This Week in Startups - All-In E3: Modern Cold War between US & China, economic recovery, potential mass migration out of San Francisco, pandemic politicization & more with David Sacks & David Friedberg

Episode Date: May 21, 2020

Angel investor Jason Calacanis (Uber, Calm, Robinhood) interviews the world’s greatest founders, operators, investors and innovators. Get an insider’s look into venture capital, learn how to start and scale your own startup, and ride the cutting edge of technology in today's headlines and beyond.

Hey, everybody, welcome to the All In Podcast with Jason Kalakannis and Chamoth, Polly Hopatio. We record this podcast. Well, on a really unique schedule, Chimoth, what's our schedule right now, whenever we feel like it? Basically, it is whenever our significant others get so sick of us that they kick us out and say, don't come back. Yeah, we get thrown to the pool house. We decide to pop up the podcast. You're in Atherton. I'm in the city in San Francisco.

Thank you, Duke of Discretion. Is there anything else you'd like to detail my address? By gate code. Gate code off the fence. You know, we had two guests on that people just went absolutely crazy for the two David. But they weren't available. So we're just going to talk shit about them. No, we have two amazing Davids in our lives, David Friedberg and David Sachs.

And they are super smart, super effective at their work. Everything we're not, Chimov. And so we bring them back on the podcast. And we'll do a little roundtable here and talk about life in the age. of Corona. So welcome back to the podcast, David Sacks. Yeah, good to be back with you. And also David Friedberg. Thank you guys. Happy to be here. All right. Fantastic. So I just want to start off with our quar check. How is everybody doing in this quarantine? How is everybody's mental health? Let's start with you, Sacks. Well, as you might be able to see, we've moved our bunker to undisclosed

Mexican location. You know, and it's been great. You know, we, you know, I think it's really kind of sad because where we're at is a tourist city that would normally be at peak season and it's just deserted right now. All the construction stopped. Normally you see lots of, you know, hotels and houses being built and that's all stopped. And there's no tourists, so it's all just kind of cleared out. But I think it's quite safe.

You know, every worker that I've seen here since we landed at the airport to, you know, got transported to the community we're at, I mean, has been wearing a mask, much more consistent than I think in the U.S. And, you know, I think it's been fine. Now, of course, you founded the Kraft Venture Capital firm, and people know before that, you obviously did Yammer and sold that to Microsoft for a billion. plus and before that you are the C-O-O at PayPal. What's going on with your business?

Are you actively investing? And how is your firm running remote? It's worked very well. I mean, we've always been super collaborative as a firm. We were already on Zoom and we were, you know, we share everything on Yammer. And so for us, just moving to Zoom wasn't that difficult. We've done four or five deals, I think, since the whole kind of quarantine started.

I'm sorry, sorry, sorry. Did you say that you actually use Yammer now in 2020? We're still using it. Oh, my God. Is Yammer still available? Yeah. That's insane. I mean, it's kind of gone a little bit buried inside of Microsoft, but you can certainly

still get it. And no, we love it. I mean, the whole firm kind of works in Yamer, and it works very well for us. And now what's going to happen with this incredible office that you you have, this beautiful office you have in San Francisco and commercial real estate now that are you going to come back to work? We start Twitter and Square the Jack collection of companies. They're not going to come back to their offices. They're work from home primarily going forward. What are you going to do? Well, it'll be a great asset for us in the year 2025 or something like that.

No, I mean, we will eventually go back to work there. I think that the team still likes having an office. I think, you know, the idea that everyone wants to work out of like, a small room and, you know, extra room in their house. I think it's probably getting, it's probably a little overrated. I think people would like to get back to the office. But do we have to have one? No. I mean, I think we've proven that we can do our jobs via Zoom.

And, you know, we've done a lot of, we've done, like I said, we've done four or five deals since this started where we haven't met with the entrepreneur in person. You know, it's all been done via Zoom. And it's work great. All right, Chimoth, how are you doing? What's your mental health like? I get to see you once in a while on CNBC throwing bombs.

But how are you doing? I was really excited for phase two of the shelter in place to start here in San Mateo County. So that's been really good. A new poker table that I had built arrived today, which I'll be installing after this. and what I mean by I'll be installing. You'll be supervising. I'll be supervising. You'll be watching as people do real work.

It's a beautiful table. I saw the pictures of it. Does it have an infinity edge? Is it an infinity edge over table? No, no, no. No, but I'll send you a picture when it's all done, but it just looks stunning. And I really want to try to organize a game soon

so that I can get you guys back into my little cave here. Yeah. I am ready for this shelter and place to end. I'll just be honest. And I think that my sentiments are the sentiments of a lot of people. It's really tough. Really, really tough. I'm losing all my motivation to be quite honest.

It is weird to not see people. And you're an extrovert. David, you're an introvert. And then David Freiburg also on the line. David, how are you handling all of this? I'm fine. I think one of the things that made a huge difference for me is creating a rhythm in the day because there isn't one when you kind of normally get up and you go to work

and then you come home at the end of the day from work. That's a rhythm and you kind of get kind of adjusted to it. So not having that, a lot of people I've been hearing and struggling with that. I was certainly struggling with it having sleep issues. I sit on about a dozen boards, some of which are small companies, some of which have a couple hundred employees.

And I've been hearing pretty consistently mental health issues across all the companies. And I think it's just been really grading on people. I think it number one kind of says we probably do need to be together and have social space, as David said, like being in the same office, people really miss that and you get a lot of value from that. I've been getting up every day in the last couple of weeks and going off-site, going out of my house to go work or actually working on another place and I have like a little office there and I go kind of work there.

And so that's made a huge impact, honestly, on my mental health, being able to do that every day. So just doing that's been helpful. Not everyone has that privilege, but I, I think it speaks a lot to why we're going to need to go back to offices when this is all done. And what do you think about what's happening with your businesses? Obviously, you're running a startup studio, I guess, would be one way to describe it, where you create companies and then spin them out.

What's been the business interruption, if any? We have a couple of hardware and lab companies. That's most of what we've done. And so those operations are paused. So that's been really frustrating. The teams have all found ways to adjust and work from home. So our companies are not predominantly software-based. There's a lot of software, but it's not predominantly software, so it's been difficult on those scientists and engineers that work in a lab or in a physical environment that they have to go to to do their work.

The larger companies, we have a number of food businesses that happen to be in the food supply chain one way or another. Frankly, those businesses are doing fantastically well, and there's been just this incredible success in the era of COVID on kind of a focus on fundamentals, like food, supply chain, efficiency, availability of things that people need. And we were doing a lot in human health, and we've kind of benefited from that. So, yeah, I think it's kind of a mix for us that I think every business is bifurcated one way or another during this kind of moment of punctuated equilibrium. Yeah, I think one thing I'd like to sort of talk about is we've had you both on the podcast early on at the start of the pandemic. And I'm curious, Chimov, now that we're here, over two months in quarantine, sheltering in place. And a lot of information, a lot of cards have turned over here, right? we've seen the flop, I think. We haven't seen the turn in the river, so to speak.

What is your assessment of what we were talking about, you know, a month or two ago and what we thought about this and what's become reality and what hasn't? What are you more optimistic about? What are you more pessimistic about? Chimov, let's start with you. I think that we will have this pandemic or this disease well in hand within two years. So whether it's a combination of a therapeutic and a vaccine or just a therapeutic, I just think that we're going to kick its ass. And so that's made me more optimistic. I think that the thing that's made me more pessimistic, though, is the return to normalcy has been sort of cut on political lines. And it's been so massively politicized. I mean, when David talks about the fact

that, you know, you can go to a developing country like Mexico and all of a sudden. sudden, you know, everybody can get around the idea of masks. It's because that there's a level of common sense there that trumps politics. And in the United States, that just isn't the case. And so what you're seeing in this crazy way, I think, is sort of the center left and the left probably sticking very firmly to the ideology of sheltering in place and a lockdown, probably on the sort of hope that it gets Trump out of office. And on the other side, sort of the red states, I think have basically said, hey, I would rather get sick from coronavirus and take my chances than the 100% chance

of failure that I have in my professional life if you leave me at home for another week or month or what have you. So that's been a huge disappointment of how political this whole thing has gotten. And Sacks, you've been talking about like common sense. procedures. Sort of same question to you. What you first thought, and you had been talking about, you thought an L-shaped recovery, so we'll get into also the economy here. But in terms of the disease, what did you think two months ago that you don't think now? And what do you think? Yeah. Well, in preparation for this, I kind of went through my Twitter feed to see what I was saying

the last time I was on the pod and how well it was holding up. And two months ago today, I tweeted that the pandemic, that underreaction caused the pandemic and overreaction will cause the depression. And I think that's kind of where we are right now. We still have this pandemic with us, but now we're also potentially facing, I think, a potential depression because of the way we're overreacting. We're still in lockdowns, in, you know, huge swaths of the country. And no one can quite understand why. I mean, the original reason for the lockdowns was to bias time so that the hospitals wouldn't become overwhelmed like Italy.

Well, nowhere in the country did the hospitals get overwhelmed and we're still in these lockdowns. And so, you know, I think that it's long overdue for it to end. Now, at the same time, you know, where I agree with Tremoth that this whole thing has become politicized where, you know, the people who generally want to get us out of lockdowns don't. don't believe in doing anything. You know, they're not even, you know, a lot of them aren't even willing to wear mass, which I think is just kind of insane. Um, so, you know, where I come out on this thing is that I think we should end lockdowns, but wear mass. And it's very hard to find anybody, you know, in the, in the political spectrum who, who agrees with that because, you know, one side wants to keep lockdowns going indefinitely and the other doesn't want us to wear mass.

And it makes no logical sense, obviously. And if you think about our political system, The left is so far left that the moderates on the left side don't have a place to live anymore. And then on the right, the conservatives, which I would put you in, the group of who were, you know, looking for fiscal conservatives, they don't have a home anymore either. And so the most reasonable approach is clearly to start going back to work for people who are not at risk and who wear a mask. Yeah, I think there's been since the last pod that we did together, I think there's been three kind of major discoveries or sets of facts that have come out about the virus. Number one, the official fatality rate has been over, which is about 6%, you know, it's a very high fatality rate. It's pretty scary. But we now know that that's overstated by probably at least 10x because it doesn't take into account all the asymptomatic cases or mild cases that just never got tested. And this is the fatality rate of people who contracted the virus.

Right. Yes, exactly. As opposed to people whose case, the problem with the, it's kind of a debate between the IFR versus the CFR, the infection fatality rate versus the case fatality rate. The problem with kind of the official CFR numbers is that only the people who got really sick or, you know, ever got tested. And, you know, Freiburg was the earliest person, I know, to start talking about the need for wide-scale population testing and these blood serology tests and other kinds of tests to establish what the real baseline is. But regardless of like, and there's been a whole bunch of different tests with different results, you know, we don't know exactly what the true IFR. is to this day, but we do know it's probably closer to half a percent than to five percent. So that's sort of discovery number one. I think discovery number two is, and we knew a little bit, we saw a little bit of this from the Wuhan data, but now it's really clear that which populations are at risk.

And it's, you know, the data seems to suggest that people under 60 who are healthy don't have sort of preexisting conditions are 50 times. less likely to develop or there's there's a 50x greater chance for those over 60 in terms of a of the you know having a really bad outcome um and so for people under 60 who don't have these pre-existing conditions it's you know it's just not yes there's always you know examples to the contrary but it's not this this sort of gigantic risk and so for two-thirds of the population they don't have a huge risk and we're still locking them down um I think the third thing the third study, and not just study, there's been studies and there's been models and then we've

also seen practice, is that wide-scale use of mass, sort of ubiquitous mass wearing, is sufficient to control the virus, meaning to stop the exponentiality of the virus. We've seen, you know, in the Asian countries or Czechoslovakia, other places, they've been able to get the, you know, the so-called R-not, the viral coefficient, to go below one with, you know, wide-scale use of mass. And so we have a way to prevent the virus from going exponential that doesn't require lockdowns. And so the thing, you know, I blogged about the last time I was on your show was,

why would you do this most severe thing, these lockdowns, and not do this easy thing that's just merely inconvenient, which is mass? Freeberg, when you look at it and you're the, I think, have the deepest science, clearly of the deepest science background of all of us. How do you look at this pandemic now that we're 75 days into it here in the Bay Area? And obviously, you know, this started in December, it looks like in China. What's your take on it now? What did you get right early? And what have you changed your mind about recently? I think I'm actually funny. When you say that, I just pulled up the original WHO joint mission on COVID final report.

And the date of this report, by the way, is February 20th. So there was this big thing they published 40 pages long from the WHOO. And in it, they highlighted, you know, this fatality rate estimate inside of Hubei, you know, Wuhan and outside of Hubei. And they, you know, we knew from this data very early on that we were at about a half percent fatality rate. And then, you know, we saw all of this other stuff happen with Korea. Korea and the Princess cruise ship and the NBA players.

Very early on, we saw all these people that were roughly asymptomatic. And we're starting to get two kind of explanations for why that is. But from the beginning, I felt really like, you know, this is going to be a largely asymptomatic kind of spreading infectious factor. What I got wrong was when we went into lockdown. I don't know, Chimak, if you remember this when we talked the first time on Jason's, on your guys' podcast. I asked you guys, or you guys asked me when I thought we'd be back. And I was like, oh, April 7th, we'll be back to work. And I also had a bet going with you guys. And I said, we're going to have less than 20,000 debts in the U.S. I so overestimated the effectiveness of the lockdown. And I think that was kind of, you know, one of the more kind of like striking things to me is the quote unquote lockdown. And I just sent a video to Nick. Nick, do you have it? Can you queue it up? So basically, this is what I think has happened in the United States. Like pull this thing up. I was in Berkeley.

on Saturday. And I went to to meet some buddies and we played Frisbee golf on campus and had a beer, some college buddies of mine. And so I'm walking around in Berkeley and there is frat party after frat party going on. No masked. Everyone's on top of each other. You can see the video right here. I took a video of one of the party. I think that's beer pong. Yeah, they're all

paying beer pong. There's like girls and drinking and people are passing around bottles of vodka and there's no mask. And this was the entire campus of Berkeley. And I think this is what's gone on like around the country. So the belief that you could just kind of like lock away the virus, I believe like, oh my God, it's so extreme. It's so draconian. We're going to shut down the world and this thing is going to get stopped in 30 days, like happened in China. That is not what happened in the United States of America. Like people want to be free, people want

to party, people want to live their life, they want to go to work, they want to see their friends and family, and they're not used to being told no by the government. And so I think that's been, to me, the biggest surprise is just like how ineffective the quote unquote lockdown has been. And I think it really speaks to the need that David mentioned, which is this lockdown isn't binary. You can't just say lock everyone down or let them all out. You've got to nuance your way to a solution, which means like masks, which means watching out for nursing homes, which means temperature checking before letting people in the buildings of over 100 people, like all the stuff that I think needs to be done for this to be kind of effective at, you know,

tracking and tracing. And we can't just assume that, you know, a quote unquote lockdown is going to keep people inside and keep this thing from spreading because the frat party, as you'll see, is the perfect representation of what's really going on out there. All right, circling back around to you, Chimov. What do you think of what the two David's sort of outlined there in terms of the path forward and how we all handicapped what was going on? Well, I think the reality is that by hook or crook,

we're going to basically exit this lockdown sooner than we think, because I think people just can't take it anymore. So there's no point in having a shelter in place. order if everybody's running around playing beer pong. And so it's not doing anything. And so you might as well get the productive value of the economy going again by letting people go back to work. And just finding some simple ways that people can look past the politics and just do the right thing. We're a goddamn mask and shut the fuck up and go back to work. It's really like, I mean, When you think about it, it's like, why is this such a big deal? Get everything you want and just put a little bit of cloth over your face.

I mean, a lot of the folks that push back on this, you know, they're better off wearing the mask. Yeah. I mean, it is pretty striking when you watch the protests and you see a bunch of people who are, you know, obviously older and obviously obese. Those are not the best looking knives in the drawer. Let's just put it that way. Not definitely not. Little dull and rusty is what I would say. Well, and, you know, they're carrying guns and they've never served a day in the Army. I mean, they're literally cosplaying Marines. I have nothing to say about that.

All I'm saying is this whole mask thing is not such a big deal. Just if you can wear a mask and get back to being productive and get back to a job, I think you should be allowed to. All right. So we had a big debate, V-shaped, W-shaped, U-shaped, L-shaped recovery. I was in the, I'm aspirationally V-shaped, but I'm expecting. a U, Saks, you or the L, and I think, Chamath, you were the W, the U or the L. We've had a V.

How do you explain, Chimoth, what is going on in the stock market? Because you said it was the end of days. You said this is going to be a disaster. Is it going to be a disaster? Is this the end of the days and we've got some false rebound and this V-shaped recovery is not sustainable? How do you explain this inexplainable V-shaped responsibility? There's two things to keep in mind.

first of all, the economy is completely fucked. So don't, don't look at Facebook, Apple, Amazon, Microsoft, Google, and a handful of, you know, Internet SaaS companies and kid yourself. We have 30 million American men and women out of work. That is, every fifth person you see walking down the street does not have a job. What happens when lockdown ends? If the lockdown ends in June, as expected for most people, how many people are? How many repound?

Yeah. Yeah, no, so look, here's the thing that we've had. We've had trillions of dollars of money printed into the system. And when you print that money into the system, which the Federal Reserve has done, it hits the asset markets and it is basically stabilized the bond market. And the incremental dollar sits in the hands of an individual who must put the money to work. Because when you look back on this, this is not, you know, a random person managing their 401k. The overwhelming majority of the money sits in the hands of hedge funds or pension funds or sovereign wealth funds or mutual funds. They have a job to do.

And so you have to think about what is their incremental decision. So even if the stock market made no sense on any valuation metric, the incremental dollar that they have, which they're paid to put to work, will get put to work. And so what you've actually seen is a dispersion. And what I mean by that is if you graph the S&P 500 index versus the unwated S&P 500 index, which basically means the first one ranks companies by market cap and gives the biggest companies more weight, the other one ranks every company equally. There's been a massive split, a dispersion. And what it really shows is that companies are traffic in bits.

so software businesses have a bid, and companies at traffic in Adams have gotten completely decimated, and they are literally worthless. And so when you put all these things together, the real economy is in the toilet. There are tens of millions of men and women out of work. The earnings power of real companies that do physical things in the world are cheaper and lower than they've ever been. Meanwhile, the companies that have high velocity, high margin, software-driven businesses have gone to the moon. So it's unfair to look at 30 or 40 businesses and paint that as a V-shaped recovery. It is a equity market that is buoyed by Fed dollars that is not mapping to the reality of what's happening on the ground.

Okay. So, Sacks, you're pretty plugged into the economy and you think about this a lot. What do you think the recovery looks like? Is this going to be two, three, four, five quarter recession? Is it going to be depression era like some people are apt to say? What keeps you up at night thinking about the economy and what gives you hope? Well, it kind of depends if there are other shoes to drop. So I agree with Tremoth that, you know, the state of the economy right now is terrible

and it's divorced from the financial markets because of, you know, all the money printing and interventions that, the Fed and Treasury have been doing. You know, one way to think about it is, well, the stock markets denominated in U.S. dollars. And if, you know, they just prints in a whole bunch more of them, those dollars are worth less. And so, you know, the price of the stocks are going to rise.

But, but yeah, I think looking forward, you know, I, it's probably going to be a two to three year process to get out of this unless some other shoe drops, which could make it much worse. You're betting on two to three years to get back to, let's call it, single-digit unemployment. Well, let's see. We're at like, what, 15% right now or something like that. So, you know. 35 million people.

You get down to, you know, 10 million again, 20 million? Yeah, I mean, it's hard to say. It's going to take a long time to create all those jobs. You know, a lot of these businesses are not just going to come, you know, racing right back. So yeah, I think it's probably like a two to three-year process to get back to some sort of, you know. And by the way, the thing you have to remember is like, look, the unemployment numbers that we have had in the last probably seven or eight years. So during Obama and Trump have been completely manipulated because the number of people that are entirely leaving the workforce is quite high. And so, you know, it's not just a numerator problem.

We have a denominator problem too. There are fewer and fewer workers that, you know, are willing to work. because some of them just give up. Right. Or it's just not worth it for the pay that's available is another stated reason. So the thing that we're going to have to figure out is like how many of the people that are leaving the workforce may never come back? And that has a societal toll and weight that we all have to bear.

Yeah, there's going to be a lot of people who maybe are in their 60s or maybe even late 50s. They got 10, 20 years left that they could be working in management, sales, whatever it is. And they just say, you know what, it's not worth it. I'm going to go try to find a place to stay and maybe not rejoin the workforce. Early retirement or just capitulation. Yeah. But remember I said about other shoes dropping.

I mean, we're still in the early, I think we're still in the early stages of seeing the repercussions of what, you know, but two or three months shut down the economy, you know, what that's going to look like. And so the wave of defaults is just beginning. And who knows what happens with cities and states and so on down the line. I mean, who knows, do the debt markets have kind of an inexhaustible desire for to buy U.S. debt? Or could we reach some sort of saturation point? And then that triggers the next set of crises. So we just, you know, I would say like,

The two to three-year outlook is the one that's kind of like what it looks like today. But if there are these other big shoes to drop, it could turn into something much worse. I think Friedberg, we're all in agreement that there will be a second wave of some type. It just depends on how big the spike is. Do you think there'll be another New York City level outbreak where we'll see 2,000 people, 1,500 people dying in a certain region every day for some sustained period of time? What are the chances of that happening, Freeberg? I don't know. I mean, I think going forward, the New York situation, people's behavior

have been shocked. So, you know, to the points earlier, the most effective thing you can do is stop coughing on your hand touching a railing. Someone else touches the railing and touches their mouth. I mean, that's kind of how this goes. You know, there's been early on some weird, like, aerosolized, aerosolized studies that they've kind of said, hey, this thing spreads in the air and so on. It's really, you know, you've got to be in a closed kind of confined space. People are wearing masks now. So the likelihood of the transmission happening at the rate that we saw in New York, great paper out of MIT, by the way, that shows how this happened on the subway.

Oh, really? Described it. Yeah, identified the subway as kind of the primary vector that drove transmission in New York City. That was always my thesis. And I remember talking about it and saying, how is this not obvious to everybody that 8 million people ride that thing every day or something? Like, it's so obvious. And they did an incredible job proving it.

So it's not like people running in Central Park or spreading coronavirus to each other. It's everyone in these confined spaces, coughing in the air, and then you kind of get this stuff. And 20 people get on and off at every stop. That's the other thing people don't realize is that it's not just a bunch of people. It's not an airplane where you have X number of people

going in one direction for three, four, five hours. This is 20 people getting on and off every five minutes. It's almost like you couldn't design a better incubator for it. And I don't think a city in the United States approaches the density that you have in New York. So remember, these are not determinants. factors. There's like a spectrum of a probabilistic spectrum here. So you have a lot of people, they have a certain type of behavior, they're not wearing masks. You kind of add these up and you end up

with this really high kind of vector that drives this rapid spread as we saw in New York City. You're not going to see that in Dallas. You're not going to see that in Houston. You're not going to see that in San Diego. You're going to have more of the slow, steady burn as some risk is taken in the environment, some risk is taken by frat parties and people not wearing masks and people touching their mouth, but it's not going to have the same sort of massive effect you saw in New York. So I wouldn't expect us to have a New York style second wave. I do expect there to continue to be this like slow burn going forward of new cases. And it's certainly going to be more obvious now that we're testing a lot more. And so, Chumad, at this point, we're basically putting a price on life

and saying, hey, some amount of deaths is worth taking the risk. And as Americans, a unique group of people in the world and how we look at personal freedom. Americans are just making the choice, hey, listen, if you don't want to take the risk, stay home, but the rest of us, if we want to take the risk, we're going to go take the rest. That's what this has come down to in your mind, Shama? Yeah, I think that it's very difficult for Americans to envision a world where, like, you know, their personal freedoms are infringed upon. I mean, it's sort of like one of the founding principles of the entire country. This is why I think that, that the tragedy of this thing is that the way to get everybody what they want is so simple.

As David said, it's like, you know, above 65, you stay home, you work remotely, under 65, you temperature check and wear a mask, and, you know, you're 95% of the way there, but it's become a left versus right decision to do it. You know, the mask wearers are still in a lockdown, and the non-mask wearers want to get back to work and basically, like, there's, it's just another kind of culture war between the left and the right. It's really just shocking to be. I mean, I might, for, for, for, for, for what it's worth, you know, if I was, I am a betting man, so I'll just tell you, you know, my line now is that I think that Donald Trump is overwhelmingly likely to win as a function of people's frustration

about the lockdowns. And I think that the Democrats' best hope of winning in November is ending these things sooner rather than later. It's amazing. We're talking about a pandemic. A once in a hundred year pandemic, it looks like. And we're literally looking at our reaction to it through the lens of this president being reelected or not. Like literally, that's the determining factor on the advice we're giving to people. We're telling people they can't go to the beach, but they can be on an airplane. They can't go to the Tesla factory, but they can ride the subway.

I mean, on a communication basis, is there any worse way we could have communicated this to the populace? Well, the communication was bad. but I think the bigger problem, quite honestly, is that the Republican Democratic governors in the United States can't get on the same page. And at the same time, there's just a tendency to support Donald Trump or not support him

in a very reflexive, instinctive way that isn't helpful right now. And there just doesn't seem to be enough political wherewithal and courage to just stand up and do the right thing, independent of what your political persuasion is. So, but I think at on the margin now, I think you have different but very similar boundary conditions to 2016, where there are all these people that kind of like told you one thing and did another. There are all these people right now that probably are, you know, preference falsifying as we speak. And, you know, they'll show up into the voting booth and they'll be angry if they're not back in their jobs, especially if they've been laid off by as a result of not being able to get back.

And they would blame that on the Democrats, not the Republicans, and therefore Trump gets. his next term. Well, because it's the democratic states that are pushing the hardest that basically like, you know, you saw the craziness in Los Angeles, but like, you know, Eric Garcetti was basically like, we'll enter the shelter in place in, you know, December of 2022. And it's like, this is, it's Los Angeles. Yeah, it's not going to happen. You know, players got to play. I mean, like, this is just as unbelievable. Yeah. Well, the, I do, I agree, the lockdowns, the, or the, the unwillingness to end the lock. lockdowns gives Trump an issue for November, assuming this continues, that supersedes the incompetence

of the COVID response, which is that, you know, our lives and livelihoods are not owned by politicians to, you know, meter out and give back to us in drips and drabs. And as they see fit, that is the issue that the lockdown crowd is giving to Trump. And I do think it will. if it's still the issue in November, it will supersede the initial incompetence of the COVID response. And what did you think of this whole, what's the drug that Trump said he was taking, David, Sacks? Hydrochicloroquine. Yeah. So, or Freiburg, maybe you take it.

We talked about that early on and that, I think you properly said, like if you took it early, this could be, you know, could have potential taking it later. It's probably too late. I think you nailed that on the pod last time. Why has this become such a political issue? And what are your thoughts on that drug specifically and its potential efficacy? Look, I'm not a doctor, but from what I understand, is there's a, so just so you know, there's like side effects to this drug for a small percentage of the population. And this drug can actually inhibit energy production in certain cells, which can cause organs

to dysfunction and it particularly shows up in the heart. So people end up with what's called a long QT interval and potentially some heart issues that can be pretty dangerous and deadly depending on your body. So it's really a little bit of an unknown. There's also issues longer term with vision impairment can damage your retinal cells and cause vision loss. So there's risk to this drug. It's not like taking an Advil. It is a measured risk.

It's a low probability, but the severity can be high. And so typically with a scenario like that, doctors and scientists like to see, you know, phased clinical trials and you kind of do, you know, randomized and you have placebo and testing. And so that hasn't necessarily been done for this particular virus, this particular condition. And often the design of those studies matters a lot. So you could give it to a bunch of quote unquote COVID patients, but if it's not being given to COVID patients either before or right as they're getting sick, maybe it doesn't show the results that you would expect from a prophylactic treatment, meaning you're getting it before

you're really sick. And that's where it may be the most efficacious. And so some people are saying, wait, we don't know enough. Don't do it. It's not worth the risk because of that small percentage, high severity problem. While others are saying, oh, my gosh, it's totally worth the risk because the downside if you get coronavirus can be really bad. And, you know, so there's a lot of room for debate here. And when there's a lot of room for debate, you usually kind of revert to some sort of base belief or some base kind of political point of view or something. And I think that's what's gone on here. This isn't a clear cut.

The sun is yellow and the sky is blue kind of conversation. This is like I can interpret this a lot of different ways. It does seem that like, look, this drug, you know, like a lot of, has an effect in the same way that a lot of other, that this drug might have on a lot of other viruses. And this especially plus zinc, you know, and this Zipak, this is ithromycin, which is an antibiotic, together may be really effective. And so, yeah, if you weigh the downside and the probability of that downside for a patient against what the potential upside would be, depending on the risk factors now that we know those better for COVID, you can make an educated decision and maybe it should just be left in the hands of doctors versus like I have some national statement about it. I don't know. But, yeah, certainly a lot of room for debate and thus a lot of kind of political engagement on this.

Sacks, there's a lot of talk about what the Bay Area looks like after this, whether it's commercial real estate with Twitter and Square going full work from home and people not wanting to work in cities. What are your general thoughts on what the world looks like a year from now and maybe five years from now? If there is going to be some permanent change, what do you think it would be? Well, there could be a big resorting. I mean, it kind of depends if the virus becomes indefinitely. and this is something we kind of end up living with. But, you know, so let's, if it does, I mean, if you're like over 70, are you really going to want to stay in a place like New York City or are you going to want

to go somewhere else? And so I could imagine if this does become this long-term thing, that's just an endemic, you know, if we don't have a vaccine, I could see cities resorting where, you know, New York is people who are comfortable with COVID risk. And, you know, it's, I'm. I think San Francisco, the big issue with San Francisco is that there were always a bunch of reasons not to want to live there. I mean, the city just seems like chronically mismanaged. Feces, lots of poop.

The huge homeless problem. It's just, you know, public health issues with that. There's a lot of crime that isn't responding to properly. So there's all these reasons not to live there. But the reason why people chose to live there is because the tech industry had a very strong network effect and you needed to be in Silicon Valley or San Francisco in order to have access to these jobs and opportunities. And if those jobs and opportunities are now available via Zoom and you can be doing them from anywhere, are people still going to choose to live in San Francisco?

You know, with the cost of living and housing and apartments and all the rest of it that goes along with it. So yeah, I mean, I think there is some chance that this whole remote work thing could break Silicon Valley's network effect, and that would be really bad for places like San Francisco, which otherwise might not be the greatest places to live. Yeah, my thesis on this in terms of getting out of the recession, I think remote work could lead to a level of efficiency and profitability in the companies that we have never seen before. If you think just about every manager now knows how to manage.

remote workers, right? You learn that in like three, four weeks. You figure out how to manage people remote. Even people who hated managing people remote, all these Gen Xers and boomers who are managing, you know, millennials and earlier Gen Xers, they now know how to do it. And what they quickly learn is, these three or four people in my team are crushing it. These two or three people don't need to be here. They're not actually adding any value. So I think what's going to happen is they're going to cut the bottom people. Then they're going to cut their office. office space. Now you've removed, I don't know, call it, 30% of the cost basis of a business, 40% and it's operating better and people are happier. And then when you do hire somebody,

there's going to be more talent available and you've just opened it up that you can hire somebody anywhere in the world without an office and you don't have to relocate them and you don't have to pay. I don't know what you guys think the average additional cost is to be in San Francisco, but I'm going to say $30,000, so a $40,000 a year job or a $50, thousand dollar your job becomes a 70 or 80, something like that. And if all that happens, these companies are going to be so profitable that they're going to start growing and that leads us out of the economic downturn. Any thoughts on my thesis? That's not a thesis. That's a hope. Hope's not a fucking strategy, Jason. Well, I just think it's a potential way out. I think it,

I mean, what do you think in general about this trend of remote then, Jermott? I think it's great. And I think that we're realizing that, you know, there's no monopoly on innovation. And companies can be really productive remotely, that most of the work in an office is busy work and politics, and you can cut it all out. And you can do the same amount of work in much less time, which gives you more time to, frankly, be with your family or take up a hobby or learn a second language or a third language. I mean, I just think it's so much better for people to realize, like, we've got to, you know, it's not like you know it's not it's not 1820 or 1920 it's 20 it's 20 so we're going to live to

100 years old like we have a long time to be in the grind and so um you know working and accomplishing what you used to in half the time and not having to commute and being able to live where you want and your people you like man that has a huge positive impact to your kids you your community, it's just way better. I just think offices are just complete kind of like, it's all Shakespearean theater in the end. And cutting it all out is great. And specifically, San Francisco is just a complete cesspool dump of shit. And so, you know, being able to just get out of that city is just... All right, everybody, welcome to the all. You're listening to the all in podcast. I read some stats yesterday that were just so unbelievably shocking. Like, the number

of break-ins, the number of... Number one in the country. Number one in the country. The amount of disease that, like, communicable disease, like, typhoid. And I'm like, typhoid. I was born in a country and scratched and clod to emigrate as a refugee to leave a country that had typhoid as a disease. Welcome home.

Just to end up back in that in San Francisco. Did you bring it? That's a joke. That's an absolute joke. So, yeah, I mean, the idea that I'd never have to go to San Francisco ever again is, oh, my God, it brings joy to me. It is an unmitigated disaster. And I think this will be part of the boom bus cycle that, you know, David, you were part of when you were here at Stanford, you know, getting an office in San Francisco or having an apartment. It was cheaper, I think, in the city than it was down in Palo Alto, was it not?

Well, back in, yeah, when we moved Yammer to San Francisco, which was 2009, I think we were able to get space for 20. $20 a foot per year. Crazy. That's what I paid, 2007, 2008. I read a crazy article. It was about the Kushner's and this building that they own that Brookfield Asset Management was going to buy. And it said that they bought this building.

And so the Kushner's moved to like Park Avenue, the General Motors building, overlooking Central Park or something, right? It's a beautiful building. And it actually quoted in there the price that they were paid. It was incredible because it was like a hundred bucks a square foot per year. And I realized, oh my God,

they're paying less for Central Park views in New York than I'm paying for a warehouse in Palo Alto. What the fuck is going on? This makes no sense whatsoever. Yeah, that'd be supply and demand right there. And I thought to myself, like,

this is crazy. Like, California is so expensive. The taxes are so high. I think people are going to leave in droves, honestly. What do we think of Elon selling all his homes and then actually saying he's going to

leaving, you know, move Tesla out? I mean, I don't think it's a practical reality to move Tesla out of California. I think that the incremental facilities can be built wherever he wants him to be built based on where he gets a tax incentives. Well, but I think the Tesla-Fremont was a really

good example of this sort of like culture war that's going on, this political battle over lockdowns. And, you know, you had kind of a mid-level health department bureaucrat in Fremont padlocking their factory and saying they couldn't go back to work. Whereas if he was in Texas, he could. And then, you know, around the same time, you had this whole like chilly Luther thing in Texas where she was a small business owner, you know, owns like a haircut place. And she was basically going to be put in jail for a week for giving somebody a haircut. And there was like a, you know, dust up over that.

So, you know, I think that like, you know, the country is certainly ready to get back to work. And if this is the political debate, you know, in November, I'm not sure it will be because six months is a really long time from now. But was it four or five months? But if this is a political debate, I, you know, this will be the way that Trump gets reelected. Yep. I think there's going to be some pretty significant benefits because the reaction you guys are speaking to. It's not just about people moving, but it's a reaction to regulation. And that could have some pretty profound effects that could benefit certain sectors and businesses and accelerate new outcomes.

One of the things that, you know, I have a strong belief in is like I think in 20 years we could kind of eradicate all infectious disease. The only thing holding that up is regulation because the science is known. The engineering is basically there. And it's simply a function of getting these things approved and getting across the finish line. Doing gene editing in humans for genetic mutations that cause harm to humans is a technique that we've known for 20 years. And there was a guy, a patient that died in 1999 from one of the first AAV treatments, the viral vector gene editing treatments. After that, there was this clampdown and suddenly everything stopped. there was like no longer any progress in the space.

And they're just now starting to come back. And there's a lot of, you know, really interesting technology that has been kind of hindered. I mean, you know, not being able to put Teslas out, I think is the tip of the iceberg of what people are seeing regulation can do to businesses. And look, I'm by no stretch, you know, a libertarian party card carrier. But I do think, and I see it in businesses that I'm involved in all the time, that this, you know, incredibly onerous like overreaching regulatory burden and bureaucrats really hinder great new things from happening in the world and it's just become so friggin apparent how inept the people are that are making the decisions that are doing this to us are during this crisis and i think it could have

a profound benefit on kind of deregulation and accelerating the adoption of new tools and new technology that could really help us all um so i view the positive side of this it's not just like everyone's going to leave California. Like there's inept bureaucrats and overregulation everywhere. Let's talk geopolitics for a moment. Chamath, you know, you heard the president call it the Wuhan virus. Obviously, there's no doubt that it came from there. There is a debate. Was this something that was not created in a lab, but that was being studied in a lab and accidentally got out? And that's how the jump happened. And there's some tension there between China and the U.S. What do you think the global reaction is going to be and the fallout will be for China, if any, Japan? Japan.

is paying factories I read and helping subsidize them to move factories out of China so they can move that dependency. We obviously saw the dependency on PPE and drugs being made actually in Wuhan in that area and how we don't have a supply chain that we can rely on for really mission critical stuff. How will we look at this Chinese relationship in the United States and global post-pendent? This is the beginning of the modern Cold War. To hear Tremoth's take on China and date David Friedberg's plan for bringing manufacturing back to the U.S., subscribe to All-In, available on all-popular podcasting platforms, or go to bio.fm slash the all-in pod.