. There's fraud to. It's criminal. It's It's fraud. Let's be honest, this fraud. Some of it's fraud. So read the quote, read the quote from the US attorney of Manhattan who said Milton with respect to Nicola lied about nearly every aspect of the business. People like that need

to go to jail, okay? Jail. Big time. Jail. Big time. The startup world, the investing world only works if investors can trust the information and the financial statements are being given by operators because we have to make decisions quickly. And if they give us bogus numbers, how are we supposed to make educated decisions? Well, people don't want to do diligence, sacks. People don't want to do diligence. No, we look at metrics. We always look at metrics. We can do the metrics in one day. Turn. We look at ARR, we look at net revenue retention,

we look at churn, we look at CAC, and we look at your financials. We can do it in one day, okay? It's not an invasive process. We can decide very, very quickly because we know what numbers we're looking for and how to read the statements we're given. All right, so, but question for you.

When the founders say I have a competitive process, we don't want to do all that. Has that been happening in today's crazy market? Where people say the crazy of the station and we can't do diligence, we don't have time for this. Are you in? Yeah, yeah, yeah, yeah, yeah, yeah. Have that happened to you?

Has that happened to you in the last six months? In a sense, but we say to them, listen, here's what we need, and if you give us these numbers today, we can make a decision within 24 hours. So, and there's no reason we can't, and by the way, they have those numbers, and if they say they don't have those numbers, they're too incompetent to be funded, because these are all the core SaaS metrics

that you should have to be tracking your business. So we would never make an investment without seeing the SaaS metrics for SaaS business. Yeah, let me just step in for a second because I think there's two camps. One is businesses, companies that operate a business. And what you're talking about makes it makes a lot of sense. You could have looked at the business metrics

of we work and made an assessment of the quality of that business. Or Nikola. Well, on the other hand, on the other hand, you have companies, I'm saying not there, and also not Nikola, because those are not businesses yet. Those are still in technology development. They're deep tech.

So what happens is the founder, the CEO, the management team, they put together their own representation of the metrics that they believe should matter. And then they try and show how those metrics translate into value over time. So there's no revenue, there's no customers, there's no profits. What they're saying is we can, in the case of Zimergen, we've got X number of experiments we can run per day. And as a result, those experiments should translate into Y discoveries per year. And those discoveries should translate into Z dollars of revenue per year. And that's where the pyramid gets built.

And the same was true of Nikola, the same was true of a lot of these companies where they say, we can do X. Therefore we're worth Y. And it's that sort of narrative that investors then say, my God, the story is so compelling. If you're right, I wanna believe it. I wanna put the money in and I want this thing to work and therefore I'll fund this thing. And I think, and I think that's what we've seen continuously.

It started with the clean tech industry and now we're seeing it increasingly with all these other companies. Varena, that's the gleepe. And in a lot of these cases, by the way, I will also say, it's easy to do that, but it shouldn't be a representation that the entire set of opportunities

is a false narrative. Absolutely. There are many great businesses in biotech that actually do deliver the goods, and they turn into incredible companies. There's a synthetic biology competitor, a disimergen, who I spent a bunch of time with.

I'm not gonna say the name of the company. And they, and I asked them what gross revenue is. Simple question. What's your gross margin? What's your revenue? What are your cogs? What's gross margin? And I got an asterisk laden answer.

What does it mean? Asterisk laden answer. It's kind of like adjusted EBITDA, adjusted for what? Speak English. That's when you got to tell them speak fucking English. It's kind of like adjusted EBITDA, adjusted for what? Speak English. That's when you gotta tell them, speak fucking English. This is like when I would come home, my dad say, where's your report card? I say, you know, that's interesting.

My report card? Yeah, I don't have it. So where is it? I passed. And then I, you know, again, it's still shocking to see the number of people that will still do these deals. And look, maybe it all works out in the end, but I tend to think like if you can't present things simply

and you can't explain things simply, that's on you. However, if then you still do that and you still have good intentions, maybe you don't, but then investors told the line, the problem is there's this momentum thing that happens among investors, as Friedberg said, where the FOMO kicks in, and some of the smartest people

become some of the dumbest fucking people. No, they are suspending disbelief, like you would not believe in the industry, right? Well, because it's not their money. I mean, look, at the end of the day, why does it happen? Meaning, how can a zymrogen IPO happen like this? Nikola like meaning if you look under the hood in the S1 I was trying to find it in the S1. Was there somebody that actually did like some due diligence into highline

Clearly not was there was there a synthetic chemist or a synthetic biologist that basically helped clearly not Did everybody say that that was okay? Clearly yes. You know? Did I don't know? Anybody get under the hood of Nicola and actually like look at the engine, make sure the thing were, I don't know. By the way, people did. They're just where enough people that didn't that they were able to get a financing done, right? And I think that's the important point is there's enough people to walk away. In the private market, I'm talking about two public market examples. You're not allowed to have sex equestrian diligence

when you're going through an IPO. Yeah. So how it works? By the way, like, do you guys know the difference between humans and animals? There's one, there's one distinguishing characteristic that I think making toys, making narratives, narratives. It's narratives, stories,

yeah, it's all comes down to narratives. Like there are dolphins that can communicate with one another. There are monkeys that sit in a tree and they can warn each other about approaching predators, meaning that there are other species that can communicate. What humans can do, that no other species can do is create a narrative, to create an ethereal belief

in something that does not exist and get others to believe in that story. Religion, democracy, the financial institutions, the monetary system, a business like this, they're all the same. It's all the same. High-aligning. High-aligning, Nicolas. Exactly. And I think in all these cases, by the way, this is the cliff notes version of sapiens everybody. Yes, yes. Yes, yes. That's it. That's the cliff notes version of sapiens.

I have a funny Theranos story if you guys want to hear it. Let me just finish this one point. Like, there's a fundamental premise which is humans want to believe. And so when you have a Barnum-type person show up, when you have a, you know, a compelling narrative and a compelling deliverer of that narrative, whether it's a religious leader or a presidential or a government leader or a business leader, and you want to see what they're selling come to reality, you want to write a check and you want to put your time or your money into seeing that thing come reality.

No, no. I fundamentally look at you're, you're missing a key point. It's not their money, so stop saying that. Go ahead. They would not put their children's fucking education account into these companies. They're putting all their people's money. They're putting other people's money.

This is the key thing. Not enough skin in the game. Please put their time into these companies for the same reason. People join, we work. It is not their money. People trade off money and time all the time. My point is people will take their time.

They're giving up the opportunity cost of working somewhere else to go work at these companies. No, David, I honestly, I really fucking disagree with you here. The reason why somebody goes and works at this company because they believe there's positive signaling from a soft bank. These people are smart, they think, this money must mean it's real. They think I'm now going to commit my reputation and my time to get options because obviously these folks must have done their work. I'm not making the mistake and that's the lie because those folks are not doing the work. You're both making sense. There's a group of people. There's a group

of people placing bats who are placing bats of other people's money. It's hard to do it with our diligence. I agree. You would do different diligence. Let's be honest. The Ximrogen IPO, the traditional IPO, would have been entirely different if they had to write. If the underwriters were at risk for their own net worth, it would be. If their stock was locked up of the management teams for five years or ten years I do agree with the point you're making for okay, sex go sex go Sacks from a boat go. Yeah, I'm not I'm not disagreeing with Jamal, but the The point the point that resonates with me that freeberg said is actually the book sapiens really did

Impact my thinking as a VC Which is you know you've all heard RRI makes this point that it's narratives that kind of define, you know, humans, and that's what binds us together in societies. And frankly, the vast majority of narratives throughout human history have just been wrong, but they still worked to, good stories, binding people together. And I kind of, and I kind of applied that to VC, which is the VC process revolves around a pitch. It's a narrative session where the entrepreneur goes up there, yeah, and presents a narrative. And then everyone debates the narrative and decides where they buy into it.

And, you know, after reading sapiens, I'm like, this whole process, like, is stupid. How do I get out of a narrative driven investing philosophy? And that's where I'm back to, look, I understand SaaS, I know what the metrics are supposed to be. Also listen to the pitch, I want to hear it, but to show me the numbers first, and at least I can get to a decision that's somewhat grounded in reality, because I think most of what the VC process does

is just measure a founder's ability to tell narratives. And that may be correlated with their ability to do marketing, but it's not correlated with whether their idea is finally correct or not It's fine in the seed stage is fine in the seed stage. I think yeah, I think there will be the least amount of fraud when you either have Irrefuutable metrics or The investor has to invest their own money Yeah, that's the gold standard.

Everything else is just, you know, catch us, catch can, and you're just going to have a bunch of trash. Yeah. Here's how I'm handled at the early stage, SACS, you, who you get to meet my companies. I have told them to craft their narratives around their traction now, because I know that all this performative stuff is nonsense. So when you meet those companies, they do a three minute pitch. It's the majority of it is, here's the product, here's the traction. And I accept people based on traction, and then I give them more money as the traction goes up.

And we bet four or five times on the same company based on metrics. And I tell them all, you're coming to the accelerator, here's a hundred K. If you want more money from us, we'll keep giving you money if you can grow 10% or more per month on real metrics, period. And we will keep giving you money if you can grow 10% or more per month on real metrics, period. And we will keep giving you money forever.

Right. And I like these launch demo sessions that you do with us because now you force them to base their presentation around a chart. So at least I can see some metrics. And the other thing we do similar to you is I always start with the product demo. Our motto is show me the product, not a PowerPoint, because the same PowerPoint can describe 10 or a hundred different products. It can describe a product that might be great, it can describe a product that sucks. Totally. So show me the product and at least I'm grounded in what you're doing, and I'm not just listening

to some story. By the way, I go back to this. I still think that funding narratives makes a ton of sense in the early sage seed. Yeah. I rip I rip in 50k to 5 million dollar checks all the time. I could care less if it sounds reasonable. I take a punter at it Right, but the minute that I'm writing a hundred or two hundred or five hundred million dollar check I pay Fucking attention. Yes, because it's my money. It's my money and I go back to this when it's not their money You're gonna see this thing riddled with fraud. You're gonna see cases like this stuff Constantly and the person that pays the price where I do agree with freeberg

Is the employee because they mistakenly think that these folks must know what they're doing But the reality is just that it's somebody else's money. They don't really care. They're just doing a job They want to get paid themselves and so this is how these things are You guys look let me just give you some specifics on the ZimerGen scenario. So they're gonna go public, right? Leading up to their IPO, the stocks at 31 bucks on the IPO. So if you're an employee and you have stock options

in ZimerGen, you have the option to exercise your stock options anytime, which means you buy the stock at your strike price and then you can sell the stock later when the IPO's over. So a lot of employees exercise their stock options, meaning they put their own money up to buy the stock at 10, five bucks, four bucks, whatever it is. And they actually owe taxes on the difference

between their exercise price and the fair market value at the time that they exercised. So if the stock goes public at 30 bucks that they exercised. So if the stock goes public at 30 bucks and they exercise, they got to pay taxes as if the stock was at 30 bucks. And then they end up in the situation where they can't actually get liquid. And so there was a lot of employees that got really screwed on this transaction when Zymerge and went public, because they thought the company was going to be worth $10, $20, $30, $40, $50, and now the stocks are $8 bucks. They're going to actually owe money to the IRS and they paid for their stock auction.

It's a brutal scenario when it plays out for employees, and I just feel really bad for a lot of really great smart people that work there that take a massive hit on this thing. I hired two more researchers on my team just to do diligence at the syndicate. And I would say between 20 and 30% of deals that look great when we get under the covers and look at the diligence. We look at the cap table, we look at the revenue, we look at the accounting,

we ask them who's doing their accounting, we ask them for bank statements, we ask them for incorporation docs, we asked them for IP assignments. This is like the basic blocking tackling. 20 to 30% do not pass diligence. And we find stuff that is crazy. I had one founder give themselves a loan and then we didn't know about it and then we find out about it later.

They did a loan and the company owes them hundreds of thousands of dollars, had another one where they were presented, their revenue is reoccurring, and it was a cruel based, it wasn't a cruel based county, it was a cash based accounting. And I'm like, what is going on here? You're basically lying, and you're misrepresenting your company.

Don't do that, it's called Securities Fraud. When you make a representation, don't ever bend it or exaggerate it. Just tell the truth. Period. What's the Theranos story? Chimoff, I need the Theranos story and then I'll give you a follow-up story.

The Theranos story, so I had a couple, I had a very famous investor telling me this is like 2015, 2016. And I said, guys, you know, we were just talking. I said, what do you like? What do you like? Like, you know, we all kind of talk like that. At some point, whenever we interact, you know, and he said, this company Theranos, you have, maybe it was 2014. Anyways, 2015. Theranos, Theranos, Theranos. and I said, are you an investor? And he said, no, but I wish I was. It's incredible. And I tried to get an introduction. I thought, okay, this is, this is going to be really interesting. I couldn't get an introduction. But then I find out who the board is, and instantly

I get turned off. So in my mind, I had a very negative impression because the board was literally not all 90 year olds, and I thought, what do 90 year olds know about blood testing and basically building a tricorder? And at that time, I think I told this story before, but I had burned about maybe 50, 75 million bucks on six different startups trying to do this, like, you know, in situ, kind of like, you know, finger prick, blood testing, blah, blah, blah. So I was really fascinated with this space. A year and a half later, a guy that I worked with at Facebook,

a very senior guy says to me, I'm thinking, and I was trying to recruit him to come work at one of my companies at CEO. I'm thinking, and I was trying to recruit him to come work at one of my companies as CEO I'm thinking of going to Theranos and I said just go to the interview and tell me what happens Before I you know try to convince you to not go He goes into the to the interview to be CEO of this fucking company They don't let him pass perception. They interview him in a makeshift room outside of the meeting

and he said, well, can I go inside and when do we have a follow-up interview? I'd like to meet some of the team. I want to see what it is. And they said, I don't know, we're good. Here's your offer letter. Do you want to join? Well, can I see the device? Can I try it? I don't know. No, we're good. Here's your offer letter. Do you want to join? Well, can I see the device?

Can I try it? I don't know. No, we're good. Let's go. And I sit to this guy, I said, how can you fucking join this company? I mean, it's not like you're coming in as a good junior flunky.

You know, you're coming in as the second or a third most important person in this business. You haven't been passed reception. You don't even know what's passed reception. You don't even know what your office will look like. You don't even know if you like the office furniture at that basic level. Think about everything else that comes after that and then, you know, what happened happened.

So what if it's a disaster? William Perry, former head of cyberdivance, Henry Kissinger. We did, it was like... It was a bunch of grandpa-bought types. That's how you knew it was a red flag. If you got one of red flag if you got one Red, those guys you got one guy like Kissinger on your board. It's okay if they're all like that. It's a problem

Problem huge right I go on CNBC. I just had John Kerry Roo from the Wall Street Journal who broke the sting wide open on my podcast and I start getting all these inside tips about podcast and I start getting all these inside tips about Theranos and one of them was that Elizabeth Holmes and Balwani who was the COO were in a relationship together They lived at the same address all this nonsense and I check with Carrie Rue and I'm like, hey, is this true? And he's like, yeah, that's true. Yeah, I was like wanting to report. I was like, I'm just chasing it down Whatever it'll be in the next story. So I go on CBC and I was like listen when their smoke does fire if they had the device my game theory is if you have the device you show it if you don't have the good You don't show it period end to story. I think my gut tells me this is a total fraud it'll be zero

And they're like oh, and I was like yeah, and you know when the COO and the CEO or in a relationship That's bad and they're like what and they didn't know this. And they're like, are you sure? And I'm like, yeah, that's what people are telling me. I don't know if it's true or not. I don't know, first day of knowledge, but that's what I think is going on. So this holding blows up. Callacan says this, but bublossi and bc,

that night I got invited to Beeps House in the Valley for movie night. We've all been to that movie. Oh, yeah, yeah, yeah, yeah, yeah. I walk in, there's Zuck, there's this famous person, there's this Googler, bad person. It's, you know, it's 50 people and the celebrities who are in the blockbuster movie are there.

I think it was the movie arrival, but I'm not gonna make any, I don't wanna give away whose house it was. I go to this secret movie night, I walk in, I get greeted, and I kid you not 15 feet in front of me, looking directly at me, is Elizabeth Holmes. And I get with like 10 feet or an, she just looks at me, snarls, and walks away. It's like the most uncomfortable moment of my life. Clearly a giant scam and fraud. And she's gonna go to jail too, by the way.

She's going on trial. This month, August, I believe, she'll be on trial. It's taking way too long. And I hope she goes. Yeah, I mean, the justice system's a little bit screwed. Okay, we got a rap bubble. I got a story. You have a pretty good track record

of calling out these frauds. I think it's a service to the community. Yeah, I agree. You're one of the few who actually does it. You got any other budding frauds? I think it's a service to the community. Yeah, I agree. You're one of the few who actually does it. You got any other budding frauds? Well, Ripo, you know. You called out Ripo, right? It's not go easy on the Ripo.

It's just some people who are friends with Ripo. Well, I think we're back in off. You're back it off? I'm not backing off. I just don't want to lose a member of our little quartet here. But I will say that my fraud of the moment, the one that's making my spidey sense go crazy, is tether, USDT.

These guys are, I mean, this feels like it is going to be a C billion, okay, this is the crypto thing. The stable coin, there's a crypto stable coin. The idea is they said it's $1 in US currency, $1 per tether, always. And then over time we find out, maybe they don't have a dollar in their bank account for each one. The New York Attorney General finds them $18 million as you can't work with anybody in New York.

They say, we're not a fraud. And I'm like, well, what about the attorney general who said you were a fucking fraud? And they're like, yeah, yeah, no, no, that was a misunderstanding. Yadda Yadda, I'm like, well, what about the attorney general who said you were a fucking fraud? And they're like, yeah, yeah, no, no, that was a misunderstanding. Yeah, yeah, I'm like, there's no misunderstanding. You know, we should do. You know, we should do. We should get all the fans, the all-in pod, we're going to declare a certain time and date. And we encourage everyone who's in tether to pull out a tether to stress the system and see what I'm doing.

Yeah, let's stress test. Well, the problem is you don't actually own your tether. Is that the other scam. It's like eight or nine of these offshore, unregulated crypto exchanges. Not the ones in the United States that are highly regulated, like Coinbase. This is offshore and there are white,

what I've been told is you can create an exchange yourself with white label software and pop up your own. Jacob, you're like a, you're like a crook. It's a crook. I mean, like you just just got sniff this shit up. I don't think I have to in my life. When I find this out, I like it. I love it.

It's like one of my favorite bronze brawler. You're throwing the streets looking for a crackling. I mean, I can't. I love a fight. I love a good fight. He's got nothing going on right now. Yeah. There's some other people who want to call out.

There's some people who want to call out. So let's move on to it. Oh, Scott Galloway. Dip Shit. Oh, Scott Galaway, dipshit. Oh, no, no, no, for he's small potatoes, but. He's a small potato irrelevant. Doesn't look like Durston held the third on his, he does, he does on a yacht. Yeah. All right, so Jason's in Florence, Chamat, Chamat is at his estate.

I'll tell you where I am. Actually, Jake, you want to appreciate this. I'm on a boat outside Elba Which is the Elba he's a little there. It's where Napoleon was in prison. I'll actually I'll show you the the prison where he was Where he was kept? I think you can see it me if I get to the right spot You know what we put the nickel a founder in there and we'll put let's put it there same place Can you see the, the,

Just see your fucking ugly face. And your beautiful yacht. Ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha Of course, I'm staying in an Airbnb, it's costing me 350 euros a night for four bedrooms. I feel pretty good myself, I'm the center of Florence. I think it's you, you're spending about the same amount on your boat, right? 354 euros a night, per room? Yeah, I got the Airbnb deal. Talk to us about after paid sex, tell us. Okay, so well, first, I mean,

if we're gonna call somebody, I'll first I wanna call out PayPal, okay, what's going on there? I actually wrote a blog post about it called the no buy list. Basically PayPal is creating the equivalent of a no fly list with respect to their services. Well, for anybody who they put this they deem as deplorable or undesirable. Basically they're working with the ADL, the anti-deformation league and the Southern poverty law center, SPLC to create lists of people and groups who they are going to ban their accounts. Now,

let me, I got to say this, the ADL and the SPLC are storied institutions that did great work combating both anti-Semitism and racism, but they are now under new management and new leadership, and they have greatly expanded their emissions. The ADL was originally about stopping anti-Semitism. Now it's about basically opposing extremism or white supremacy in any of the places they find it. For example, they've taken positions on US Supreme Court nominations.

They've gone very, very far afield of their original mission. Yes, the SPLC has gotten sued a number of times for putting people on these lists. They put Sam Harris at some point on the list. They put another human rights person on this. Anybody who challenges any or has any gas on their podcast that the Southern part of the Los Angeles doesn't like.

They basically blacklist them. Right, right. And the list have become right right and the list become very expansive they become very expansive so so here here's the problem is you now have look it before this was just some ivory tower you know uh non-501 type thing where they would basically it was hyperbolic rhetoric they would basically call these people and groups names but now paypal is operationalizing these ban lists. They're turning it into a no-by list. They're saying we're going to cut off your account. That's very dangerous because we've already seen the precedent with speech online that we

had a bunch of social media companies banning people from participating in online speech. What PayPal is potentially doing is banning people from financial access. And losing your right to speech is bad, but losing your right to make it livelihood is even worse. And I think Republicans in Congress need to say to Dan Schulman, first of all, be great for them to haul them up there in front of Congress to a hearing like they did with Jack and Zuck and Sundar haul them up there and say to him, and no uncertain terms, we see what you're doing, we don't like it, we oppose it, we're going to get on our hind legs and fight this. If you try to deny Americans, they're right to access

the new economy, we see no reason for your company to get any bigger. We're going to oppose every acquisition you ever do and we may not be empowered today but one day the tide will turn we will get control of Congress and at that point you know elephants have long memories so you know we're watching you and you know it's been a long time since Republicans thought of their role this way for the last few decades they've been very lazy or fair with respect to the economy. But there's a very successful Republican president on Mount Rushmore, Teddy Roosevelt, and he's on Mount Rushmore because he busted up the cartels and the oligarchs of his era, and he fought for the rights of the common American to make a living. That is the playbook that Republicans need to follow right now.

Okay, Henry Belkaster, you got this clip right here. Let's get some animations on top of it. Let's go. All right, Square has bought after pay for $30,000,000, which represents a large portion of their outstanding equity. It's an equity-based deal. What do we think, Freiber? They issued a third of their stock to buy this company.

So basically, Square is a public company. They issued shares to after-pay shareholders. After-pay only represents about 4% of Squares revenue. They gave away a third of their company to increase their revenue by 4%. That's the pessimist view of the business. If you think about Squares, they've got two businesses that are equally size. One is like a consumer business. This cash app. They do a bunch of stuff including crypto in a consumer business. This cash app. And then cash app, yep. Yeah, and they do a bunch of stuff including crypto in there. And then they have another app, another set of tools for merchants, which is businesses

on the other side. So it's becoming more of a marketplace business. And the idea is that this after pay deal can solidify their ability to basically be a lender to their consumers and provide a tool to merchants to increase sales. Because the way after pay works, it's a buy-and-out pay later product. These have been around for a long time. You can basically make a purchase online without having to put down a credit card or to pay for it. They instantly run a credit check on you and instantly offer you credit to buy that thing and then

you pay an installment over time. It allows websites and businesses to get more consumers to buy that thing and then you pay an installment over time. And so it allows websites and businesses to get more consumers to buy stuff because it's really easy for them to buy stuff if it's been on the money that you're doing today. And by the way, this business concept has been around for a long time. There's a company called Bill Me later

that was bought by PayPal in 2008 for a billion dollars and it was a similar thesis, right? So the thesis, what's old is new again, the thesis is, if you can provide these tools to merchants, they will get more sales and PayPal on the other side would make more money, because consumers would spend more through the system. And I think that's the same model with Square. But most important, so we're seeing Square consolidate

the marketplace dynamics of their business. They're also effectively stepping up and competing and making sure they're locking in the competitive advantage they have with having this two-sided marketplace against emerging competitors like a firm and so far in terms of- Kona was the original. The public capital markets will always reward

great growth strategies. The minute that they announced this deal, the market cap of square went up by almost 25%. The deal is free. Free. I repeat, they just acquired a $30 billion company for fucking free. Which is what happened with Whole Foods and Amazon. Here is the secret hiding in plain sight that not enough CEOs understand about the public

markets and so for the CEOs out there listening. There are two ways for you to get constantly rewarded by the public markets. Number one is what Square did, which is to incrementally acquire feature after feature after feature. The thing with Buy Now Pay later is that it is not a company. It has always been a feature and it's a feature of a much larger financial services platform and I think Square is proving that and everybody else over time will realize that Goldman Sachs and Apple Are about to do something there with buy now pay later as well for themselves. They already Apple already does it for the phones So the idea is that this is just a credit feature that should be on every single major network

I wouldn't be surprised of what's happened Facebook had to buy now pay later features. Amazon over time. Everybody needs to have this feature. You can't build a company around it. And so if Square can basically continue to acquire or build adjacent features that consolidates the financial services stack for their consumers, the stock market will reward these guys.

They'll be able to grow and buy things for free for the next five or 10 years. The second way that companies can get rewarded in the public markets is if you look at your costs and you flip them from a cost or an expense into revenue. And the gold standard is Amazon. So if you guys look back, I'll just give you a very quick example because it's incredible. In 2005, you ran 2005 Amazon, they had 8.5 billion of sales, 2 billion of net profit.

Their two biggest costs there was product and shipping. So what did they do? They started Amazon Kindle, they started Amazon Kindle, they started Amazon basics, they started Amazon fire, they started Amazon echo and all of a sudden That whole thing shrank their gross margins went up Then on the operating expense side Amazon was spending 6% of revenue on fulfillment. They started a fulfillment business They were spending 5% of revenue on technology. They started AWS They were spending 2% of revenue on marketing, they started Amazon Prime. They were spending 2% on payment processing, they started Amazon

payments. So if you look at any company like this square, I think Stripe is another part of me, Shopify is another great example where you can see the path to growth. If you can see folks acquiring adjacent features, or if you can see the path to growth. If you can see folks acquiring adjacent features, or if you can see folks taking expense lines and turning them into revenue lines, these are, in my opinion, sure bet companies that compound forever in the public. And there's great network effects.

If you think about financial services for consumers, I would argue there's five general categories. There's banking, lending, trading, crypto, and insurance. And I think in order of retention, meaning how long a customer is likely to stick with a service provider, it's banking, then lending, then trading, then crypto, then insurance. And in terms of profit generation per customer per year, it's trading, then crypto, then lending, then insurance, and then banking. And so what we're seeing is a lot of these financial services providers to consumers in the

digital world, replacing the old school world by starting to consolidate these categories in a smarter way than the old school offline companies have been able to do. Banks need to make money through overdraft fees. They make $30 billion a year in overdraft fees. So if you make banking entirely online and make it free, you retain a customer and then you can make money by offering them lending, trading, crypto, some of these other services. And that's certainly the trend. I have a big thesis and a big belief that over the next decade, we're going to see those five categories start to merge and you're going to have three to five superpowers that are going to offer a consolidated stack of services and the unit economics are going to change because they're

going to focus on getting the high retention products to be cheap and free and then they're going to make money on the high margin products. The canary, I completely agree with you and the canary and the coal mine is who will be given a federal banking license because that is the only gate that the authorities have to king make who those consolidators will be and that's an easy thing that can be unemotionally as us or Amazon just buy one of the bank to apply no you have to this is an incredibly arduous process to get a federal banking license to be cleared by the federal reserve to be a bar or a bank you have to get a beautiful case and you're not listening to these are regulatory

issues. I'm asking a question for the audience. You cannot just go and buy these. I'm not going to buy these. Okay. So even if you want to, you can't just buy a company like your bought Whole Foods. So for example, I think Square now is a federally licensed bank. And I believe that at the federal reserve recognizes these guys, they can borrow when they can borrow money at the discount window at the discount rate.

As startups get more successful and can get there, those will be the ones that will do what David said because it doesn't matter how many users or how much momentum you have. If you cannot get a federal license to operate, you can't consolidate. So you can be a vertically specific grade business, but eventually you have to sell each trade Morgan Stanley is a great example, where in the absence and an inability to expand, you have to sell yourself because the cost of capital eats you up.

The comment on this, by the way, the most obvious one here, which I think is interesting is the Shopify Stripe debate, because if you look inside the P&L of Shopify, an enormous line item now, about $350 million a year is what they're paying to Stripe. And, you know, there's going to be a lot of pressure over time to figure out what these big businesses want to do with respect to their payment strategies and do it themselves, because they may be able to save a lot of money.

unclear. I'd be like the lone voice of dissent on this afterpay thing. Oh, go ahead. Yeah. Well, look, it's clear the market love, Ditch. Martha's right about that. It's sending a signal to everybody in the industry, in the finance industry that consolidation is going to be rewarded. It seems like finance is going to go the same way that media did where you start to see

studios in Hollywood all get gobbled up by big tech players, sort of the final convergence of digital analog. You're clearly going to see that in banking now too. So as a business person, as an entrepreneur, I respect and admire what Jack Dorsey has done with Square. But as an American, I'm definitely concerned about this accumulation of power. And we now see Jack as the first person. I don't think it's, there's ever been anyone in American history who holds in his hands

the right to deny people's speech on a major speech platform. And the ability to deny them access to a major consumer payments platform. Now, he doesn't have dominant market share in either one of those things. He needs it. No, he's got less than 10% in each. But he's an influencer and we saw that Twitter was the first site to kick off Trump and

then in the wake of that, every other tech platform did it. And Square, after January 6, cut off the accounts of everybody who was involved or connected to it, whatever that means. And a bunch of other players in the Fintech stack did it. So we now have this issue of financial de-platforming. PayPal is already well down that road. What will Jack Dorsi do? I don't know.

I mean, on the one hand, he's like, why don't you start at why don't you buy or start or incubate your own that's protection freeze for you? You're not going to ban people from calling. So you win. Just fucking start your own square competitors, Axon. Stop complaining. Jason, look, these companies have gigantic network effects. PayPal is over a $300 billion markup company.

If all of them... If they back those 10, if they knock 10% of people off, you get them. Now you got your, now you got your beach head. Stop complaining about it. It is not, it is a non-argument to claim that a cartel of gigantic fintech companies that have monopoly scale, monopoly network effects, acting together that is not a threat to people's rights

to have a lily. I'm not saying it's not. I'm talking about how you can make money from it. I'm just talking your book. This is not about making money from me. It's not about making money for me. This is I know But it is an opportunity like who's to stop somebody from create? Isn't parlor back and isn't there some other like Right wing or more conservative Twitter that's booming right now

I heard there's another one Cara swish was talking about I'm predicting right now that financial Deplot forming is again be the big hot potato, political hot potato over the next year. This is the next wave of censorship. And what Republicans on the FTC, what the Republicans on the FTC on that board need to ask, Jack Dorsey right now is, will you import the Twitter block list over to square? Or will you kick the thing separate?

Bestie, guestie, Jack. Can I just say something, Saksipu? Yes, yes. I think you're right. But if you just want to make a lot of money and you have to have some financial stock ownership over the next few years, I think the way to do it is just to kind of like figure out which of these emerging companies have or are about to get or have disclosed in their earnings that they're filing for licensure. And I think you want to own those things because the key thing is like when you get these

licences, you just get a cheaper cost of capital. It just allows you to out-compete and out-maneuver. And then all of a sudden you're competing with these big lumbering incumbents who just don't have the access to the same flexible technology and they're running code that's you know 40 50 years old. Then the policy decision becomes much more complicated because I do agree with you that there's going to be platforming or de-platforming issues that happen. The good thing about this that it is highly fragmented and that there is. that there is no clear path at least that I see for two or three folks to have 25 to 30 to 35% ownership. That already happened sort of in credit cards

and I think we've learned our lesson from that. It hasn't happened since. I hope it remains that decentralized, but what I think the reaction of the stock market to square buying after pay is now everyone's gonna be looking at that and going, wait a second, I can spend a quarter of the markup my company and have a position to be free.

No, but David, my point, that's not what they're saying. What they're saying is, hold on a second, these companies are features and we want to have folks who are licensed and capable to consolidate what Friedberg said, these five categories. And if you look inside a square, they have an incredible lending business, they have incredible merchant services business, they have a pretty decent and emerging crypto and trading business.

So they're putting all the pieces together. That's what they saw and they're licensed. Right, but who are the big winners in this way of consolidation going to be at the end of the day? It's going to be square, it's going to be stripe, it might be, it's going to be PayPal, it's going to be the big online companies, not the offline legacy banks. It's the same thing that happened in Hollywood, the only studio that didn't get gobbled up by a tech company is Disney, right? So it's gone 80% protect.

And they became a tech company. And they become a tech company. They became a tech company. So I, They're whole business. They're gonna catch up to Netflix and then they're gonna roll Netflix. They're gonna roll right over Netflix.

The reality is that there is something about big tech that wants to de-platform people. They're going to catch up to Netflix and then they're going to roll Netflix. They're going to roll right over Netflix. The reality is that there is something about Big Tech that wants to de-platform people. The legacy analog offline companies were never this moralistic towards their customer base. They never de-platformed and banned people the way that these companies are doing. They limited their moralizations and their high horse to the Oscar awards in the anime. You're correct. J. Cal, I'm going to do a crazy wine dinner tomorrow night and it's about 45 minutes

from you. You should take a car, have them wait, eat dinner, and then drive back. I'll try. I'm going to see David, which for me is a lifelong dream. Because every time I go to see David, because not David Sacks, David, the statue of David, which to me is like looking in a mirror. My whole life, I looked at that. That body. Small stubby shlong, I get it.

But why do you... Why don't you... I have so many tours I'm doing in Florence. How many be out zip out, let's see, maybe I'll zip out. But I'm gonna see you next week. It's 45 minutes. The question is Friedberg. What are you fucking doing?

Get on a plane and come see your besties. You're the only person not in Italy. You come for three or four days. I know you got a pregnant wife. I know you got to let you moving, all this stuff. You gave up on seven. Let me go talk to her. Just come for three days, three days. Get her some present and maybe get some extra help with that.

All your pilots doing. They're all just sitting there and Italy hanging out. Binder literally having the best time, but they're living their best lives right now. They're like, oh, we're going to take a tour of Venice. Do you want to get some hours in? I mean, yeah. Okay. I'll send my plane. It's united. I'll send you United for you. Jake, why don't you come visit me tomorrow? You don't need to see a museum. You know, you don't want to spend time museums.

Hey, Zach, why are you doing a great time with my girlfriend? I'm going to do this in Florence. I'll see you in a little bit. Weak, relax. It's going to be so high. No, I'm only going for a day. I'm coming to drugs. What?

Yeah, yeah, yeah. My mom's here, you know, like I have a lot of lot of people here for two days and hang out for two days with us What are you doing 48 hours? It's not a big deal bring everybody. All right. I love you guys. I love you besties All right, yo congratulations to Cal on rock congratulations on Robin Hood, okay? Thanks guys Well, I'm gonna say is, is my first fund, my little $11 million fund right now, we'll see what happens a long way to go. Once again, I'll have a top 5% 1% fund.

The first fund I did with Sequoia with the Scouts was like 150 cash on cash. Who knows, this first fund I did with you guys backing me, thank you for supporting me, that $11 dollar fund could be five six, six, seven X could be who knows? We'll see. Go big boy. Sean Cash. Yeah, you know, it's a good feeling.

It's a good feeling. Yeah. Thank you for the sport. You reberged me. I do. Saxie. Probably. Yeah. I know. Forever.

Everybody. Wait, did you have any wins this week aside from spending a lot of money on wine? Chimop is there any spectacular news that we need to know? Well, David David can confirm, but I think I probably made a billion dollars this week. All right, there you go. Oh, something's going on. There's a lot of things to be a spec coming. Grace, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, you guys, love you, Basties, love you, Italy.

Of course, everybody's favorite. The queen of Kenwai, the science conductor himself, Dave Freeman. All the data, all the science is going to do whatever you want to do. Go into a nightclub, sweaty, rubbing, knees, and up. Go into a rubbing wave.

Go into a, nothing else matters. Go into a braving rave Go into it, nothing else matters Go into a braving rave But I think understanding what the other counterpoints and counter-屬ions might be It's critical to get people to actually get to the opinion themselves As opposed to just telling them This is a single point that you should believe Go into a braving rave Nothing else matters.

Robin Hood. Nothing else matters. So much is all about like the good and evil them and us. And we don't recognize it in moments where there are shared values we're just sitting on both sides of the same coin, or recognizing that sometimes having different values doesn't necessarily make someone stronger Go into a grove and raise Nothing else matters Go into a grove and raise

Nothing else matters Go into a grove and raise I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm a man, I'm cool yo my god this is like a drink I'm through It's gonna be like hug me, me his face is right next to my face I didn't know what to say And I like a mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo-mo- I try and kind of elevate the conversation a little bit and why I care so much about this point Go into a rubbing rig of course everybody's favorite a queen of kinh wa The science conductor himself Dave Friedberg the quality of the show he calls it the Friedberg index Talks a lot. It's a great episode That's a lot. It's a great episode. Go into it.

Throw in red. All the data, all the signs that do whatever you want to do. Go into it. Throw in red. Go into it. Nightclub. Go into it. Throw in red.

Sweaty. Next to you. Go into it. Nothing else matters. Go into it. Throw in red. Nothing else matters. Go into it.

Throw in red. Nothing else matters. Go into it. Throw in red. Nothing else matters. Go into it. Throw in red. Nothing else matters Go in quick, perfect great Nothing else matters Go in quick, perfect great Nothing else matters Go in quick, perfect great

Nothing else matters Driving real