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Language: en
the following is a conversation with
jason calacanis
who's an entrepreneur investor author of
angel how to invest in technology
startups and
as many people may know he's a fun
brilliant
long time podcast host of this week in
startups
and co-host of the all in podcast with
chamath palahapatia david sax and david
friedberg
who all happen to be poker buddies and
self-proclaimed besties
the result is always a great listen due
to both
the love and the heated disagreements
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as a side note let me say that i've been
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in the past few months
to give you a bit of context on the side
i've studied trading from an algorithmic
trading perspective
as a machine learning and a game theory
problem off and on for a few years in
undergrad and grad school
i found the distributed complex system
aspect of finance and economics in
general fascinating
but now i find even more fascinating the
human side of the whole thing
ideas of greed power freedom and truth
wall street bets robin hood and the
whole beautiful mess around this topic
allows us to have great conversations
about human nature
and the systems that underlie the rise
and fall of civilizations
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at lex friedman and now here's my
conversation
with jason kilikanis i have a million
things to talk to you about but we
do happen to be living through what i
would think of
as a historic event in in terms of its
impact in terms of
like almost philosophically thinking
about the role of
people and how they can fight power with
this whole wall street
bets and game stop situation i was
wondering
you've covered in your uh amazing all-in
podcast you guys have been having
fascinating battles over this whole
situation
i was wondering if you could tell maybe
from your perspective
as it's unrolling uh the the saga of
wall street best in gamestop what are
some interesting
insights yeah uh that you have
about this whole set of events in full
disclosure i was an angel investor in
robin hood before they launched
and when i met the founder vlad and his
partner
you know they pitched me at a a bar not
too far from where we are right now in
palo alto called antonio's nuthouse
and my friend adeo it's a really good
story
my friend adeo had asked me to speak at
his founders institute which is kind of
like an
accelerator for people who are thinking
about starting a company yes and so i
gave a talk and then he said hey let's
go to antonio's nut house and
um we'll meet elon for a drink uh and so
elon met us for a drink there and it's
it's the divest of dive bars
like you'll take a beer love the image
of all of this
you hang out with elon yeah i mean it is
the
worst bar in the peninsula
like just garbage on the floor and like
cheap beer
and warm beer and like you pick up your
pine glass to be lipstick on it
it's just brutal classy not your
lipstick you understand
somebody else's lipstick yes and so
we're sitting there
and vlad walks up with um
his partner and he says you're jason
calacanis and i said tell me about your
startup he said how do you know i have a
startup i said you recognize me
and i mean that's the only way and he
goes is that elon musk and i said yes
elon come
say hi and he came over and said i said
tell me what you do he said well i'm a
quant
i said what's that and he said
quantitative
analysis and i was like oh yeah i know
about that that's like you guys make
algorithms and then try to beat the
market right he's like yeah i was like
so you're gonna pitch me on a startup
and you're gonna sell your algorithm to
other people
and if it was so good why wouldn't you
just use it yourself and print money
he's like yeah no no that's not our
business our businesses we're going to
create an app to get millennials to
trade stocks
and i said you do realize there's no
retail investors anymore like the dot
com crash plus the 2008 financial crisis
eliminated any individual's belief in
participating in the stock market
and he said that's the opportunity i
said okay i like it tell me more
he said well we're going to get these
millennials to trade i said the same
ones
who live in their mom's basements and
take uber and lyft and
are on their parents have no money got
screwed and
you know went 250k into debt for school
and now can't get a job those people
and he's like yeah i'm like okay they
have no interest in their future but
they're going to trade stocks he said
yeah that's the opportunity i was like
how do you how are you going to make
money
and he said well that's the best part
it's going to be free
and i said so your idea is to get a
group of people who have no interest in
saving for their future
to trade and your business model is free
and he said yes i said i'm in
because in almost all cases the crazy
outlandish ideas
that nobody believes in are the ones
that have the greatest returns i mean
uber
i introduced to about 25 investors and
three of us said yes
so you know a full 12 percent of the
community
who saw that deal decided to do it so
the your sense about this idea being
good
had to do with the fact that this guy
was just uh crazy and ambitious and bold
thinking or was it that there's
something here in uh
allowing a much larger magnitude of
people to be able to be investors
yeah the way to do really well as an
angel investor or
just in technology or in life is to not
say what could go wrong but to say what
could go right
and then to just imagine for a moment if
it does work what would the world look
like and so when elon was investing
in tesla and some other guys were
running it
and he was trying to save the company
you know
it wasn't is this gonna work it was
almost
positively not gonna work it was and he
knew that um
but if it does work what does the world
look like and so that's really what
you're looking for is
not the chances of success but if it
does succeed
does succeed what would that look like
and
you that's what the world needs more
people doing and so when you looked at
robin hood it was like well if he does
succeed what would the world look like
and now we've seen what it looks like
you have a generation who are so
financially sophisticated
that they know how to do puts and calls
and shorts
and research at a level
that dominated the hedge fund industry
so let's pause for a second
these traders sitting there on a
subreddit in a discord server
are able to do analysis and research and
then act in unison
to say we're going to beat in the robin
hood sense
uh you know this group of sophisticated
insiders who have
more access and more access to capital
but we will
figure out how to solve this problem and
you know things
most things don't work it's like the
wikipedia like
there's no way no way the wikipedia
would ever work right
except it did yeah right like you're
like how is this ever going to work
you're not paying anybody but it's both
the largest corpus
of an encyclopedia ever so i think
robinhood actually succeeded and then
what we saw was
this system and a lot of the systems in
our society
whether it's the political system the
constitution of the united states
uh education higher education which
you're involved in
and then even the financial system we
have not stress tested and
stress tested it and we don't actually
know all the edge cases and how it works
so trump was able to just really put
this crazy stress test like
it is the democracy going to hold
are we going to break this two or three
you know 200 someone-year-old experiment
and then we looked at the financial
markets and it turns out there were more
people shorting the stock than stocks
where
the shares were available i don't know
how that's possible and then i'm trying
to uncover
where can i see a list of people who've
shorted the stock and it's like you
can't
but we can tell you sort of how many
every two weeks or maybe twice a week we
can create a report
maybe we know i was surprised that
nobody knows
the list of people who were shorted and
you guys were trying to figure that out
yeah there's no transparency on a lot of
these systems
and if you call to try to shorter stock
like it's almost like they'll tell you
on the phone like let me see i think i
might know a guy who has shares to loan
out
so it's like am i calling to like try to
find like a
73 mustang grande in you know gold
you know you're gonna call around it's
like shouldn't this be like on a
ledger somewhere and be completely
transparent so
now we're seeing those things and i
think the investigations will make it
super clear but of course
in a vacuum without information there
are so many investors in these startups
that conflicts can start to appear and
then you know how it is with people in
conspiracy there is
the mind starts to wander right and so
in some cases there is actually a
conspiracy and then in other cases
uh people's mind will fill in like oh my
god there's some grand conspiracy here i
can tell you robin hood's only goal is
to get more people to trade stocks
and to democratize it even more and they
apparently
were on the brink of you know seizing as
an as an entity if they didn't get more
money
to cover all these trades i mean they
were on the brink and they raised three
and a half billion dollars or something
like that in a week
yeah so in some sense robin hood enabled
this very like the magic of this
distributed system of wall street bets
right you said wikipedia which is
another which is probably one of my
favorite websites and one of my favorite
examples of like a distributed system
somehow coming together in a way
just like you said at that crappy bar
you i would have guessed it would never
work
but if it does work it changes
everything and it did
and robin hood in that same way probably
enabled or was one of the major enablers
of wall street best of giving
power uh like empowering young kids
to learn about how this whole messy
financial system works
and take on the big elite centralized
players
yes and you know it's very easy when
these companies get big
um one thing that's changed is the
footprint of these startups and the
velocity at which they grow
so something like airbnb is another
perfect example of something that should
really not work
in practice but it does like i'm gonna
rent my
couch or my extra room to somebody like
a serial killer or
i'm gonna stay in somebody's house like
a serial killer's house and
you know it's like it really sounds
scary but it actually works and
and it has not destroyed the hotel
business
it has added so the best startups induce
a market to exist
if you look at you know uber or airbnb
people replaced their cars and uber was
not
competing ultimately with taxis they
were competing with car ownership
public transportation walking or just
not going out
and then you look at airbnb a lot of
people who stay in an airbnb would not
be
taking a trip to kyoto if not for the
fact that they could get a 75
beautiful room with great reviews in
kyoto for
three weeks it inspires people and it
manifests a market because the product
is so transcendent right
and i think that's one of the things
that robin hood did you can't learn how
to do this options
trading and puts and calls and all this
sophistication stuff
unless you actually do it it's just too
hard to learn except in practice
just like poker if you want to learn how
to play poker or guitar
or tennis or skiing like you could talk
about it you can watch youtube videos
but at a certain point you got to get on
the mountain at a certain point
you got to put some chips in the pot and
it's going to be painful
yeah like poker is going to be painful
you're going to lose a lot of money
that's why you should play at the small
tables first and
you know even in trading like you look
at people who are doing this
crazy trading and gamestop a company
that's worth
you know maybe a couple of billion
dollars but certainly not tens of
billions of dollars of course the people
who are throwing their money in last are
gonna lose it
i think everybody knew that um and so it
was a momentum play and
you know they're betting against the
hedge funds um so i think it's good for
people to learn
and become financially illiterate and
just always understand
the concept of the risk of ruin yeah um
the good news is for a young person the
risk of ruin might be like they lose
five thousand dollars or something and
then they have to build their stack back
up
right but that's really the the only
thing i am concerned about is
there are people who will play poker or
blackjack or sports betting or whatever
it is and lose control
just like there might be people who try
alcohol and lose control
but we can't build a system based upon
limiting
you know the average person's behavior
based upon somebody who can't control
you know their ability to drink you know
two glasses of wine instead of 20.
how does this whole thing end uh
probably in tears
for who yeah who's crying is everybody
crying
who's crying when so i think there were
some of the hedge funds that were crying
initially
that maybe some of the wall street bets
people who bought last would be crying
and then eventually there's an probably
another set of hedge funds or even the
wall street bets
mob and you know that army some of them
might have broke ranks and then shorted
the stock
yeah so nobody knows so everybody has to
be aware of what's happening in the game
so if wall street vets said hey let's
squeeze these hedge funds because they
have too much short interest
let's all buy the stock then some of
them might have said okay you know it's
not
two or three hundred dollars maybe i'll
join the short movement now that they've
covered and they could have shorted
their in been like double agents so
people have to understand like this
stuff is gnarly and it's a it's a
free-for-all
i mean it is a literal free-for-all
there's a kind of morality
like a big statement that wall street
bets made in terms of like the elites
can't just push us around they can't
bully around
but at the same time you know they're
also interested in making money
right yes is uh what's your sense you
said that
some of the people in the wall street
best might have broken off and shorted
the stock
sure are they more interested there was
an emergent
like morality that emerged and said like
we're not going to put up with the
centralized elites but
is that going to continue are they going
to fight the power structures that are
bad for society
are they going to now like i mean are
they ultimately going to introduce more
chaos that's going to damage the economy
and damage the world or are they going
to continue being the good guys and
fighting the uh
the the the evils that manipulate uh the
market
what's your sense you know it it really
feels like the dark knight series of
films where like
some people just want to see the world
burn yeah i think there is a contingent
of people who just
literally want to see chaos yeah like
you know that contingent
on some of these you know forums who
just want to create chaos
right um so there's certainly that chaos
contingent but i think overall what the
arc will show is
a group of people getting massively
educated you see it in crypto as well
there was like a three-year period where
all of these failed entrepreneurs who i
knew who couldn't
build companies were then coming back to
me
after their companies has failed or
after they gave up or couldn't clear a
market raising money with the venture
capital community
and they were doing icos and i was like
i met you before right and they're like
yeah yeah no i'm doing an ico now i'm
like okay
where's your company at and they're like
here's a white paper and i was like
this white paper with spelling errors in
it that says you're going to destroy
airbnb because everybody's apartment is
going to be on immutable ledger
yeah like wouldn't that be better in a
regular database that was private and
not public
like why does it need to be an immutable
ledger so it can't change i'm like
not changing the database is a feature
that's that does not seem like a good
feature
and they couldn't explain it they're
like well just people are interested in
icos and there was that ico mania
and what it showed was there's a global
appetite for risk people
want to try new things this is one of
the great things about the human spirit
is one of the great things about
capitalism
and one of the things that concerns me
most about we're at society is
the sort of socialism communism
you know entrepreneurship is bad
technology is bad
and polarization of wealth and you know
people getting rich is a bad thing when
i grew up i'm 50 now but when i was a
gen xer growing up we kind of
maybe too much idolized bill gates and
people who are doing interesting things
in the world
and we thought capitalism was a force
for good i still believe capitalism
is a force for good because when a group
of people builds a product or service
that changes the world and and it gets
globally distributed whether it's
tesla or spacex or google or airbnb or
uber or robinhood
you know everybody gets to benefit from
that product or service
having to compete and if you look at the
places where there's no competition like
public education or less you know profes
you know uh you know established
you know colleges and stuff like that
less competition for accreditation
degrees
like things tend to get a little weird
don't they yeah
and people tend to be protected and
that's not good you need
you need competition um does it mean
that
you know people shouldn't have global
health care it doesn't mean that you
know we shouldn't have a safety net but
we need to keep capitalism vibrant
especially because china
has now co-opted capitalism and created
their own version of capitalism
which is communism with capitalism it's
like this weird operating system like
we still want to keep communism so we
can take any of your gains at any time
yes but we'd like you to be
entrepreneurial yeah and then you have
somebody like
you know um you know the founder of
alibaba jack ma
who disappears for a couple of weeks
who's that
exactly like who's jack he kind of
disappears for a couple of weeks and
then he comes back and he's really sorry
about the things he said and
then he disappears again and like you
know we have to be very careful if china
wins
capitalism yeah this is going to be an
existential threat for humanity yeah
the chinese are no joke i mean they are
seriously focused
and they are picking the winners it's a
very weird system because it is in fact
i don't know what you call it like
communism capitalism in such uh
overloaded terms but they do encourage
entrepreneurship
but they and they do a good job of it oh
yes but but then they're like
they're like the surveillance thing and
they're controlling things in a way yeah
it's it's weird
because it seems to work really well for
them
uh in the short term yes it's definitely
got short-term benefits
so the question is like what what uh how
that gets distorted and becomes worse
and what's worse
what should potentially might be and i i
think on
you know the the entrepreneurial spirit
which
you have apocalypse all centered around
the entrepreneurial spirit it
is one of the magical things that makes
this country great i don't know if money
is deeply tied into that
i do get bothered by people you know
treating the word billionaires if it's a
bad word yeah
but in general like all the hard things
all the difficult things we're going
through in this country it seems like
the way out is going to be uh
making the the entrepreneur the hero of
society of like
letting that young kid with the big
dream and the guts to take the big risks
and build something totally new
uh make giving them a chance and
whatever that involves
i i don't think it's about taxes i don't
think it's about like
uh regulation all that stuff it's about
us and just public discourse saying
that that kid that guy that girl they're
bad asses
like encourage them to do it we have to
have people buy in
to the fact that they have that
opportunity and i think one of the
problems in society is
there's a group of people who actually
don't believe that they
can succeed or they don't believe even
more perniciously
that other people can and that's the
group of people that i think are
highly vocal but a small group of people
which are
generally people of incredible privilege
rich parents
white city dwellers liberals they kind
of look and say
poor people cannot change a lot and
their they're battling in their minds
to protect poor people and but they have
this very weird patriarchal kind of
approach to it which is
they think that they're not capable of
changing their lot in life and they're
like it's not possible
and then once in a while i'll tweet
something where i say you know it's
really incredible that
every piece of knowledge you could
possibly want is now available for free
on youtube
and every course from mit and harvard
and stanford is available on edx or
coursera
and all that information is there freely
available and you can take the lectures
this is amazing and then people will be
like yeah but people don't have access
to it i'm like
they do it's free here's the link and
they're like
yeah but they don't have internet and
i'm like here's the chart of internet
penetration in america like
and they're like well poor people don't
have internet and i'm like really
find me any downtrodden person without a
smartphone
with a high-speed connection that
capitalism provided
for 12 a month or 15 a month like it's
very hard to find that
and and we have it so well in this
country and there's so much opportunity
um but people don't believe it
and that's actually one of the problems
see the average american still watches
four or five hours of television a day
and often i meet people they're like i
need a technical co-founder
and i you know but all i need is a
million dollars and i'm like okay well
what is your skill and they don't have a
skill
right and i'm like well are you a
designer no
are you a product manager no are you a
developer no are your sales executive
no okay what are you it's like well i
have an idea well
as my friend sam harris i think your
friend as well says like
everybody has like a million ideas an
hour like you don't really get credit
for those even when you're asleep your
idea is spewing ideas
like zero credit for your ideas it's all
about execution
you have to believe that you yourself
can be the core of that execution you
yourself can build the thing and every
no matter what your circumstances are
and you could talk about like structural
racism and all those kinds of things
that very fast
but from the individual perspective when
you just like are coaching or giving
advice to an individual
you can literally change the world i
mean wall street bets is an indication
of that in the financial space that you
yourself
can have can change the world that
that's why this country is
is amazing still the best country in the
world right i mean it still is
amazing the opportunity provided to
people all this educational experience
is online
and the ability what i tell young people
who are looking for advice
i say you know your the skill you need
to refine is the ability to learn new
skills
like if you become good at learning a
new skill
and tim ferriss a friend of mine has
really pioneered this like
he can get to 60 or 70 percent
of like the knowledge in a skill in some
incredibly short period time now i'm not
saying he's gonna become a virtuoso
drummer
or a great basketball player but tim and
i were on vacation together in
like a group vacation in italy and there
was a basketball court
and uh i said let's go let's go shoot
some hoops i never shoot shot before and
i was like okay come on
i'll teach you and tim is fabulously
uncoordinated people don't know this
yes like he tried to dribble a
basketball and do a layup yeah and it
looked like
he had a blindfold on i mean you've
never seen something
less elegant than tim ferriss doing a
layup in basketball and then he watched
me do it three or four times
and i watched him study me and i listen
i i've been playing basketball in
brooklyn since i was a kid
i got a couple of moves and he was just
taking notes and taking notes and taking
notes and by the end of a couple of
hours of doing this
i could just watch him checking his form
and figuring it out
that's every skill in the world now and
what i tell people is like
i'm like have you did you watch game of
thrones and they're like yeah
watch breaking bad like yeah i'm like
okay that's about 400 hours
yeah how about you don't watch the next
two
and you put that 400 hours into learning
how to be a graphic designer
a ux person a developer whatever it is
and learn how to add skills that's what
i did my whole life i was a kid from
brooklyn
went to school at night but i was very
quick to get to maybe 50
of the knowledge base of graphic design
or being a writer or being a sales
executive whatever it was a developer
even
and i was just good enough to not have
people be able to bullshit me like when
i hired them
and that was a big unlock when you know
enough that people can't snow you that's
a really good one and look at yourself
like
you figured out how to set up an entire
podcast people don't know this but
you don't have a team around you i have
a team of like five six people working
in my pocket you see even knowing
enough about to set this up you would
then be able to hire a team
correct and you'll be able to call them
on their bullshit if they're not doing a
good job
and that's really important and i don't
know that much about this whole thing
but i know enough to be able to
see who knows their stuff or not you're
absolutely right and then
the process of learning how to learn is
uh
is essential there because uh like i've
uh i did martial arts uh jiu-jitsu and
so on
and it's so funny to watch i did take
one yeah definitely that was awesome
it's funny that there's some people that
do an activity for years
because to sort of elaborate on
something you were saying about
uh hours it's not always the
amount of hours it's the quality that
you put in deliberate practice versus
just doing some behavior i mean
literally i've been playing chess and
and trying to get that going again after
watching queen's gambit and i got
chess.com
and i realized i was just playing and
i'm not getting better and then i was
like oh wait there's a little analysis
feature here at jazz.com
where we'll show you your blunders and
mistakes and i'm like oh
i'm spending no time reviewing my losses
in chess
and i just want to play the next game i
should really review these losses and
figure out what mistakes i made when i
started doing that i was like oh
i'm getting better yeah right so some
deliberate practice really well and if
you want to take it all the way uh
magnus carlsen
uh shout out to the guy he has an app
but there's a few other coaching apps
where you like focus on the end game you
focus
drilling a particular it's you basically
don't play the game at all you're just
focused on drilling the
the different apps the openings the
openings yeah yeah and there's different
kinds of puzzles so you can really make
it into a
deliberate practice not to make this
episode uh sponsored by chess.com but
they literally have puzzles
yeah so i was like oh and it's a hundred
dollars a year for this product and i
just thought to myself
this is capitalism they don't need to
charge you a hundred dollars an hour for
a lesson
they can charge you a hundred dollars
and they've created the ability for you
to play chess 24 hours a day
against opponents who are perfectly
matched against you based on your rating
and they analyze every game and they
have puzzles and they have tutorials and
they've got everything else
it's like just think about how
much value is being provided to society
because of capitalism and because
competition if you want things to get
better
and you want to step up your game just
make it slightly competitive it is one
of these things
in human uh existence that is
so powerful i don't know did you see the
michael jordan documentary the last
dance
like half of it okay i'm still working i
mean he's so
competitive yeah and petty yeah it's so
inspiring that
all he cares about is just winning
to the level of which he literally
there's like this running meme
i took that personally and i took that
person i don't know if you've seen the
images of him
sitting smoking a cigar looking at like
an ipad or a video clip and it's like i
took that personally
and you can make a supercut of every
time he took something personally he
literally takes everything personally to
give himself that competitive motivation
to win that's capitalism and when people
are competing
man look at what elon did to the the
the space of cars like every they were
literally laughing at him in the first
10 years electric cars ha ha
that company will go out of business and
now every single company is like
we're going fully electric by 2035 and
he
kicked their asses so brutally
that they had no choice but then to step
up their game
and that's what we want right and this
virus and this pandemic
i think the the the great thing that
will come out of this horrible
experience that we've all had
psychologically death learning just so
many bad things occurred the economy
people losing their jobs
but we also got to see the human spirit
with these mrna vaccines
and and just how if we
took out some of the regulation and
people were super motivated
we might actually be able to eliminate
all
uh pandemics from ever happening again
and before that bill gates was banging
his fist and jeff skull was doing
the movie contagion i mean for two
decades people have been banging their
faces we have to be prepared for this
yes and everybody's like yeah whatever
yolo
it's not gonna happen and now it's
happened and people are like
we need to be able to destroy every you
know
pandemic and virus before it happens and
you're listening you know a lot more
about science than i do but this mr mrna
has been around for a while
we've just never gotten aggressive about
doing it and then you think about
challenge trials
i don't know if you've been following
this but they're doing challenge trials
now in the uk this month
where they're introducing covid into
healthy young patients
and then giving them the vaccine or you
know and that is against all
yeah rules and regulations about
you know do no harm but then you think
about it
we kind of celebrate people jumping out
of planes and we got that one guy alex
honnold who's climbing up mountains
without a rope and they give him a north
star
you know back page ad and a a you know
an endorsement deal
yeah and we celebrate that we celebrate
people
surfing with sharks we celebrate people
doing deep welding we pay them extra to
go
200 feet underground and weld stuff and
people do dangerous stuff all day long
astronauts yeah but we won't
soldiers firefighters but we won't let
people
get paid to be do a challenge trial yeah
we're weirdly risk-averse in certain
areas that completely don't make any
sense
and this is where the world needs to be
we could have said these thousand people
young people who we know are in all
likelihood not going to have a bad
outcome
but there's a possibility this is a
possibility but it's very low and it's
certainly lower than
riding a motorcycle right it's lower
than riding motorcycles people riding
motorcycles everywhere we have ads for
motorcycles
we could have just said to those
thousand people we'll give you a million
dollars each
to do this okay there's your billion
dollars
we we're printing trillions of dollars
of money to deal with this if we had
just done
a thousand people for a million dollars
each to do a
challenge trial in march april may when
they had the mrna vaccines ready
we could have deployed the vaccines in
the summer we would have been done with
this
it would have been over by now so we get
to challenge all of that thinking i
think that's what the great pause did
it's letting everybody challenge that
thinking is why do we have that rule
okay yeah we don't want to have people
you know like
give up their organs for money like we
obviously understand but there's a
reasonable discussion about
well maybe there's a level of risk in a
global pandemic i mean we fought the
nazis
right we defeated the nazis that took a
lot of deaths to do that but we had to
kill that evil this is another evil
which we must
fight and it's going to result in it's
already resulting in thousands of people
dying a day but
we could have actually stopped it
earlier if we just had a reasonable
discussion this is why podcasting as i
respect what you do
this is why intelligent people are so
drawn to podcasts because you and i
can expand on this yes and not cancel
each other
over this very suggestion when i make
this suggestion that are challenge
trials reasonable or not
if i were to do that on twitter they'd
be like oh calacanis wants to
give poor people corona virus in order
to save rich people
yeah no i didn't say that but
we you and i could have a reasonable
discussion about a challenge trial is
something we should consider
in a acute situation where millions of
people are going to lose their lives
right so you know that's an example of
capitalism and competition working
really well
there there's one of the to me sad thing
to see about coronavirus is that for
example testing
at scale should have it seems obvious
i i was a little clueless about it but
because i thought there's no way you
can have like antigen tests at hundreds
of millions
like order hundreds of millions of them
and make them cheap but actually
i realized recently that there have been
available since about like may
yeah you were able to in korea in
finland all over the place
you could have done mass manufacture so
there
there's a little bit of a failure of uh
of capitalism to step up yeah and i
don't know if you agree with this but
it seems that the blame is to be placed
at the regulators
yeah and the the the various
institutions
crony capitalism and all likelihood is
what stopped it here in america
i mean i had friends who had imported
them from other countries
the testing kits and you've probably
been to parties where people had these
kind of testing kits from other
countries
and we're sitting here and they're just
approving them now really in february
month 11 of the pandemic in america
we're going to have testing online
really
i mean even if these tests were 80 you
know
effective and they're 95 effective mass
producing them we should have sent them
you know in every postal anybody with a
post office box should have
you know with the mailing address should
have had 10 of them put in their mailing
address just for free from the
government
and then everybody would be testing and
we would have contained it we don't have
test and trace here in the united states
all the countries that
are on the other side of kovid did it by
having testing
tracing and closing their borders and
masks
that's the combination that works the
the problem with
the coronavirus is uh while there's a
lot of institutions did not behave their
best
it's also the case that there's a lot of
uncertainty so i tend to give a little
bit of a pass
to everybody involved for the
uncertainty
we were all i give them that until june
i wonder how history will remember this
whole period i'd love to ask you
because you were an early investor in
robin hood and you're sort of
you're in a very nice place
of uh being a huge supporter of the sort
of wall street bets
kind of distributed power of the people
and at the same time
uh because of you being an investor like
intellectually giving a chance to robin
hood in this kind of chaotic time of
conversations
to think about like well what did they
do right what did they do wrong
yeah so you have a kind of a balanced
view on the whole thing which is really
nice
is there we've talked about what
robinhood did
right i think can you uh sort of
steel man uh charmata's argument
of uh what robin hood did wrong in the
last few days
yeah i mean there communication is
always the number one issue with these
startups right
and if you you have to get ahead of any
problem
and you have to put all the bad news out
immediately and in the case of robinhood
it seems based on what you know has been
in the papers and what robinhood said
publicly
is that they had this kind of liquidity
crisis right where
they were being uh because of these
exchanges telling them you have to put
up this amount of money in collateral
and them being pinned at number one
in the app store there were so many
people trying to buy five shares of this
stock five shares of this meme stock
that it kind of broke their system and
then the people who clear the trades for
them
they said you got to put up a billion
dollars 2 billion 3 billion so you can't
do that overnight
and i think that they were an
uncomfortable situation of
like going on tv and saying uh we have a
liquidity crisis
like that could be like a run on the
bank everybody then logs in at the same
time to
robinhood and tries to sell every share
they own because they're afraid that the
whole thing's going to collapse right so
i think there was this kind of like
black swan event and they probably
didn't communicate it all that well
at the center of that this is this is
really interesting maybe you can comment
on the nature of communication
uh vlad the ceo yeah the guy you met at
the bar
yeah i think at the center of the
communication right yep
so elon is an example of a guy who also
is at the center of the communication
for his particular set of companies
and that you know on twitter seems to be
a really powerful way to communicate
yeah and there was something this is me
saying it yeah there was something about
vlad that sounded like he's
hiding stuff that yeah as opposed to
elon it doesn't sound like he's hiding
stuff it could be the nature the the
the beat the timing of the conversation
same thing with mark zuckerberg he
mark zuckerberg for some reason often
sounds like he's hiding something yeah
and then there's like jack dorsey is
much less so
yeah and i don't know what that is about
the ceos it makes you
trust them and not it might be the perm
point in time
um like in terms of escape velocity uh
you know there might be non-disclosures
in place that we're not aware of
where they're not allowed to talk about
certain relationships i see and
and and that results like in vladimir in
this case and that results in you being
like
acting weird or nervous or nervous yeah
it could just be the person is nervous
you know so
it's it's really hard to be building one
of these companies and you're at scale
and
you know oh my lord the entire thing's
coming apart and you're the most hated
person for that day you know how the
rage cycle works and the
the media is just so crazy when they
get their hooks into something i saw it
happen with uber we saw it happen with
facebook
and even tesla you know there were times
when auto
people did stupid things with autopilot
and it's like yeah okay somebody's
watching a movie
and sleeping in their car yeah or
leaving the driver's seat against all
the rules of autopilot
and somehow tesla's responsible for that
it's like we have people who stand on
top of their motorcycles and drive down
the road on a motorcycle
and we don't blame yamaha for or harley
davidson for some idiot
standing on the seat of their motorcycle
on a highway going 60 miles an hour we
just say
that person is an idiot but when new
technology comes out
we blame the technology not the person
operating it
yeah and if you are going to operate
uh we basically vilify and demonize i
think that that is part of it like when
the person at
i remember airbnb we always thought what
if somebody trashes your apartment
and then sure enough a bunch of meth
heads rented this poor woman's apartment
she left all of her stuff in it and then
a bunch of meth heads had a drug party
destroyed her apartment ripped up all
her photos and went crazy
and we knew that day would happen but
nobody remembers it now but it was the
number one story on
every news channel because wow that's an
exciting story
and i just thought to myself i wonder if
there are
any parties in hotel rooms where the
hotel room is being trashed and people
are doing drugs and
and crazy things like yes that's
basically every hotel in los angeles
right now is being destroyed by some
rock band that's throwing a tv out the
window
like we expected in uh you know a hotel
we just didn't expect it in somebody's
house with airbnb and then airbnb
created rules around you can't rent an
airbnb for a party
uh and they learn so i think there's a
learning curve with these companies and
they do get to scale
at a level that is unprecedented it used
to take
decades for a company to become an
international phenomenon now it happens
in two three four years
i mean look at clubhouse this thing went
from being you know a private beta six
months ago to being the number one app
in germany
and in japan and here like just like
that boom
and it's because there's an ecosystem
that has never existed
the app store then there's uh payments
online
everybody and then everybody has a super
computer in their pocket when we
the thing people got wrong about
entrepreneurship technology
uh and business you know over the last
couple decades was just how big the
market was
and then how quickly you could um you
know
achieve relevancy in these markets
we thought the market was like the 60
million homes would broadband
and originally it was like maybe 10 or
20. then it became 60 million
then i was like okay well how many how
many hours are you at your desktop
computer well like probably at our
computers for five hours a day ten hours
a day at work
three hours a day on our own and then i
was like yeah nobody's on their desktop
computer everybody's on their mobile
phone
and oh and by the way they have it with
them so the people with mobile phones
are now using
this high-speed device with an app store
with their credit card in it yeah
in the early days of the internet people
were scared to put their credit card on
the internet that was considered a
really dumb thing to do if you put your
credit card on the internet you're gonna
lose all your money they're gonna
they're gonna hack you or whatever and
now it's just amazing to me how quickly
when a company hits
how quickly it can get to a million
subscribers or 10 million or a billion
users right
and there's all these networks like
social networks that allow the spread
of uh the viral spread of like a new
startup a new
company uh a new app to be announced i
mean
anything was an idea a podcast right
like i mean single thinking just as a
single meme could change the world
speaking of clubhouse i mean yeah i just
wanna we're saying so many interesting
things but
there there was a magical moment with
vlad and elon on clubhouse
yes is there do you have thoughts about
that
interaction uh which felt like
so many uh aspects of this whole
situation feels like
totally novel surreal like it's defining
world
era like it is yes like a billionaire
the richest
human on earth is interviewing uh
the person at the center of one of the
most
interesting mass scale like uh
power battles in finance ever
you know perhaps by the way seven movies
have been sold
and two weeks just think about how fast
things are moving
this thing happens yeah like people had
the idea to short the stock six months
ago
they start doing their research they
build an army they execute the trade
the system goes down robin hood raises
three and a half billion dollars in four
days
elon is interviewing them on clubhouse
on sunday after the wednesday it
happened and now here we are
it's ten days later yeah doesn't it feel
like it's been 10 months yeah it's been
10 days lex
it's been 10 days 10 years there's like
a new president
all these things that and everyone
forgot like it was an insurrection
by the way we also almost had a
revolution at the capitol where
a bunch of crazy people who have guns
and body armor and then a bunch of them
who are just yoloing in cosplay
yeah took over the capitol well so and
the other more dramatic thing to me is
that was one month ago that was one
month and the pres the president of the
united states got banned
from every major social network and uh
which i think i'm still uh deeply
troubled by
is parlor being removed from aws that
changed the way
i that changed a lot of things as
somebody who's an aspiring entrepreneur
that changed the way i see the world
that little maybe i'm
being overdramatic but no you're not i
think you're paranoid for a reason
you're paranoid for a very good reason
which is as big as these companies can
become
they are beholden to the mob and if the
mob says
hey this person needs to be canceled
they're going to get cancelled because
you can't lose your entire audience you
could lose your whole customer base and
you can lose all your employees
i think what's interesting about your
fear about parlor and aws taking off is
we went from being like a social network
which is
you know the software layer and then we
went to like the infrastructure layer
you know and they'll even go after like
cloudflare which is a cdn provider right
they're just like
a plumbing you know it's like sort of
like the telephone
so we're basically holding everybody
responsible
on the whole chain of events here what
that's going to do is you know
i'm not a huge believer in crypto but
distributed computing
um where nobody and decentralized and
distributed
computing platforms um and open
standards podcasting's an open standard
the web is an open standard ftp was an
open standard but twitter
and you know facebook are closed
captioning not
where everybody available and i invested
in a company that tried to do this and
um got sold and it didn't work out but
take your hard drive on your computer at
home you give
you know a terabyte of your 10 terabyte
drive over to the cloud
and then everybody else does their
terabyte and then all of a sudden you've
got this virtual cloud
and anybody can store stuff on it and
it's all encrypted and then nobody can
stop it
and that could be tweets it could be
videos and so this idea that
you know youtube will be able to tell
people to kick people off because
they're skeptics of
i don't know the pandemic or the vaccine
or they've
you know uh they'll make things that are
more censorship resistant i think
that'll be the reaction to all of this
what this is my question for you going
back to that crappy bar and people
pitching you
is is there do you like with clubhouse
do you see
competitors do you think it's possible
that another
perhaps more decentralized or another
kind of social media will emerge
that will take on twitter and facebook
it might be able to replace something
if you look at the whole landscape yeah
uh with clubhouse and everything else do
you think
some other company might emerge there'll
be ten versions of clubhouse we looked
at social networking we thought
friendster
was it like friendster was so good
nobody be able to compete with that it
was growing so quickly
and then myspace was a juggernaut and
they hit 100 million in revenue and 100
million users and it was like well
that's game over and then facebook
and linkedin and snapchat and friend
feed
and countless others you know so there's
usually 20 people
who will win in a category and
80 of the category will be owned by the
top two or three players
but will those players change do you
think what's your sense oh yeah for sure
i mean if we
if facebook hadn't bought instagram it
would be a company in decline right now
people would be shorting the stock right
facebook peaked and then was sort of
heading down um and instagram saved them
and whatsapp saved them so
you know that's another kind of weird
moment in history that they were able to
accumulate that much power
and consolidate that much power
instagram should have never sold to them
that should have gone public they had
just raised money from sequoia
and they had raised 50 million dollars
at a 500 million
valuation and they didn't need to sell
and that was a big mistake to sell
they should have kept going and they
should have take took on facebook and if
instagram was a standalone company right
now it'd be worth
500 million do you think 500 billion
yeah do you think
uh facebook might buy clubhouse has been
uh oh they'll probably copy it
i mean zuckerberg has no moral compass
or ethics or anything i mean he's a
marauder i mean
he basically copied snapchat seven times
yeah like he did poke and he just kept
trying and trying and trying
part of the reason why the whatsapp
founders and the instagram founders left
is they found zuckerberg so distasteful
in terms of his ability to copy what do
you think makes
a great leader in that sense because
okay so when i look at zuckerberg
he's a great executor is he a great
actor i don't think he's a great leader
i was bullish on
i was excited about facebook in the very
early days uh
i thought it was an exciting opportunity
to connect people and stuff started
going wrong
in certain kinds of ways and again maybe
it's
our human nature but i attribute a lot
of that to the leadership
absolutely and i mean the guy started it
because he was unable to ask girls if
they were single and on a date i mean
that was this excuse to be a good
motivator that could be a good i mean it
does i mean
the motivation of 18 19 year old manners
yeah
pretty clear um he was just trying he
had no game
he had no game and he needed to know who
was single so
he could you know at least have a shot
at getting
cree