We Study Billionaires - The Investor’s Podcast Network - BTC037: Tech Entrepreneur To Bitcoin Investor w/ Jay Gould (Bitcoin Podcast)

Starting point is 00:00:00 You're listening to TIP. Hey everyone, welcome to this Wednesday's release of the show where we're talking about Bitcoin. Today's guest is a friend, entrepreneur, and fellow bitcoiner Jay Gold. Jay has been a tech entrepreneur for more than two decades. And on today's show, we get into a detailed conversation about many of those experiences that shaped his thinking on founding, building, and selling businesses. The last tech business that he sold, he sold for $33 million. And today, he's an active venture capitalist and a Bitcoin.

Starting point is 00:00:30 For the first half of the interview, we cover his lessons learned, trials and tribulations with raising money from billionaires like Reid Hoffman and much, much more. And then in the second half, we cover his thoughts on Bitcoin and how he thinks about it as an investment in his overall portfolio. I thoroughly enjoyed this conversation with Jay. He's just so open and candid with what he knows and what he's learned through the years. And so it's just an incredible lesson for people to kind of hear from this firsthand experience of all these different businesses that he's created through the years.

Starting point is 00:01:01 So with that, let's go ahead and dive in with Jay Gold. You're listening to Bitcoin Fundamentals by the Investors Podcast Network. Now for your host, Preston Pish. All right. So like I said in the introduction, I'm here with Jay. Jay, welcome to the show. I'm pumped to talk to you. I love talking to entrepreneurs.

Starting point is 00:01:34 So I'm excited to do this, man. I'm excited to be on. Thanks for bringing me on. I guess let's start here. My understanding is that you started your very first website business whenever you were in college. Mike, I guess my question for you is, are you a self-taught programmer? Were you outsourcing the code base to somebody else? Just give us some insights on how you got your start with your very first company.

Starting point is 00:01:57 Believe it or not, it wasn't programming. People always think I'm a programmer. I wasn't a programmer. I had these ideas. I used the internet, just like everybody else. I'm a power user. You see me on Clubhouse and stuff. and all these other things.

Starting point is 00:02:08 And I saw my behavior, and I've always felt I'm very average. I don't think I'm any different than anybody else. I think most people are just very similar to each other. And by the way, when you go down a path in school for pre-law, you take a lot of psychology classes and sociology and that kind of stuff too, right? And so you understand the mindset of people by taking these types of classes a little bit. So when I started to use the internet, I thought I was using like AOL in the chat rooms, like the early days in the 90s, you know?

Starting point is 00:02:36 And I was like, you know, I think this is going to be really big because of the way I felt using it, I was compelled and sucked in and drawn into this. It was addictive to me. It was like playing a video game. I was a big gamer as a kid. And I was like, you know, I think this is a thing, you know? And this was like late 90s in college, right? I graduated in 01. So in like 97, 98, 99, I'm having some friends that I met in like CS classes and shit.

Starting point is 00:02:57 There were programmers. And I really didn't have the bug for that. I wasn't really into it. But I was into wanting to build. I really wanted to build something that people wanted to use. And I saw the opportunity to build something where it could be massively scaled before I even thought of the term scale. Just lots of people using it, you know?

Starting point is 00:03:12 And I just knew how I felt about using these products. And I thought I could draw people in if we added certain types of features, just that and the other thing. So the first thing I built early days was not social, believe it or not. I was into e-commerce kind of websites, selling things and all that kind of stuff, you know, SM, SEO. Learned that. That was a good foundational base, right, from the marketing side of it, understood the users.

Starting point is 00:03:33 And when I started to get into like building social media sites, that was the first thing I really did after the e-commerce stuff to make a little money. The first thing I did was I built a dating site. And I built that site and had a real early success there sold that, like 2003, I guess. Were you hiring the programmers or what were you doing? You could do that back then. Today I say to people, my path that the way I went, I don't think you could replicate that path. Today, everybody who's a good programmer in the way the world is with the zero percent. We'll probably go in and out of like Bitcoin, as you said, with the zero percent interest

Starting point is 00:04:07 rates today. Money's almost free. So if you're a good, talented developer, you don't need to work for me. Just go get money from somebody and build it yourself. You have your own company. That was not the case in the late 90s, right? People didn't understand how to raise money. It wasn't widely available. There wasn't YouTube yet. There wasn't blogs, like people like Naval Ravikin teaching people, how to raise money and how a term sheet works and all this kind of stuff. So we've democratized the information for people to freely understand how to do this, which is great. because we're getting better products and lots of companies you're being created. And amazing things come out of that.

Starting point is 00:04:38 But when I did it, it was not as competitive as it is today. So when I started to do it, I could hire people to work for me and not even paying a lot of money, right? Can people find people in India and Pakistan and all parts of the world through like Elance and stuff like that? And that's what I did. In the beginning, it was kids in college that I knew. And then over time, I found people through the internet and became friends with these guys

Starting point is 00:04:57 and still friends over 20 years of some of these people. And we built some of the earlier stuff together. Yeah, it's funny. I know whenever I was just starting my business, I used E-LANCE a lot. And it was almost like a cheat code that nobody else out there was really. And I think, what was it, O-Desk bought them. I think if you search for E-LANS right now, it won't even take you to that site. But I just remember using it and just being like, wow, like I can get like deliverables,

Starting point is 00:05:25 like digital deliverables for just unbelievable prices. That's fascinating. So you're building these sites. You're probably you're flipping them. You're selling them, but not for a lot of money, like a couple thousand here and there and just kind of. Rader Day was the first one I sold. I had a body jewelry website. I had a lot of other stuff that I didn't sell.

Starting point is 00:05:44 I was just making money on. But on Rader Day, I copied Hot or Not. I'm actually friends with the founder of Hot or Not James Hong. Now I am. Back then, I copied him. But he had Hot or Not. And actually on his website, he had a link at the bottom. I think it was called Copycat sites or something like that.

Starting point is 00:05:58 And that was one of the companies. There was like tons of like rate this or that, rate my car, rate my prom dress, rate my dog cat. And then I had rate or date, which was a little bit more directly competitive to what they were doing. But they were obviously the best, him and Jim, you know. And it did really well. Like it was a free thing when online dating was still paid.

Starting point is 00:06:14 And it seemed ridiculous to me that you would pay a membership for dating when I could create it for free and monetize it through advertising. I was like, this is not sustainable for Match.com. What a little did I know. They're huge companies today, right? But back then 20 years ago, I was like, that's not sustainable. Like, if I could offer this for free through advertising ad support, I know I'll make less money than if I had a subscription base, but I'll have a place in the world and I'll compete and siphon off some of their customer base, right? And that's what I did. And so I got to like maybe 100,000 members and I sold it to Matchnet PLC, which I think is now Spark Networks. They own American Singles.com, J-Date, and a bunch of these dating sites. So there's a guy named HUD. That's his nickname, HUD.com, is his blog, Philip Kaplan. He started Adbright and he now runs the largest music distribution service on the the web, which is called DistroKid. And in the early days, he created before like even Instagram was

Starting point is 00:07:02 around, I think it was called Mobog. He had like this mobile, before it had iPhone apps and stuff, right? Before the even iPhone, he had like a mobile app uploading site for photos, believe it or not, right? Really cool. And he sold a site through eBay, which was like, I was like, oh, that's a great idea. So I listed it on eBay within days. Yeah, but I didn't sell it on eBay. I listed it. I got all this inbound. I took the listing down and then I negotiated and I sold it. So I saw what he did. I was always tracking some of the guys in the industry. And I said, you know, that's a good idea. Let me see if I list it.

Starting point is 00:07:33 And all of a sudden, like this big company reaches out. And they were like, they didn't even know about me, right? And they're like, how are these guys getting these numbers? And they verify the numbers and we negotiated and we sold it. I didn't get rich or anything off of it. But it did show me that there's a there there. Yeah. Yeah.

Starting point is 00:07:47 And I was like, holy cow, I got to run with this, you know. And so then I built another social network, which was socialtree.com. People never heard of this, but SocialTree.com was competing with like Friendster back in the day, right? So Raider Date was kind of pre-Friendsterr or right around that time. Back then, they were like, we used to call them profile sites. There was Black Planet. There was Asia Magenta. There was MySpace.

Starting point is 00:08:10 There was Friendster. There was Face thejory.com, the dilly.com. There was all these like profile sites, right? You go and you create a little profile. It was kind of, there were social networks, but nobody was calling it that yet, you know. And so I thought, well, the dating thing, like the stigma was hard to get people to join because of the stigma of dating. and not everybody's looking to date, right? I was like, but I do think, like the early days of AOL chat rooms,

Starting point is 00:08:29 I do think people want to just hang out and communicate. I think generally people are kind of bored and looking for community and connection. I saw that early on. And so I built Social Tree. We built a little audience. And I was trying to compete with Friendster. Then Friendster got beat by Myspaces, as we all know, because we hear it all the time of Bitcoin. Is Bitcoin the next Myspace, right?

Starting point is 00:08:46 So, but it's not. We can get into that. But the long story short is that I saw that there was a there with Rader Day. I created Social Tree, and with Social Tree, it actually introduced me to the biggest idea I've ever had. So we were now competing with Friendster and moving towards competing with Myspace. And MySpace allowed, if you remember, you to customize the CSS, the style sheets and stuff of your page. You can change the colors and embed things. So we said, well, that's cool.

Starting point is 00:09:11 We should do that too. If that's what kids want to do, we should do that. I was a kid too then. And so we did it. And a kid took a video and he embedded it into his profile and he sourced the source-equal. from a video file that he found somewhere else. And I pulled it into the video player. And I said, wow, it's really smart.

Starting point is 00:09:28 And my programmer, yeah, he embedded it in, right? And it was just like you could do for an image, right? And he sourced it in with the video. And I was like, that's really cool how he did it because he had like a Windows media player and he sourced into source equals file. I was like, it's really genius. And my program was like, we should take it down because of copyright. And I was like, no, obviously this is cool.

Starting point is 00:09:43 We're fascinated by it. I'm looking at his video. I thought it was kind of cool. You weren't even hosting the video. You just had the reference. The way he did it, he had the, That's right. And then when we first did it, by the way, that website that I'm about to tell you about, that was called music video codes. This is not rocket science here at Preston, right? So I'm looking at

Starting point is 00:10:01 the HTML code and I'm like, it's a music video. Let's call it music video codes. And if you go to like Google, what are they called trends, I think, where you can see like search terms and stuff. Yeah. Music video codes is like flat. And then there was a moment in time like flying way up and then it came down. It was like insanely popular in the mid-2000s. That led me to building a video sharing site because when I put all the music videos uploaded to the site and gave everybody the codes so they can embed that code. Now you're switching and now you're hosting. That's right.

Starting point is 00:10:33 So I gave everybody, every music video has ever been created. We created a directory. Everything's there. And I thought, well, this will help social tree become really popular. We'll have the two sister sites and feed people in and we'll get them coming from my space, but then we're like cross promote my social net. That was my master plan was to be like what Facebook is today. I was like, oh, you know, I never thought it would be that big.

Starting point is 00:10:51 But I thought it would be a big thing. And what ended up happening is we started to bring people in and using video codes just took off and nobody ever clicked the other link to go to social training. It just was going. Like within a couple of days, it was thousands, tens of thousands, hundreds of thousands, and then millions. We ended up getting over 40 million views a day in 2005. God.

Starting point is 00:11:10 This is before YouTube existed, right? Wow. And the story goes, and I'll tell you the inside story, and I'd love to hear chat or Steve tell me something different, copy me. because I was out first, and I know it's true because one of my investors, my previous, another company I had was Reed Hoffman, the founder of Lincoln. Yeah, yeah. And so Reed told me that those guys squatted in the offices of LinkedIn because they used

Starting point is 00:11:34 to work for him when he worked at PayPal. They were junior guys, right? They were like graphic designers and program. And so they came over and they were like, can we use some space? And they had like a dating thing first. Sounds familiar, right? Dating thing for YouTube. And then it kind of converted over and became a video.

Starting point is 00:11:48 They had the technology, but they converted over to video sharing. And in the very early days, I was the only one to allow you to upload the video, give you a code, and then take that code and embedded on the third party side. The first one to do that. It wasn't very long after that that people started to say, well, if he can do it, it must not be not profitable. So there's got to be a way to monetize this. How was he able to do that?

Starting point is 00:12:07 So that's what we were doing. So we kind of like showed everybody. And I got to tell you, I sat down with a spreadsheet dude, and I modeled this out for like days and days and days. And I was like, I was worried that like this would scale. And then I would just like rack up server bills and be out of business real quick, right? Like I'm not going to be able to pay this stuff. And it was a little worrisome for the first like month or two because you're waiting on checks

Starting point is 00:12:26 from ad networks and stuff. I was really worried. I maxed out credit cards. I started getting credit cards and like applying for 2000 here, 5,000. And I was just like paying for all the servers and stuff at Softlayer and the planet. And I was racking up. I had like $65, $75,000 in debt before any checks came in. And this is just all for server space.

Starting point is 00:12:46 Yeah. This was all operational costs. It was crazy how fast it's scale. It's scaled. And my thing was this. At the beginning, I was very nervous when I thought to myself, before I pulled the trigger, I said, what's the worst that could happen? The worst that could happen is these deserver bills go crazy, which is not a bad thing.

Starting point is 00:13:02 It means you have scale and you have traction. People care, right? The worst thing is that the advertising networks don't pay me and I go bankrupt. But then I thought about it and I was like, but I am bankrupt. When you really think about it, everybody listening to this, you're already bankrupt for the most part, right? Unless you're already rich, right? But most people, they just don't know they are.

Starting point is 00:13:19 You have a job, right? You have income and you have expenses like a mortgage and a car payment. But effectively, you owe everything to the bank. They own everything. You don't own anything, right? So take a risk. Worst can happen is you wipe it out seven years from now. You start over, right?

Starting point is 00:13:33 And I got over that really quick. I was like, if it doesn't work out, I'm so young. I was like early 20s, what's the worst thing could happen? Before I'm even 30, I'll be back to fine, you know? And so I just took the bet and it scaled really fast. And then I ended up selling that company to a company in New York City because once I hit scale, this is Bolt that bought it. Once I hit scale like tens of millions of people, I didn't realize.

Starting point is 00:13:56 But like, and I was a young kid in my mid early to mid-20s, everybody started calling me like benchmark capital, Sequoia, like all these venture capitals. I didn't even know a venture capital was. So I'm like, who are these guys? They're analysts that work there, you know? And they're all like, we'd like get a meeting with you. I'm like, how do they even know who we are? Where are they finding me?

Starting point is 00:14:12 Like, are they on these websites? and they found my website, but we don't have a phone number. How do they even get my phone? It was really weird, right? But they know what they're doing. So I was really afraid. And then companies started to call. We'd like to buy you.

Starting point is 00:14:24 So it sounds to me like they were getting their queuing from the hosting companies. That's probably the only way that they would be able to know. They're probably pinging these hosting companies saying, hey, which websites are just growing like crazy? And how can we get the number of them? What I didn't know, I know now, but they were using Comscore Nielsen. And so I was showing up number one for music and number one for entertainment and video and stuff. I was like number one on ComScore.

Starting point is 00:14:50 And they're like, who is this site? We never heard of these guys. So everybody wants to invest in this thing that comes out of nowhere and it's really fast. Yeah. Right. So everybody contacted me. And I just didn't understand venture capital like from a very young kid. Like didn't, I didn't go to school for economics or finance.

Starting point is 00:15:04 I was like it sounded like they wanted something out of me and I was going to get the wrong into that deal because I didn't have to negotiate it. But when the guys came in with offers to buy it, that was a different story, right? It was like, okay, sense of ownership, control. These guys were talking about board seats, two to one, and it was crazy and like preferred dividends. And there was all kinds of terms I didn't understand. And again, like I said earlier, the Navavs of the world didn't exist on these blogs like venture hacks to teach anybody of this stuff in like 2005, right? So how would you know?

Starting point is 00:15:32 And I wasn't in that circle. So Gorilla Nation, stupid videos.com, bolt.com. There was a lot of these kind of like mid-sized internet companies that had raised some funding and stuff like that. that had investors. They understood that came better than me. And the founders of Bolt were very close. It was New York City. I live in Jersey. I'm not that far from them. Luke Turner, who started Dot TV and sold it for, I think, $100 million. Aaron Cohen, who was the founder of Bolt.com. And Boll.com was founded in 1996 as the first social network. So I'm like, all right, these guys, they know what they're doing? So I said, well, what's the deal? So I negotiated a deal for an equity

Starting point is 00:16:05 deal. I didn't get very much cash on that transaction. But I came a third partner with Lou and Aaron. And I thought to myself, I'm a third partner with these guys. This guy sold a company for $100 million. He used to work at Goldberg. I'm in Sacks. They went to Ivy League schools like Columbia and they went to Stanford. And I'm like, this is like way out of my league, right? So my dad, who's a carpenter, my stepdad, he said at the time, he's like, what are you crazy? There's a guy offering you a $2 million in cash. Take the cash. And I'm going with Lou and Aaron. And I'm like, I'm not taking the cash. I'm going with these guys. He's like, you're crazy. Like, you know, my dad's not rich. And he's like, take the

Starting point is 00:16:32 money. And I'm like, if I take that $2 million, I'm going to pay taxes, I'm left with a million dollars, goodbye house. I got to go find a job? No, I don't think so. I'd rather go to, I'd rather go to school. And for me, I wanted to go become a student of Aaron and Lou. And again, I built a network through these guys too. Like I just, I didn't think that at the time I'd build a network, but I built a network very quickly. Credibility, authority, network. You know, that's what I did. And so I sold to them.

Starting point is 00:16:58 We kept scaling. YouTube eventually surpassed us. They beat us, right? They came out of nowhere and they kind of beat us. That's a whole different story. And then we got sued by Universal Music. So, and because of the earlier days of music video. It came back to haunt us.

Starting point is 00:17:13 And it killed the company. Jay, leading up to all this, you have lightning in a bottle, it's scaling, it's exploding, and so a person who's listening to this, they're sitting there looking at themselves and they're saying, how can I replicate this? So what in any of this was replicable versus just kind of being the guy who's in the right spot at the right time that has, and I don't want to take away from the the situation that you created because you worked extremely hard to grow this. But like, what is replicable or what would you say the takeaway is for somebody listening

Starting point is 00:17:50 to this who's inspired by the story and wants to do some of the same for themselves? I would say that some of its luck. I would say to its people. I think success is a function of, in my opinion, having opportunities available. A lot of people don't have opportunities. Like if I was born in Kenya, I wouldn't have been able to do any of this, right? So opportunities are important, right? And even if you're in the U.S., there's different opportunities in different parts

Starting point is 00:18:11 the country, different socioeconomic backgrounds, all this kind of stuff. So opportunities are available to a lot of people that I had, very similar opportunities that I've had to probably millions of people, right? So it wasn't very unique in that sense. It wasn't like I was born to Silver Spoon. But then you got to make the right choices, Preston. And that's a function of having pattern recognition, in my opinion, and good instincts and intuition, which is based through your experiences growing up. And so for me, I think there was just, and I call that a little bit of luck. You sprinkle a lock right there. You got opportunities, making the choices, and then you need a little bit of luck. I think the lightning in the bottle is a good way to describe music video codes. But then from

Starting point is 00:18:43 there, you have to then be able to have that pattern recognition to know the adapt and evolve and the iteration of building a product to scale. Because it's not like you had that one thing and then it was like, there's a lot. I'm oversimplifying things. It took months and months for us to get to a product market fit before I even know what product market fit was, you know, and Eric Ries and his book and, you know, lean startup. None of that existed back then. You kind of just figured all, I was in his generation. It is all of us figuring this out on the fly. So for those listening to try to figure it out, you got to be able to see what's

Starting point is 00:19:14 happening in the market, see what's happening in your life, understand the way people work from a psychological perspective when you're doing social because it is all about the mind. And then you have to be able to build a product around that. You really recognize the technological change that was happening as a young kid. You're like, hey, this internet thing is going to be huge, right? So when you look across the landscape today, what do you see out there from a technological standpoint that would be akin to this that's happening right now?

Starting point is 00:19:44 Well, I met you on Clubhouse. And I think audio, I don't know if it's going to be Clubhouse, but I think drop in audio, whether it's going to be on Twitter for spaces or something. I think that's the next movement. It's surprising in many ways. I had the opportunity to meet Ev Williams, the founder of blogger.com, medium, and Twitter, co-founder of Twitter back in 2006, December of 2006, introduced at a party. And somebody said, go ask him about this Twitter thing. He was running a podcasting platform called Odeo. He started

Starting point is 00:20:13 blogger, sold it to Google, pre-IPO. I think you sold it for them, pre-IPO, Google, obviously. He starts Odeo next. And then he goes with his investors and says, I'm going to return the capital because it's not working out. And I don't think the world's quite ready for audio. But I actually think we have something else we built, which they used internally to communicate, which I guess was Jack Dorsey, I think we created it for him because he was working for audio. I remember the story correctly. So he creates this and they were communicating internally using it, I guess. And they were like, we like this.

Starting point is 00:20:39 So I talked to Ev at this party and I said, well, describe this to me. And this is 06. Free iPhone. Imagine understanding, I was just thinking that Twitter is in the scale before an app. Yeah. It's like a web-based product. And his description of it was really interesting. And he was kind of a, you know, like a typical programmery tech guy.

Starting point is 00:20:58 He was a little awkward, you know. And he's like, well, you go to Twitter. you sign up, create an account. I was like, okay. He goes, and then, you know, you go on your phone and you go on your contacts and you add a short code. I was like, what's a short code? He's like, it's like five or six digits, but five or six digits, like 40, 40, 40, four. I was like, okay, he goes, name it Twitter. I'm like, whoa, there's a lot of friction here. I'm like, okay. But I'd say that to, I'm like, okay. And then when you do that, every time somebody that you follow on, once you go back to the website, you start following your friends or people you like and

Starting point is 00:21:25 they follow you and you, when you send something out to that short code, they'll receive the text message. And I'm like, so isn't this like, I said this to him. I go, isn't this kind of like almost like a group test message? And he goes, yeah, I guess it is like group texting. I was like, okay. So why do I need to use Twitter? I was so confused. And he's like, well, maybe you don't. I was like, okay. You're giving all the money back for audio to your investors. Because he's one of the investors told me, I think he came out of pocket to make them whole on what he spent. If I'm not mistaken, you're giving all the money back. And then you're saying if you want to invest in this other thing, you obviously see something here. What are you seeing that I'm not hearing? Yeah, yeah, yeah. And he's like, he goes, I don't know, maybe we're just. drinking the Kool-Aid or something like that. And I was like, that's when you want to ask even more questions. I had to leave, right? I walk over to read. I think was reading Josh Coppiment. I walked over and they were like, what did you think? I think he should just take him money back. Worst advice ever. It's like a $15, $20 billion company, right? But how could you know without, this is the difference between great entrepreneurs,

Starting point is 00:22:18 as obviously a great entrepreneur. And I'm a good entrepreneur, right? But he's unbelievable. And they can see that, that vision in the future. And I can see it. I've been good at that several times. We can go through a couple of those, like social network, online video sharing, video ad networks, things like that. But he's been hitting it every time. And every one of these companies are like billion-dollar companies. So he was able to envision that it's probably going to, he probably envisioned it's going to go to mobile in the future. And I couldn't understand that, you know? I mean, he was talking about mobile, but he's talking about it from a text message perspective. And I think in his mind, it's like we think about Bitcoin. It's only going

Starting point is 00:22:53 to get better. This isn't the end of the road. He's envisioning like the growth story. the future, the secular growth trend of internet usage and adoption and speed of the internet, which I did with online video desktop, right, when I was doing the video sharing site. Everybody was like, oh, most people don't broadband. I'm like, but the penetration growth numbers are going up when you look at Forrester and stuff. Let's take a quick break and hear from today's sponsors. All right. I want you guys to imagine spending three days in Oslo at the height of the summer.

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Starting point is 00:27:20 Back to the show. They were seeing it in application there as a messaging within their company, and it's completely different when you're seeing something versus somebody just explaining. He was just telling me. Yeah, exactly. I didn't use the problem. And literally, if you look at my account, I think I joined a few months after he, I didn't even join that day, right?

Starting point is 00:27:38 So if you look at my account, I think it was like March of 07 or something like that. I met him in December of 06. So early, early days, I was like, oh, really interesting. But I stopped using it that much, you know? But then I know what I thought Twitter was like what it is today when I saw Ashton Coucher join? Then I was like, ah, I get it. This is a broadcasting platform for famous people. This is not a communication tool for the average person.

Starting point is 00:28:03 Although most we're on here and you see all like the Bitcoin plebs and stuff and I have like 50 followers and they're adding you and you head them back. But like it can't be as enjoyable for you as like 250,000 followers. You put out. You get great feedback right away. Well, you get access to somebody you'd never have access to. And you can have interactions with people. that you would never have interactions with it. 100%.

Starting point is 00:28:22 Which is why, to your question, what's next? Is why I really love the audio, because it's more context. It's not a tweet and a meme. You could send it out. And then if you say something like Bitcoin Tina, right? Let's talk about Tina. So Tina comes on, Clubhouse, and he says these inflammatory crazy things and he does the same thing on Twitter.

Starting point is 00:28:38 He acts the same way in Clubhouse. But nobody actually does the follow-up question with him. They love how he acts, right? Because he's like a character. It's high band. I pissed them off the other day. I was like, he always asked so many questions. I was like, isn't that why we're here?

Starting point is 00:28:51 I'm not here to listen to you to a diet trap and then not question what you're saying. Yeah. He was saying something. And I was like, well, explain why. And he's like, well, it's because of this. I go, but she didn't really explain it. Can you go in a little deeper? And then he tried to say something very high level.

Starting point is 00:29:03 And then I go, no, no, no, because I'm not like everybody else that just listens to him. I'm like, I'm really just trying to understand what you're saying. In Twitter, he would tweet it and you could ask him and he could just ignore it. But on Clubhouse, you're pressed. I want to ask you. And you got it. And so that's why I love the audio because we'd have a conversation. you can really learn from people.

Starting point is 00:29:20 It's the equivalent. I would say the equivalent of like listening to a radio station versus like high deaf TV where Twitter right now is like you can put out a little, you know, a little tweet. It's text. There's, it's really hard to understand the context. It's hard to understand the confidence in the person's voice, right? Like you're not hearing any of that. You get on clubhouse or you get on, what do they call it on Twitter spaces?

Starting point is 00:29:44 By the way, you should be doing spaces. I know, man. You'd be getting like 10,000 people in these rooms. I guess I'm just too lazy to do it. That's what it is. I think that's what it is. I've done it a few times. It's been good.

Starting point is 00:29:57 Let me know. Pick me when you do it. I've enjoyed the conversations. It's just, I don't know. I see people doing it all the time and I'm just like, oh, God, I just don't. Too much is too much, but I want to do that right now. I'm just, I just want to sit down and just like kind of relax and have a bourbon or something. Hey, so let's go back to the legal piece of this.

Starting point is 00:30:16 So you've done the music video codes website. You have to know that like you're in that gray space, right? Like I'm onboarding like, would you say 40 million a day, which is? Well, we were getting like five to 10,000 uploads of videos a day in 2005. It was crazy. I think at some point it peaked at like maybe 50,000 plus it or something. And the number of people viewing the videos throughout the web, like virally, right, was 40 million a day. Yeah.

Starting point is 00:30:44 You got all that going on. And you have to be in the back of your mind saying, okay, so I'm getting a lot of traction. I'm probably getting a lot of traction because I'm on this cusp of a legal battle potentially with these content creators that are making the music and the videos that are being hosted there. So what were you doing leading up to the lawsuit, right? To protect yourself or to guard against this, just walk us through kind of the thought process, especially with your background. You know, you got this background and law, right?

Starting point is 00:31:17 So two things. Number one, I actually wasn't so sure that I was breaking any copyright laws because I looked into this. And we'll fast forward, from what I'm saying. About two years later, I sat down with Wendy McGrath, the CEO of MTV Networks. And so what I suspected was actually true because I Googled and did all these searches and I talked to lawyers. And I couldn't find a license agreement for video, music videos. I could find it for audio music, but I couldn't find it for music, right? Like videos.

Starting point is 00:31:43 Yeah. Yeah, yeah, can't find music video licensing agreements anywhere. They didn't exist in 2004 and five. So I thought, is it promotional value? Because they do call them promotional videos. And the interesting part was you have labels that are major labels. You have the universals and the Sonys and the largest, the big four. And they have smaller labels underneath each of those.

Starting point is 00:32:03 And those smaller labels found out who we were too. And they would send, it was so funny. It was like old tool stuff. They would send you CDs of their new artists. And they would give you on the CDs, their music videos. Please put this on your website. Meanwhile, a few years later, they're parent labels suing me. They're giving me the stuff and saying, please put it on the website.

Starting point is 00:32:20 So they're not even communicating, left-hand, right? So I didn't even think it was necessarily illegal because I couldn't find anywhere that there's licensing. There's no one. But at some point before I even sold the company, Universal reached out to me and they said, we don't have a licensing agreement for this, but we need to put one that, we need to put one in place with you because the scale of it, right? And I was like, that doesn't make sense.

Starting point is 00:32:41 If you don't have it. And they were like, yeah, well, we need to define something. So they gave me a licensing agreement. I said, well, how am I going to pay licensing fees for all the stuff that's on other websites? The stuff that's on my website I can track, but I don't kind of lied. I was like, I don't really know how many views those are. Oh, you're saying for the embedded, you're saying for the embedded plays.

Starting point is 00:32:59 I got you. I mean, I knew exactly what we had, but I was like, I don't really know that. So, but I know it's on my website because I can track it with a pixel on the page, but that the video gets taken somewhere else. And they were like, yeah, yeah, that makes sense. So we signed a contract. I had an agreement with them that I only pay for the licensing on a CPM basis on the website, on my website, right?

Starting point is 00:33:18 But if it got played in some other player, okay. They said, we'll deal with that later. We'll make them pay for the licensing when your video gets embedded. They're going to have to contact all these books. I go, oh, that's fine. So I'm thinking it's way bigger off my site than on my site, right? I was paying them thousands, I don't know, $10,000, $20,000 a month at some point, you know, it was crazy just from the licensing on our website, not virally.

Starting point is 00:33:38 Just universal. Universal. How did they know which videos were universal videos versus non-universal videos? I'll ask you a question. How does the IRS and how much money you made last year? It's the same thing. It's self-reported. I got it.

Starting point is 00:33:53 They could audit, right? Like if they wanted to, because under the contract, they could come in, audit the servers. But the burden of proof is like crazy. Yeah, I got you. They were happy to get their $20,000 a month or whatever these numbers were, right? So they were like, whoa, this is crazy, right? They weren't getting that from any video company, right, for video, music videos. So when I sold it to Bolt, I told Lou and Aaron, I have this licensing agreement.

Starting point is 00:34:12 It's in place, but we got to keep this. They threw it away. They sunset my website. They merged the traffic into Bolt.com. In the two-month period, I was the one that ran the product for them because I was the product developer guy, kind of, you know, my role in the beginning of the company, I think was like VP product when I first came in. Eventually, I became the president of the company.

Starting point is 00:34:28 But I came in and I basically reshape the entire social network into a video sharing site. So they weren't concerned at all. Like they weren't thinking like, I mean, Universal's going to stop seeing the check show up. I said, guys, you can't just not write the check. Like, what are we doing? Because like, weighing it down maybe, but like you can't just cold turkey. And within like a year, they filed a lawsuit against us, MySpace, really Fox, because they bought MySpace. So they sued us, Fox and Sony, their competitor. Sony owned what is now Crackle. Then it was called Grupper, grouper with an arm. So they sued us the three of them. I made one, might have made a fourth one in

Starting point is 00:35:02 there. But they sued the three of us for sure. I mean, if you just Google like bolt.com universal So a lawsuit, there's all kinds of articles in the Times and financial times, New York Times. It was everywhere. Wall Street Journal. It was a big deal. If I'm not mistaken, I want to say it was a $150,000 fine per occurrence based on their way they would have done it with the lawsuit. And that's, I think it was like a billion dollar plus if we had to pay the fines at the

Starting point is 00:35:25 end. It was like it was not impossible to pay. It's just a total stop. Everything you pulled down the site or? No, no, no. They filed the lawsuit like a year or so later, and then we fought it for a while, and we were just draining and draining. It was taking all the profitability of the business.

Starting point is 00:35:43 Then it was, then we raised a little bit of money from some angel investors and fighting and fighting. You were telling me Mark Cuban came into the mix here. Mark Cuban, I reached out to Mark on his blog Maverick website. He has like his email. Anybody could email him. He'll probably write your back 10 minutes. Like he's pretty cool like that.

Starting point is 00:35:59 But I went back and forth. And he was writing a lot about YouTube, which I think he was a little salty to be honest, because he did broadcast.com. Yeah, yeah. And he sold for $5 billion. And YouTube was like, you know, this trajectory. He didn't sell yet when he was talking on his blog all time. And he's like, there's no model here.

Starting point is 00:36:12 And he just didn't like what they were doing. He thought that they were building the business on the backs of, I think copyrighted content. He was a copyright owner because he owned the HD, I think HD Net was the name of it. Remember he had the TV thing? Yeah, movie business. He had the movie business with Wagner. Anyway, I think he was a little, frankly, I think was a little salty in hindsight. I didn't think that at the time.

Starting point is 00:36:29 But thank God at the time because he was like, but I can help you guys. I know Doug Morris from Universal. I was like, really? And he's like, I could get rid of this, right? And then his offer to me was, he goes, but I need to, I got to invest. I got to do this for free. And I was like, sure. And he's like, but I got to invest. I want 75%. I'm like, how much are you investing? This is what I want. And it was almost like a blank chat. The way he was going back and forth an email. We never spoke to him on the phone. This is like weeks and weeks with Mark on emails. It was like, every five minutes. It's like, it's 75%. It's almost like he said it was a blank check. He's like,

Starting point is 00:36:58 whatever it takes, I'm obviously going to put the money in. And then if it keeps grown, then we'll raise money from BC's and stuff. And I was like, I went back to Lou and Aaron. I couldn't sell it. They were like 75%. This is 25% between the three of us. And they were like, no, we'll take our chances. And it was a bad decision in the end.

Starting point is 00:37:14 Well, you don't know what would have happened. Maybe it would have failed with Mark as well. They may have. They thought Universal, Doug Moore, CEO, Universal, he said to us on a conference call with the lawyers once, if you Googled Bolt back then, I don't know if you could find it now. They had previously raised $60 million for venture capital. I think Highland Capital was the main VC.

Starting point is 00:37:33 But they recapped the company before they bought me like a year or two before. So they were running out of money after the dot comrade crash in 2000. About 2002 or three or four, I forget exactly when. They recapped the company. It was about to go bankrupt. They ran out of money and everything was dying in the internet back in the early 2000s. But Lou and Aaron said, we'll buy it back. And the VC said, sure, if you want to buy it back.

Starting point is 00:37:50 So I think they bought it back for like a half a million dollars after they've raised $60 million. Totally recap the company. The investors are not involved anymore. So when Universal sued us, they were like, oh, and they did the research lawyers. They were like, and they said it on a call with us, they were like, didn't you It was like, we were going back and forth negotiating. We'll try to find a buyer and this.

Starting point is 00:38:06 And Doug comes off a mute once. He's like, this is Doug. Don't you guys have like $60 million raised? Can't we just do it? What the hell's going on here? He's in Highland, your VCs. We're like, no, we recap the company. You can hear pin drop.

Starting point is 00:38:17 We're like, hello? And he's like, that's unfortunate. We're like, well, yeah, but can we just works on that? He goes, well, unfortunately, we're not dropping the lawsuit. You might be a casualty of war here. I'm sorry. I didn't really mean to do that to a private company. He's like, well, he's apologetic about it.

Starting point is 00:38:30 He's like, but, you know, unfortunately, we're not dropping the lawsuit over this. He hit mute. We never heard his voice ever again. I'm thinking about like, I'm sure you've war game. Like, what could I have done difference so that I come out of this with whatever amount? Any amounts better than zero, right? So, you know, thinking about it, would you try to then sell it to Universal if you had to do it all over? We did try to do that.

Starting point is 00:38:53 So what they ended up doing, you might remember. And I can't remember the, is this the website? Let me just look real fast, Justin. So what they ended up doing was building vivo. So it was a consortium of all the labels. Just like you saw Hulu for, right? They all got together and they did Hulu. I think they did Vivo, if I'm mistaken.

Starting point is 00:39:09 So they were like, we don't need you, right? And that's, they thought, we own the content. We don't need these guys. We have the content. I'm like, but we have the scale, dude. You're not going to just get 40 million people like that. You have the SEO juice. It's like already in place.

Starting point is 00:39:23 It was insane that they wanted to shut it down. I was like, why don't you just bring it in? And then we can make this going a whole different direction. And they had no interest of you in giving an offer. I will say this, though, when you, yeah, no, not even an offer. It was just like, no, they wanted precedent going back to my pre-law degree. They wanted that precedent. And we didn't want to give it to them.

Starting point is 00:39:42 We ended up shutting the company down through an ABC and assignment for the benefited creditors. We didn't actually file bankruptcy. We liquidated and whatever was left, everybody got, whatever they got. And we did that because we're like, if you're not going to work with us, we're not going to give you the right to just use this lawsuit and a verdict as a precedent for everybody else. So we took one for the team being the whole internet. And what ended up happening was Viacom sued Google. It's like war stories.

Starting point is 00:40:06 Viacom sued Google for YouTube. And Google ended up beating them. And I remember it was like maybe a couple years after we were done and I was moved on to the next thing. And I remember reaching back after like instant messenger back then to like Aaron or Lou. And I was like, look at this. It was like a 10K filing. They ended up spending $100 million defending it at Google.

Starting point is 00:40:24 Oh, my God. 100 million. I was actually happy to see that. I was like, we would have never been able to do that. We were trying to go the distance. Eventually, it would have been inevitable. That's right. Yeah.

Starting point is 00:40:33 Inevitably, we would have gotten shut down. Okay. So let's transition to the company that you founded gamers media, which was then ultimately rebranded as Yoshi. This was your really big win, right, Jay? Yeah. This was, this was a, like again, YouTube sold for $1.5 billion. We did the back of the napkin, Preston.

Starting point is 00:40:56 We're like, well, if we have this much traffic and they have that much, I did, oh my God, we're worth a few hundred million dollars and then worth nothing, right? But in between those two companies was a company called WikiU. So on the heels of this, this was going to be shut down, a guy named Raj Kapoor, who was just a guest on my show recently, the founder of Snapfish. At that time, he was at Mayfield Fund. So he had, one of his investors was Mayfield for Snapfish. He sold Snapfish for. Reed was involved in this too, right? Reed Hoffman. Correct, which came through Raj. And this is what I found. So the first time around, I have traction and I shun all the VCs and I go down with these entrepreneurs and do I go down.

Starting point is 00:41:33 And it didn't work out. And then I said, I got an idea. And I had this idea for a while, which was, and this is really interesting too, because there was a notebook down from Mark Zuckerberg. And one of the idea, I forget what he called it, but one of the ideas he had was basically WikiU. It was one of these things like we might do this. And the idea was he wanted to get more adoption for the social network.

Starting point is 00:41:54 In the early days, it was hard to get people to join these things. They didn't join like they do today because there was a stigma about, uh, It sounds like dating. You know, this is like early 2000s. And the idea was, if you don't want to be on there, Preston, I'll just create your profile. And then you'll claim it. It's like a Wikipedia bitch, right? So that was my idea.

Starting point is 00:42:11 I had this idea. I always talked about it. And when I was a bolt. And then Raj Kapoor knocks on the door. He calls up, says, yeah, I'm going to be in the city. You might as well come by the office. Comes by the office. He says, I'm an investor in a social network called TAGG, and I think it's called Miwi

Starting point is 00:42:24 now or something like that. And so, but anyway, so he comes in. He's like, I'd like to merge you guys. So he was seeing an opportunity of a distressed company, merge these guys in, bring the founders in, merge the assets and bankrupt the liabilities kind of thing. You know, this is a common thing that you say when the company has problems. We weren't open to that. I happily flew out to San Francisco.

Starting point is 00:42:43 I met with Greg and John is his co-founder. And we sat down at a coffee shop. They were real great guys and really smart guys. I think with the Harvard. And I was like, you know, I got one question for you guys. When we merge in, if this happens, who's the boss? The critical question. I was 26 years old, but I knew Aaron cared, right?

Starting point is 00:43:02 Because Aaron had been running Bolt since 1996, right? And this is like 2006. So 10 years he put into his life into this thing, right? I said, who's gonna be the boss? And Greg's like, he looks over, John, Aaron looks at me and I'm just like, well, what are they all gonna say, right? And I just knew that Aaron would never not be the boss because he is like a great CEO, he was that kind of guy.

Starting point is 00:43:21 And they were like, I go, this isn't gonna work, is it? And he's like, everybody at the same time, like, probably not. We wasted our time for line up. So we come back to New York. Raj comes back the next week for another meeting. And he's like, do you mind if I stop by? I want to talk about the meeting? He already heard from Greg.

Starting point is 00:43:35 He's like, I heard it's not going to work out. I was like, no, I don't think it's going to work out. I was like, we flew out to give it a shot, you know, the good old college dry ago, but I don't think that was going to work out, egos and stuff, you know. And he's like, but you got nothing. I was like, Jay, tell him your idea. I was like, what, the wiki thing? And I was like, oh, no, why would I tell him that?

Starting point is 00:43:50 And he was like, well, tell me the idea. I like you guys. And so he was trying to make investments, I think. And you really should invest in people, not ideas, right? And so we were great entrepreneurs that scaled businesses. We demonstrated that we have the ability to do that. He wasn't execution-wise, he wasn't worried about our ability to execute. There's a little bit of light and a bottle with every idea you have, not everything works.

Starting point is 00:44:14 But anyway, I tell him the idea, I said, this is my pitch. If MySpace is your autobiography, then WikiU is your unauthorized biography. And he was like, wow, I really like that. And then I explained how this would work. move again to the details. When you're raising money, by the way, I think everybody needs that. They call that a high concept pitch. You need a 10 words or less, like an analogy of some sort that clicks. And they're like, I get it. And you want them to put the pieces together because they feel smart, right? Like, oh, I got that. And if I got it, then everybody else would get.

Starting point is 00:44:43 And it has to be digestible and easily be repeatable to their other partners. So it was easy. We said, WikiU is the biography of every person on the internet. Everybody creates everybody else's biography and in a world in which everything is digital and we can keep a record of everything, why is it that my mother, there's no record of her, and in 25 or 35 years, or 50 years, her descendants, great grandkids, they'll never even know what she did or who she was other than oral oral history. I think that's crazy. Like we live in a world where they have Wikipedia.

Starting point is 00:45:15 So Raj says to me, he's like, I like it. I want you to go meet with a guy who might know a thing or two about this. And I'm like, all right, he goes, let me set it up. So we fly back out to San Francisco and we meet with Jimmy Wells, the founder Wikipedia, and Gil Pinchina, who was the CEO. And the real thing was, number one, will you invest? And Jimmy's like, no, I can't. I was like, okay, are you guys going to do this if we do it?

Starting point is 00:45:39 Because, I mean, they had the scale, right? There's no point in trying if these guys are just going to copy it. And he goes, we don't control Wikipedia. It's like Bitcoin. It's decentralized, right? He's like, so at this point, it's open source. like everybody else is controlling it. So the community may do that. He's like, but I can tell you that's probably not going to happen. As you probably know, he said this to me. He was because

Starting point is 00:45:58 I create a profile for Preston Pish and I can do that because there's notable articles about you and all this stuff. So it has to be a notable person to remain there or the editors will take you down. So you just can't create profiles of people that there's no record if it's true or not. And he's like, how are you guys going to manage the truth? I was like, yeah, we don't know about that. We never figured that part out. That's why I failed. But Raj liked it when it got blessed that it's not going to be copied. We have to worry about a threat of competition from Wikipedia. At least we didn't think we did. It made sense to see if we can get some money. So, and then build it. And then he's like, I want you to meet with Josh Kaplanman, the founder of haf.com. So we meet with

Starting point is 00:46:32 Josh. And Josh sold half.com to eBay. And I guess PayPal sold to eBay. So there's like a fraternity of these guys. So he knew Reed. And he's like, I like it. I want you to fly out to meet Reed. If you don't mind, go to the LinkedIn office. And if he invest, then I'm in. Convince him, you got me. Okay. Fly out there. Told my pitch with a And literally, I'm not even kidding, I give that analogy thing. And I said, it's in a biography of every person on Earth and reads like this. I'm in, how much? I swore to God.

Starting point is 00:46:58 I had my laptop there. And I was like, I went to open. I go, but I have a deck. Aaron goes, you don't sell someone who sold. Exactly. I was like, I'm a young kid. I was like, wait a second. And then they start talking because they've been in the 90s.

Starting point is 00:47:10 And they're like, oh, PayPal. I know this guy. I know that BC. They're doing all this crap. And I'm sitting there like this. And Reed's looking over. He goes, what's wrong? Aren't you happy?

Starting point is 00:47:15 You got the investment. And I was like, I don't understand how. And Aaron's like, dude, enough I don't understand. Just take the money and shut up. Shut up, Jay. I said, no, I got just, I just want to know how you've been able to. Because he was an investor in Facebook and dig and like all these big things. He had like 100 plus investments.

Starting point is 00:47:30 And I like, I idolize the guy. You know, I was like, how did you do that so quickly? Like, like, this is crazy. You're just spraying and praying. Like, what's happening? When the YouTube guys came into my office, I knew who you guys were already. You already knew like the competitors, right? And they asked me to invest in YouTube.

Starting point is 00:47:46 And I said, sure, I'll invest. Why don't you go meet with Roll off both over at Sequoia Capital? It used to be a PayPal. This whole PayPal Mafia thing. Yeah. So they send the former PayPal junior level guys who were running a scaling product called YouTube from LinkedIn over to Sequoia. And they say, yeah, it's interesting.

Starting point is 00:48:02 We'll make the investment. I think they up the valuation. And when it went back to Reed, they said, we're really excited. They said, yes, they'll do it. But they want to increase the value. They want to increase the amount of capital going in, but without diluting us, they're just going to increase the valuation. And Reed was like, oh, um,

Starting point is 00:48:16 okay, I don't like that valuation. I think I'm going to pass, but don't worry. They won't not invest. I'll talk to roll off. It's not a big deal, right? You don't need me, you know? He goes, I ain't making that mistake twice. Great entrepreneurs.

Starting point is 00:48:26 Like, there was actually a third co-founder of people to talk about, Jow Edgraham, right? So there's the three co-founders of YouTube, he liked them. He liked the market. He liked that it was starting to scale a little bit. And, but he didn't like the valuation. Didn't like the valuation. Isn't that crazy? It's so dumb.

Starting point is 00:48:40 He goes, he goes, in the end, what matters in venture is getting it right. because if it's right, it's multi-billions, right? And the only reason this didn't remain private is because of all the labels, right? That's why they had to sell too. Same issue that I had. You had to get out or you had to deal with lawsuits. Because once you sell it to the buyer, YouTube had to deal with it anyway. I'm sorry, Google had to deal with it anyway, right? They just couldn't sustain that as a private company. That plus all the server bills and everything, right? It's just an unprofitable venture. So anyway, he passed based on valuation. He's like, I'm not doing that with you guys. So we raised the money. It's a half a million dollars

Starting point is 00:49:10 roughly and never scaled it. It just didn't work out. We were cross-promoting. it off a bolt, trying to migrate users over. And it was getting there. We had like tens of thousands, maybe hundreds of, I don't even know how it was, but it was thousands of people, not millions, you know? And it just didn't get there in time. And I went back and we raised the money in like late 06, going into 07. By the summer of 07, the iPhone comes out. And we already build a product and we're live. And we had a tech crunch article in this and that. And they were comparing us to another former PayPal Mafia guy who created genie.com, genealogy kind of thing. And so, and I think it was David Sacks, from not mistaken. So we were competing with his site in the article, but we really

Starting point is 00:49:48 didn't think of us, I think of ourselves as competing with them. But that's how Michael Arringen wrote the article. Because it's like not good with other investors and stuff. The long and the short of the story was we didn't get to scale. I went back to them and I said, I think we have to reshape this product to make it an app. And at the same time that summer, Facebook launched the apps that they called them, right, on Facebook. So I was like, we need to make it so that it's a Facebook app and an iPhone app. And on the Facebook thing, and I I think anybody can do this, by the way. If you get a program out there, I think you should create WikiU.

Starting point is 00:50:17 I think I would invest, actually, if they did it the right way, because I think it's a great idea and it still hasn't been executed properly. But the way to solve the issue that we had is we couldn't solve for duplicate profiles. I can create 100 present famous people like you, by the way. And Zay, right? I was tell you, I just interviewed Zay the other day, Isaiah Jackson. A lot of you guys that have like hundreds of thousand followers, you end up having all these fake accounts. Actually, Jason Williams does too, right?

Starting point is 00:50:40 So I was talking to him about this. He's like, they won't verify me on Twitter. He's like, it's so annoying. It's crazy. I always mess with him because I haven't verified it. I'm like, you're just not famous enough. Let's take a quick break and hear from today's sponsors. No, it's not your imagination.

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Starting point is 00:53:59 investing, including objectives, risks, charges, and expenses. This and other information can be found in the income fund fund's prospectus at fundrise.com slash income. This is a paid advertising. All right, back to the show. You would think the AI would be able to just pick up like the, yeah, it's kind of crazy to me. I was thinking, like the problem we had was duplication and then the lying, right? So I create 100 profiles of Preston and we don't know what's real or not. I have a solution for that. It's called Facebook Connect.

Starting point is 00:54:30 I don't know what they call it now, but when you log in with your Facebook, so we can, we could set it up that a profile goes public when you create your own profile to be created, to be edited and created. and you do it through Facebook Connect. So essentially, once you have the profile up there, it can be edited by people either that you approve, people that are connected to you or something like that, that you follow, something like that.

Starting point is 00:54:51 So you have your family and friends creating your profile for you so that your biography lives on for your descendants or whoever else for the rest of time. But we didn't get there. And I went back to reading them and I was like, it told them then, 2007, Preston. I was like, this is how we got to fix it. I see it now. I couldn't see it before the iPhone and the Facebook apps and the Connect and all that was there.

Starting point is 00:55:07 And I was like, I need a little. bit more money because we're running out of it. We're running low. We had like 50 grand left. I was like, and we were trying to raise money as it was. And we went to the Sandhill Road thing. We met with like, you know, Sequoia and Lightspeed ventures and, you know, Klein or everybody. And Jeremy Lou at light speed, it was a friend of mine. He said, when we finally got to his office, he's like, it's great to see you guys here. He's like, I'm just, we walk into the office and sit down. He goes, you're not getting any money. I was like, he's like, just so you know, I've gotten 10 phone calls over the last day that you're meeting with everybody. This is how it works. I was like, what do you

Starting point is 00:55:37 He goes, all the VCs talk. Like, oh, did you guys meet with WikiU yet? And it's like, no, Reed's introducing us. They introduce, yeah, I get meeting with them tomorrow. It's like such an insider thing, right? A lot of entrepreneurs don't know this that aren't in the circle. They all are friends, all these VCs. They co-invest in syndicate, you know?

Starting point is 00:55:51 And he told me straight up. He's like, I'm just going to be honest with you. You're not getting any money. You should stop embarrassing yourselves going around the street because it ain't going to happen. I go, why isn't it happening? I don't understand. And I told him the strategy.

Starting point is 00:56:01 He goes, I love the strategy. But you have an adverse selection problem here. Why isn't Reed just anteeing it up right now? The guy's a millionaire. If it's that good of an idea, it's almost like they know something we don't know. And I was like, there's nothing that they know. He's maintaining his pro rata rights.

Starting point is 00:56:15 They go, yeah, it's not enough for us. What they got for the last percentage and the amount they put in, they should just do the whole next round. And the fact that they're not, I would syndicate. I'd be a syndicate on that round, but they got to lead it. Because if you convince them to lead it, I'm in. But if you can't, you're not getting money from anybody.

Starting point is 00:56:29 So I'm back and talk to them. And they were like, I talked to Josh. And Josh says, from first round capital, He's like, I don't really know if that'll work or not, but like the way his mindset was, at least then, he's like, fail fast. You tried it. You iterated. You built it.

Starting point is 00:56:41 You had a couple change. And let's just move on. I was like, really? So I had two failures back to back. Right. So Bolt goes under, sued, bankrupt, you know, ABC. And then I try WikiU. And within like eight months, I run out of money.

Starting point is 00:56:54 I'm a loser. So, but I had this idea. The stress. For people that have never tried entrepreneurship and they've always just worked for a company, Like, you just can't imagine the stresses surrounding all this. I mean, it's just, it's nuts. And then you're there building late nights just. Seven days a week.

Starting point is 00:57:13 Yeah, this new hardware on a phone came out. It just completely disrupted our whole, like, plan, right? And just, my Lord, stressful. And it was stressful, but I was young and I didn't have kids. Yeah, yeah. And, you know, I had a house and mortgage and all that kind of stuff. But I didn't really, like I said earlier, I didn't care if I went to zero. I was never afraid of losing all my money.

Starting point is 00:57:34 That wasn't a thing to me. As we know, they just keep printing more of it. I always thought that before I even thought about inflation. I was like, they make more money all the time. I could just get more of it. It's not like it's a zero sum. It's not like the money goes here and I can't get it. There's going to be more to make.

Starting point is 00:57:47 And there's always opportunities you can create new things. I was never afraid that this is a one shot deal in anything I've ever done. That's just the way my mindset was. And I don't know where that comes from, but I was never afraid of that. I'm still not afraid of that. If I lost it all, I know I can make money back. I'm not worried about that. Anyway, long story short.

Starting point is 00:58:02 That failed. And I go to my girlfriend who I met at Bolt. She's not my wife with four kids, right? And I said to Kate, I said, I got an idea. She was our number one salesperson at Bolt. And nobody knew we were dating for a while when I was there. I was trying to be as professionals I can in front of everyone. But this is all unwinding. The business is getting shut down the first one and the next one's not working out. We're not getting any funding. And I said, I got an idea. But I mean, the track record doesn't look so good right now, babe. But you got to trust me on this one. She's like, what's the idea? I go, so I kind of popularized video sharing. And it's happening on YouTube, but it's not going to be the only destination

Starting point is 00:58:36 for video. You have to remember back in the early 2000s, if you went to CNN.com or Fox.com, they had subscriptions to watch the videos. I don't have to remember that. It's crazy. Like, I'm going to pay you to watch the video content because they didn't have a lot of video advertising to support it. I said, why don't we build a video advertising network so that they can be supported and there's no more subscriptions? Doesn't that make sense? And she's like, okay. And she was doing like six million in sales at Bolt. I was like, let's go. Let's rock. So I went to her father, my now father-in-law, and I said, well, you meet me in Soho for lunch. So we go into the city. I sit down on him. I said, I would like to ask for your hand in business. And he's like, what this guy about to say?

Starting point is 00:59:15 I've only been dating his daughter for like eight months or something. And I'm like, and he's like in business. What are we talking about? And Kate was here at the table. And I said, I want to go in business with your daughter. And I was like, and I don't want to do that without the consent. I don't need your consent, obviously. But. But we're dating. I'm close with the mom and dad and this and that and aunts and uncles that go to Christmas and all stuff. And I was like, I've had two failures back to back.

Starting point is 00:59:34 I can't guarantee a success. I will guarantee you I'll give everything I got. That's how I am. And I'll work as hard as I can. I will work 24 hours a day. I will tell you there's going to be good times. There's going to be a lot of bad, rough times. And I was saying this to hire as much as I was saying to him that day.

Starting point is 00:59:47 I said, so if you think this is because he was a teacher and his wife was a teacher. And I think that in their mind, they're like go to work and put in your, they put in 38 years and have a pension from their time. Very, very different. Totally different mindset. And he wanted his daughters to be teachers. Kate was in English. My wife was an English major when she went to Boston College.

Starting point is 01:00:08 And so I think that was the plan, at least obviously she has a different outcome. She would have been a teacher because she did this. But I said, I go, the opportunity is an asymmetric risk thing, right? I was like the opportunity on the upside is worth what the opportunity, what it is on a downside. Worst case scenario, Bob, is it doesn't work out. we just get jobs. That would have never happened for me. But for her, she just got another job. So he leans over and he's like, no eye contact to me, right? At this point, he looks at his

Starting point is 01:00:36 daughter and he's like, so you know, Julia, whoever her name was, that you went to high school, but she works at Google. I can reach out to her. I still keep in touch. And you, you know, they're always hiring. And I was like, hello? What are he talking about? I was like, Bob, are you saying you don't want to do it? He goes, I'm just, it's up to her. And I was like, okay, you guys talk about this. I know I'm doing this. It's either going to be with one of the, the guys, Aaron or Lou, or it's going to be with you. I'd rather be with you because I knew I wanted to marry her. So I was like, either way, like we're going to be together. It's not like this girl and then, you know, and you'd break up in the middle of it. I knew I was going to marry her.

Starting point is 01:01:07 I just didn't want to propose and get married in the middle of all this happening, you know? Like you said, it was stressful time. And so we did. We went down that path. We built it. And my way to get into what I believe that it would grow into Preston, which it did, I didn't know where it would end because that's the iteration of adapting and evolving in technology. but I knew that we needed to start in a niche market that we can own. And so we at Bolt had that social network slash video sharing site, but we also had a good sales team there. And so we repped miniclip.com, if you ever heard of that gaming site, the largest gaming site

Starting point is 01:01:40 in the world. We were the exclusive sales force for them at Bolt for U.S. sales. We also wrapped Roonscape and a bunch of other gaming, large gaming sites. So I said, well, this is getting shut down, Bolt, right? It's going away. and WikiU is gone, right? That's not going to work out. Let's just reach out to all the gaming sites and sign contracts with these guys,

Starting point is 01:02:00 rep the inventory, and then we're basically an agency. I go, this is not that complicated. We have the relationships. We know all the advertisers, and we just got to build a business around it. We did that initially, very services agency like in the beginning. We would do homepage takeover banners and things like they call them adver games where you make a game. We did one called the Oscar Meyer Deli Creations, which is a thing they sell in the store,

Starting point is 01:02:21 right? And it was like the hands putting sandwiches together, you know, as you're playing. You know, you click the, you know, grab the bread and you get, you know, this whole. And it gets faster and faster round by round, you know. And it was all branded Oscar Marr. So we did a lot of that kind of stuff. Craft, Disney, underrews, the underwear. Like, we did all these games.

Starting point is 01:02:35 And I was like, this is terrible what we're doing. It was great. We're making a lot of money, right? It was very profitable. Day one, we were profitable the whole time around that company. And the revenues were growing really fast. I thought year one, we do like three million in sales based off of what we did previously in the relationships.

Starting point is 01:02:49 But what I didn't see happen. We started the company in July, I think it was August or July of 2007. By December, we had no sales, right? I was like, who this isn't working out. We finally get a sale in January in 2008. And in that first year of 2008, we only did $750,000 in sales. So it was basically me, Kate, and a couple contractors remote, you know, and I was like, this isn't working where I thought it was going to go, but it's an income and I'm making

Starting point is 01:03:13 a lot of money. And that's cool, but I don't see, hold on, I got a thing here. I don't see how this is going to scale the way we're doing it. I was like, we have to get to more automation. And this is before RTB, real-time bidding and all this kind of stuff, right, before you saw the programmatic buying. But I knew that that's where it was going to lead to. And a lot of years so later, like Pubmatic and Rubicon project came out in some of these

Starting point is 01:03:32 platforms. And we started to get connected with these platforms. We started to build technology with the profits. We hired programmers. And we built out a real platform. And then we changed the name to Yashi because it kind of had like a game-y Asian. It's an Asian name in India, a female name. And I was like, it's got that Asian gamey ring to it almost sounds like Yoshi.

Starting point is 01:03:50 from the video game with Mario and stuff. And so the gaming community accepted the name. And then it was kind of like this just ambiguous name. It didn't mean anything. It was like Yahoo, you know. And what people didn't realize is that Yashi was owned by Yahu one time, 1995. They owned the domain name. So who knows?

Starting point is 01:04:06 It might have been Yashi. So we started that business. And in 2008, we did like 750,000 in revenue. By the time we sold it, we were doing like 36 million in revenue. So we just kept scaling and scaling and scaling and then it starts to scale a little bit faster as we started to kind of automate things a little bit. Amazing. So I saw that early on.

Starting point is 01:04:21 I was like this video thing, I don't think it's going anywhere. And a lot of websites and blogs and everything are to want to monetize this. We just got to lock them up, started in gaming. We moved outside of gaming. And it went from like services to more automation by the time he sold it. All right. So talk to us about the transition to you becoming a bitcoiner. What was the timeframe that this started coming on your radar?

Starting point is 01:04:44 How did it come on your radar? Take us to your, I guess, core story. The first time I heard of, it's actually funny, I interviewed Howard Linson, first investor in Robin Hood, put a million in. They went IPO today for 100 million. I retweeted my interview with him today. And like, good for him, bro. You know, it's unbelievable. He learned about Bitcoin. I'm on an interview. I asked him. I reminded me my story because it's so related. It's crazy. I said, how did you learn about Bitcoin? No, no. This is the question I asked him. I said, what percentage of your net worth is in Bitcoin today? First, I said, De On he said, yes, which percentage of net worth? He says, too much. I said, okay, I just want to tell me, right? I was like, okay, it's fine. I got you, you know? I said, is it because you just haven't sold it and it keeps growing? It was, yeah, basically.

Starting point is 01:05:27 He's like, I bought a small amount a while ago and it's becoming a larger. He's like, I probably should sell some of it. I was like, no, no, no, no, don't sell it. Just leave it along, right? You did great. I go, but what's your favorite book on Bitcoin? Like, Bitcoin standard, hard money you can't foggway. Like, what do you like?

Starting point is 01:05:40 I never read a book on Bitcoin. I was like, what do you mean you never read up? What do you know about Bitcoin? Tell me, what do you love? What are your attributes? I swear to God. I was like, how did I learn about Bitcoin? Fred Wilson, not personally.

Starting point is 01:05:54 I've read his blog of VC.com. The first time I ever heard about Bitcoin was from a VC.com, Fred Wilson's blog. He was talking about it, maybe in 2012, probably the first time I really read about it. But I was very skeptical because, again, I'm very skeptical of venture capital. So I was like, well, why are they talking about this? What is the nefarious angle that they have? Like, are they pumping and dumping? And I can't imagine it's the Bitcoin itself, the Department of Dumb.

Starting point is 01:06:20 They want Bitcoin to grow because how are they going to make money? They're not going to just as a venture capital is just buy Bitcoin and hold it for their LPs because the LPs could do that. It's not own the Bitcoin. It has to be some tangential thing. It's some it's like blockfi, right? It's like it's all this other stuff, right? Like what, and that didn't exist then.

Starting point is 01:06:36 But I was like, there's got to be an ecosystem that they're hoping develops and they're going to invest in the ecosystem around this coin. So I'm going to buy the coin like the sucker. And they're going to invest in the company, make all the money. I'm not buying this coin so that you could go and create your company. pump it and then dump it into an IPO or an exit. I was like, that doesn't benefit me. Jay, you're seeing that right now. You're seeing this right now in 2021. You're seeing people take that same mindset, right? They're like, it just can't be that easy. There's no way I can just

Starting point is 01:07:01 buy Bitcoin. It's always going to happen. It's going to get worse as the price keeps going high. I know. I mean, I'm saying this in 2012. Look at those prices, right? And at that time, there was two things that prevented me from one to get in. Number one thing was I thought, I'm not in the inside club of what's really going on here. Right. So I just, that's how I felt. I was like, I got to Figure it out. I don't get it, right? I just, I didn't get it, right? For people in 2021, it's easier to get because you have places like Clubhouse to learn.

Starting point is 01:07:25 You have the blogs. You have Twitter. You have Max Kaiser. You have Preston. You have all these people teaching you about Bitcoin. Nobody was teaching anybody by the coin in 2012. It was this magic internet money. And it was like this, the fairest thing that it felt like.

Starting point is 01:07:37 And not only that, the market cap was so small. Oh, yeah. It just didn't seem stable. It just didn't seem that it wasn't the price per. I don't care about price per, because I understand. stocks, right? So that doesn't matter. It's all about what it divides into and stuff, right? The market cap was too small. It's like, this is nothing. This could go away, right? Now, I say that to people like Bitcoin Dina. He's like, no, it can't. I'm like, I know he can't now. In 2012,

Starting point is 01:08:00 it could have. So don't tell me it can't, right? Because it didn't, he's right. So I'll give him that. But I just didn't believe it. So I was an idiot, right? I just didn't say it. So then in 2013 running gamers media yashi, we had a customer, this guy, Francesco, He kept asking me every month, will you accept Bitcoin for payment? I'm like, nah, I don't know about that. Let me look into it. So I start looking around. I'm like, well, how do you even sell it?

Starting point is 01:08:23 It didn't even make any sense, right? How's this guy even getting this Bitcoin, right? Nothing registered. After like a month or so, I figured out what he was doing. He was buying traffic from us. We were driving visitors to his site through his advertising, he was buying from us, right, to push to his site. And then he was working with other ad networks and he was selling out.

Starting point is 01:08:39 So he's arbitraging. And I'm like, why is he insisting to want to pay me in Bitcoin? I never accepted the Bitcoin. But he kept asking, he was mining it. And back then, you can mine GPU. So he was making a lot of money, I think. Oh, wow. Okay.

Starting point is 01:08:50 Yeah. So he's getting like traffic for free, essentially, electricity costs, which was low. And right back then. And driving the traffic to him. And then in the end, he's, I mean, if I feel bad about not taking it, he's got to feel like an idiot that he was spending it as fast as he made it. Do you know that he was mining it back then? Are you just assuming that's what it? And so did he talk to you about that way back then?

Starting point is 01:09:13 Yeah. Funny story, I went to his office once after the first payment didn't come in. And he's like, no, no, no, he was Italian. He's like, you just take a payment. I give you Bitcoin. I transfer it. I go, no, no, no, no. You have to send me your wife.

Starting point is 01:09:23 No, no, no, you take it. It's okay. You take it. He's like trying to convince me by just saying, yes, I'll take Bitcoin. I was like, I'm going to come up to your office today. I'm not that far from New York, right? I go up there, my wife. We go, we're going to eat lunch and then we're going to go hang out with this guy.

Starting point is 01:09:35 He's going to wire me the money. You see me. I'm not a small guy. I go, oh, he's going to wire me to fucking money. So I go in his office. This is no joke. And he's like sitting at his office. And on the back wall, I didn't notice there was all this stuff on his wall.

Starting point is 01:09:45 But I walk in and I was like, there was like 100 plus people. It was a content business. It was like a news website almost. I go to the office. I go, where's Francesco? Oh, he's in the back. I'll bring you. I go, no, I'll go.

Starting point is 01:09:55 I was so pissed. I was like, this guy would be $50,000. I want my money. So I go to his office. And I was like, hey, Jay, how you doing? I go, I'm doing great. Where's the money? He goes, I give you to Bitcoin.

Starting point is 01:10:04 I go, there's no Bitcoin. I want you to wire me the money right now. Not so easy. I have to sell it first. I go, okay, I sat down. I go, sell it. He goes, no, no, it doesn't work like that. I go, we're going to go to lunch.

Starting point is 01:10:14 When I come back, I want my money. So I leave. We go to lunch, come back an hour or so later. He's like, I got about it, like, you know, a little bit of it, but not all of it. I go, what are you talking about? It's not so easy. You want me to take this shit and you can't sell that fast? No way.

Starting point is 01:10:26 You wire this when I go home. And I'm like staying in his desk. I'm like, you know, trying to be like a tough guy. And my wife's going like this. And my wife's going like this. And I'm like, their eyes are moving around looking at the, and look at the back wall. And he's talking.

Starting point is 01:10:36 He's all happening. He's leaving his back and chick. He's no big a deal. I sell out of Bitcoin. I give you the money. Don't worry about it. Calm it down. And I'm like, and what's she looking at?

Starting point is 01:10:44 And on his wall, all these plaques and trophies for Taekwant. And I'm thinking like, you wire me the damn money, bro. And he's all relaxed. He's all relaxed. Because he's thinking, I'll whip this dude. Oh, my Lord. And I'm like, I'm like, you wire me to money now. And he's just looking at me like, get at it.

Starting point is 01:10:59 But he did. And every month he would, he would convert his Bitcoin to Fiat and he would send you the money. Man, do I regret that? Because I probably collected by $250,000 to $350,000 from him that year. And probably 60% of that was profitable. That could have just remained in Bitcoin on the treasure. I would have never done it. I had no regrets.

Starting point is 01:11:16 Of course. Of course. Yeah. But that's my missing of Bitcoin story. When I got it was a couple years later. So running Yashi for a while, Bitcoin's definitely coming on a radar more and more. People are asking me. I even have an email from a friend that worked for me. And he's like, what do you think it is Bitcoin? And I had those stories, you know, and I'm like,

Starting point is 01:11:32 it's a scam. I have this email. I have a screenshot of it on my desk. It's a scam from me to him. I'm like, oh, my God, I'm such an idiot. And I didn't think it was actually a scam. I was just like, it's speculative. It was weird. Yeah. I could only imagine based on the story you just said, like how can you take that seriously? The thing is there, we know, like Kaiser and all these guys. They did. Yeah, no, they did take it serious. You're right. You're right. I didn't.

Starting point is 01:11:57 And I don't know how they saw that because they don't, when you look at some of these guys, I don't know Max's background necessarily, but a lot of the others, what else have they seen? Nothing from what I can say. Like, they got this. But like, what else did they invent or create? Yes. Like, they saw it so early.

Starting point is 01:12:13 And I, my hat is off to all these guys. I have all in respect to the world for anybody that saw it way earlier than me. Because I've seen things early like social network, the online video sharing, ad networks, a lot of the investments that I've done at Angel. and stuff. I totally missed this one in the beginning. And I was like, when I finally clicked, it was like around 2015. Five years from now, 10 years from now, people are going to look back at you telling people that you missed it in 2021 and is going to be like, it's got to miss nothing. My first purchase was 2016, right? So I sold the company 2015 in January. Now I'm just sitting

Starting point is 01:12:45 around just chilling, right? The first, I was supposed to work for Next Star for two years, six months in from the buyer who bought Yoshi. I call up to CEO and I was like, I want to quit. And the guy's like, Perry Suck, his CEO, he's like, what are you talking about? You can't quit. I was like, yeah, I can. I don't want to do this. You told me you would work for two years. I don't know anything about Yashi.

Starting point is 01:13:05 I go, but my guys, they know it. No one's going to screw you. Like, everyone's going to stay. I could be an advisor, whatever you want, you know, but I don't want to do this anymore. He goes, why? I go, because you have, you've taken over two of my conference rooms with auditors every day. I got people bringing me and my executives in nonstop, asking me questions about revenue recognition.

Starting point is 01:13:21 I go, I can't do this. He goes, but you have to go, no, I don't. I sold. I'm done. This income that you're giving me, which was a nice income, I don't need it. I don't care. So I'm out. So he's like, all right, I'm going to come to the office tomorrow.

Starting point is 01:13:33 I was like, tomorrow. He's in Texas. He's like, I'm jumping on the private jet. I'm there tomorrow. I was like, okay. So comes there. We go to a diner, we hang out. And he's like, you can't quit, dude.

Starting point is 01:13:40 I was like, what do you mean I can't quit? Are you going to sue me? I'm not going to sue you. I'm just telling you from an integrity perspective, you said, I give you two years. I was like, oh, God. And I have integrity. I was like, you're right. I'm sorry.

Starting point is 01:13:50 I go, I just don't want to deal with this. Can I step down? That was a nice move. He's smart, right? That's why he's a CEO of a $5 billion company. I'm not, right? I was like, can I just step down and make my number two, which was this guy, Scott Hoffman? He was like the 70th employee at Yahoo.

Starting point is 01:14:05 So he's got a lot of experience. I go, just make him the CEO or president, whatever, and just make me like an advisor. He goes, listen, if you stay home, like, and I don't live that far from where the office was. I live on the water over here in time zero. You're going to lose your mind. You're going to lose your mind. Yeah, he goes, but because this, and I did, right? He goes, if you stay home, you can go in the office whenever you want,

Starting point is 01:14:26 but I'll give you the opportunity to just kind of just chill at the house. But you want to talk about Petty? He's like, but I got to cut your salary down. I was like, I don't care, too. You don't even got to pay me, Perry. He goes, no, you have to be on payroll because I need the NDAs in place and the non-competes and all this non-disparagement, all this stuff that we sign, you know? He's like, that's all got to remain in place.

Starting point is 01:14:42 They go, too, whatever you need to do, right? Six months after that, they called me up. They're like, would you resign? And I was like, why am I resigning now? And they were like, well, we're merging in with media general, like the two major TEPTEL to Bruns. And they were like, they're going to be like, who are these guys? And you're just saying home on payroll and you don't do anything.

Starting point is 01:15:02 Unless you want to start coming to the office. I go, no, I'm good. I'm happy to quit. So I wanted to do about a year ago, you know. So long story short with that is after I quit, I had a lot of time on my hands. I'm hanging out with the kids playing with toys all day. And my wife's like, you need to do something. I was angel investing and all that kind of stuff.

Starting point is 01:15:18 Bitcoin keeps coming up with radar. And I'm like, man, did I miss this? Because I'm watching the price movement. And I was like, I got to get in. So I make my first purchase, 2016, start buying in 2017, 18, and so on. What was your narrative for owning it? Just like you were watching the network grow or what? I was watching the price action in the market cap.

Starting point is 01:15:36 I know this sounds so stupid. It doesn't sound stupid of all. I think for most people, that's the thing that's like they hear about it two or three years ago from some crazy friend or some person who just wouldn't shut up about it. They know what the price was when that person was there talking about it. And then they reassessed three or four years later and they're like, Hoddle tells me, too. I become pretty good friends with Hoddle, right?

Starting point is 01:16:00 And he tells me, he's like, it takes three touches in his opinion. Not everybody's the same. But it's like that third touch is when you're like, what am I doing? I got to go in. The first touch, I forget what he said, the exact, I wish he was here, I can say. But the first touch, it's like, this is a scam, right? The second touch is like, I missed it. And the third touch is like, I better get in before I really miss it.

Starting point is 01:16:17 It's something along those lines. And he's right. Like the first time I saw it, I thought, ah, it's highly speculative. It's not going anywhere. It can lose all my money in this, right? The second touch, I thought, I was like angry about it. And then the third touch, I was like, I can't be an idiot here. Like, I got to do this.

Starting point is 01:16:31 So I got, I didn't put a lot in in 2016, but I put some in. I put a little bit more in. And as everybody will say, I should have put more in earlier. And what happens is every time I buy, I buy more and more and more as it goes up price. And I found because I had angel investors in Yashi that were Wall Street executives like hedge fund guys, this is how they buy in the stock market. A lot of people don't realize this, particularly in Bitcoin, because now the new money coming in is a lot of institutional money in Bitcoin. And I kind of have an idea the way these guys think. They buy on momentum. So what we've been after the last few

Starting point is 01:17:01 months, it's sideways. And it will remain this way until the catalyst goes one way or the other. They're either going to short if it starts to drop or they're going to go long as it starts to go up because nobody wants to miss the momentum. That's just the way it works in Wall Street. And that was kind of the way I started to think about it. I was like, I got to get into this. I'm not worried about it dropping because it wasn't that low to begin with. And I definitely saw that this has the opportunity to scale in terms of network externalities, which most of my businesses were based off of.

Starting point is 01:17:24 I got that. What I didn't really understand until probably in the last six months becoming friends with Hoddle, I kept thinking of it as a network effect business like social networks. And Hoddle's like, no, no, no, no. This is a monetary network, not a social network. We could have 500 people in this thing and it could be worth $10 trillion because of all the billionaires just put their money in, it goes up, right? I was like, I thought about that, but that seems really unstable if it's a small number of people, concentration risk,

Starting point is 01:17:45 you know? But he is right. It is a monetary network. It's not a social network. So when people say there's only a hundred some million people that own it, that doesn't matter. What matters is the substance of the people that own it and the dollars that bring it to the table. Because every dollar is the participant, not the people. Yeah, and I think he's using a more extreme example in what he's saying, but I agree with him 100% in that people that want to deal in exchange of value in a unit that can't be the base as that trust in that system and that it's unmanipulable moving forward, you're just going to have more people that want to participate in a network like that, especially if the underlying value keeps appreciating

Starting point is 01:18:24 because more and more participants want to use it. So yeah, I'm with them. What I didn't understand earlier on on Bitcoin was the stuff that's the most important stuff. When I started the buy me, he's crazy. I was buying it and I didn't fully understand. I think most people do that. They buy when they don't fully understand. Yeah, I agree. And they buy out of FOMO and all this other stuff, right?

Starting point is 01:18:42 And then when you own something, that's when you really start to do your research on anything, right? It seems at least for me, I don't, I researched enough before I buy something. But once I'm in it, I'm really researching because my money's in it now. So now I have risk, right? There's risk capital involved. And what I didn't understand early on about Bitcoin was really like that it is the hardest money, right?

Starting point is 01:19:02 That part, like, totally escaped me in the beginning. I just saw it as like, as if you were buying like, like, like a stock. It sounds so silly, but like, that's kind of how I thought of it. I was like, this is an asset class that's taken off, right? But when people talk about the shit coin, which I never got into, the only thing I ever bought was Ethereum, because it was a real close, not close, but first as anything else, it was a close competitor, right? And I was like, well, it's not so clear to me what will end up winning. And the Ethereum argument made a lot of sense to me because whether you believe in the DFI movement or, or not, there is an

Starting point is 01:19:31 ecosystem built on top of Ethereum is my thinking at the time. What I realized is that it's not truly decentralized. And that part escaped me in the earlier days, right? I sold all my Ethereum, right? But I had Ethereum. It was my second, you know, I had probably 20% Ethereum in terms of the dollars invested and 80% in Bitcoin. It's 100% Bitcoin now. I've never brought any other of these chick coins. I just thought, again, just like the VC's calling me, obviously I don't know enough about what's going on. What I realized now took me years to figure out last year or so is it's the pre-sale, right? Like the VCs and all their inside buddies are getting these things it like under a penny and then they bring it to an ICO or it goes public essentially.

Starting point is 01:20:09 And everybody else, they're dumping it on them for like three, four, five cents or 10 cents. After they market the living hell out of it. Yeah. That's exactly right. And it's like, and they're like, oh, we, door coin does this and that. I've learned this through like the guys on clubhouse actually, the narrative at least, against it, which totally makes sense. They're creating a marketing scheme of some sort to get you to buy in around some technology.

Starting point is 01:20:29 But what they're saying is that it's based off a blockchain, but it's really just a database because it is mostly centralized, right? All these companies, right? The thing I ask people when they talk about shit coin, whatever, is just what application that is currently exist on the internet is this token or protocol going to try to replicate, but on the protocol layer where it has a need for a native token? So like what is that application that it's currently replacing?

Starting point is 01:21:00 And like anytime I ask that people just like, they look at me. me and they're like glazed. They don't know what you're talking about. What are you even talking about? So like, let's say Twitter wanted to tokenize a coin. And for anybody that wants to advertise on their platform, they'd have to buy the Twitter coin in order to do that. Like that would be, and I think that in the end, that's going to lose, even if, you know, a large platform that already has a massive user base tries to migrate and port all their users over to this protocol that would be doing this stuff, I think it's going to lose in the long run because I think there's going to be such a massive

Starting point is 01:21:32 network effect for Bitcoin in the long run that it's just, they're not going to be able to compete. The other day, Amazon, we're digressing, but I'm going to have a deal. But like the Amazon, Amazon said, well, we're not going to accept Bitcoin payments. And then the fear that I was hearing on Clubhouse, I love Clubhouse for that reason. You kind of hear what people are thinking, you know. And they were like, well, they're going to create their own token. These are people coming up from the audience.

Starting point is 01:21:56 And I'm just like, but it's no different than having credits. like on these websites, within this for years. You buy credits and then you use your credits, like music sites and all kinds of. So if they create a coin at Amazon, it's not transferable necessarily outside of their ecosystem. And even if it does become transferable outside of the ecosystem with a wallet and stuff, it has to get adopted. And even then, it's centralized, right? Bingo. It's centralized. At the end of it all, it always goes back to it's not decentralized, right? And that's the key that escapes a lot of people, I think. But that's the thing that, I guess the whole reason I brought that idea up, and I don't think that it would work long term for

Starting point is 01:22:28 scaling and centralization purposes. But like, the reason I bring that up is like, that's the question to ask. It's like, so what application, because you'd call it Amazon, Twitter, whatever, right, that's the application? What application is this shit coin replacing that would then become a protocol that requires a native token? And when you ask that question, it's just like, you can't answer it. It's just crickets. And look at what Jack. Doesn't exist. Look how smart Jack is. He's trying to incorporate Bitcoin sats into Twitter. I don't know what the timeline is for that. But he knows that that's where all roads lead.

Starting point is 01:23:05 And he's just cut into the chase. He's not trying to tokenize anything. And I know we're about to get into a conversation. We probably shouldn't. But like the other day when Kathy, Elon and Jack were talking, it blows my mind that Elon is still promoting and saying he owns, even if he owns Doge. It's just crazy. This is the thing I don't understand.

Starting point is 01:23:25 This is the part that I can't understand. This is how I rationalize it is I think he just wants to see something weird and something non-standard that's goofy and kind of like thumbing his nose at like the system and like status quo. The status quo. Yeah. I think he wants to just see like he would find it really funny if Doge coin became like a Doge. Because of that alone. But this, I know, it's nuts. Well, he's definitely weird.

Starting point is 01:23:58 I mean, I'm weird too, right? But the weird thing, this is where he's weirder than me, right? The weird thing is like, if you look at all these other influential people that have come before him and before us, right? Bill Gates, Steve Jobs. Just think of like these titans, right? Like, who has ever went out publicly and said, I'm really invested in this highly speculative thing? They probably have been invested in highly speculative things, but they felt a personal responsibility to the public to not tell people that they're invested in highly speculative things because they'll copy. them thinking, well, he's smarter than me.

Starting point is 01:24:25 Yeah. And this is where Elon, if he's listening to this podcast, can't imagine if the clip ever gets to him, you're going to wreck people if this doesn't work out. And you should feel some responsibility for that. Yeah, he already. I'm sure he has. I'm sure. And it's like, I think I almost feel like he's doubling down because it was a joke.

Starting point is 01:24:40 And now he's trying to act like it wasn't a joke for like maybe the CFTC or something. I don't know, you know. He has such a massive platform that could be used for good in the impact in the education. He's writing Jack. Yeah. And, and it's just kind of like, hey, dude, like, you got to have a little bit of, like, responsibility here, feel a little bit of an obligation to all these people. I mean, dude, his account is massive.

Starting point is 01:25:06 Look, I got a few rules that I kind of live by, really simple ones. Integrity is important to me. The most important thing. Most important thing. Integrity, empathy for others. I have a relentless kind of behavior that I, that I, that I, that's why I was able to do what I did because I worked nonstop, 10, 15 hours. a day, seven days a week for eight years, right, on the last company, not including all the

Starting point is 01:25:27 ones before. You have to be, like you do, like you're putting it in the hours, right? You got to do that. Pattern recognition is really important, right, for business and stuff. I said it earlier. I think that's key. Win-win solutions, I think, are really key to. Like, you try to seek a benefit, something that's beneficial to both parties or all parties involved. And a lot of people, I've been, I don't want name names or anything, but there's been people I've done deals with in the past. And they don't everybody operates. They don't operate this way. They're like, it's beneficial me and my family. I'm not trying to hurt you, but, you know. I think that one's huge, and I think so many people miss the mark on that one. Yeah. And it's important. What they don't

Starting point is 01:26:03 realize is when it's not a win-win and it's just you winning and crushing the soul out of the counterparty, like there's some type of force in nature that destroys your win through that. I'm just firmly believe it. I don't know how to describe it or what it is, but like the people that are so, I mean, it's selfish nature, right? It's just, this is what I'm leading to. The selflessness is another one. And if you die tomorrow, what are they going to say about you at your funeral?

Starting point is 01:26:39 For Elon, they're going to say a lot of great things. But on the Doge thing, there's a footnote, unfortunately. And there's going to be millions of people that lost their life savings, I think. And their life savings to him is a joke, right? their life saving maybe $10,000. This guy's the richest man in the world. And he's like, oh, come on, they can make that again. But dude, they might not.

Starting point is 01:26:55 And some people may even commit suicide over this kind of stuff. Who knows? Like, I just, there's some responsibility of treating people with the respect and dignity that you should be treated with. And you can't think that everybody's as smart as you. And I'm not saying that you should assume everybody's stupid. But I don't think that it's a stupid versus smart thing necessarily. I think it's an in the no versus not in the know. And people are looking to him for guidance.

Starting point is 01:27:16 And we can move on. But I just, it really does bother me when I see what he's. doing. I saw somebody commented on Twitter that you think the timeline for Bitcoin potentially becoming a unit of account is way out there to the right. Explain this to me. I'm curious to hear your thoughts on. It's kind of like Amari's law where people will say you overestimate things in the short term, but underestimate things in a long term. And I think that problem with the Bitcoin community is that we're living in a bit of an echo chamber and we're very, very bullish, right? I try to remove myself from this all the time and everything I've ever done.

Starting point is 01:27:52 That's why I was able to do the things I was able to do because I know I'm not the smartest guy in the room. I'm not an Ivy League or I don't have pedigree, right? So I'm humble enough to recognize that about myself. So I'm constantly trying to learn. And what I've seen with the Fed is I think Amari's law applies to the Fed. Now, the Bitcoiners will say it applies to Bitcoin. And that is true.

Starting point is 01:28:12 I think in the long term, now it comes down to time preference, right? And are you saying what's long term, right? Because I saw the tweet today. I think you would both get that. I was like, yeah, define it. I'm 42 years old. I say my lifetime. I'm talking about the lifetime that matters, right?

Starting point is 01:28:29 If I'm 80 or 90 and it happens, maybe, I don't know. But I'm just saying like in my working years and my like the years that matter over the next 20 or 30 years, I would say, I don't see it happening. Because I think that people are underestimated the ability of the Fed to keep this going as long as they want. And I think that the Bitcoiners believe it's all just going to collapse overnight. Max says that the dollar is going to collapse in August. He was saying this on Clubhouse two months ago. I was like, you're living in your own, like, you're drinking your own coolie. Like we all want to see these kind of things happen because Bitcoin goes through the roof, right?

Starting point is 01:28:58 So you're just, it's like hopium like the Bitcoin community has. And I love all these Bitcoin maximus. But I think that they're underestimating that the Fed can keep the party going longer. And I'm not saying they can keep it going forever, Preston. There's no question that's not going to be the case. And I might be the one that's wrong on this. I just think that they've, it should have failed a long time ago based off of what's happening. It should have failed in 2009 and they inject the money.

Starting point is 01:29:20 2018, they inject the money. 2020, they inject the money. They're buying $120 billion in bonds every month right now. This is crazy talk. I mean, when you really think about it, everything is completely fake right now. The stock market, real estate, bonds, it's all fake. And we all know it's fake. And we know that the inflation numbers aren't even real.

Starting point is 01:29:35 And the Fed even just said something the other day. He was like, well, you know, I don't know the exact quote he had, but he said something along the lines that it's not a real number almost. It was interpreted that way when I read it. And I was like, what the hell are we? We're kind of bizarre land are we living in. And when I talk to people outside of the Bitcoin world, which I do a lot, friends of mine that are doctors, lawyers, smart people, wealthy individuals.

Starting point is 01:29:58 I bring people on my show. I brought Greg Olson on my show. This guy sold his company, he sold his company at 48 years old, I think, for $600 million, bought it back for six, then sold it again for $60 million. I said, how much Bitcoin do you own? This guy's like, Bitcoin. I don't want any Bitcoin. I'm like, why not?

Starting point is 01:30:13 He's like, I don't need to own Bitcoin. people don't realize if you're that wealthy, you actually don't need Bitcoin. And when I say that to a maximum, they go, oh, no, he needs it. I'm like, no, he has time. He's invested in assets that are inflating with inflation right now. So he has time to make that decision in the future. And that's why I'm trying to explain when I say, it's probably not going to go to a unit of account in our lifetime or it's going to be so far out.

Starting point is 01:30:36 Some of these guys think it's in 10 or 15 or 20 years. And I'm like, you want that to happen? I want that to happen. Clearly, we have invested interest in we're aligned. We love that to happen. But I don't necessarily see that happening because I don't see the adoption from everybody who has the money. Because, again, it's a monetary network. You need that money to believe.

Starting point is 01:30:51 And it's not as simple as saying, like, hey, I give this to my two-year-old. And in like five minutes, he knows how to use it. 10 minutes, right? He's using an iPhone. So I showed him how to use YouTube, but my six-year-old using YouTube all day long. These are simple things. Simplicity works in tech, Facebook, Google, Twitter, whatever, Google. I could just simple input search box, right?

Starting point is 01:31:10 Like, this is not complicated stuff. That's why it scales really quickly. This is complicated. I'm sure you can admit you don't know everything about Bitcoin, but to the average person, you know 99% more than most people, and yet you still don't know anything about Bitcoin, right? Like to me, there's a learning curve that needs to come, understanding about money and monetary policy, and most people don't know anything about this.

Starting point is 01:31:30 Even people have a lot of money, though. And that part, I wouldn't say it's worrisome. It's a slower adoption than I think people believe. I like your point. And if I was going to summarize your point, it's really kind of like Larry David. It's like curb your enthusiasm. Like just pull it back a touch. And you know what?

Starting point is 01:31:47 If you're wrong, so be it. You're able to plan around and kind of not be so dependent on this crash happening for you to materialize like what all your expectations are and what the performances. If I was going to push back on what you're saying, I think that your argument there at the end was it's going to be really hard for users to onboard and fully understand what this is all about to bring. it to the table. I don't think that's where the value appreciation of Bitcoin actually comes from. I think the value appreciation of when Bitcoin goes from $100,000 to a million to $10 million per coin happens through a just total meltdown in fixed income. So as fixed income, and when you think about user count compared to fiat value, there's a handful of people

Starting point is 01:32:38 that are controlling hundreds of trillions of dollars in fixed income. And so what I think, I guess why I think the timeline is pretty fast, I think in the coming 10 years. And I guess the reason why I think it's going to happen by the way, I hope you're right because they're a lot of Bitcoin. And it doesn't, you know, either way. So I'm not like anti-Bitcoin in any way. Yeah, no, it doesn't matter with either one of us are right. But the, I guess what I think you're going to see is as they're continuing to compress these fixed income yields down to, I mean, they're already at nothing. You've got a little bit of nominal yield here in the U.S. still, but it's getting so compressed. And then you just look at the trajectory of how much fiat's being added into

Starting point is 01:33:17 the system. You're going to be down to zero. You're going to start going into negative rates. They're going to try to take it even more negative. And I think there's going to be this point where, especially if the price appreciates to $100,000 goes to $200,000, where people in the fixed income space are going to start to say, all right, I think I can see how this story might actually start to end here. And I need to stop allocating so much into these contracts that are a guaranteed loss of capital if I hold it through maturity, which is based on just this further hopium Alice in Wonderland kind of scenario that's happening out of central banks. And I need to start putting at least one to five whatever percent into Bitcoin. And I think once that trust is

Starting point is 01:34:03 lost in the fixed income space, those few people that control so much of the capitalization of that asset class start transitioning it over. I have a feeling that it's going to happen quickly and it could happen at a timeline that's fairly abrupt. I'm with you that that is, and I believe that a little bit stronger in the beginning of the year when Sailor and Ross Stevens had their, I forget the name of their conference that it did, that was remote. Yeah, yeah, yeah. What was that called? I forget the name of it. But they were teaching people about Bitcoin, basically. And that's when, you know, by the way, I think Michael Seller has been great for Bitcoin. You need more people like Michael Seller. We don't just want one, but we need more people like

Starting point is 01:34:46 that. And the Bitcoiners have said we don't need anybody. But I think you do need people like you and Michael because I think you take a complex problem and you simplify it for people. You explain it in a simple way that they can understand and in a coherent way, right? And he does a really great job. He talks about $400 trillion in assets. He's amazing. It's like his brain is moving. It's like, is he reading a slideshow in his head? It's amazing, right?

Starting point is 01:35:09 It's unbelievable. I want to interview this guy so bad. It's like, God, can I get him on my show? I love this guy. But he's amazing, right? And the narrative makes sense. It all makes sense. I'm not saying it doesn't make sense.

Starting point is 01:35:20 Yeah, yeah, yeah. What I should not have is the timing of it, right? I'm not saying that institutional ways I go in. I had Anthony on my show is my first guest and he was talking about a wall of money coming in from Wall Street. And the one thing he said that was like simple, taking complex things and making them simple, rather than get into all the intricacies about Bitcoin and the strengths of Bitcoin. Here's a simple one for the average public. He goes on CNBCs at the whole time.

Starting point is 01:35:39 There's 21 million Bitcoin. There's not even a one Bitcoin for every millionaire. That's a pretty simple thing to say, right? The only thing you can do something. Right. It's like there's not even a, it's like you're sitting at the baseball game at the Yankee stadium and it's like, who wants a hot dog? It's like, you know, supply and demand scarcity kind of thing, right? Like they all want the hot dog, but I only got 10 of them here. It's like, it's the same idea. And so I get it. I get that. But, But Wall Street's really smart about figuring out how to create new products to sell that will replace the fixed income bonds.

Starting point is 01:36:09 And they're starting to do it at Blackstone. Warren Buffett said it years ago in 2009 collapse. He's like, man, what I'd really like did you go buy a bunch of single family homes? And it's like, yeah, I wouldn't say that. Isn't this crazy? Isn't this crazy what they're doing? So when you think about like how this plays out, the fools at the table are the ones that are issuing the Fiat at nothing percent interest rate, right?

Starting point is 01:36:31 And so think about BlackRock. I mean, they're a fixed income house like at the core. And so like, you're like, they're the patsy at the table here. Now I understand like they got all these, these policy type things that they've got to do to get the money out the door that the Fed and the government is kind of putting on them. And so when just recently in the last six months, when they started buying all these homes down in Texas and their leave. The whole neighborhood before pre-sale. So, resale. Exactly.

Starting point is 01:37:00 What are they doing? They've stopped being the patsy at the table by issuing the fiat that they're going to get paid back as worthless currency over a 30-year period of time at a fixed rate. And they've become the owner of the equity so that they can adjust the rent rates. That's exactly right. Annually. Inflation. As the inflation and the debasement occurs on. I had Grant Cardone on my show.

Starting point is 01:37:24 And Grant and I've had multiple different conversations on an offline, you know. And he's obviously a real estate guy. And he's, I got him to my Bitcoin, by the way, just so everybody understands the Bigler community, I got Greg Cardone to my Bitcoin. I convinced his ass, right? Because when it dropped like $29,000, he goes on a clubhouse. He's like, Jay, you be proud of me. I bought a bunch of Bitcoin today.

Starting point is 01:37:42 Who knows who he really did, but he told us all. But he's been saying that America's going to turn into renters. Americans are going to go away from home ownership. It's going to turn into renters, right? Garrett Camp said this, obviously, and Travis for Uber, car ownership as well. But he's been pushing, pounded a drum on the real estate side. And he said, I'm going to sell. he has $2.5 billion of assets under management right now with all his properties that he has at Cardone

Starting point is 01:38:04 Capital. And his buyer, he said, will be Blackstone someday. He's like, but I don't have to scale yet. It's got to be way bigger, right? Two and a half billion is not enough. It's got to be like 10 to 20 billion. Yeah, it's got to push the needle, right? They just went out and raised $6 billion from investors to buy up single family homes, like you said, to replace dead instruments. Right. But this is crazy, right? So, no, no, Blackstone, I said, did the $6 billion, right? So Blackstone just gets the $6 billion. It says, yeah, and not Grant, right? Grant's trying to get the same. The point was that I'm getting to is there's $1,18, $120 trillion in debt globally. This is the sailors numbers. And I think 18, 20 trillion of that is negative, effective real rates of returns are negative, right? That money is not going to,

Starting point is 01:38:43 so my bullishness in the beginning of the year after hearing sailors said, I was like, wow, that's really bullish because that money has to come into Bitcoin because they're yield chasing and they're not going to get a yield on Bitcoin, but the appreciation, if you look at the history of it. But that's a big bet for a bondholder to say, We're not looking for a yield anymore. We're just going to buy something for the appreciative gain on the going forward. That's not what bond holders like to do. They like to get a yield annually off of the asset that they purchase.

Starting point is 01:39:08 And that's real estate. And I think the first, this is where the slowness happens of the adoption, I'm telling you, right? I think that it's something that I didn't foresee happening. I couldn't see that coming. That they're just going to buy up houses. They're going to keep finding things they can buy as an asset that gives them a yield until they've ran out of everything with all the money they're getting from the Fed.

Starting point is 01:39:27 and then what's the last thing to buy? It's going to be Bitcoin. I'm not saying, I'm not saying everything's first and then Bitcoin. I'm saying they're going to start doing this to dilute what could have been Bitcoin adoption. They're going to do other things that we're all in a Bitcoin community saying, what are they doing? Like eventually everyone's going to do a run on housing, right?

Starting point is 01:39:42 And buy Bitcoin. That's what you and I believe, I think. They're going to be the ones holding the bag. But to your point, they could just, the underlying asset value of the real estate isn't actually important to the bondholder. And that's in sense. It's about, like you said, the adjustment on the on the rents for their yield on the inflation as it's changing year to year. And that's the most important thing. I went to

Starting point is 01:40:01 some of my investors about three years ago. And I said to them, I want to get into triple net real estate. I want to raise a fund because they had contacts in Wall Street. And I was like, let's go out and raise like $100 million, $50 to $100 million, and we'll buy triple net. We'll buy corporate, a Starbucks corporate run properties. You buy the land, it's triple net. They pay for all the maintenance of the building. They pay the property taxes, et cetera, et cetera. So you do nothing but collect money, basically. This is great. And it's a fixed product. It's better than a negative interest rate from a bond. Because you're getting five, six percent yields on these properties. And what they said to me was, if you look at the history of the way assets have worked for the last 30 plus years,

Starting point is 01:40:38 in the early 80s, we had like 20 percent interest rates. They drove all the way down to 0 percent by 2009. And the guy said to one of my own investors, if you took a ball and I threw it at the ground, what's it going to do? He goes, and that's what rates are going to do. I go, no, the Fed can't raise the rates. This is three years ago, right? This is before. You're dead right. This is after 2018, right? So I saw the crash in December and then it popped right back up. Like, bang.

Starting point is 01:41:02 As soon as the Fed went on 60 minutes, Jay went on 60 minutes and calmed everybody's nerves, bang, the market's recovered instantly, like literally instantly, right, the next day. And I said after I saw that, and by the way, just to be clear, 2015, it sold a company, this is how I'm very intimately familiar with this, just sitting on this pile of cash that windfall, and you had to risk it. I had to buy stocks and equities and things like that because after they were up over $130. 50 or 200% at that point. Yeah.

Starting point is 01:41:28 I'm taking all this money and I'm putting it in a savings account, gilding me like 0.1%. What are you kidding me? A 10th of 1%. That makes no sense, right? So I wasn't doing that. So anyway, some of the money was in that, unfortunately, but like not all of it, right? And so I just believe, to be honest with Preston, that you're going to see money moving

Starting point is 01:41:46 into real estate and other types of vehicles. They're going to create vehicles. It's what they do. Wall Street creates products and vehicles and then they sell its head or constituency, right? And that's just what I see happening before I see full adoption to Bitcoin. So that's why I'm saying unit of account, bro, we're a ways away from like pricing a house in sats if you don't have ever all the money moving into it first. Because I'm not saying you don't get to a multimillion dollar coin first.

Starting point is 01:42:11 What I'm saying is, and this is the tweet you got today. The tweet was, Jay doesn't believe we're going to a unit of account. I was explaining this to my wife. As I saw a tweet, we're at soccer. And I was like, look at this one. I showed it to it. This is before earlier today. And I said, this is crazy.

Starting point is 01:42:24 Like imagine looking around this room right now, Kate. And you're so conditioned that everything you look at, you're like, oh, that's 50 sats. Oh, that's 200,000 sats. No, like this is crazy town. This is maximalism at its best where you're in the echo chamber and you're visioning and projecting out where you see things will go. But the rest of the world isn't. You have to have the rest of the world doing that.

Starting point is 01:42:43 That means you have to have a market cap that goes up, but you need adoption. And again, market cap can go up before you have unit of account. No, I totally. Because you need everybody thinking this way, right? So we can get a multimillion dollar coin. I'm not saying you don't get there first. I'm saying for everything to be priced in Bitcoin, you need full adoption. You need a major collapse for that.

Starting point is 01:43:02 It doesn't prevent somebody from using Bitcoin as a unit of account for how they value everything on the planet today. Me personally, the way I run my business, the way I think about investing in equities in general, Bitcoin's my unit of account right now. That's how I do valuations. And let me tell you, I'm not saying this to brag. You can give me whatever investor you want. I'm pretty sure I've clobbered them over the last five or something.

Starting point is 01:43:24 Cheers, right? And I truly don't say that to try to like sound egotistical or whatever. I'm saying it because once I made that shift to looking at everything through the lens of that being my unit of account, I go back, I look at the Apple top line revenue. I'm going back and reverse engineering it so that I'm looking at it in Bitcoin terms. And guess what? The top line at Apple for the last six years has gone down every single year when I value it in Bitcoin. The free cash flows, they've gone down. So when I'm doing a dollar discount, you know, account cash flow analysis on that, and I'm looking at a trend line that's trending down, it's real easy for me to do.

Starting point is 01:44:01 I do the same thing, Preston. I look at when I sold my company, had I moved all of the proceeds into Bitcoin, oh my God, yeah. It's a multi-billionaire number. It's a multi-billion dollar number. And I'm like, oh, my God, why did I not do that? Yeah. But I didn't because of fear and uncertainty and doubt, right?

Starting point is 01:44:18 Like, just be honest, right? That was the reason why I didn't do it. Didn't have the conviction and understanding that I have now. But anyway, long story short is I do believe we'll have a multimillion dollar coin in the next 10 years, right? I believe that. I just don't think I'm going to be pricing. Not me, but I don't think people will be pricing the world.

Starting point is 01:44:32 Yeah, I can buy that. The one thing that I want to say for people that are listening to our conversation about the real estate piece and Black Rock stepping in and buying the real estate, I don't think this is a good thing for society. Like I want that to be very clear. Like we're kind of laughing and joking and like, to us, it's just really obvious as to why this company is doing this and why any other big fixed income house is probably trying to put those quote unquote positions on of buying people's houses. They're going to bid the

Starting point is 01:45:04 prices of real estate. And it's just going to, it's going to be a mess. But this is a company that is reacting to the policy decisions that are being made on a global scale. It's not that they're trying to be bad people. They're just trying to protect their equity holders by making sound decisions to protect themselves against future debasement. It's happening in the double digits based on M2 money supply growth. And like they're just reacting, just like everybody else's reacting, just like you out there buying Bitcoin are reacting to the circumstances of what's being dealt. So I just want that to be clear. And I know Jay Phil's the same way is like, one thing I wanted to tell you that I agree with it, that it's dangerous is that what's going to

Starting point is 01:45:49 happen, I believe, is that there's like $40 trillion in value for single family homes in the U.S. So from a perspective of the negative interest rates, they could probably suck up a lot of that dollar shift from the negative interest rate of bonds over to real estate. So if there's $40 trillion, you're not going to get all the single family homes in the U.S., but can they get 10 or 15% of the single family homes? And then when there's a cataclysm collapse and the bailout comes from the Fed, they're going to own our houses, too. They're going to own our bonds, our houses, our stocks at some point, the government's going to own everything if this keeps on. You can't allow this to keep. We have to vote this crap out with politicians. They're nationalizing everything,

Starting point is 01:46:27 but they're doing it in a fractional kind of way where they very slowly. Just slowly, it's not like, oh, we now in this company. It's like, no, we own 5% of this company. Now we own 10% and now we just own everything. It's crazy. And like the bonds I'm not so worried about because they have maturity dates, so that you don't own the bond forever, right? They'll eventually, they'll probably not sell them off the balance sheet. I don't think they'll ever sell the bonds that they've been buying, $120 billion a month. They'll just let them expire as maturity date, which is fine. They will come off the balance sheet based off of duration. So I'm not too worried about that. I am worried that the next leg will be that they start buying equities because they bought

Starting point is 01:47:00 ETFs for bonds. That's a symbol. They're going to start buying the SPY and everything else. And then the next thing will be when there's a major collapse after all these hedge funds start buying up real estate, they're going to have to buy their houses because they didn't work out. And then they own all our houses too. Like, what are we doing? Like, this is scary. We need Bitcoin. They're going to hold. Exactly. So to your point, you might go to hyperbiconization much faster if the collapse happens in the next 10 or 15 years after they bought everything up and you have the major, major great reset. Honestly, I love your point, which is curb your enthusiasm.

Starting point is 01:47:32 Hey, man, let's wrap this up. Give people a handoff. I know you're active on Twitter, but if there's anything else you want to highlight, give them a hand off. Dude, I love this conversation. This was so much fun, just jiving on business and entrepreneurship and all this fun stuff. Yeah, well, the one thing we didn't touch on, I'm an angel. So if people are, you know, looking to, for investors, you hit me up through Twitter on a DM. I have my DMs open. You can hit me up on Twitter. You'll probably have it in your bio or something like that.

Starting point is 01:47:59 But it's Jay, A-Y, G-L-U-L-D. You can find me there. But outside of that, like, I'm not operationally running anything. I'm just an investor. That's it. Jay, thanks so much for making time and coming on. I love the chat. Thanks, Preston.

Starting point is 01:48:11 Appreciate it. Hey, so thanks for everybody listening into the show. if you enjoyed the conversation, be sure to subscribe to the show on whatever podcast app you're using. We really appreciate that. And if you have time, leave us a review. So thanks for joining us this week and we'll catch you next Wednesday. Thank you for listening to TIP. To access our show notes, courses or forums, go to the investorspodcast.com. This show is for entertainment purposes only. Before making any decisions, consult a professional. This show is copyrighted by the Investors Podcast Network. Written permissions must be granted before syndication or rebroadcasting.

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