#AIS: Bestie AMA with Valor's Antonio Gracias
01:39:01 Share

man.

We open sort to the .

fans and got. And tony O U an had a moment of reflection, and he was talking about two thousand and eight. He's talking about the imminent collapse. He felt that of space ex and test at the same time in december twenty fifth.

And he said they are just a handful of people who came out there and and put their careers online for him your shelf and Steve jervis specifically mentioned and IT an ira and IT was a particularly pointing moment for him. He was getting little chalked up to about IT. Tell us above that, that you made in two thousand and eight and the potentially career ending bad for you to bat an electric car company at that moment. Take us back to that .

decision. But before I do that, I just want to say that I left my wallet at back stage because the last time I was with the four of you, I lost a lot of money, and I realized that I Better leave. I Better leave all the cash somewhere where you can get IT.

And then, and you also maybe cry. So do I think I, I don't might cry and now, I mean, no, no, I was more like a ation. So yeah.

if you pull the palmer lucky no.

no. So if I cry again this time, I will be from from a sense of just gratitude for those moments that we got to share. So for awesome particular because you know our strategies, so Operational, I was there working on supply chain, the factory and on sales and those in that period, along with my party, tive, walkings and three, four of our product and people.

And we had a major problem, supply chain, the cost for where control was engineering on the verge of part. We are doing the, I called the b parts, they in b parts. And then IT was brutal.

But IT was very cleared us. That in member was also the middle triassic, right? right? We had a treasure portfolio. We had decided we did temple a lot of capital time.

These are tiny funds, hundred and twenty three, and our funds, where are capable, where our people would go, more importantly, where opportunity go and where I would go. And we decided to focus on tesla a because first, we really did believe anyone when most people didn't. And we saw on him something very special, which I think he probably saw here yesterday, that not only he is a brilliant, brilliant engineer.

Know one hundred year, can I near? He's a man of deep conviction and deep passion and deep compassion. What he is doing is really trying to bend the arch of humanity for all of us, because he really cares.

And that came through to us, and we want to beyond mission with him. And so we were pulled enough to be there a moment time that had mattered. And IT was really hard men. I mean, we had clients. So ex ett client said to me, how do I know this isn't a lorian? And I said, look, I can tell you for a fact, we are not selling cocaine out of the back of the factory, in the cars delory .

being the famous back to the future car, exactly where the owner was trafficking cocaine to underwrite the car. exactly.

I may live in miami. Even twenty grasses were not something, cocaine a share that sure. Yeah, I know.

I was, I was. I was a crew betting event for us, and IT turned out, right, that was going to do. But yeah, for me I was. I just deeply grateful these experiences. I mean.

you really double down because you didn't just do tesla. You also were there in some really critical moments that space sex as well.

We were, although I tell you, you know, we double down at the time and tel, we put our money and testing them will financial crisis and then blead to convert around there. There was really tough us to do and then put money in space x. But I tell you Operationally, like in terms of capital stack, I think there were other people around and and spaces is also writing on our money.

And we put money to space acs Operation. We were to basics of the years, but he was never as existential in terms of the Operation. So was a tesler.

I mean, tez was truly, I think, truly existential. And because we are Operating guys, and I myself have been a factory manager. I worked in all parts and all parts factory.

I've run industrial facilities myself. We could can unique that down there in the rock factory, we was less. But yeah, both these companies were going got at the same time. And you know the mona stress were all under was extraordinary. But you looking back on IT, it's one of the greatest moments of my career.

I mean, this sense of fellowship, one of the, I think the great thing about in our business, the business we are in, is that we get to back amazing people that try to change the world. And in these dark, dark, dark, deep moments, we get to get to war for them. And in those moments, I call them these moment of fellowship, where you just care deeply about a someone and and passionate about the mission, and you need to make a huge difference.

Like these are the highest of my career, and if you ask my partners, they tied the same thing. These are the best moments. We've had some together three years.

I've had some together, actually wall at them together here on the stage we had a fighter or something believed in. And it's it's a privilege man to do IT. It's a privilege initiation. It's privilege with the elon. It's in a privilege ata with with all of you at different moments in my career, and i'm very .

grateful for IT. How do you feel like you come off of a high after having huge successes like that? Like how do you stay grounded and motivated to try to find the next one? If in the back of your mind there must be a little piece that says it's never gonna as good as disguise or those two things.

I mean, IT is its interesting question for us. I think that there's a couple of things and play for us. One is we keep going because we believe making world Better, we invest in companies we believe make a difference with people who respect and revise line with.

And that's that's the ethos of our firm, right? So whether it's larger, small, we may never find them as important as spaces again, but we will find more brave people. We will help them if we do our companies here and we invest in andero with palmer, we have A A small vest and flex port.

Which one of the biggest mistakes the last ten years of my career is not putting more money in flex port? Yes, we had to do. Actually, it's kind of funny story about we had as a kind of soft hand ship on a term sheet at saa Price of x and in soft came and like later to meet two x and I had too much Price memory to keep going and collect at.

So an error. But you have two people on the stage here. Their extraordinary entrepreneurs are trying to make the world Better.

Both these companies that are really are really great and and making the world much more pretty. Now I was coded and in times of war, making IT with all of us. There are people like that out there.

There's more than they may not be on. This was very one on in our generation, but there's lots of people. And I am very optimistic, happy on the economy. We're seeing incredible, incredible van with for medicine to neurons in our pipeline. So maybe there's on the one I don't know.

And twenty, how do you think about the in the business as you guys invest in? There can sometimes be a very long capital deployment cycle before he any real return. And in terms of you know business value, whether it's farm mine or you ve done farma some of these hardware companies where there's a big build cycle, how much do you need to kind of think about and see a customer and revenue show up before you're willing to say, hey, let's build the big rocket chip to go to the frigid moon and how do you judge and value that business and back a team?

It's really question that depends on the the sector in yeah IT depends on look at the world share problems and we're looking for companies that we call printer everywhere they are in the rogues war.

So in the case of farma or something like space ex, we'll think about like what is our was our probability tree here, which are probably lost probably of three x, five X, A ten x or hundred x and and then will think about when the capital is in, what is the actual or on capital. And I was watching the talk you guys had with round about what is the most markets. The reality is that a businesses in machine you put capable on one side and out the other side comes return the r see the return of us.

The capital really matters. And if you're climate class between investor way I am, we think about that a lot. So I ve know we may be putting lot of capital in.

The question is what's the margin of in the back in the company of space x like I was going in. But we know that if IT works, we believe that will work. We're also to have a become as tremendous margins, even industrial sector because of the industrial structure.

IT lives in an oligopoly inside the us and outside the us. So it's like building starting the same thing, capital going in. But we know that the the the margins and the profitability that business on the back and will be very, very high. And so the R S, he will be very good.

Are you backing a lot of deep tech startups like companies a founder shows up with the powerpoint they like, I need fifty million bugs to make our prototype. I see what happens there.

IT depends on the business. So as an example, you know, we have passed on things that are are you going to have margins that are also competed to a low, a low level, right? And there are I don't want give examples here, but there are lots of examples of people are doing things in, know, I called electric OCR v tls, cetera.

We look at and say, this is to be a holy competitor market. These are not in and of one space. X is the end of one. If you can pare that to someone making a left c vehicle that, say, electric plane or leta v tall, that will not in end of one, you'll an end of many and in the end of many business, you're ultimately going to have margin competition that's gonna IT. The return capital goes down to base industrial margins like you won't be that much Better than those R I C or airbuses R I C because those will be ultimately petitsou.

said IT a little too, I think superficially. So let me just double click. And I think antony brings up, I think, one of the most important principles of investing that is so. Utterly poorly understood, which is roic roy c. Return on invested capital.

Most people don't even know what IT means, how to calculate no pot over your waited average cost of capital? These are enormously fundamental principles when you're running a business, especially in a moment like this, because when the rubber meets the road and you need a lot of money and you run into somebody is sophisticated as him, he's already work from first principles to understand IT. It's really, really, really important to know these things because these are the core foundations evaluation. You know. So obviously, dcf are one framework, but roy is incredible, incredibly important, especially when you make real things and you need to spend capex.

Look in the world and the last ten years of money free, nobody thinks about this very much. We always have thought about IT, which informs our investment model. But yeah, you must write him.

In today's world, if you're entrepreneur, you can show and silly. And I have a fifty, sixty seven percent turning couple every day you give me, we yelled the seventy percent turned on the back end, even though we're losing money along the way. That's a very compelling case well to have. We're losing a unit of money when I wish to happen, which we hear.

What this also builds on the question from yesterday, which is how do you present yourself as you know, a Young emerging company, and cut through all the noise and understanding of these things in about future value creation? In a moment like this becomes really important as well. Even if people will debate whether it's right, people will give you credit for the intellectual honesty of actually going there, understanding these things. Really.

you see a lot where companies slip away from first principles. So you know, the first principles is on a high margin enterprise software business. You can define A, R, R, assume some, and then people say some multiple of R, R is your valuation comp, like know your multiple. And then another company shows up in the margins are different, the growth profiles es is different, the revenue retention is different. It's a services business.

And they try and use a similar sort of comment on everyone's thinking about valuation as a function of some industry standard comp is opposed to going back understanding how do that company get created in the first place and what's the nature of the business from which that comparisons and people are doing things like calling revenue A R revenue. So and I think that happens considerably more. And then that investing cycle just becomes you hey, will the next round will be this multiple in that I will get our remenant valuation. And everyone just misses the the core of proposition of building a valuable business that can just .

what's you're look through into the economy just from your portfolio companies.

We think I think go on A A session. I know I know somebody said this, but winner session in a session and this will be like my I don't know, hundred cycle or something. I'm pretty old.

The rest of us here we ve seen over over again you I see David weeks about going to have as some money. This is correct. And you're going you need not capital through the problem. The good news about this recession.

And there is some good news here, which is to me, if you look at the the micro o picture here, IT looks like if you look at the modified al debt stated consumer and what's have this information IT actually looks a little like postal war two. To me. In the world war two period, we had the last massive mobilization, or demobilization, and our economy occurred in world war two, right? That happened, getting code when we change.

In this case, it's a mini version of remobilisation that we change the economy. We thought of the system with with money to get, to get buffer the problem. And we started the economy, and now we have inflation.

But we also have lots of business formation, and we have a new ways of doing work, which is what happens at the war two. So i'm very optimistic because most of these recessions to really get inflation down and we have to reduce consumer demand and or change all Prices. So for sure, if you only going in this country and it's controversial, but that's important to lower oil Prices to get inflation down.

But the reality is underneath the the numbers, there's a lot of innovation happening and that's what happened. Kind of people will wear two. So I would say we're in a bit of a mineral tooling is going to be a rough year.

Two, hang on, it'll be a rough year too. But the consumers and pretty good shapes, which they're not over levered, we should go out to OK. And the U. S.

Economy is so zen. We are all either one generation from being evident or regency early. Most of us, right? It's the best place in world.

Live with the most inviting tive economy, the world. We i'm super optimist. What's happening here because there's so much innovation, so many more people working so hard to make things Better. I think it's going to be great if we get the next .

couple years going talk about this pumping more oil situation. Obviously, sha is involved and we A A today had a debate about ukraine and then you have maybe some focus in middle east, not pumping as much well as we might like them to. And then europe decided, well, we don't want a Frank here.

We want you to do that over there. And and then we stopped here. None of us want to see environmental damage done to the planet, but we also don't want to see dictators take over the planet or the economy come to halt. What's a reasonable proposal for america? Yeah, an american sovereignty in terms of Green and renewables and maybe popping some oil.

So I we were the first insuing vestures as a motors. So I think I have an a point of fit as and saying this, I believe Green technology, okay, absolutely hundred percent but energy. And in the same fund we did tesla, we d actually fracking assets because energy independence is that's incredible, really.

Yes, in und because then as IT is today, energy independence is a national security issue. This is not a part an issue extreme popular standard understands. Not about genoc republicans, it's about wars in the midst east.

And the reality is that the sauces are not pumping. OPEC is not pumping. This is cable for america.

And they noted there are squeeze american the way in the seventies, and it's absolutely doing done on purpose. So the answer of that, in my mind, is too fold one. We should have an an industrial policy join this country. But the first we should have is an energy policy. Energy policy look like this.

We take all of the background subsidies, literally make them equal, and we give, let's say, five hundred billion total, two hundred and fifty in in low cost, low energy patch for drilling in places like texas lusa a and equal mount degen energy. And we spring to a Green in future. At the same time, we ensure that this country is safe, and we have energy security country. For all the people out there being hurt behind station, it's a security problem.

You you guys invest heavily manufacturing. What do you see in terms of the future manufacturing? The opportunity for on showing manufacturing other technologies is that you guys are excited about the created advantage for the united states build manufacturing capacity to service industry here. And yeah, look, I think this .

thing about we outsource the enter entirely division based in china is was cheaper. But the reality is that we have are the productivity and between the kind of us and china knowns about eight to one. So a us. Workers eight times work products than a chinese work. We found in cases like tesla where we actually have .

read terms of GDP or worker.

yes, in time we helps to in source the supply chain of tesla wise, tesla ini RAID. Because I got news for you, you actually can make stuff in america. It's really, well, shocking. Okay, shocking.

And let me tell you, when you put what.

what is that? Why do we have this narrative that I can be done? And then we go to get a factory and you see.

let me, I tell you why. And boy, I mean, here's this, a probabilities for saying this. But great companies are built by engineers like elon mosque.

That's a reality of IT. And they know they want to control their manufacturing. And we do IT here.

We can iterate faster and make the product Better. And the product could not feel thought for great margin. They optimize, marking people and destroy by the CFO.

When you put the finance guy in charge, you like, oh, hey, we can get a lower peace part part by saying it's in china. But he didn't understand the iteration cycle of making that product. That guy destroys the company and that .

will happen in amErica being countless yeah we put the CFO in church for got say you'll do that like these being counters. I mean, can I say that? Let me say that more engineer. Let me say that if you calculate return investigation .

ital and you think about this carefully, what happens is these long supply chains in asia, they have huge capital to play, but the capitals cheap. You do that because the peace part Price of cheaper. But you count what happened and tells in particular when you calculated overall cost in capital wasn't very good. Do and get me, he was actually, what smart ring IT back to.

The long term cycle, you make more money. The short term cycle, you make less money. The short term cycle, you make more money. And another way .

to you to mize improve that improve the income statement because you might improve properly in short term, but you actually hurt the baLance sheet because you sell this capital on the water over to china.

You never bring IT back and your iteration cycle goes down, right?

Because you get in now, he said really important, which is that it's the financialization of the p nl that in some ways LED to the decline of american manufacturing in part meaning if you are a CEO of a business and you construct your employment agreement and it's based on a certain kind of earnings in a certain period, a certain earnings per share, the incentive to then dry financialization goes up.

Now the perfect example of this is if you compare IT, for example, and you did this, the come package that you gave you on in two thousand and eighteen first is the contact, is that any other CEO amErica have got IT was completely black and White IT IT was opposite land. yes. And you basically completely said, you get nothing. Now let's set these extreme goals. And then if you can hit IT, you'll get compensated so much so that you know when you had glass .

Lewis and I know right the S S.

Class is said no but they uses in most things and were being suit forward to get to care for what I hey about IT. But yeah, we had a compact. It's fully voice and equity appreciation that require recreation, new products.

And look, i'm going to i'll pick an apple here. Apple the first. Like everybody, I was twenty years old. My mom actually went to OK back and bought of a few years apple. I still have in my count. Remind me with taxable, our company save jobs, dies terrible and look at me type takes over time could spice and guy I mean, they've really optimize profitable, it's believe two truly dommara or something now but when the last and product airports airports yeah I mean pretty, but I mean incredible .

free cash aggressively by back the financialization of that company has attracted I me. If you look at a time, if you can look at a the larger shareholder is the most open istis ted financial asset owner in the world, burker. Burker doesn't buy technology companies. They buy incredibly well run financial assets and IT.

I don't look at the ducks getting land being said for the V R investment. Some might say that strategically not a great investment, but he's saying I got going to spend ten billion dollars a year.

No, no, no. He he said IT for a quarter and then he had to take a back and cancel.

Oh, they take IT back. Yeah, yeah. That's what you wanted to do.

Um and so to your point, like it's very hard to really build things now.

Yes, but I can be done. And look, I think one I am, what is happening the world today of geopolitics, tragic. The war where spends ukraine's apps, tragic. But from all tragedy comes some some good things is always the server lining.

And one of the civil lines, I think, should be the acceleration of reassuring the all these products until amErica to rebuild our industrial base because we actually can do IT. I can tell you, I am started my career basic as a factory manager in california. IT can be done.

There are americans wants to make stuff between here, mexico, canada. We can make farma a. We can make I tech products.

Yes, the Price might be low higher, but I got to tell the iteration, you could be Better and your value be Better. If the product is Better, people will pay forward. And resilient, resilient, listen for hundred to percent percent. alright?

We are setting up a couple of microphones here, and tony is congrats enough to join us for some Q, A, the audiences filled with entrepreneurs, capital, alligators, artists and builders. So we're going to put a couple of microphones out there, hopefully some lights on the microphones, if I could see them line up and remember the rule. We don't need to know about your company.

Just a tight, concise question. Anybody does any marketing or promotion? We're all going to grow. Let's practice a grown three to grow.

No, god.

you can say your name.

You could say your favorite before we start. Yeah, is Christmas. I. Okay, a everybody you guys might wanna just know, Chris, whenever you're in vegas, a crisis, the guy, a carbone in last vea the restaurant reservation to get.

But Chris, boat bottle of wine for us that we can open now and drink. Va, well, bring up a bottle of, say, I don't get to get this number and text them. If you're ever lost gas.

I want to go. I mean, only chaos would bring the captain of carbon to our event.

No, to drink the stress to one.

Meet you right? First, you tell us your favor and we're still in father that a quick time question, go favorite, best C J, out point out of the century to this team. So hats off to you.

My question is, first of all, we've been here all week in last three days watching these cards fall from the sky ah and we all know that you guys center around this poker table, this beautiful game. My question is, how is that game influence both your relationships and decision making in business and your personal lives? Great question to math. Start us up and you can go to the back.

next person to up. I was proper inference.

friendship, our lives. How is the poker game itself had an impact on our lives OK.

I think I really do believe this, but I think it's the most incredible game and training ground for business because in any given moment, you are forced to deal with the spectrum of good information to moderate information to bad information, good outcomes, moderate outcomes, bad outcomes. You're taking risk, your learning information, you're adJusting your style.

And the most important thing is you're forced to anchor to your core values or not. How you behave at the table is how you behave in life. You.

you can take these, yeah, yeah. You can .

take these .

winds poorly.

You can take these winds well. You can take the loss is poorly. You can take the loss as well. I would encourage all of you to learn to play the game with your friends. It's, it's a beautiful.

beautiful start, a weekly game. Sax.

well, they put a game at my south is how I got be friends with sash, right? I mean.

i'm to say this, you guys tell you why is very table on my plane because i've been there with you guys. No, it's pretty for king to .

generate .

holding him. Think about aby. It's trading.

It's train for business. I've i've been.

There i've been the food saying .

to month, I mean, didn't you invest in the amar after I start playing your weekly poker game?

yeah. And I was actually so degenerate. What really happened after that? What I was in last vegas in two thousand and eleven, I had just left facebook. I moved to vegas and I was on the phone with tax in between playing tournaments and he'd like, let me in, invest in the amar, literally like, and you know, you did me an incredible solid because I put money in and you know what this is like, nine months later, he sells to microsoft, and I returned to third .

of my first fund. And IT really .

solidified my reputation. So.

I mean, I know you are big. I David, I know David for one to five years, but he did hammer. I want to put money at IT. He said no, because is a true story, is true story. He said, no, he said, he said no, because if this fails, you are my backup plan.

Great job. Yes, I to come join me.

And I was so afraid of .

losing everyone's .

money when I found the company took for me. I want you to have, like, one friend whose money, and I know that was a long way of thinking about that.

I mean, how is the game .

before tomorrow there? Are you leaving? No, I no.

Come back for that. Okay, you'll get glasses OK.

I tell you guys, one thing to mop is one of the most generous people you'll ever make. unbelievable. And for all of his, for all of his bluster about his frigging mink coats and shit, like he has brought together a group.

And he largely is the reason that I think the game grows and goes on. You saw somebody, amazing people that we've had on stage here and some of our friends are here, that we playing our game with that. Really, that network has been built and solidified because of chaos and his generosity and friendship that it's really something i've left to appreciate my life. And thank you. I think yeah yes.

I mean, it's it's a tremendous group and amazing people, amazing people. And because sist C A. IT has been amazing from chamakh had this like .

a little tiny .

two million dollhouse with like a one and a half car garage when he was at facebook and we would play in the garage that little tiny place you had remember before you bought the two houses next door knocked them down and gentrify but a true story um sacks said, hey, you know you doing these conferences you should invest in the companies and this is when I put the fix in for him to win tech from fifty at hammer with the amar he said I have to win and then he his wife told my wife he asked to win. So then I basically got the whole jury to vote for him with the ammo. He wins and he goes, he shmuel.

All my success is due to J. K, L.

You guys understand, was a IT was a good fix. I put the fix in for him, but he said, listen, I want to thank you for this and you should start a fund instead doing all this work at the conference. When you just invest in the companies, i'll put two hundred fifty k into your fund.

I'll be the anchor I said, that's incredible really and he said yes and then I went to the poker table. I told the story and then dave golder aggress in peace, one of our our gray friends and and certainly the best amongst us. Thank you. Um he said i'll put money into you.

Thank you.

And he put money in, and then Billy said, i'll put money in. And everybody said they put money in free brakes that i'll take a past. But you know you put that aside anyway. I was A.

And this is this is a true story building there he couldn't make IT to hear but he's one of our gray friends, one of allowance best friends in the world and he said, of course, I mean, um would you mind if I if I tell our billionaire end the the cofounder of um ebay jeff school and he tells them a jack house to do to find you should do IT I meet jeff goes money manager um and yeah and I I say hey here's what i'm doing on the first time fun manager I don't know the fuck i'm doing a former journalist and he said, how much was the fun I said ten million and he said, i'll take half and I said, abb, sorry and he said, i'll take five nine and that was the biggest truck ever got and he was because of ability.

And literally, the first fund was raised around the poker table in one night. And I changed a directory of my career. And that really is the fellowship.

And that is started with David and you hosting. And I remember us like yesterday, and that I think maybe also a good moment to a just maybe cheers to gold. Dave gold, no longer what it's. And tony shape, you played in the game as well. Two incredible men.

Next one, hey, there's bobin favor. Best city is to month. Great to thank boss night.

Antonio is also our people .

to right, we know much Better to work with the question.

Let's go. And my main question is like when you guys actually decided to manage capital for people, like what really was the scarious step in taking that leap and taking that risk? I know a lot of you are gp solar GPS.

I mean, that humidity ally was the scarious step.

Well, I mean, even as a founder, like I mentioned before, I was like, so worried about losing people's money. I mean, that was like, I mean, I don't know, like founder today even care that much that this seems but IT IT seems like company didn't work. We've on to the next one. And maybe that will will change now that the environments that can be a free flowing but I was always like, really worried some of these people's money. And I remember .

when I started social capital, I think I was playing, I was like a playing golf, and I had dinner with chase common in new york and chase us to me. I'll tell you the one piece of advice Julian gave me when I start a tiger over, I said, what was at this two thousand and he said, this is a death sentence and I was like, well, what does that mean and he said, you were the only person is going to live with this because you're responsible, especially based on who your l pes. Are for folks that if you really think about what they are, it's just going to create this thing there.

And it's like, you know, I I was Lucy in that moment because we were able to get like the night foundation and male clinic and these folks that are doing these good works, but then you're representing their capital. It's heavy. It's heavy because you make this decision.

no. And if it's wrong, you just feel literally like you're dialect and you're taking money away from sick children or you know free speech. I mean, it's IT was that's a brutally stressful thing to lose money on behalf of people.

Anyway, I recommend you that you, as a founder, if you raise money, raise money from your friends too.

really change you. I mean, I raised the first fun for my friends, and I tell you I took every single deal very seriously, and I did my diligence, and I was very thoughtful about IT.

How about you, antonia? Oh, man, our first fun. There are two fears ahead. The first one was raised from, I live in chicago, from my friends in chicago. And I, lily, said to one of my partners, the time, if this doesn't work, I have to move. Hello, because in chicago, you might can .

kill you wear.

No.

no.

Because people I like, sad about that. You would like break your legs in your house down. And thing, no, keep. Not the second thing. I think I was the worst thing for me, the worst care thing for me, which is the people had three, four guys had to work with building combes before that. And I knew I just felt, if I disappointed them, if I were failed, I would have felt terrible.

Yeah, yeah, yeah. IT certainly makes you focus on the game. It's like being staked in poker. You played Better 啊， sir.

I ve have a question for the seventeenth most important .

person from paypal. Okay.

obviously free burg is my favorite sty.

All right, five point. Let's out. Women, let's go married. Unbelievable, the free bird love. How are three birds soaked in?

You've been talking about how all this reason money supply has been sending the asset Prices up and notes and winding. I don't think before you talk about cyp to specifically bit quite as obviously come down, but it's still over three times where I was prepare demise. Curious what you think will happen in that world. Does this online? Es.

you may address some yeah .

thing .

about the .

crypt to market to understand is that is like a liquidity sponge. The more liquidity there is out there, the more people feel empower to make speculative investments. And crypto is like the most speculative.

Now that's not to say you it's not real. I actually do believe in bitcoin. I think it'll be a number of other serve all currencies that work, but probably the vast majority will not end.

There's bench man smell of speculation, inflation there. And so that spaces is in the process correcting. I've never been able to say like what the right Price levels fraying the stuff are. Lesser, you believe in bitcoin long term. Lesser, you believe this can be the first non field currency.

What Price should that be today if there's no like this kind of casual analysis as you can apply to IT? So it's always been very hard to know what the Prices of these things should be. And so in practice, the Price of function of how much liquidity is in the system. And when you go through a period of liquidity getting destroyed, it's no surprise that crypto services with IT and tony.

you have you touched, I mean, you were so into physical assets and building real things like spaceships and rocket ships when you watch the crypto bubble grow and burst and grow and burst and now it's burst again, what's your take? Well.

first I want to I bought my first script in nineteen twenty seventeen because David sax and Billy, we're pushing the pon scheme on me. So they were like where I was in a birthday party, and you part were there two?

And they were like.

were they were hacking big line. I bought something I think was I actually like that particular is a bet on a rising political risk and on political freedom. Economic freedom is is closely to political freedom.

And last time I looked, ukraine is the third largest holders of book in. And if our seeing in taiwan an today, I would have ten contribution asses bitcoin. So this removes the abilities of control currency, ccp c controls from governments.

This is very important, and they should survive. Price levels, I don't know. I do have a no reason a big as a hedge to political is globally, and that's how we think about IT.

We have invested in infrastructure assets in round a block chain with day. We have a couple asset because we believe that blockchain itself as a platform shift in the technology of tracking assets, this was a real thing and it's going to happen. It's going to change where we do finance. So we invest in .

infrastructure. Got let's take another question. Time is there over there? Oh, i'm sorry, we're going to take one from hear will alternate. So tide is right.

Yeah hi, car montreal CEO crato. I have to say i'm a science nerd freeburg. But j, how has been awesome today? I want to say you guys like you're courage and bravery to do what you've done with the pod and watching this today. Lake, thank you.

Thank you.

Yeah, you've talked a lot about later stage. I'm wondering if you could like tune in a little bit more on on proceed and seed and kind of what you're seeing in terms of valuations and metrics s that, that you ve got a hit in the earlier stages.

It's very simple. I invested in uber some tack and calm for fifteen million dollars combined. That was a combined valuation post money, post money. And those call three companies had products in the market.

And then what we saw the last five years is people want in credit for a White paper, a prototype and MVP to the tune, fifteen, fifty million dollars. And we did sit out some of those and said, listen, when the product is ready, let's take a look at the product and talk to the first two or three customers. To David's point, about zero to one customers is the really hard a hurdle.

And now it's back down to six to fifteen million for a company that has a product in market and maybe fifty two, one hundred times usually revenue for evaluation. So to the extent you can get to two hundred hundred k and yearly revenue, you can get you attend to twenty million dollar uia. So i'd say half way back to Normal and perhaps a permanent, a livable reset because the outcomes have been pretty fantastic.

So the early day you go up, the only thing you really need to raise money is to build a world class product and just get a couple of customers who are absolutely blown away by what you have built. That's all you need. But everybody gets concerned with the atra s and the performative stuff and their network and nonsense, and who you are, where you came from. None of that matters. Build the world class product that two or three people are obsessed with, and you'll get the sea check focus.

I think if right person had a started after a pause, jack, I know that's important here. I'll take a .

little to get. So I think .

greg are .

made a really important point on this, which is the new Normal is going to look like the old Normal, meaning the precocious Normal. We had the abNormal period was this two year kova period where tend trillion of liquidity pumped into the system. Things are going back to what they look like before all that happened and maybe before the fed start with this zero interesting policy.

So we're actually getting back to Normal understand that the the environment entering now is is the Normality. The abNormal period was the inflation. We saw an assets for the past couple of years. That's the like reset that I wanted to like rap their .

heads around section, my boy. Finally.

finally.

I think there may be some .

preferential .

false location around this because you do want to MIT their conservative. All the polling, all the polling shows this so that anyway, thank you, sir.

And your second favorite t best is tucker. Go for early stage SaaS investors, which most of you are in an increasingly digital world where there are large sas solutions for nearly everything. How do you think about selecting companies and founders in the early stage that are coming to market with a small amount of utility?

And how do you think about they compete with companies with already established customer distribution?

yeah. So I think of one of the things I really like about sas, which is your software. The service basically be to be software, its business software, OK, that sold as a description is that the world's never gonna run out of new ideas for business.

Software business keeps changing. So therefore the software that businesses need will keep changing and there will always be an opportunity there for new companies, new verticals, new new niches, always be um you know new new ideas. And so i'm never worried about running out in terms of how we evaluate the actual idea.

We've actually been a super transparent around the metrics that we need to seek. IT really does start with a company hitting the metrics hurdle that we need to see for, for example, series a um you know it's a call IT roughly more or less a million times A R. You want to be growing fifteen percent of over a month, certain that dollar attention, certain capital efficiency.

We've all we published IT on our website, on our blog, so IT starts with that. And then once we know that like our threshold of in hit, then we get into more quality tor or subjective factors like what do you think about this founder in this market? But one thing I like about IT is just it's it's very well defined, like what we're looking for and. Just go to our blog, you'll see we'll tell you exactly. There's no mystery .

to outside of productivity tools. So there's not a single company that can stay in one category and become really big. What does that mean? There's not a single public company that doesn't have now an entire strategy that says we saw IT sb mid market and enterprise.

And so the think of businesses is unless you're like a really powerful productivity tool like a slack or net latian, your valuation kept in the mid to high single digital bliven as as IT currently stands today. That is the law of the math in the public markets on how you're reward IT. Though hide, you grow out of IT.

You have to embrace a strategy that actually does more where you become a system of record. So good example is like A N desk they hit him up bound. There are many of these examples. And so if you're building a house business or you're investing this house business, the other thing to think about is in the absence of being a productivity tool of wish again, there few um everything else has to find a way of being applicable to larger bodies over time in order to maintain.

We're going na try to move .

faster so we can get more question here. Other guys favorite best, probably four way time, maybe cheatham dout 对不对？

OK time.

So I go such a map. Quick question. So um know you guys that incredibly well.

So what what would you do if you're dropped in the middle of, say, kansas? Take away the resource, take away the network and take your backend twenty five. What would you do and why turn'll take IT. I'm actually .

from michigan. I got drop the little there with no resources and not want to do. And I wasn't twenty five.

I was about twenty years. I would, I would find a way to make IT work. Man, you, you should actually, when ever scale, you want to start at whatever job you have.

I would turn our little company. There's always people listen, a plastic grama machine. An man, you could cut grass, a little computer company. I was resolved doing like network for people.

And note, in the old days, I think there's always something you can do if you have A A vivo skill, build the skill, start a company, and just kids started, start moving and make good decisions along the way. One good decision compounds on top of the other. And all four, these guys, but they have done their careers, is made very good decisions and they have kept moving .

when they have had problems.

You start really yeah but and I start I just want to take this. They may look like superceded ful guys now in, but IT wasn't easy and IT wasn't lenie. They've all had ups and downs.

They've all had problems and and they also do what they do. And I great respect for four. I know them all well.

They keep being good decisions. They're had the resilient and they just keep going. And I would .

take to the same thing that to keep is to .

keep in good.

Oh yeah, you go.

I have been had anything and I just got um .

but I .

would just .

say keep learning as well. Like one of the biggest advantages i've had in my career is that I tried to always learn as new stuff as as often as I can, and whenever I find area of interest, I pursue IT in terms of deepening my understanding of IT. And and that's always created opportunities for me that I wouldn't have just stumbled across ser walk my went.

it's such a great opportunity to have you heard and tony, when I asked you to do this.

you had never been on a podcast.

You i've never done this kind of thing.

something i'm only .

doing IT because it's to four of you and I am usually very private.

but i'm incredible voice, you know. It's like, very like M, P, R. I.

It's like everybody you are listening to.

people tell me, have a voice for radio program. Y IT works pretty well. go.

Hey guys, i'm Samantha favorite precious fruit berg. I run the factory automation team for a large seme conductor manufacturer in the united states. Really are impressed with the innovation in industrial automation. And so really interested to here your thoughts on where you see the next disruptions in automation? Um and also maybe a question for antonia, where do you see uh the disrupter specifically and how we get not only the technology but the economies of scale for these really capital intensive businesses in the U S.

This is your good for sure. And and by the way, you should talk about automation. I don't know if you want to .

check yeah we know that nation when my partners is like a genius engineer in this area. And you're particular in the chip business, you said, right? Ah so tf MC basically took the this idea of authority manufacturing assets that intil't did with the s MC the beginning to created that business and moved most of our high technology and ships often offshore in taiwan is like a terrible idea.

And think, as I said, all in industry policies country. I think we need industry policy to bring to a manufacturing back. It's very important. And the problem you have in automation to many factors kers, when you think about where all the great engineers go today to good automation, they're not going there because you're computed MC. So you you have a couple in file apps in the us, but we have to have some I big axes and required dusty policy to force people like until AMD to want to bring stuff back in to the us and to really get great talent to want to do IT.

Do you think there's opportunities outside of Greenfield models to kind of reinvigorate and unlocked the capacity that we have in some of our older manufacturing here in the U.

S? Yes, I do. I I look at we a tested over the factory was a former gm tota factory. And we recall IT was IT would been, we had to do IT cause any money. And IT was pretty icy.

But if if you took that approach and you get the you get really great entrepreneurs to focus this problem through industry policy, they need money to do IT. I think you'd get great invasion. Look in video is actually here in us.

This is around IT. This is a great chip company, and the fabs they use our scratton of the world. But if you gave a video of fabrics to, who knows what happens? IT was the right Price. Yeah, Jenny are great a year.

You go that side favorite best. Jason, you keep the ship together, the glue that keeps IT together. My name, Chris, my friend, and I started all in talk nine months ago, the bank ge for thank you really.

I was at the outdoor mall in in my house and my dog attacked another dog and the guy was like, it's okay. I saw you on tiktok was so was you but was your channel .

that was for his key watch channel that was channel.

So my question is in the twenty two, twenty twenty two predictions uh episode to math you talk about a all in media idea and starting in all in media channel maybe. And I wonder if you guys have talked about that anymore, your goals for the future on that because i'm pretty sure everyone would agree here that if you did start one, IT would do a whole of a lot Better than seeing n plus. So that may not be a very high bar, very low bar.

We actually did get together, the four of us, we said in free brags office people started yelling. Two people walked out. X sax. I started to do this in the table.

Yeah, i'm definitely as the driver I drive and the drive .

he was in a was IT was coming .

Price that was .

our first and only me but .

no but we did take one key step, which is that freeburg said i'm going to get my team to draft the L.

C. Agreement for the .

four refused to sign.

but now no one signed IT x.

So we're one step closer to starting IT. But joking aside, I still think that it'll become inevitable. And I think the reason is the two people, the robots, not humans, that were a uncomfortable with human interaction. David, David, like lifters, once the, once we do the the recap of this, I think it'll be the I think these two are probably the most shocked.

I'll tell you, by the way, my observation, I used to go to ted. I went to ted from two thousand and eight. O, I stopped going to ted because I got the content, went to ship and IT basically got overtaken with, like social justice talks and like you to started to like tech and interesting ideas about where the world had had.

And like I listened to our speakers this week, the last two days that I like, man, like really fantastic content, like this could be the new ted. So I got really invigorated by that. Like I really thought, I felt like that was really. And and by the way, I think it's conversations people don't really seem to want to have, right like and those are .

make them really and let you say you are not the earliest believer in this was going to get pulled off to.

I cannot tell you how many times have considered quitting the pod and not even showing up for this event, and I give jan props publicly for doing a great job holding this thing up. so.

go. Hey, guys, my name is Sarah, and I really love all of you. You got me through a very tough, chAllenging time.

When I started listening to you. I came here over sixteen hour flight from a bodi. So thank you.

Wow, that's we love you. We love you.

I have a common and a question, the comment, and maybe, David, I have a lot of relatives in sweden. And when the ukraine war started, this is very amiable, innovative, beautiful. People haven't had a war over one hundred and fifty years, and they were putting gas in their car and supplying kids of goods and got really, really nervous about what's happening.

And we're watching closely to see what would be at the next step. I think if the U. S. Did nussed up in, though. So there was a lot of reality out there for the us.

To stay, I don't know, like the safety of the world in a certain way or another finish, people felt the same way. My lovins. So this is a real big reality out in the western european world, not just eastern europe.

So that's on my comment. So thank you for the question. And this comes from my husband. If you're sitting on access liquidity right now and want to invest for a long time.

sorry.

Sex is .

raising a fun that transition from war three .

to investment .

vice stocked stop what to say?

That is dynamic range right there. Yeah, well down well that you want you're got from people.

you know.

I mean, know the upside downs of my life. So yes, IT is like that.

Why are we to say the first part? I think very good. So so on ukraine, you I thought I was important to have this debate today where we got both sides of the issue, and we got two people were very passionate on both sides.

And I tend to agree more with glen on IT. But but that doesn't mean I don't want to help you create at all. I just think we have to keep a close eye on preventing the thing from escalating into war three, because the russians have six thousand nuclear weapons and their military doctor and says they can use them if they feel that they're essentially threatened.

And so, you know, if our objective here is to help the ukrainians excel the russians from an invasion, that's one thing. But if our objective, if we have mission creep into destabilizing the russian regime, into basically trying to take back crimea, which they see is theirs, if we're trying to weaken them to the point where there are no longer a great power, we're really playing with fire there. So we have to be really careful yeah about our objectives there and make sure that we don't let the same .

spare a lot of control and tell you have thoughts on your crane and are we being to Davis h hockey? You're doing IT just right.

So I think we are there's a lot more going to hear than the baby to the eyes. And this question was about sweden thinner. And here's what I would say because I want to focus on that, that if our our friends, in particular, north western europe, should actually be arming themselves.

And if they aren't themselves, we won't have this problem. That's a reality. Bit the reason ukraine, yes, that's a reality. So the the time for sitting on the sidelines in central europe is over.

If you care about your contrary, care about your children and care about your families, then you should ARM yourselves, period, full stop. In american we are, have to say, you weapons, no problem with without nato. I think that's true.

The reason ukraine ans are able to defend themselves is because they are that they have actually been invited weapons, and they ought, they build up their own weapons with the turks that the drones are being used to destroy the actions of pilots are not coming america, coming from a joy venture with the turks. This is the reality. So should we be drawn and to a warm to europe? No, I think this start will worth free.

Should we help these folks to fend themselves? Yes, I should. And in your pocket.

part of the world, yes, for sure. Starting the weapons. Tough to follow. But my names, ana, favorite, busy. I think freedoms. G think you do a good job of being hard and hearing others equally. So I think that's an important scale trying to work on at myself.

In terms of my question .

is a little more quality native. But some of us were having interesting discussion about first impression last night. And i'm curious to think one in terms of your own first impressions.

How has you the way that you introduced yourself to others changed as you've grown? And what if you learned about that? And on the other end, what are some of the most notable first impressions others have made on you? And why have those stood out to interesting question.

Well, seeing is the only two of us have emotions.

Maybe we can yeah we can trap IT up. sure.

Going to go to bathroom.

you will find any emotions there.

Turn the mind, please, the chema. Oh my god, that .

1000牛 爸爸 跟 你。

I think that when I was Younger, I was more insecure, so I had to wear what few labels I had on my sleeve and use them as a weapon before others could use their labels on me. I honestly felt that way.

You an in silicon valley at the time and IT really there is a very monocultural aspect of you know folks from a few schools, you know folks having worked at a few companies um and I had neither know I work, I went to waterloo, it's is in canada and I worked today well so I didn't go to stanford and I didn't work at google or yahoo. And there is there is a great lining agent of of where you the really credential credible folks came from. And so you do what any insecure person does.

You can throw what few things you have out there very quickly yeah you know, trying to one up the person in front of you and that's calm down a lot. So that's about thing. And I think .

it's I have a similar observation. I when I was taken that our train into manhattan used to say to myself, jasie collections as editor in chief, jasie collections is millionaire. And I was like literally had a sixteen page photo copy magazine co silicon, I reporter and I trying to convince myself that someday I would be somebody.

And I think that narrative was important for me and people. When I would give him the sixteen page photocopy, I say, here's my magazine and they said, is a photo cop. I say, no, it's a magazine.

It's got a picture on the cover because for me, that was that why IT was magazine and interventions became a very large magazine, in fact, of three hundred pages and and today, thank you. So I think there is something about manifesting stuff and and just believing that you're going to get there. But today I define myself by the things I love to do.

So when people do ask me, now here, what do you do? I say i'm a writer and I have a podcast and I Angel invest. And I don't say it's the number one pockets or i'm one of the topic and your investor time.

I just I just think about what I don't say that and I don't say, you know like it's the book is in eleven languages or whatever, you got a million dollar events. I just there's no eagle about IT. I just say Whiter podcasting, Angel. Okay, how did you go in there? Okay, David, okay.

What's your events?

You getting a million dollars? He said a million dollar advance.

That mean the books in twelve. Thank you. I have one outside.

Sometimes I think Jason just pumping out all of us to fuel his media career.

You think .

sometimes, hey, David, all honesty.

how is the deal flow gone since you've got this podcast?

Think he is down fifty percent.

Tent that was .

the attending .

this .

then you went on tucker, go hi.

Today, the crypto a world is focus on decentish zia, speculation, stores of value. Who here is excited about micropayments and whoever is most excited? Which industries you think will be most impacted by the new foundation? 给 to send payments in as little as one hundreds of .

a penny very best day they want .

you yeah like .

um so you know .

this question of micropayments has come up all the way since back to when I was working on paypal。 And one of the problems with micropayments ces, as the name suggests, the amounts are very, very small. So you have to do ate a lot of them to create enough volume for them to be meaningful.

And so there is always sort of this market size problem. Now for crip to there may be more an opportunity there because the way that the old credit card rails network works as there's like a twenty five cent charged per transaction. And so like a paypal t IT just didn't make sense of consulate micropayments because the cost that transaction always exceeded the feed that we can get.

So you're right that I think what you're suggesting with your question is that there is sort of a crop to opportunity to do this in a different way because you can basically do a costless instantaneous transfer using a blockchain base currency. So I was sure someone's going to do with something interesting with that. And then the question is just like what is that agree into is, is that can be big enough to be way?

There's an interview step, which is also pretty obvious, at least to me, which is this idea that you, for example, like if strike actually took the time to embrace one of these stable coins, there's no reason why stripe needs actually run in your change as well because like you can just basically swap that dollar in a ledger into U. S, D. C.

I just pick that as an example. Not to the not to told to um run on those rails for free and then basically transfer back. And it's it's not .

obvious why people you need the gas costs to come down. So like you're in transaction on a theory um are certainly .

biton things from something .

but other chains yeah yes you need like a chain like something that's like super .

cheap and the the cognitive load of the transaction action, just the person decided do they want to pay a tenth of a penny. A penny is sometimes greater than the actual value of the money, which then creates almost like friction to them wanting to read the article. Let's take another question. Hi, my name is kate and my favor. Basti right now is freed berg, who often plays jevons s out to kit, and so forces to stop writing the way with.

Free mind how many people .

did you pay off? good. So we all admire your success is. But we've also been hearing from marr, for instance, that we need to become revolved failure and we need to become resilience. And so when you look back on your careers thus far, what i've been, the toughest moments, the moments when you have made a mistake that have taught you a lot.

I mean, I had .

had two new tori.

Mistake, mistake.

You learn the .

most room man. My biggest mistakes and life have been about people. And I have over the years um made errors in in judging people and how honest they were and how good they were.

And as I look back on that is because I have A A weakness for ideas are great and sometimes those come with great people and sometimes they don't. The reality is there are some bad people out there who are acting really great and doing interesting things. And we have, we suffer from that.

And I know, David now where deal they are that suffer from that. And IT happens. So I would be, i've learned a lot about that.

I've gone deepen the neuroscience actually. Have a start. We have a woman who's got a PHD in the neuroscience of emotion kill tech.

Now on staff that helps us learn, as you said, always learning about how to assess people and how to say their emotional states. That's the most important thing. I think we've, upon our processing .

in my own thinking. So you love the idea so much that you.

igor.

ignored the other data that this person was not honoring able truth.

No, I think so. There are times when there are two kids of of the areas here. One type there is, we just didn't see IT because the person was so good at being bad.

They are. One of these in earth scientists told us, is that about five personally. And population has a brain long way.

They make the maximum synoptic to find as the middle and fire properly when they do something bad. Guilt, fear, ea, and in an our particular industries, primarily ten percent. So we raise our baseball forecasts at ten percent and it's gotten Better. But there's something going so good at that you can't see IT mean therre us.

What is the hopes go like about the smart people want in that company? We didn't, but IT wasn't obviously then, obviously then there are moments earlier on when he had yellow flags were overall because we were so much he committed to the idea that we we had a business did was in the downspout IT was medicated deodorant for kids. They were black and espana, and i'm from that demographic, I wanted to meet that grave in the road. Is we overall deal lights because we want to make a great .

and we failed to. You were going to add.

I had two huge wilders, but they were more personal moments of learning for me. One was we were in the midst of building a phone, and I didn't come to pass. And if I really think about what I thought, the problem was this, but when I was a facebook, what the problem then versus now then, you know, I would have said I was up and I had a huge kind of thing and blab a blah.

Now what I would have said is I didn't really understand my own limitations. And what I was really asking of him in the board in that moment. And then the second is there were all these moments that were people decisions um at social capital that ultimately manifested in sub quality financial and investment decisions.

And had I had this to do over again, I would not have ignored some of the red flags because I was so desirous to be in the game to you, be in IT, that I probably look the other way a little bit on folks that just give you the the practical example. I remember in a three hundred million dollar fund, I put twenty five or thirty million dollars in the bitcoin at fifty box a coin, and when the thing went to, like one fifty or something, just the pressure to distribute was so high. And I had conviction, I had all of these things.

I had all the voting control, I had everything to just say no and I didn't have the courage to understand my role as a leader versus something. You my job as a investment partner. And so you learn you know um you learn what you're good at.

You learn where your strength are and you try to just get Better, try to fix those weaknesses. I mean, at the end of the day, what we're built saying is the same thing, which is ultimately IT is nothing to do with anybody else. IT still comes back to you and what your skills set is in your toolbox and what you're .

upgrading your toolbox, everything, freezer sex, any mistakes that you are able to access through your CPU in your long term storage. Well, I think as you get older.

you learn and how to pick your battles Better. And you just have to decide like what are the occasions that are really worth fighting for, which aren't you know? And sometimes you just let us go and others you have to fight and just knowing when you should choose which path I think is really important. By the way, the guy you really want behind you in a battle is this guy so phenomenal investor, back when I was on the founder side of the table.

So good, broader.

Yeah for sure. That's why I got in a same where is sorted for his birthday?

He did. Yes.

sam.

the collection sami word saw my partner on start with David sax is sami sd. yeah.

Thank you very much to to play that. Something was not a toy.

yes.

A Y freeburg anything in that long term storage tape drives of?

I've made a lot of mistakes. It's really hard. I'm very hard of myself um .

when .

I was .

Young, I always said there's no limit and I always believe that. And when I hit walls in my life, IT was very um very difficult because IT IT totally countered what I what I felt was possible. I always thought everything was going to be a success as there's no way i'm going to let anything fucking failed ed. There's no way i'm going to let anything not work. My voice is cranking not because i'm crying, because i'm losing my voice so um .

we know what we need if you cry. Now there .

is he actually .

but .

I would .

say he's .

smart, kind yeah, and a vegan. 对。

perfect. The biggest mistake I made.

he's my dream boyfriend.

Maybe coming on the stage of the biggest .

stage I joined on the .

part of that. But I think antonio's point is right. You you just have to be willing to to learn and evolve. It's I now know that my life isn't about everything I do has to work one hundred percent of the time um and being so harder myself caused a lot of like emotional chAllenges for me over time but getting on getting to this point where I can now be much more calculated um and just move forward quickly and learn from IT um it's been a big evolution for me to .

the general yeah and I know is okay I just I I was thinking about IT while these guys were being so candid I was immediately going to a punting go to the expression but I thought that would be unfair um you know I think two things. One, I think a lot of my decision making early on was out of fear, fear of losing whatever I had gained up until that point.

So although I was a wristy taker and I was being bowled in one way, I was also throwing myself because I was just so scared that I would lose whatever gains I had and IT IT made me be an imperfect manager of people, an imperfect person um maybe on edge a little too much and maybe not picking my battles today with this point, I saw everything as a battle because those winds were so important to me because they were so hard lot. And then I think later in my life I realized I never actually thought about what I enjoyed. I just thought about winning to an extent that was not healthy and um then after dave golmard guy and tony shade died, I really took a self assessment of what I enjoy doing.

And I mentioned this yesterday, you know, hanging out these gentleman into tonos way of phrases ing IT, which is just beautiful of the fellowship. I thought that the joy, you know, my family, my kids, my wife and this fellowship with my friends that I wanted to, and I I made a deliberate effort to be a Better friend, a Better parent, a Better husband. And because of all the games I got from that, and they joy that I got from that, and and I just thought a little bit, god, I do like those conversations.

I do like writing the book, do like throwing the events and just going to do things i've enjoy, which took me thirty years of my career to actually assess what is that that I like and maybe I should enjoy the journey a little bit more. So I think it's a great question and appreciate that will take one more, make you enjoy the journey. I bet these .

my name's area.

I was the third of fourth employee of dorax um and my question is regarding all my favorite beste, I was a joke favorite is china ths and sax although it's onesta sophie choice. My questions regarding the positive impact that silicon valley could have on the political discourse and politics, which I know there's typically in an aversion to intact you all.

I've done a fantastic job outlining what those problems are as well as your guests what i'm wondering what a viable path forward looks like to moh. You mentioned that people in dc pay close attention to the podcast. Sax has recently endorsed Michael sHEllenberger, which I really hope can save our homework ate.

And i'm wondering, is the solution something came to a third party like what Andrew ang is trying to do or some new know so can vali technical party? Or is what what does that look like? I'm curious.

Well, I don't think it's set up to actually have a third party structurally in america. So what you have to do, practically speaking, is field more centers, Normal people on both sides, whether there are republicans or democrats.

That's a practical thing that we can all do and then we can all show up and vote for those people so that the majority voice is much clear than IT is today because right now, the fringes a little bit get to hijack the process um and so we take things that are that should be common sense and we pervert them in a way that just makes no progress possible. Um I really do think that we have that impact. I am not sure how much can be quite can be quantified.

But when I spend time in dc, I think it's true. What I was told and what i've heard from people, it's basically required listening. Reviewing IT helps shapes people's opinions, doesn't mean they follow IT.

But I think IT helps people think about things in a more Normal way. I think what happened today is like a perfect example, like the way that glen Green wall and antonio Garcia Martina's debate, like that's probably for some of you, was really unsettling. Maybe raise ed your hand if you were just like you felt awkward.

Honestly, just be honest with you. okay. Well, you shouldn't because that's Normal. My point is that helps you make IT seem more Normal because those guys were not saying to each other that you're worthless and you they .

are just debating, by the way, we went out for bigger after that. This my point, three of us was like, okay, we need to like a drink and cool down.

So not chastize ing you for feeling that way. I'm just saying this is what the culture does. The folks IT makes you even afraid to hear people debate things and still have respect each other.

The way that he and palmer kind of dealt with that wasn't, if that's incredible, the courage of palmer had to say what he did and then for him to be the first guy to walk out and then to owe that. That's I think those are a really important moments. And you have. You have seven hundred more people capable of being that way because of what just happened. So yeah, I think it's a slow march, but I think we're d we're writing a small dent in a smaller .

twenty years ago. Every political show on TV was a format like going all the way back to really ough bucky versus grav at all or pep. You can diverse Michael kiss I on cross fire.

I mean, they were all debates. Now like none of them are debates. It's all this. Their own little echo chAmbers, I think, is one of the reasons why this was successful, as we actually can have debates and there is a divergence of use.

what? What do you think?

This pot, I was on .

one once, dancing in the background. IT, yes. Thank you.

Dancing bear, yeah, he did dance behind him. I recorded an episode from my side. And when you look at politics, any interest there, any, any, any behind the scenes work you've done? And and how do you you think about IT just as we get into as jane's boomers are going away, I mean, we're going to kind inherit this whether we like IT or not.

yes. So IT outtake buildings. First, whenever you have time, you look historically, and he is important to texas. Ze this, when you have moments of of large technological change, you always have political structure because the means of communication changed the ruden work, press the tall ship, and you should go back and look IT always leaves. That lies how to em, often to war.

And so the question of are those of us were technologies, the top of the system delivery responsibility, to start this technology responsible? We absolutely do. I believe we do. And I think that has been forgotten that number one.

Number two, I have involved in campaigns, and it's interesting right now what i'm doing is supporting any interest candidate that I think is good on either side of the isle. I'm a register democrat. I support democrats for most my life.

But the round is, now all I care about is sensible people that I think you are really good. And i'm engaging in microtargeting forts across the bedroom in primary races. I would encourage all of you and anyone appear who cares about american book system to engage in the primaries, because the primaries are what determines the quality of the candidates that actually up for election.

And they're actually decided by very few people that how many of us actually voted the primary, like very few you, very few of you. Okay, so relevance us just complain about the device in american politics. Next time, please go on a primary and go vote for the centuries candidates.

By the way, did I hear a lot of support from Michael sHEllenberger out there?

What time maybe? Hi, favorite busty is china? H, I heard you speak with the north cosla. I've hacked the north and you see waterloo. So my question is, a more talk about these like started journey systems like stanford or paypal. Do you see like over the pandemic, do you see any like remote or distributed systems that have like appeared red? Or do you see any like building that are not just center and one geographical location?

I'm not a huge believer in this old decentralized work movement. I don't think any high quality work can get done 嗯 on difficult problems， so I think that there are types of products and types of problems that can be solved in a remote way, certain forms of software for certain kinds of products. But for example, let's say you're trying to engineer you A A farma drug.

I don't believe that unless you're sitting there collaborating, talking, debating, you can do that necessarily over a zone if you are trying to build something physical. You know, we have a business that three prince rockets. Those guys can't do that by just you know zoom around and having a couple calls.

That doesn't happen. So I think it's too premature to kind of say working together has no value. I also think there is a huge cultural divide that will get created in amErica between these companies that come together and the companies that don't.

And I think that the ones that come together have a chance of having more empathy in the end, because there are moments where you can actually get to know the people you're working with everyday. And I think that that gives you margin for error because everybody sometimes is a little of dealing with their own things in their lives, sometimes can be a little roots. And we all have tolerances.

Those tolerances are higher when you spend time with people, and they're much, much lower when you're destination zone. So i'm know i'd love to believe that everybody he's going to be arb in being in a castle and a tent in a bucket country house. But i'm just not sure that that's realistic to really solve the big problems that amErica has.

You believe in the work from home, the antonio, you have a strong feeling. One, where are the other?

I am more chaos camp than not. But I will say we have some great companies are fully remote. We have come to a coalition example in tape security, fully remote, run by wonderful CEO on the age of thirty five.

And he's found a way to make this work. And i've learned a lot from him. And so i'm trying to be very open algeria about this.

And there are people to make IT work in work. I can't make IT work. I want people in the office. We invest in farma, we invest in biotech and we have some biotech anties that have made IT work remotely in something insistent, bringing back people back if you're a lab, obviously a fee back, but I think we'll be a mixed environment. And I also think there's an interesting retooling going on a tivy.

The portal ity numbers in amErica they were seen today are wrong because they're not capturing what's happening on the technology because these remote environments. So I don't know yet. I think it's depend on the CEO and how good people are and the time of the ministry.

And i'm keeping an open mind towards that. I know that for investing, IT was so much more efficient, people could do twenty minutes zs instead of two hour meeting.

But I mean, think of the problem that that created. Look at the overhang when you could raise tens of billions of dollars over zone that turned out to not be a good thing well.

And but also, if your capital allocators being able to meet with three times as many people.

you could find more companies in my who raised billions of dollars over the last couple years cycle. And he said I was able to raise fifty million dollars checks in thirty meetings, now spending five hours for ten million dollar jack. And my reaction to him in the back of my mind was that's probably how I should be.

Well, part of us that .

could be tire system a little bit healthier.

Yeah, we raised one points there are funded and go. And he was, like, all done to the reason, new fun now of fire on the world, taking meetings. The part of that just because people can be at the up and liquidity cycle, scotland is reversed on us now, right? So that in order is gotten get hard to be a capital.

But for sure, I think I grade your mother or like being to allocate ten billion dollars in venture fund in two years over sume. I think just the metrics and not see people. I think that's a .

bad idea of my name is ken from the third, and my favorite, jl. The course. Legendary is my .

fair best. youtube. By the way, i'll be offended.

And then my question is, what advice would you give to non tindal people trying to fit into the tech oriented start up venture world? I'm an econ major, but this is seems exciting like how do I become a part of IT and turny have that.

And I think that the the best way to do this is to find a company you think is great and get a job that's a round time. I I would associate myself for the business I really respect you were respecting in the job. S in the mail room, the bob is the job as a janitor, whatever, just figured out because what IT happens, a high grove companies as they need good people. And you'll be surprised how much being the first person in and the last person to leave if there's an office and doing the work that you will ask you do with a smile and a great attusah, those people, they move up fast. So I would just find a way in men, wherever IT is, how IT is, make IT happen and start .

moving up in the way. Are not you're not. Not at all. You're not yet technical. And I think that's the opportunity that sits in front of everyone that you can become technical idea. My, a cousin who was a music major, U C, L, A working music.

And then he came back from covet, and he started learning how to program online, taught himself, spent six months in his parents basement teaching himself how to return his life, and got some contract jobs on redit and boards and other stuff. And he got this amazing full time job off for a few weeks ago. And IT was really amazing that I got to watch him transform himself in his life over the last year and a half just by taking that on himself.

And he became technical. IT wasn't that he had a non technical degree. He said he just wasn't yet technical. And I think everyone has an opportunity.

I'll tell you i'll tell you a great quick story. He's a minority guy, grew up in houston, um really wanted to work at tesla, couldn't get a job, couldn't get a job, couldn't get a job. Finally got a job on the line.

He was making sixteen twenty box an hour work there, did well transferred work there, did well transferred, ends up in the supply chain group, ends up working in battery supply chain, ends up basically being two layers between him and elon, gets into an MBA, goes there for few years. Uh, works on the side. Uh and he ended up raising a bunch money to start a battery business recently. And this is an example of what he just said, which is, you know there are these jobs available and then it's just is your hoods by and your hostel and he's an example, but it's a very motivating example to me because I just shows it's so possible, know. And these there are phenomenal organizations that identify talent and will move you .

up really quickly. And knowledge is literally free .

and experiences up to you. Yeah the overriding, I think, advise getting here is that skills are acquired and my lord getting to fifty sixty percent proficiency on a skills. Just give him what's on youtube or IT open course where any number of websites um you can do IT in a matter of weeks and now of course going from sixty, seventy, seventy, eighty, that might take months and then eventually years.

But startups are looking for generalists. They are looking for people who can say, I need somebody who's going to do the accounting and figure out how to do an email merge and build a mAiling list and then I need somebody to help with recruiting. If you can just become thirty, forty, fifty percent, as you know, good at each of those things at a start up.

You know, before people get specialized, eventually you have ten people doing recruiting. But in the beginning, it's one third of somebody y's jobs. So I love startups.

For the sign of a great culture of a company is how little the obvious labels matter once you're inside of IT. And the best companies like a tesler can become a trillion dollar mark cap because they find the kid working on the line and then four years later is running the battery supply in. How does that happen? IT happens because you're looking at the quality of the individual and their potential.

Where they went to school doesn't matter. Their gender doesn't matter. Their ethnicity doesn't matter. None of that matters because the .

people don't see I see work ethic results.

they integrity. So that's another little test. Test for you is like in the companies, even if you're CEO and if you're building if every other day you're reminding everybody else of like where people need to have gone to school and where they should have been, that's a route to nowhere.

Let let's give turny a big round of a lot.

还行， 还。 可以。

Thank very much. Thank you. Thank over here.

Yeah Sunny life, charney .

reeling to .

I know I.

Feel that I can .

we're going to just take fourteen to twenty more questions. Go .

studying them on here. Chemo, my favorite .

best d .

because of my A A little dry spell of him .

I A shop at law piano, honey. So thank you. So just got a question um for freedom. I know that you wanted to talk about this yea, about this sort of consumer credit crisis on the horizon that you see as potentially like the next shooter drop. So I think you wanted to mention something yes, say about IT, but because of time and stuff.

don't make me more to out. When I said on the pot, I not like I don't think this is like high certainty. I'm just concerned there's a lot of loans out there, a lot of buy now, pay later, a lot of stuff that, that has floating rates attached to IT.

If we're going to have a recession, we're going to see job loss. You're going to see these um and by the way, these other loan portfolios have like crazy outperformed over last few years. And now these and a lot of those other loans are floating rate.

Those asset values are inflated, people losing jobs. You can see a bunch of these things start to create a bit of a cascine effector with the next couple quarters depending on how this all goes. So i'm not i'm not going to put my foot down on the ground and say, oh my god, consumer credit bubble, we're totally fucked.

It's gonna ad to the great next great recession. Um but I do think it's going to be pretty kind of surprising by now. Paid later. I saw that. And if you guys saw this this week on how a lot of the people that are going on by now pay later sites are actually max out on their credit cards and so they're actually fully credit out. And then all the smart allegorist ms are like, oh yeah, you are good credit risk like eating lighting .

around five questions and we're done one best will answer each question.

the free burger, my favorite best. What problem do you most want to solve right now?

Bary lifters actually .

I kw actually I ve .

been working .

on the so I spoken about this publicly.

I think it's a big problem. I was going to talk about IT in the talk that we scrap, but I i'll do IT another time um which is really the opportunity for bio manufacturing as a way to replace um a lot of traditional food systems, including all egg, all of animal agriculture um and a lot of the systems that we use to basically make our food.

It's it's a big infrastructure play a couple square miles using usance analogy, you can basically recreate all the food on earth. You can distribute those systems um and and so I think that IT can be extremely carbon negative. IT sucks carbon out of the atmosphere.

Um IT would create incredible jobs, is an incredibly infrastructure opportunity. IT would return billions of actors of land back to kind of know whatever form natural form we want them to be. So that's an area that i'm spending a lot of time in and um that i'm particularly uh, excited about.

Thank you, kay. Number two, hi there. I am k co. As you all imagine, a parallel time line when I say you're all my favorite ite because it's not true. So i'm curious kind of extension of the immediate question.

Have you very much thought to forming a consortium, our community with the all in podcast and kind of what further applications of that? Because if you think about the force, multiple lick of, like any number of these mines in the same room, working tories of the problems we have talked about, from education to entering energy IT could probably be prety considerable the impact there because we have such respect for what you guys do and how you're doing IT and the discourse you're having that were clearly all die hards here. So just if you thought about that, actually, yeah, shit ton of work.

But I think IT IT is and we all have day jobs. No step one was to try to just see, and I I told the best, let's just see if we can each make getting to the pot each week a priority and a habit. And and that took the first year or so.

So now IT is a habit. We all value doing this. IT has had tremendous impact on our lives, personally, professionally, been very inspiring for each of us.

So we had to lock into that. First doing this, you was a ton of work, and we will see if it's sustainable. And we have some other ideas we wanted to do.

A college tour was the other thing we were considering, which would be like three thousand seeds or four thousand seats and just an episode of the potting q na. So I think that could be the expert to fall and then maybe hiring in urban and next server and then having to build a media company to take on CNN. No, we have really given a much thought, but you never know.

Were here totally rent? They were here totally rent.

We're not recruiting or anything, but you know this possible. Hi, best days again, i'm rejoice.

I run a talent marketplace for early and you workers. We use game fiction to accelerate the yes.

I just the question is about the great .

resignation, which we believe is the half told narrative. So how can small businesses, which are most superb odors, democratize their own labor supply and demand?

Wow, I think that's a very difficult problem to solve. Um I think again, if as a supporter of capital alem, I think one of the biggest things that we don't get right is how money gets to the right problems. I've said this roughly before, but like money is really just a voting way of deciding what you think is important in the world.

And that's why the accumulation of money is just a practical matter. Forget moral or physical, los philosophical is so important, because you can vote what you want. The thing is that aggregation happens easily, distribution is terribly broken, and so the ability for focus to solve practical problems is very hard, because the R I is in obvious.

And getting money from capital pools like us, the individuals and super priests is a basic is I think this is a very broken problem. A because the systems on exist. B because the laws don't allow IT.

And until that gets solved, i'm not exactly sure how a business who can actually like build for the future well or solve their supply forecasts or demand forecasts can actually get the capital you need because the lu e rican that allow you to solve that problem is money has always been, will always be but getting IT to those people is legally hard and its organisationally in practical um I don't know if you had last pot. I mentioned this thing. We tried this called capital as a service, doesn't get to the sole propriety level.

But IT gets to like small five to temperament companies. We would send fifty hundred thousand dollar checks. Here's our heart, that is the cost of getting a fifty thousand dollar check.

We did this a Fishery in indonesia IT costs us one hundred and twenty five thousand to give them fifty thousand. We still did IT because I just want to to prove the point. They ended up tripling our money so we barely kind of like broke even. Um but he just goes to show you how really complicated in the system.

okay. Fourth question, then one more after that.

Hey, i'm prem as a waterloo poker player, favor best ties to math. I'm very in into next year manufacturing. But as appreciate industry, my concern is follow on financing.

How do we get more investors interested in investing in the physical world? Because at least in canada, seems like most investors only want to invest in software. No, I think I think this is what i'm saying.

I think there's a very broken part of the capitalism right now, which is that technology investors buying large. And I don't mean to disparage ge. Anyone here are not well rooted in the principles of math and finance.

And I think that that's a real problem because in a moment like this, that is where you can actually make safe investments of capital. You can structure the money in so that you are capital protected. You have assets to back these things.

And the reason why folks don't do IT is they don't understand how to put together a model to demonstrate IT. And then the person that is then receiving that information is unfortunately not as well instructed as they should be to understand how to make a decision from that. That's what we have today. So it's it's a little bit of a business education problem and it's going to affect the non sexy areas. Rockets will always get money, but like three, manufacturing as sale at scale may not because of this exact issue, because people don't know what rock means.

Sorry, you have the final question. Favorite best is freeburg and .

hate them on a recession question.

That question why you let me.

why do you guys think IT up you so much?

Well, because you're the biggest pain in the s you are the .

most fucked and neurotic purse.

Every time we posted herself, we should cancel the eyes. So we've fucked everything up again. Why do we keep screwing up? We're going to destroy the, I were the first comments and .

the downward .

I was just .

somebody he does.

he should not reward him. It's like this model are feeding a easy, you know, it's not a two year old child.

Who would you given too much Candy too?

Is yeah I believe .

this is what .

I can take up to feel do to everyone. yes. yeah.

So IT seems like a common theme on the stage. These Oscar blazes. You all feel like we're in a recession or heading towards a recession, but I get feeling that you have the confidence that this be a quick recession like a year. So my question to be, why do you feel after thirteen years of mark manipulation by the fed that this can be cured? And under a year.

I think you're the average recession has measured like if you look back historically is two quarters. Um the problem is that we've never really figured out what it's going to take with the distortion of money that never should have been in the system.

Because if you think of a supply demand baLance as being a naturally self balancing phenomenon, if you perturb one side of IT by an enormous amount, exactly to your point, I think, be open question that the world has right now. Is that really a two quarter problem? Well, the fed is told you that they are going to take three years to get three trillion.

You've heard from David that ten trillion was put in, probably another three or four trillion was productively used. But that still leaves another three trillion of slashing ing around money that we don't know. So I think it's an open question.

I don't know what you guys free work, how many months, how many quarters sex, how many quarters if you yet to get.

Again, I just hate this definition of recession where it's about GDP decline when we had a lot of the underlines and those numbers for GDP that I like artificially inflated for a couple of quarters because of a bunch of structural stuff. We ve talked them out.

So I don't know like if you look deeper at economic growth, companies signing up more customers sell like a lot of technology companies are about increasing productivity with their tools they are selling and um those businesses are going to a continue to to do well and to grow and uh increase customers creed revenue. Um and I I don't think that there is necessarily a lot of the structural stuff that we saw with the g fc. The one thing I am concerned about, which have highlighted is this consumer credit risk. And besides that, IT seems like you know things are um you know i'm good footing so I don't know like the the the the technical recession definition, probably couple of quarters .

yeah you never know. And I I think the best way to to look at the future is by doing scenario planning. So we basically we could say this could be a short, medium or long recession. Short will be six months, media might be eighteen months, and you long might be two years plus. And we just say, I don't know, say one third, one third, one third probability, and that kind of gives you some picture exactly.

So now what we're on your portfolio companies as you would have two and half hours a runway right now because you've got to go raise six months before you want a cash and you really want to have have two years of question because things could be choppy for two years. I'm not saying they're going to to be, but they could be you don't want your company to run on the money and die just because of macedonia ic conditions that are no fault of your own. So if you can try to engineer that amount of runway, that's Better.

I also think that here's a thing about a quick recession is or the prospect for one, we don't know what other shoes are going to drop. Consumer thread is still a shoe that we don't know is going to drop. Look, six months ago, did we think we will be talking about tiger global or softening, for that matter, potentially teetering on the verge of being you ever redemptive out .

of coin base in palatine?

Just things right. Things can change fast. We don't know what system risk is in the system that hasn't been flushed out yet, and we won't be out of this until IT feels like everything's been flushed out and then the markets back and things to serve them upward. Doctor, again, clearly, we're not there real state.

Clipt doesn't feel like that's rushed out yet. There are.

So do you have a clip to play as an ultro?

I don't know. I was this the clip .

of the cut clip in your team at all and credible talks, everybody.

all in you guys. So and they really put a lot of event. And this pretty redial. I guess this is a lost clip of from last week you did not .

have like a dungeons, drag and sleepovers, great. Seven and grade. I was actually .

programing pascal.

and we made a .

water bursty zer.

IT was a binary lifter.

much like the s have a time to win, have made a complete replica of uncle awdas water vapor ezor on time to win. And that took six years. But I was good.

And that I went hilariously. I see three po. I went to see three P.

O. To our science fair. You should have see the look on our teacher's bases.

Okay, guys, have your code up and let's go.

Rain man, give time.

We open sort to .

the fans and.