Jason Calacanis: Startups, Angel Investing, Capitalism, and Friendship | Lex Fridman Podcast #161
the following is a conversation with jason calacanis who's an entrepreneur investor author of angel how to invest in technology startups and as many people may know he's a fun brilliant long time podcast host of this week in startups and co-host of the all in podcast with chamath palahapatia david sax and david friedberg who all happen to be poker buddies and self-proclaimed besties the result is always a great listen due to both the love and the heated disagreements quick mention of our sponsors brave browser linode linux virtual machines four sigmatic mushroom coffee and rev speech detect service click the sponsor links to get a discount and to support this podcast as a side note let me say that i've been learning a lot about real world finance in the past few months to give you a bit of context on the side i've studied trading from an algorithmic trading perspective as a machine learning and a game theory problem off and on for a few years in undergrad and grad school i found the distributed complex system aspect of finance and economics in general fascinating but now i find even more fascinating the human side of the whole thing ideas of greed power freedom and truth wall street bets robin hood and the whole beautiful mess around this topic allows us to have great conversations about human nature and the systems that underlie the rise and fall of civilizations if you enjoy this thing subscribe on youtube review it on apple podcast follow on spotify support on patreon connect with me on twitter at lex friedman and now here's my conversation with jason kilikanis i have a million things to talk to you about but we do happen to be living through what i would think of as a historic event in in terms of its impact in terms of like almost philosophically thinking about the role of people and how they can fight power with this whole wall street bets and game stop situation i was wondering you've covered in your uh amazing all-in podcast you guys have been having fascinating battles over this whole situation i was wondering if you could tell maybe from your perspective as it's unrolling uh the the saga of wall street best in gamestop what are some interesting insights yeah uh that you have about this whole set of events in full disclosure i was an angel investor in robin hood before they launched and when i met the founder vlad and his partner you know they pitched me at a a bar not too far from where we are right now in palo alto called antonio's nuthouse and my friend adeo it's a really good story my friend adeo had asked me to speak at his founders institute which is kind of like an accelerator for people who are thinking about starting a company yes and so i gave a talk and then he said hey let's go to antonio's nut house and um we'll meet elon for a drink uh and so elon met us for a drink there and it's it's the divest of dive bars like you'll take a beer love the image of all of this you hang out with elon yeah i mean it is the worst bar in the peninsula like just garbage on the floor and like cheap beer and warm beer and like you pick up your pine glass to be lipstick on it it's just brutal classy not your lipstick you understand somebody else's lipstick yes and so we're sitting there and vlad walks up with um his partner and he says you're jason calacanis and i said tell me about your startup he said how do you know i have a startup i said you recognize me and i mean that's the only way and he goes is that elon musk and i said yes elon come say hi and he came over and said i said tell me what you do he said well i'm a quant i said what's that and he said quantitative analysis and i was like oh yeah i know about that that's like you guys make algorithms and then try to beat the market right he's like yeah i was like so you're gonna pitch me on a startup and you're gonna sell your algorithm to other people and if it was so good why wouldn't you just use it yourself and print money he's like yeah no no that's not our business our businesses we're going to create an app to get millennials to trade stocks and i said you do realize there's no retail investors anymore like the dot com crash plus the 2008 financial crisis eliminated any individual's belief in participating in the stock market and he said that's the opportunity i said okay i like it tell me more he said well we're going to get these millennials to trade i said the same ones who live in their mom's basements and take uber and lyft and are on their parents have no money got screwed and you know went 250k into debt for school and now can't get a job those people and he's like yeah i'm like okay they have no interest in their future but they're going to trade stocks he said yeah that's the opportunity i was like how do you how are you going to make money and he said well that's the best part it's going to be free and i said so your idea is to get a group of people who have no interest in saving for their future to trade and your business model is free and he said yes i said i'm in because in almost all cases the crazy outlandish ideas that nobody believes in are the ones that have the greatest returns i mean uber i introduced to about 25 investors and three of us said yes so you know a full 12 percent of the community who saw that deal decided to do it so the your sense about this idea being good had to do with the fact that this guy was just uh crazy and ambitious and bold thinking or was it that there's something here in uh allowing a much larger magnitude of people to be able to be investors yeah the way to do really well as an angel investor or just in technology or in life is to not say what could go wrong but to say what could go right and then to just imagine for a moment if it does work what would the world look like and so when elon was investing in tesla and some other guys were running it and he was trying to save the company you know it wasn't is this gonna work it was almost positively not gonna work it was and he knew that um but if it does work what does the world look like and so that's really what you're looking for is not the chances of success but if it does succeed does succeed what would that look like and you that's what the world needs more people doing and so when you looked at robin hood it was like well if he does succeed what would the world look like and now we've seen what it looks like you have a generation who are so financially sophisticated that they know how to do puts and calls and shorts and research at a level that dominated the hedge fund industry so let's pause for a second these traders sitting there on a subreddit in a discord server are able to do analysis and research and then act in unison to say we're going to beat in the robin hood sense uh you know this group of sophisticated insiders who have more access and more access to capital but we will figure out how to solve this problem and you know things most things don't work it's like the wikipedia like there's no way no way the wikipedia would ever work right except it did yeah right like you're like how is this ever going to work you're not paying anybody but it's both the largest corpus of an encyclopedia ever so i think robinhood actually succeeded and then what we saw was this system and a lot of the systems in our society whether it's the political system the constitution of the united states uh education higher education which you're involved in and then even the financial system we have not stress tested and stress tested it and we don't actually know all the edge cases and how it works so trump was able to just really put this crazy stress test like it is the democracy going to hold are we going to break this two or three you know 200 someone-year-old experiment and then we looked at the financial markets and it turns out there were more people shorting the stock than stocks where the shares were available i don't know how that's possible and then i'm trying to uncover where can i see a list of people who've shorted the stock and it's like you can't but we can tell you sort of how many every two weeks or maybe twice a week we can create a report maybe we know i was surprised that nobody knows the list of people who were shorted and you guys were trying to figure that out yeah there's no transparency on a lot of these systems and if you call to try to shorter stock like it's almost like they'll tell you on the phone like let me see i think i might know a guy who has shares to loan out so it's like am i calling to like try to find like a 73 mustang grande in you know gold you know you're gonna call around it's like shouldn't this be like on a ledger somewhere and be completely transparent so now we're seeing those things and i think the investigations will make it super clear but of course in a vacuum without information there are so many investors in these startups that conflicts can start to appear and then you know how it is with people in conspiracy there is the mind starts to wander right and so in some cases there is actually a conspiracy and then in other cases uh people's mind will fill in like oh my god there's some grand conspiracy here i can tell you robin hood's only goal is to get more people to trade stocks and to democratize it even more and they apparently were on the brink of you know seizing as an as an entity if they didn't get more money to cover all these trades i mean they were on the brink and they raised three and a half billion dollars or something like that in a week yeah so in some sense robin hood enabled this very like the magic of this distributed system of wall street bets right you said wikipedia which is another which is probably one of my favorite websites and one of my favorite examples of like a distributed system somehow coming together in a way just like you said at that crappy bar you i would have guessed it would never work but if it does work it changes everything and it did and robin hood in that same way probably enabled or was one of the major enablers of wall street best of giving power uh like empowering young kids to learn about how this whole messy financial system works and take on the big elite centralized players yes and you know it's very easy when these companies get big um one thing that's changed is the footprint of these startups and the velocity at which they grow so something like airbnb is another perfect example of something that should really not work in practice but it does like i'm gonna rent my couch or my extra room to somebody like a serial killer or i'm gonna stay in somebody's house like a serial killer's house and you know it's like it really sounds scary but it actually works and and it has not destroyed the hotel business it has added so the best startups induce a market to exist if you look at you know uber or airbnb people replaced their cars and uber was not competing ultimately with taxis they were competing with car ownership public transportation walking or just not going out and then you look at airbnb a lot of people who stay in an airbnb would not be taking a trip to kyoto if not for the fact that they could get a 75 beautiful room with great reviews in kyoto for three weeks it inspires people and it manifests a market because the product is so transcendent right and i think that's one of the things that robin hood did you can't learn how to do this options trading and puts and calls and all this sophistication stuff unless you actually do it it's just too hard to learn except in practice just like poker if you want to learn how to play poker or guitar or tennis or skiing like you could talk about it you can watch youtube videos but at a certain point you got to get on the mountain at a certain point you got to put some chips in the pot and it's going to be painful yeah like poker is going to be painful you're going to lose a lot of money that's why you should play at the small tables first and you know even in trading like you look at people who are doing this crazy trading and gamestop a company that's worth you know maybe a couple of billion dollars but certainly not tens of billions of dollars of course the people who are throwing their money in last are gonna lose it i think everybody knew that um and so it was a momentum play and you know they're betting against the hedge funds um so i think it's good for people to learn and become financially illiterate and just always understand the concept of the risk of ruin yeah um the good news is for a young person the risk of ruin might be like they lose five thousand dollars or something and then they have to build their stack back up right but that's really the the only thing i am concerned about is there are people who will play poker or blackjack or sports betting or whatever it is and lose control just like there might be people who try alcohol and lose control but we can't build a system based upon limiting you know the average person's behavior based upon somebody who can't control you know their ability to drink you know two glasses of wine instead of 20. how does this whole thing end uh probably in tears for who yeah who's crying is everybody crying who's crying when so i think there were some of the hedge funds that were crying initially that maybe some of the wall street bets people who bought last would be crying and then eventually there's an probably another set of hedge funds or even the wall street bets mob and you know that army some of them might have broke ranks and then shorted the stock yeah so nobody knows so everybody has to be aware of what's happening in the game so if wall street vets said hey let's squeeze these hedge funds because they have too much short interest let's all buy the stock then some of them might have said okay you know it's not two or three hundred dollars maybe i'll join the short movement now that they've covered and they could have shorted their in been like double agents so people have to understand like this stuff is gnarly and it's a it's a free-for-all i mean it is a literal free-for-all there's a kind of morality like a big statement that wall street bets made in terms of like the elites can't just push us around they can't bully around but at the same time you know they're also interested in making money right yes is uh what's your sense you said that some of the people in the wall street best might have broken off and shorted the stock sure are they more interested there was an emergent like morality that emerged and said like we're not going to put up with the centralized elites but is that going to continue are they going to fight the power structures that are bad for society are they going to now like i mean are they ultimately going to introduce more chaos that's going to damage the economy and damage the world or are they going to continue being the good guys and fighting the uh the the the evils that manipulate uh the market what's your sense you know it it really feels like the dark knight series of films where like some people just want to see the world burn yeah i think there is a contingent of people who just literally want to see chaos yeah like you know that contingent on some of these you know forums who just want to create chaos right um so there's certainly that chaos contingent but i think overall what the arc will show is a group of people getting massively educated you see it in crypto as well there was like a three-year period where all of these failed entrepreneurs who i knew who couldn't build companies were then coming back to me after their companies has failed or after they gave up or couldn't clear a market raising money with the venture capital community and they were doing icos and i was like i met you before right and they're like yeah yeah no i'm doing an ico now i'm like okay where's your company at and they're like here's a white paper and i was like this white paper with spelling errors in it that says you're going to destroy airbnb because everybody's apartment is going to be on immutable ledger yeah like wouldn't that be better in a regular database that was private and not public like why does it need to be an immutable ledger so it can't change i'm like not changing the database is a feature that's that does not seem like a good feature and they couldn't explain it they're like well just people are interested in icos and there was that ico mania and what it showed was there's a global appetite for risk people want to try new things this is one of the great things about the human spirit is one of the great things about capitalism and one of the things that concerns me most about we're at society is the sort of socialism communism you know entrepreneurship is bad technology is bad and polarization of wealth and you know people getting rich is a bad thing when i grew up i'm 50 now but when i was a gen xer growing up we kind of maybe too much idolized bill gates and people who are doing interesting things in the world and we thought capitalism was a force for good i still believe capitalism is a force for good because when a group of people builds a product or service that changes the world and and it gets globally distributed whether it's tesla or spacex or google or airbnb or uber or robinhood you know everybody gets to benefit from that product or service having to compete and if you look at the places where there's no competition like public education or less you know profes you know uh you know established you know colleges and stuff like that less competition for accreditation degrees like things tend to get a little weird don't they yeah and people tend to be protected and that's not good you need you need competition um does it mean that you know people shouldn't have global health care it doesn't mean that you know we shouldn't have a safety net but we need to keep capitalism vibrant especially because china has now co-opted capitalism and created their own version of capitalism which is communism with capitalism it's like this weird operating system like we still want to keep communism so we can take any of your gains at any time yes but we'd like you to be entrepreneurial yeah and then you have somebody like you know um you know the founder of alibaba jack ma who disappears for a couple of weeks who's that exactly like who's jack he kind of disappears for a couple of weeks and then he comes back and he's really sorry about the things he said and then he disappears again and like you know we have to be very careful if china wins capitalism yeah this is going to be an existential threat for humanity yeah the chinese are no joke i mean they are seriously focused and they are picking the winners it's a very weird system because it is in fact i don't know what you call it like communism capitalism in such uh overloaded terms but they do encourage entrepreneurship but they and they do a good job of it oh yes but but then they're like they're like the surveillance thing and they're controlling things in a way yeah it's it's weird because it seems to work really well for them uh in the short term yes it's definitely got short-term benefits so the question is like what what uh how that gets distorted and becomes worse and what's worse what should potentially might be and i i think on you know the the entrepreneurial spirit which you have apocalypse all centered around the entrepreneurial spirit it is one of the magical things that makes this country great i don't know if money is deeply tied into that i do get bothered by people you know treating the word billionaires if it's a bad word yeah but in general like all the hard things all the difficult things we're going through in this country it seems like the way out is going to be uh making the the entrepreneur the hero of society of like letting that young kid with the big dream and the guts to take the big risks and build something totally new uh make giving them a chance and whatever that involves i i don't think it's about taxes i don't think it's about like uh regulation all that stuff it's about us and just public discourse saying that that kid that guy that girl they're bad asses like encourage them to do it we have to have people buy in to the fact that they have that opportunity and i think one of the problems in society is there's a group of people who actually don't believe that they can succeed or they don't believe even more perniciously that other people can and that's the group of people that i think are highly vocal but a small group of people which are generally people of incredible privilege rich parents white city dwellers liberals they kind of look and say poor people cannot change a lot and their they're battling in their minds to protect poor people and but they have this very weird patriarchal kind of approach to it which is they think that they're not capable of changing their lot in life and they're like it's not possible and then once in a while i'll tweet something where i say you know it's really incredible that every piece of knowledge you could possibly want is now available for free on youtube and every course from mit and harvard and stanford is available on edx or coursera and all that information is there freely available and you can take the lectures this is amazing and then people will be like yeah but people don't have access to it i'm like they do it's free here's the link and they're like yeah but they don't have internet and i'm like here's the chart of internet penetration in america like and they're like well poor people don't have internet and i'm like really find me any downtrodden person without a smartphone with a high-speed connection that capitalism provided for 12 a month or 15 a month like it's very hard to find that and and we have it so well in this country and there's so much opportunity um but people don't believe it and that's actually one of the problems see the average american still watches four or five hours of television a day and often i meet people they're like i need a technical co-founder and i you know but all i need is a million dollars and i'm like okay well what is your skill and they don't have a skill right and i'm like well are you a designer no are you a product manager no are you a developer no are your sales executive no okay what are you it's like well i have an idea well as my friend sam harris i think your friend as well says like everybody has like a million ideas an hour like you don't really get credit for those even when you're asleep your idea is spewing ideas like zero credit for your ideas it's all about execution you have to believe that you yourself can be the core of that execution you yourself can build the thing and every no matter what your circumstances are and you could talk about like structural racism and all those kinds of things that very fast but from the individual perspective when you just like are coaching or giving advice to an individual you can literally change the world i mean wall street bets is an indication of that in the financial space that you yourself can have can change the world that that's why this country is is amazing still the best country in the world right i mean it still is amazing the opportunity provided to people all this educational experience is online and the ability what i tell young people who are looking for advice i say you know your the skill you need to refine is the ability to learn new skills like if you become good at learning a new skill and tim ferriss a friend of mine has really pioneered this like he can get to 60 or 70 percent of like the knowledge in a skill in some incredibly short period time now i'm not saying he's gonna become a virtuoso drummer or a great basketball player but tim and i were on vacation together in like a group vacation in italy and there was a basketball court and uh i said let's go let's go shoot some hoops i never shoot shot before and i was like okay come on i'll teach you and tim is fabulously uncoordinated people don't know this yes like he tried to dribble a basketball and do a layup yeah and it looked like he had a blindfold on i mean you've never seen something less elegant than tim ferriss doing a layup in basketball and then he watched me do it three or four times and i watched him study me and i listen i i've been playing basketball in brooklyn since i was a kid i got a couple of moves and he was just taking notes and taking notes and taking notes and by the end of a couple of hours of doing this i could just watch him checking his form and figuring it out that's every skill in the world now and what i tell people is like i'm like have you did you watch game of thrones and they're like yeah watch breaking bad like yeah i'm like okay that's about 400 hours yeah how about you don't watch the next two and you put that 400 hours into learning how to be a graphic designer a ux person a developer whatever it is and learn how to add skills that's what i did my whole life i was a kid from brooklyn went to school at night but i was very quick to get to maybe 50 of the knowledge base of graphic design or being a writer or being a sales executive whatever it was a developer even and i was just good enough to not have people be able to bullshit me like when i hired them and that was a big unlock when you know enough that people can't snow you that's a really good one and look at yourself like you figured out how to set up an entire podcast people don't know this but you don't have a team around you i have a team of like five six people working in my pocket you see even knowing enough about to set this up you would then be able to hire a team correct and you'll be able to call them on their bullshit if they're not doing a good job and that's really important and i don't know that much about this whole thing but i know enough to be able to see who knows their stuff or not you're absolutely right and then the process of learning how to learn is uh is essential there because uh like i've uh i did martial arts uh jiu-jitsu and so on and it's so funny to watch i did take one yeah definitely that was awesome it's funny that there's some people that do an activity for years because to sort of elaborate on something you were saying about uh hours it's not always the amount of hours it's the quality that you put in deliberate practice versus just doing some behavior i mean literally i've been playing chess and and trying to get that going again after watching queen's gambit and i got chess.com and i realized i was just playing and i'm not getting better and then i was like oh wait there's a little analysis feature here at jazz.com where we'll show you your blunders and mistakes and i'm like oh i'm spending no time reviewing my losses in chess and i just want to play the next game i should really review these losses and figure out what mistakes i made when i started doing that i was like oh i'm getting better yeah right so some deliberate practice really well and if you want to take it all the way uh magnus carlsen uh shout out to the guy he has an app but there's a few other coaching apps where you like focus on the end game you focus drilling a particular it's you basically don't play the game at all you're just focused on drilling the the different apps the openings the openings yeah yeah and there's different kinds of puzzles so you can really make it into a deliberate practice not to make this episode uh sponsored by chess.com but they literally have puzzles yeah so i was like oh and it's a hundred dollars a year for this product and i just thought to myself this is capitalism they don't need to charge you a hundred dollars an hour for a lesson they can charge you a hundred dollars and they've created the ability for you to play chess 24 hours a day against opponents who are perfectly matched against you based on your rating and they analyze every game and they have puzzles and they have tutorials and they've got everything else it's like just think about how much value is being provided to society because of capitalism and because competition if you want things to get better and you want to step up your game just make it slightly competitive it is one of these things in human uh existence that is so powerful i don't know did you see the michael jordan documentary the last dance like half of it okay i'm still working i mean he's so competitive yeah and petty yeah it's so inspiring that all he cares about is just winning to the level of which he literally there's like this running meme i took that personally and i took that person i don't know if you've seen the images of him sitting smoking a cigar looking at like an ipad or a video clip and it's like i took that personally and you can make a supercut of every time he took something personally he literally takes everything personally to give himself that competitive motivation to win that's capitalism and when people are competing man look at what elon did to the the the space of cars like every they were literally laughing at him in the first 10 years electric cars ha ha that company will go out of business and now every single company is like we're going fully electric by 2035 and he kicked their asses so brutally that they had no choice but then to step up their game and that's what we want right and this virus and this pandemic i think the the the great thing that will come out of this horrible experience that we've all had psychologically death learning just so many bad things occurred the economy people losing their jobs but we also got to see the human spirit with these mrna vaccines and and just how if we took out some of the regulation and people were super motivated we might actually be able to eliminate all uh pandemics from ever happening again and before that bill gates was banging his fist and jeff skull was doing the movie contagion i mean for two decades people have been banging their faces we have to be prepared for this yes and everybody's like yeah whatever yolo it's not gonna happen and now it's happened and people are like we need to be able to destroy every you know pandemic and virus before it happens and you're listening you know a lot more about science than i do but this mr mrna has been around for a while we've just never gotten aggressive about doing it and then you think about challenge trials i don't know if you've been following this but they're doing challenge trials now in the uk this month where they're introducing covid into healthy young patients and then giving them the vaccine or you know and that is against all yeah rules and regulations about you know do no harm but then you think about it we kind of celebrate people jumping out of planes and we got that one guy alex honnold who's climbing up mountains without a rope and they give him a north star you know back page ad and a a you know an endorsement deal yeah and we celebrate that we celebrate people surfing with sharks we celebrate people doing deep welding we pay them extra to go 200 feet underground and weld stuff and people do dangerous stuff all day long astronauts yeah but we won't soldiers firefighters but we won't let people get paid to be do a challenge trial yeah we're weirdly risk-averse in certain areas that completely don't make any sense and this is where the world needs to be we could have said these thousand people young people who we know are in all likelihood not going to have a bad outcome but there's a possibility this is a possibility but it's very low and it's certainly lower than riding a motorcycle right it's lower than riding motorcycles people riding motorcycles everywhere we have ads for motorcycles we could have just said to those thousand people we'll give you a million dollars each to do this okay there's your billion dollars we we're printing trillions of dollars of money to deal with this if we had just done a thousand people for a million dollars each to do a challenge trial in march april may when they had the mrna vaccines ready we could have deployed the vaccines in the summer we would have been done with this it would have been over by now so we get to challenge all of that thinking i think that's what the great pause did it's letting everybody challenge that thinking is why do we have that rule okay yeah we don't want to have people you know like give up their organs for money like we obviously understand but there's a reasonable discussion about well maybe there's a level of risk in a global pandemic i mean we fought the nazis right we defeated the nazis that took a lot of deaths to do that but we had to kill that evil this is another evil which we must fight and it's going to result in it's already resulting in thousands of people dying a day but we could have actually stopped it earlier if we just had a reasonable discussion this is why podcasting as i respect what you do this is why intelligent people are so drawn to podcasts because you and i can expand on this yes and not cancel each other over this very suggestion when i make this suggestion that are challenge trials reasonable or not if i were to do that on twitter they'd be like oh calacanis wants to give poor people corona virus in order to save rich people yeah no i didn't say that but we you and i could have a reasonable discussion about a challenge trial is something we should consider in a acute situation where millions of people are going to lose their lives right so you know that's an example of capitalism and competition working really well there there's one of the to me sad thing to see about coronavirus is that for example testing at scale should have it seems obvious i i was a little clueless about it but because i thought there's no way you can have like antigen tests at hundreds of millions like order hundreds of millions of them and make them cheap but actually i realized recently that there have been available since about like may yeah you were able to in korea in finland all over the place you could have done mass manufacture so there there's a little bit of a failure of uh of capitalism to step up yeah and i don't know if you agree with this but it seems that the blame is to be placed at the regulators yeah and the the the various institutions crony capitalism and all likelihood is what stopped it here in america i mean i had friends who had imported them from other countries the testing kits and you've probably been to parties where people had these kind of testing kits from other countries and we're sitting here and they're just approving them now really in february month 11 of the pandemic in america we're going to have testing online really i mean even if these tests were 80 you know effective and they're 95 effective mass producing them we should have sent them you know in every postal anybody with a post office box should have you know with the mailing address should have had 10 of them put in their mailing address just for free from the government and then everybody would be testing and we would have contained it we don't have test and trace here in the united states all the countries that are on the other side of kovid did it by having testing tracing and closing their borders and masks that's the combination that works the the problem with the coronavirus is uh while there's a lot of institutions did not behave their best it's also the case that there's a lot of uncertainty so i tend to give a little bit of a pass to everybody involved for the uncertainty we were all i give them that until june i wonder how history will remember this whole period i'd love to ask you because you were an early investor in robin hood and you're sort of you're in a very nice place of uh being a huge supporter of the sort of wall street bets kind of distributed power of the people and at the same time uh because of you being an investor like intellectually giving a chance to robin hood in this kind of chaotic time of conversations to think about like well what did they do right what did they do wrong yeah so you have a kind of a balanced view on the whole thing which is really nice is there we've talked about what robinhood did right i think can you uh sort of steel man uh charmata's argument of uh what robin hood did wrong in the last few days yeah i mean there communication is always the number one issue with these startups right and if you you have to get ahead of any problem and you have to put all the bad news out immediately and in the case of robinhood it seems based on what you know has been in the papers and what robinhood said publicly is that they had this kind of liquidity crisis right where they were being uh because of these exchanges telling them you have to put up this amount of money in collateral and them being pinned at number one in the app store there were so many people trying to buy five shares of this stock five shares of this meme stock that it kind of broke their system and then the people who clear the trades for them they said you got to put up a billion dollars 2 billion 3 billion so you can't do that overnight and i think that they were an uncomfortable situation of like going on tv and saying uh we have a liquidity crisis like that could be like a run on the bank everybody then logs in at the same time to robinhood and tries to sell every share they own because they're afraid that the whole thing's going to collapse right so i think there was this kind of like black swan event and they probably didn't communicate it all that well at the center of that this is this is really interesting maybe you can comment on the nature of communication uh vlad the ceo yeah the guy you met at the bar yeah i think at the center of the communication right yep so elon is an example of a guy who also is at the center of the communication for his particular set of companies and that you know on twitter seems to be a really powerful way to communicate yeah and there was something this is me saying it yeah there was something about vlad that sounded like he's hiding stuff that yeah as opposed to elon it doesn't sound like he's hiding stuff it could be the nature the the the beat the timing of the conversation same thing with mark zuckerberg he mark zuckerberg for some reason often sounds like he's hiding something yeah and then there's like jack dorsey is much less so yeah and i don't know what that is about the ceos it makes you trust them and not it might be the perm point in time um like in terms of escape velocity uh you know there might be non-disclosures in place that we're not aware of where they're not allowed to talk about certain relationships i see and and and that results like in vladimir in this case and that results in you being like acting weird or nervous or nervous yeah it could just be the person is nervous you know so it's it's really hard to be building one of these companies and you're at scale and you know oh my lord the entire thing's coming apart and you're the most hated person for that day you know how the rage cycle works and the the media is just so crazy when they get their hooks into something i saw it happen with uber we saw it happen with facebook and even tesla you know there were times when auto people did stupid things with autopilot and it's like yeah okay somebody's watching a movie and sleeping in their car yeah or leaving the driver's seat against all the rules of autopilot and somehow tesla's responsible for that it's like we have people who stand on top of their motorcycles and drive down the road on a motorcycle and we don't blame yamaha for or harley davidson for some idiot standing on the seat of their motorcycle on a highway going 60 miles an hour we just say that person is an idiot but when new technology comes out we blame the technology not the person operating it yeah and if you are going to operate uh we basically vilify and demonize i think that that is part of it like when the person at i remember airbnb we always thought what if somebody trashes your apartment and then sure enough a bunch of meth heads rented this poor woman's apartment she left all of her stuff in it and then a bunch of meth heads had a drug party destroyed her apartment ripped up all her photos and went crazy and we knew that day would happen but nobody remembers it now but it was the number one story on every news channel because wow that's an exciting story and i just thought to myself i wonder if there are any parties in hotel rooms where the hotel room is being trashed and people are doing drugs and and crazy things like yes that's basically every hotel in los angeles right now is being destroyed by some rock band that's throwing a tv out the window like we expected in uh you know a hotel we just didn't expect it in somebody's house with airbnb and then airbnb created rules around you can't rent an airbnb for a party uh and they learn so i think there's a learning curve with these companies and they do get to scale at a level that is unprecedented it used to take decades for a company to become an international phenomenon now it happens in two three four years i mean look at clubhouse this thing went from being you know a private beta six months ago to being the number one app in germany and in japan and here like just like that boom and it's because there's an ecosystem that has never existed the app store then there's uh payments online everybody and then everybody has a super computer in their pocket when we the thing people got wrong about entrepreneurship technology uh and business you know over the last couple decades was just how big the market was and then how quickly you could um you know achieve relevancy in these markets we thought the market was like the 60 million homes would broadband and originally it was like maybe 10 or 20. then it became 60 million then i was like okay well how many how many hours are you at your desktop computer well like probably at our computers for five hours a day ten hours a day at work three hours a day on our own and then i was like yeah nobody's on their desktop computer everybody's on their mobile phone and oh and by the way they have it with them so the people with mobile phones are now using this high-speed device with an app store with their credit card in it yeah in the early days of the internet people were scared to put their credit card on the internet that was considered a really dumb thing to do if you put your credit card on the internet you're gonna lose all your money they're gonna they're gonna hack you or whatever and now it's just amazing to me how quickly when a company hits how quickly it can get to a million subscribers or 10 million or a billion users right and there's all these networks like social networks that allow the spread of uh the viral spread of like a new startup a new company uh a new app to be announced i mean anything was an idea a podcast right like i mean single thinking just as a single meme could change the world speaking of clubhouse i mean yeah i just wanna we're saying so many interesting things but there there was a magical moment with vlad and elon on clubhouse yes is there do you have thoughts about that interaction uh which felt like so many uh aspects of this whole situation feels like totally novel surreal like it's defining world era like it is yes like a billionaire the richest human on earth is interviewing uh the person at the center of one of the most interesting mass scale like uh power battles in finance ever you know perhaps by the way seven movies have been sold and two weeks just think about how fast things are moving this thing happens yeah like people had the idea to short the stock six months ago they start doing their research they build an army they execute the trade the system goes down robin hood raises three and a half billion dollars in four days elon is interviewing them on clubhouse on sunday after the wednesday it happened and now here we are it's ten days later yeah doesn't it feel like it's been 10 months yeah it's been 10 days lex it's been 10 days 10 years there's like a new president all these things that and everyone forgot like it was an insurrection by the way we also almost had a revolution at the capitol where a bunch of crazy people who have guns and body armor and then a bunch of them who are just yoloing in cosplay yeah took over the capitol well so and the other more dramatic thing to me is that was one month ago that was one month and the pres the president of the united states got banned from every major social network and uh which i think i'm still uh deeply troubled by is parlor being removed from aws that changed the way i that changed a lot of things as somebody who's an aspiring entrepreneur that changed the way i see the world that little maybe i'm being overdramatic but no you're not i think you're paranoid for a reason you're paranoid for a very good reason which is as big as these companies can become they are beholden to the mob and if the mob says hey this person needs to be canceled they're going to get cancelled because you can't lose your entire audience you could lose your whole customer base and you can lose all your employees i think what's interesting about your fear about parlor and aws taking off is we went from being like a social network which is you know the software layer and then we went to like the infrastructure layer you know and they'll even go after like cloudflare which is a cdn provider right they're just like a plumbing you know it's like sort of like the telephone so we're basically holding everybody responsible on the whole chain of events here what that's going to do is you know i'm not a huge believer in crypto but distributed computing um where nobody and decentralized and distributed computing platforms um and open standards podcasting's an open standard the web is an open standard ftp was an open standard but twitter and you know facebook are closed captioning not where everybody available and i invested in a company that tried to do this and um got sold and it didn't work out but take your hard drive on your computer at home you give you know a terabyte of your 10 terabyte drive over to the cloud and then everybody else does their terabyte and then all of a sudden you've got this virtual cloud and anybody can store stuff on it and it's all encrypted and then nobody can stop it and that could be tweets it could be videos and so this idea that you know youtube will be able to tell people to kick people off because they're skeptics of i don't know the pandemic or the vaccine or they've you know uh they'll make things that are more censorship resistant i think that'll be the reaction to all of this what this is my question for you going back to that crappy bar and people pitching you is is there do you like with clubhouse do you see competitors do you think it's possible that another perhaps more decentralized or another kind of social media will emerge that will take on twitter and facebook it might be able to replace something if you look at the whole landscape yeah uh with clubhouse and everything else do you think some other company might emerge there'll be ten versions of clubhouse we looked at social networking we thought friendster was it like friendster was so good nobody be able to compete with that it was growing so quickly and then myspace was a juggernaut and they hit 100 million in revenue and 100 million users and it was like well that's game over and then facebook and linkedin and snapchat and friend feed and countless others you know so there's usually 20 people who will win in a category and 80 of the category will be owned by the top two or three players but will those players change do you think what's your sense oh yeah for sure i mean if we if facebook hadn't bought instagram it would be a company in decline right now people would be shorting the stock right facebook peaked and then was sort of heading down um and instagram saved them and whatsapp saved them so you know that's another kind of weird moment in history that they were able to accumulate that much power and consolidate that much power instagram should have never sold to them that should have gone public they had just raised money from sequoia and they had raised 50 million dollars at a 500 million valuation and they didn't need to sell and that was a big mistake to sell they should have kept going and they should have take took on facebook and if instagram was a standalone company right now it'd be worth 500 million do you think 500 billion yeah do you think uh facebook might buy clubhouse has been uh oh they'll probably copy it i mean zuckerberg has no moral compass or ethics or anything i mean he's a marauder i mean he basically copied snapchat seven times yeah like he did poke and he just kept trying and trying and trying part of the reason why the whatsapp founders and the instagram founders left is they found zuckerberg so distasteful in terms of his ability to copy what do you think makes a great leader in that sense because okay so when i look at zuckerberg he's a great executor is he a great actor i don't think he's a great leader i was bullish on i was excited about facebook in the very early days uh i thought it was an exciting opportunity to connect people and stuff started going wrong in certain kinds of ways and again maybe it's our human nature but i attribute a lot of that to the leadership absolutely and i mean the guy started it because he was unable to ask girls if they were single and on a date i mean that was this excuse to be a good motivator that could be a good i mean it does i mean the motivation of 18 19 year old manners yeah pretty clear um he was just trying he had no game he had no game and he needed to know who was single so he could you know at least have a shot at getting creepy hello creepy yeah you know he he i think was so obsessed with engagement and winning and he's he's kind of like one of those friends you have who's just really good at playing a video game but maybe doesn't see the bigger picture in life and um i mean there's a reason why everybody who worked for him hates him and doesn't talk to him anymore and then actively derides them like so many this the people who sold whatsapp to him then backed other projects like telegram and said horrible things about him on the way out these are the people he made billionaires um and they really don't like him uh so i think there is something that he does that does not breed loyalty but he's very successful in his focus which is growth is all that matters he's a marauder and taking friction out of products and processes is the playbook of silicon valley for the last decade or two so whatever the friction poetry what you're saying right outside you're speaking so fast that i almost forget that you're you're dropping bombs but so removing the removing friction and you're saying facebook is exceptionally good he was the best at it i mean at uber they were like we're going to take out tipping we're going to take out the need for you to take out your credit card and do payment it's just going to be in your wallet you got picked up you leave that's it and i was like we should have tipping and they're like it adds a step and we're trying to have no steps you put your address in you click the button and you do nothing else and so we've been obsessed here in silicon valley is how many clicks can we take out of the process i guess amazon is incredible at that as well absolutely one click was the start of it and then you look at clubhouse as an example you open clubhouse and you see rooms you click on it you're listening so in one click you're listening and then in one click if you raise your hand you get invited and you say yes you're speaking so it's two clicks to speak one click to listen i mean the only way they could make that app work even faster is if you opened it up and your microphone was turned on and you which is yeah that's kind of scary but that is the next evolution and what happens when you go that fast is you get unintended consequences and so one this is why facebook has had more fines than any company in the history of silicon valley just giant fines for doing stuff like this and one of them was i don't know if you remember when they created groups or if you have a group for your podcast but you know you can just add people to a group without their permission and there was this famous case when they first came out with it um somebody created a nambla fake group national man love boy association or whatever like pedophilia association and they added zuckerberg mike arrington myself and like 20 other famous people in silicon valley and i was like and then somebody takes a screenshot of it and they're like you're right and i'm like no facebook last year and then zuckerberg's response was well if your friends put you in that namla group you should get new friends and it was like you got put in there too yeah and then the sad part about it was there were a group of young men who were gay and who were in college and there was a gay choir in their college and the person who was coordinating their facebook group added them yeah so zuckerberg it wasn't enough for zuckerberg to make it so anybody could add anybody to any group because it will grow faster let alone you have to confirm you want to be added to the group what it also did was posted it on their walls to increase engagement and what they inadvertently did was they outed a bunch of 18 19 year olds in college to their families because they joined the gay men's choir at some college and this is the kind of way you know this is where silicon valley needs to check itself and to do better is you have to really think well there is my incentive to grow faster and then there's what's right for society and for the individual you got to think it through think it through it's sometimes very difficult this is where vision is required to anticipate the uh unintended consequences and let's see it seems like mark zuckerberg is not very good at that i you've talked to so many great leaders in this world privately and and publicly what do you think makes a great leader of these tech companies is uh do you have an exam like is elon to you a great leader he's also a controversial one right there's yeah there's a love and hate controversial in the sense that there is and i know a lot of people work with him for him that there's also a love hate uh relationship the the hate comes from the fact that they get pushed extremely hard it's a it's a very competitive environment but it's a positive one because it's on there's a vision that's underlying it's similar to the steve jobs thing and it has to do with the back to our michael jordan discussion as well that there seems to be this the demons involved in tension and just and yeah anxiety all those kinds of things if you want to do great things um there will be some suffering and you know there'll be some pain and it's not easy if you want to change the world and then some people have this expectation that it's going to be easy and what you'll typically find for any great leader who's trying to do something super ambitious like if you want to be like if you're a rich guy and you start like a restaurant and you don't care about making money and people have made restaurants before like you could be high fives and everybody could love you or whatever but if you want to change the world you want to do something hard driving there's going to be sacrifice involved and so the problem is people are looking at something that is an olympic caliber sport or a navy seals like effort in other words an effort that requires massive sacrifice we would not look at somebody who wins a gold medal like michael phelps and say oh my god he had to get up at 4 a.m every day and he had to swim and he had to do an ice bath yeah oh my god that poor guy he suffered he was tortured he people were super mean to him they put him in an ice bath it was like no he wanted to be the greatest swimmer of all time and he knew what the sacrifice entailed and then what happens in work in business is that people conflate like oh well i went to work to make a living to pay my bills versus michael phelps approach to getting gold medals or michael jordan or pick the person elon or jeff bezos and when you look at the reviews of like a place like amazon there was this incredible story in the new york times where people were i don't know if you remember it this is the worst place you could ever work amazon and they we talked to 200 people and they all told us they all described for us in the new york times a culture of cutthroatness and brutality that has never before been seen and then you see all these people who work for bezos for 24 years from when they graduated with their mbas until today yeah and they've never left the company and they are ride or die forever and what you're seeing there is there's a mismatch of people going to work in an extreme pla sport or an extreme endeavor who should not do that there are people yes who should go out into the rice fields and pick rice yeah and then there's another group of people who are samurai and who wield a sword and who take on missions that are dangerous but if you're a rice picker and that's what you do and you feel safe just you know getting a couple grains of rice put them in a basket cleaning it and then you know whatever that that's valid work no big deal i'm not deriding it i'm sort of but that is one group and then there's people who are samurai and you can you cannot conflate the two you cannot compare the two and that's what is happening right now in business whenever you see these stories about this person at this company is like a tyrant and they're so horrible and they yelled at somebody like if you're in the field and you're taking the beach at normandy and it's d-day or you know you got to take the hill or you got to whack osama bin laden and you're the navy seals and like a rudder a rotor gets knocked off the back of the blackhawk like this is serious shit like don't do it if you're not serious yeah and if you're not serious about changing the world why would you go work for bezos why would you go work for elon musk don't do it don't go work there this is this is uh let me just sit back and enjoy the beauty of uh i mean it's all of that that's music to my ears but i'm not sure what to do with it because ah it com it's conflicting to a lot of things i hear from the way you're supposed to kind of act in uh i think in order to do great things you have to i always admired people that lose their shit a little bit because they're so passionate yeah and and like you know you know and apologize and all those kinds of things but like there's a tension there's a drama to the creative process when especially in the early startup you know you're not this is not like the work-life balance idea it doesn't even apply work-life balance it's ridiculous a ridiculous concept like the idea that there's like work-life balance in a startup is ridiculous if you're looking for work-life balance do not go to a startup or any kind of ambitious company there is a series of places you can work in the world yes where you do not need to do anything more than what's put in front of you and you just put the round peg in the round hole in the square peg in the square hole pole and you go home and you get your like you know you get your little you know bits and grains of rice and you go heat them up and eat them that's it there's this other thing which is the extreme pursuit of changing the world and sacrificing and we have a generation of people multi generations of people who are soft they're just soft i mean what is the big struggle we've had to deal with in america in our lifetimes like 9 11 and we didn't have the vietnam war and then we had this like weird iraq wars and middle east wars that were kind of like a small number of people went and we sent drones like we have not had to sacrifice gen xers you know maybe the talented boomers experienced the vietnam war regrettably but you know we've had a couple of generations now three i guess that just haven't had to suffer yeah and so we're soft as americans we're soft and then you look at people in china and we're like oh my god these poor chinese people are living in these tiny cramped apartments like they were living in like essentially lean to's in northern china with no running water or like one spigot of ice cold water for the entire village like they're thrilled to be joining the middle class even if it's the bottom of the middle class right they've taken hundreds of millions of people in china and moved them into the middle class and we're like oh my god these people are suffering it's like you know they're up to four dollars an hour three or four dollars an hour in the factories there and they were just two decades ago at you know i don't know it was probably 50 cents an hour something crazy like that and now they've improved the quality of life there so much just like america did 200 years ago or 100 years ago they've improved it so much in china that now they're getting out price for factories from vietnam sri lanka pakistan india and people are moving and people in china are moving the factories out of china into other countries yeah because the chinese are now outsourcing to vietnam and other countries so this is the way of the world you know people move up and they get a better lot in life for their families and just in america we've gotten soft and there's a generation how do people die in america now suicide obesity heart attacks anxiety i mean we're suffering from things that if you told people 100 years ago that the number the top ways americans would die would be overeating and suicide they'd be like what you're literally killing yourself or eating yourself to death that's what's happening in america and and when everybody not everybody uh unmasked there's a large number of people who become softer and softer uh capitalism creates an environment where there is people that still step up amidst that with a big dream and challenge the conventions that human spirit just to rise above that as elon's example that uh jeff based as an example countless examples and and they push you know the limits of those of human beings that are willing to step up and you know i i you know i think about sort of how to create a company that uh that emits all of the softness yeah still creates a revolution it's not it doesn't seem trivial it seems like how do you build a culture that's once healthy but also unhealthy in the way that it's all the olympic pursuit is it's all top down everybody just you asked earlier what leadership was and i never answered the question i think you know what leaders do is they set the example they set the bar and if you look at someone like elon you know we're personal friends for 20 years um and he is into fatigable like i mean the guy has a stamina that is just phenomenal like he does not get tired he works relentlessly and he sets that standard for the rest of the team and and i i think you know bezos is very sharp and likes to debate stuff and is very con you know and jobs was just incredible at design and figuring out how to bridge that gap so they just leaders set the standard they set the standard and you know that your time is over as a leader when you can't set the standard and that's when you have to pass the baton right and bezos did that brilliant and bezos now is saying you know what i'm 57 i'm the richest guy on the planet uh depending on the week and uh i would like to do some other challenges but i don't want to grind it out at amazon for another 25 years i want to do other things and so he passed the baton and that's the healthy thing to do in that regard i do think there is a time period in which you can run that hot and then at a certain point you have to then change just like an athlete might go to be a coach right and you or a commentator and so you know being an entrepreneur is brutal it's you know seven days a week 12 hours a day anybody who says anything differently is kidding themselves you're going to have to sacrifice if you and this competition and america has to fight if america does not win capitalism and china does it is literally the end of the human species it's it's over for humanity right now everything has been going really well in terms of the number of people living in poverty is plummeting a life uh you know lifespans have been rising science is booming the economy is booming all these things are incredible the one thing that's kind of stagnant right now is the number of people living in democracy versus under authoritarian rule it's flat so when you look at all steve pinker's charts and he's really excited yeah there's one you're going to see that's flat and i think we peaked with 53 or 54 percent of people on the planet earth being in a democracy and now it's going below 50. and it's because some of the democratic you know western countries don't have the population growth of some of the communist and socialist countries uh in authoritarian countries and we have to make sure that we're pa we win capitalism we must win economically that is the battlefield the battlefield the science technology and money and economy finance that's the battlefield china wins authoritarians win and at any time xi jinping can pull jack ma into a room and say it's time for you to be re-educated or they can put three or four million people uyghurs into prison camps and say you know what this religious thing that's counter to what is productive for us therefore we're going to shave your heads and we're going to have you literally pick cotton in the fields they have uyghurs with no sense of any kind of arc of history in the fields picking cottons as slaves in what can only be described by every humanitarian organization as a concentration camp and every jewish person i know takes great offense when somebody uses the holocaust as a metaphor except in the case of the uyghurs right now and every jewish person i've talked to has said to me that is a holocaust that is millions of people going to genocide because of their religious beliefs and i'm an atheist but if people want to believe a certain religion fine but you know china's approach is we need to win capitalism so bad we need to win on the global stage so bad we can't have any of this religious stuff going on here that is a distraction from winning and beating america and then in america the people who are going to make us win are the entrepreneurs and the scientists and the technology and our education system and finance and we're vilifying those things so it's pretty dark it's dark but i i still believe that the uh the vilification is just in the space of twitter and the space of ideas i think that's probably good and entrepreneurs win out in the end they they don't listen i believe in that and they'll build we'll get the right some of them do actually in their darkest moments i can tell you that they turn off their twitter accounts and they i've had to sit down with a number of entrepreneurs and say turn off twitter this is not healthy for you this is not a healthy pursuit because don't read the comments if you do it's like a full contact sport you should just take it as like professional wrestling or something but stay focused on building companies and you know advancing the human species through science and technology i mean as you're describing you've hosted uh this week in startups for uh how many episodes 11 years almost 1200 now 1200. yeah so you've talked to some of the great leaders in business saying general is there a common thing that you see or uh really relationship with their parents like just find me a great entrepreneur i will show me the trauma their dad was like you're not good enough in the teenage years is that is that truly is there something there is definitely something hardship of at some point in the life yeah i think so i mean and there's definitely something uh with immigrant parents um that is a a bit of a stereotype out here but i've heard from many investors like that's like their oh did you were your parents immigrants and that they beat into you that you have to succeed and you feel the need to succeed because they suffered to get you to this country like there is an archetype there that i hear when i started investing i heard from a lot of people was like yeah you want to find those immigrant founders who are coming out of stanford because they had to fight to get there and their parents had to fight right so it's like two huge fights and there's so much at stake as opposed to somebody who's fifth generation and like had everything handed to them and they were legacy and got into schools for free but i think in general the ability to get people to join you on that journey yes is so critical so you have to be charismatic and it doesn't mean like you're an extrovert there are introverts who are super charismatic uh and there are soft spoken people they don't have to be like super vivacious or rambunctious people they could be just quiet assassins but you need to be able to get people to come on the journey with you you have to be that storyteller and you have to have that passion and you have to transfer that enthusiasm to investors the press to customers to all the stakeholders and if you're enthusiastic about it and you're engaged then it's easier for people to come on that journey yeah and that's why people really start to think about what is the purpose of what i'm doing and it sounds corny and i when i first heard that i was like it's kind of corny but then i read this book by i've got his name rick something um he wrote the purpose driven church and he had spoken out of ted or something and everybody went crazy about it and he's like a church should have one purpose one single thing they do and like his church which was like one of these mega churches in san diego just wanted to do education for this specific country and that's all they did and they just they benchmark those i think it's very important to have a purpose and a mission not everything uh but you know a specific purpose of some kind of joy that you want to put into the world you want to solve some kind of big hard problem and then everybody knows why you're coming to work every day and then for the founder when you dread going to work that day and you don't feel like solving that problem anymore that's the that's the tell and a lot of times i meet young founders i'm like why are you doing this and they're like well i was looking for an idea and this is the one i came up with because i think i'll make a lot of money and it's like you're going to quit you're going to get to month 9 or 10 of this and you're going to run out of money or like your cto is going to quit then your cfo is going to quit and you're going to lose your biggest customer and you're just going to say this is not worth it you know and if you know using you know bezos or um you know ilana's examples they they just needed to see this the world change first in very specific ways and steve jobs you know they needed to see a change and it doesn't matter if they made money or they were losing or winning they just went to work every day and they had to change it it's almost like they didn't have a choice no choice you know that makes it sound like his torture his whole journey but he can't help but having been a witness to it um you know just as friends for for that long i have never seen an entrepreneur suffer more than him and uh you know he's been public about that like you do not want to be me um he has suffered to for those companies he has suffered to get them where they are it has not been easy can you analyze elon in that aspect like is there is it just he can't help but he must see the change that he uh hopes for in the world he's just incredibly hard working and uh he's very talented as well uh and i don't think people understand that he actually is a really brilliant engineer at the end of the day he actually knows what he's doing um and he asked the right questions i mean people were kind of aghast that he was asking vlad such good questions and they're like oh my god elon's the best journalist on the planet and it was like that's what he's anybody who knows elon knows he has great questions i mean i've been i used to have dinner in la and my book agent also was sam harris's agent sam and i met um through john brockman and we became friends because we lived near each other and i was friends with elon and then i used to invite them to both dinner in brentwood because one lived in bel air one lived in santa monica and i lived in brentwood and we go to this place popone this italian restaurant and every tuesday for years we would just the three of us every other tuesday or so we'd have dinner and uh i'd sit there and sam wanted to know about ai and elon's talking about artificial intelligence because he's on the board of deep mind and elon wanted to know about atheism and meditation and all this other stuff that uh you know sam was an expert on i got to sit there and like just listen to these two guys and they have both piercing intelligences but elon he goes straight to the to the gut like the the the questions that no engineer wants to hear it's like just the basic stuff that like why the hell are you doing it this way yeah when the obvious solution is like much easier or or this or that like why haven't you tried this you can figure things out i mean he's a problem solver i mean and that's another thing like that i think the great entrepreneurs can look at a problem with very fresh eyes like almost consistently and bezos described that as day one thinking right like just pretend this is day one every day yeah um and then other people use the term first principles yeah but it basically means like when you see a problem pause for a second and really think through what is the best possible solution here what are some alternative solutions and get from everybody like how do we solve this problem what people do sometimes they get in a rut they just come to work and they just go through their email they do whatever they did the day before they don't think why are we doing this yes and is there a better way to do it now you can get so obsessive about that that you can over engineer stuff and you can never actually ship a product so there have to be some pragmatism and some goals and some dates associated with that but it is a very cool thing to really think like i wonder if we actually made the batteries ourselves what that would look like or i wonder if we could get to two-day shipping you know or i wonder if we could do same-day shipping like you need to have somebody who's willing to say you know what fuck it let's set a crazy audacious goal uh two-day shipping of any product anywhere in the united states and once you throw the gauntlet down like that now everybody knows they're rolling in the right direction two-day shipping amazon prime and that's what people didn't realize about amazon the business wasn't the shipping of those products it was getting you to sign up for amazon prime they have you know hundreds of millions of people doing amazon prime for 10 bucks a month i think globally it's probably cheaper but that was the driver of that business was all of those people because they would you're an amazon prime subscriber do you know how much you pay no exactly it started at 50 and i think they even had like 40 50 60 was like the testing in the early days and now it's i think 149.12 wow 13 a month if you pay for the year i think it goes down to 10 bucks a month 120. and you're like wow and it's like yeah you're paying 13 a month for the privilege of shopping at amazon yeah but you wouldn't you say it's the greatest thing in the world because anything i need you know if you forgot a microphone or a cable goes better a camera goes bad you get it here you know within a day or less yeah it's pretty amazing you've already been dropping bombs incredible advice on startups in general but let me maybe uh go straight in and ask is there advice for somebody that wants to go big to build the big startup to help them succeed yeah it's very similar to the advice i give to investors because now i i teach angel investing because so many people want to invest and so i wrote a book on that angel and then i do a course called angel university that i teach six times a year and then i have a syndicate called the syndicate.com where i invest in companies there's 6 500 people who are members of that it's the largest syndicate in the world in fact the first deal we ever did was com.com the meditation app we put 378 thousand dollars into it when it was a 5 million dollar product a 5 million company so we bought 6 or 7 of the company it's now worth 2 billion so you can do the math on that we still own 5 percent what year was it uh six years ago so probably seven yeah maybe 2015 uh 2014 and nobody else would invest in calm yeah but sam harris was the reason i did because i asked sam tell me about meditation and he's explaining it to me and i said what about this like do you have to have like a mantra how does it work exactly i know possibilities like well you know you should just go to ucla and talk to diana winston and like there's this whole project there and i'm like ucla does meditation it's like yeah there's a mindful institute there like teaching people to be tahiti meditation and they're doing ptsd and i'm doing brain scans and i was like oh and then i talked to the ucla people and they're like it's real yeah like we we taught phil jackson and kobe bryant and shaquille o'neal did you know that's how they won their championships they meditated and i was like hmm if ucla is doing it sam says it's cool well fuck it i'll put money into that and that's the second biggest investment in my career after uber and it will in all likelihood become the biggest i mean it's between uber robin hood and calm and long story short when i'm teaching people to angel invest there's really two things that you cannot cannot fake one is a product that is built really well so if you look at com robin hood uber tesla amazon these products are transcendent they're well constructed there's craftsmanship to them they're they're great products so you're saying not fundamentally like the idea but the execution of the actual of the construction the actual product is amazing then um there's customers and that every business has ultimately a customer and that customer if they are in fact delighted by that product that's the magic because you need a team to build the product and then you need customers to use the product and really those three vectors are undeniable now you can have great teams that build a bad product doesn't happen too often um or you have customers who don't like the product but generally speaking a great team will build a great product or a good product and iterate and then eventually delight customers and so most people say the team is the most important but there's a lot of smart people out there and let's assume that you can have you can raise money for your idea or you have money or you can just convince people to do it for free if you make a great product and it connects with users that's the magic you look at clubhouse it's actually a really well designed product and that product is connecting with customers and if you were to talk to the customers or look at the product you would see a well-constructed product and a delighted customer and you can tell the delighted customer by just the amount of time they use it that's called engagement just a fancy word for how much they use it and snapchat when that was going around and they were trying to raise money they had a fraction of the number of users but the top maybe third were opening the app every hour and that nobody had ever seen that before people were using facebook you know a couple times a day the top users but nobody had ever seen people using it every day for a hundred days in a row every hour and i was like what's going on here it's like oh the ephemeral messaging and then the streaks they had created these streaks between people where you know every day and then people would be like on vacation like i just have to open my streak and keep my street with lex that we chatted every day going and so they had this like addictive nature to it and that's why clubhouse was able to garner so much investment is the number of hours people were using it every month uh was just unbelievably off the charts some of that is execution but some of it is the weird little magic of the product market fit yeah so there's something i mean clubhouse there's a it's still a mystery to me because i also use discord voice there's an intimacy to voice oh for sure you have people's yeah tent well but like the video gets in the way actually in a weird way there's a privacy when you just use voice people are not taking showers now lex i mean yeah this is a pandemic and people just roll out of bed and the hair thing nobody's getting it nobody's hair is good nobody's getting haircuts people are wearing gym clothes i mean zoom is just horrific to be on zoom for five hours a day it is exhausting well it does make me wonder what the what uh once when we emerge from the pandemic or their uh pr product market fit how that evolves with the uh with clubhouse and all those kinds of things yeah i know clubhouse is a beneficiary of the pandemic for sure when do you think uh depend when do you think debts will be under let's say 200 a day and we'll have 200 million people on the other side of this because that's kind of what it takes right you got to get to 150 200 million people on the other side in america i haven't you know i personally stopped deeply thinking about this because i've been frustrated for so long that you checked out i almost checked out because it uh psychologically allows me to carry on because i thought for many months now that testing needs to be done at scale and it still hasn't gotten done it has so we gave up basically and testing we gave up because we're and we're all sitting there waiting for vaccine to come along and the distribution of the vaccine is not you know it's struggling from the same kind of things as the testing it's going to take quite a bit of time so it does if everything goes great meaning there's not a second strand of the virus that's going to create a second major wave that i i'm cynical enough to think that it won't be until mid-summer that we start opening back up yeah i think it's going to be may june i'm a little bit earlier than you i've been tracking it's like 1.5 million shots at arms a day i think this vaccine has been undersold i mean it's a miracle not one person who was in the trials died who took it and only one went to the hospital and they weren't even put on a ventilator so and the hospitalizations are plummeting and we're at 10 now in the united states at the pace we're going at 1.5 a day i think when the johnson johnson one comes out next month it'll be three million a day maybe two and a half and we already have 100 million people who've likely had it so i've been doing the math i think we're like 60 days away february march yeah sometime in april i think anybody's gonna be able to get a shot and the number of deaths is going to go below 200 a day and once that happens i think people have had enough of this they're just going to go yolo i but see the the crucial piece for me that i've been focusing on is the the social media aspect of how the it's not just about the reality of deaths it's about the state of the uh collective intelligence of the human species which is determined by our communication on social media so we could yeah we can be collectively afraid the fear can spread or it could be yolo can spread or it could be like all different kinds of misinformation and of course during the election year the politics influences our perception of what is true and not but you know having real rigorous nuanced conversation about this kind of stuff is the way is the way out of this and that's where social media really comes in because social media has drives division where the people form tribes and so on and it feels like it's honestly a technology problem you know people say it's a human problem but it just feels like i believe people are good technology can enable them to be thoughtful we talked earlier about um you know this the magic of silicon valley and then maybe going too far with the facebook groups example where you know you take out all that friction what happened was we used to have something called arcron reverse chronological order that's how you consumed a feed so any kind of social feed like twitter was in reverse chronological order the newest thing was up top and you would just work your way backwards and so it gave this a really fresh feeling and then a guy named dave morin and the team over at facebook realized you know there are some things that got a lot of attention two hours ago and the stuff since then has not been as important but if you missed that there was a really good tweet where there was a really good update like somebody had a baby let's that's kind of can we get the baby one at the top and i was like well how would we do that how would we know that that's the important one it's like well it's let's put a like button on it and let's see how many comments there are so if it gets a lot of likes or comments or retweets let's show those first and then we'll kind of mix in the most recent stuff and so when you're on twit and then when facebook did that facebook became so addicting because facebook was on what has got the most engagement put that first so every time you open up facebook get the dopamine hit and then what happens when you see the bar mitzvah photo or you know the enraging story about some injustice in the world you retweet it you write a comment you share it on your wall and thus this addiction to the outrageous the outlandish the inspiring occurred and it used to be like inspiring stuff puppies or some heartwarming story and then it got dark and then people started to realize if i want to show up on the top of my friend's feeds if i say something controversial or i'm outraged i get to the top and then that's when outrage culture came in and then that's when cancer culture came in everybody started to realize if i try to cancel that person for being a racist or a sexist or a horrible human being or whatever they did that's wrong i get to the top of the feed and we all collectively started playing a very weird video game which is how outraged can we all be and to get to the top of the list and then of course with trump he realized it he's like okay yeah i'm just gonna make fun of a celebrity and i get more retweets okay i'm gonna make fun of rosie o'donnell for being overweight or something and he just starts attacking people yeah and people like oh my god what did he say and he copied that from howard stern because he was in new york and he used to be on howard stern and howard stern took over all the dialogue in the 80s and 90s because he was outrageous and then trump did that and then social media incorporated that into the operating system it became the actual device of social media was the ding ding ding ding we've got something incredible for you everybody salivates like pavlov's dog you know oh my god i can be outraged that's what's got to be undone and the only way for that to be undone is these things can't be billions of people where uh the most outrageous thing that happened in the world today in the last five minutes is now in front of you and that's why people have anxiety they don't sleep and they do scroll all night it's because the human mind was not meant to process this much suffering pain anger and that's why we have all this mental health issues also you know young girls or even adults watching other people post their private jets and their vacations and you know yolo adventures on their instagram to the point at which young people are now faking being on private jets to put on their instagram and creating like this crazy fomo around their instagrams like now we wonder why people are unhappy like if you think everybody's on a private jet going to some michelin star restaurant or whatever the coolest thing in the world is today yeah like going to the grammys going to whatever coachella burning man like you're like oh but i'm home i'm in my house yeah and i'm not at burning man getting inadequate exactly so this whole system is is uh creating the wrong set of incentives i tend to believe it's possible to still have extremely high engagement and create a successful profitable business while encouraging personal growth like encouraging people to be the best version of themselves i just think we haven't we got the first generation of social networks i think a new generation needs to absolutely is that your plan for a business to do so well i have a longer-term plan in terms of ambition which is uh i believe in being able to have deep connection between human and ai systems like partners friends there is a connection to their with social media i do think ai ai has a strong role to play in representing us in guiding us in how we consume social media so this algorithm that controls the feed for facebook is a somewhat centralized algorithm but instead to give more power to the people individuals to where each one of us have our own algorithm bring it together making your own ioa byo well i mean if you thought about it if we came and said i want when i look at my twitter feed i would like to see the people with who are the most helpful in the world generous kind intelligent considered you know commenting on things that i don't already know about because i want to open my world view that could be a beautiful thing for society and actually jack was talking about potentially on twitter letting people bring their own algorithms and sort their feeds themselves this would be a wonderful thing i think it's one of the reasons clubhouse has resonated is it's such a diverse group of people that i've been able to drop in on conversations with people who are nothing like me yes and listen in and and hear conversations that i wouldn't normally be privy to and i my everybody's like oh come join as a speaker i want to do a room with you i get asked every day can we do a room can we do a room ask an angel investor talk about startups and i'm like my usage of clubhouse is going on my peloton treadmill putting clubhouse on taking a room and just listening yeah it's so delightful for me as a podcaster where my job is to talk to sit back and just put in a couple of miles and play chess and listen to a clubhouse discussion that is about relationships and or you know some fashion or hip-hop or whatever it is that i'm not part of i just sit there and i listen and you learn it's like such a delightful thing i always think about these kids to go to college and always been so jealous of these ivy league kids they go and they're like i gotta go to class and i'm like i would just love to sit there and listen to professor lex talked yeah you know like what a privilege to sit there and let somebody else drive and talk and listen and learn yeah that's the beauty of podcasting but of course clubhouse creates a whole nother experience where it's conversations is different i think it's gonna be the in-between i i like it as a you release your podcast like you and i are gonna release this podcast right and then at some point i'll have you on my pod when you launch your startup and then some point somebody's gonna be like uh you and i were running and i ran into you i saw you were on clubhouse the other night and i i was busy but i was almost going to click on you and say let's start a room together but you and i will start a room together with eric weinstein or somebody or sam harris will jump in or ela and we'll have a different experience which will just shoot the shit and it'll act as like a fabric uh and a little filler between the tent pole podcasts right like you and eric you've done three i think with eric yeah was your four yeah i haven't released the fourth year okay so i i watched all three uh because i i really thought your you way and him like giving you advice is very interesting dynamic i thought it was a very interesting dynamic um and i find him like a fascinating cat we know everybody in common except we've never met it's very weird because you know you you think about the social graph in the real world this is why i think augmented reality is going to be such an amazing product i just have one killer feature i want for augmented reality we wear our glasses and when i look at you above your head i see the relationships we have and the things we've done together yes right so i see oh you both know sam harris or you had elon on the podcast on this date or you and i were both at burning man in 2006 the most meaningful element of our connection network yeah and then because we would discover that through small talk but imagine you're like at a party and you look and it just people glow and you just see a glow around a person and like green means you have some financial relationship blue means you have some friendship one yeah or yellow means you have friendship one blue means you know nothing about each other you have no connections you're like wow these blue people have no connection to yeah these people that one's glowing red we know seven or more people in common yeah and those are the seven people oh we should go talk about how we know each other yeah that could and that sort of happened with facebook remember or myspace where you were like oh you know that person friend of a friend yeah but that's what there's going to be ars like this is why i think if apple figures out ar or snapchat and they just have those glasses you know forget about vr it's just nauseating and whatever but ar where you put the glasses on you see the real world but you augmented well you make uh just like you were saying you make it frictionless a very low friction to make a deep human connection because you you have all the basic elements there already now think about the unintended consequences of what i just described it could get creepy and weird the privacy thing yeah i mean people will opt here's the thing people your privacy is an illusion like all this information is there and then people are more than willing to give up privacy in exchange for some value you know it's a value trade yeah and giving if if my tesla when i'm driving in the direction of my house just starts the navigation and saves me three clicks and that friction's gone i'm willing to give tesla my location and my home address right yeah i'm not willing to give zuckerberg anything i don't trust him but you get the idea i mean it will be that way with like dna and other things at some point we'll just be like yeah just take my dna like i don't yeah sure people can look and see that i'm a mental midget and my iq is like lower than i don't want to bring the bell curve up or whatever but but you could you could figure out like if we all put our dna in the sequence online and like oh yeah you know lex has got 10 more iq points than j-cal and yeah you know sam's got 10 more than lex and all of a sudden people are like all bent out of shape about it but what if they we did that and they were like and by the way you also all three of you are gonna get parkinson's unless you do x y and z yeah unless you eat more blueberries or whatever we figure out they're going to accept it pretty quickly yeah that's brave new world brave new world i i have to ask you you're just like you were saying you're one of the world experts in investing in in uh instruments in startups uh yeah uh the vc and so on from the perspective of the startup i was always kind of skeptical of raising money it feels like people do it too quickly too easily but i don't know what the hell i'm talking about when is the when should a startup raise money and from the perspective of the investor when should the investor invest in a startup like is there a timing thing here is there um what yeah it's a it's a very important question because the venture capital community is only going to fund you know sub one percent of enterprises started in the in the united states every year like maybe 10 basis points of them like one in a thousand and the reason is it's jet fuel you only want to take that money if you really want to build something big and you want to build it fast and when you put jet fuel behind a startup as we've seen with other rockets things can blow up and people can die you know it's not people literally dying but the business can go up in smoke right like rockets get blown up all the time at spacex as part of their ambitious plans and startups seven out of ten startups we invest in go to zero now if you were to start the business and only build it off customer revenue and use your own money and go nice and slow and grow ten percent a year the chances of you blowing up the rocket are very low because you're riding a bicycle you can go a little faster but the bicycle can only go so fast and once you start taking that money the way the portfol the way venture capital is constructed as a um in the mix of like mit or harvard's endowments is you know we're gonna put some money into uh safe things and then we're gonna have these really binary things over here and they probably put five percent uh in venture capital traditionally it's grown to twenty percent just as a function of how successful it's been so you know the harvards of the world and mit is probably one five or ten percent in venture but it's grown to 25 because you know companies like airbnb and uber have grown so big in tesla but the goal is in these venture funds we're going to invest in 30 names and one or two of them are going to return three times the capital we've deployed so it's a 300 million dollar fund and there's 30 names and each got 10 million that means one of the 10 million is going to return the fund plus so that means it has to grow 30x and then 60x to double the fund and you're really supposed to be doing three times cash on cash so that 300 million dollar funds the expectation is in 10 years to return 900 million triple the person's money as opposed to the stock market which doubles your money in the same period so you're supposed to do 25 percent annualized returns in order to triple the money and maybe i have an outlying chance of four or five times the money which does happen sometimes when you have an outlier in your portfolio like uber or facebook was and what that means is the venture capitalist behavior on the game they're playing is different than you as the founder you as the founder you may really care about this and it dying really matters to you and then you got a venture capitalist who's like we're betting on 30 names we need two of them to hit it out of the park maybe three and nothing else is meaningful so now you start thinking about the game theory there you're dealing with you know money that is coming in that only cares about you going 100x yes it's a whole different ball game whereas if you build off revenue you don't have to do that and if you look at a company like com.com we invested at 5 million the next round they did was 250 they were so capital efficient that they grew from 10 000 a month in revenue to millions of dollars a month in revenue over those four years since we invested and they didn't raise money in between wow it was unbelievable and i've only seen this happen three or four times so it doesn't happen all this capital efficient meaning uh based on customer revenue alone plus some small amount of fundraising you're able to go like how hard is it to do that it takes extreme product market fit you have to have a great price for your product that has a great margin um yeah and if you're doing something in hardware it's probably impossible because it's super capital intensive so it's probably got to be a software business software hardware businesses take a lot more do venture capitals get in the way at all of the business or do so it depends to get out of the way yeah if you if you get young venture capitalists who are starting their career they're very nervous and scared because they're putting all these bets yeah and then there's a very weird thing that happens the bad news comes first so yeah companies that don't work out go out of business immediately yes so if it's not going to be com or robinhood or uber those take sev you know you have a one of those great successes somewhere in your five six seven eight as an investor what is the first five years like the first five years you feel like an idiot because you let's say you make these uh 10 bets in year two two or three of them come back and they don't have product market fit and they're out of money yeah and they say can we have more money you say no we have to go get it from somebody else because you have to prove that there's still a market for it we may keep our pro rata we may put a little bit in to maintain our percentage ownership but we're not going to give you another big chunk of money yes and that company dies so now you've got 10 million poof up in smoke boom 10 million up smoke so this is called the j curve where your performance goes down and then it's only in years four five and six it starts going up and what you're seeing right now is the people who started like i did in 2000 you know just 11 12 years ago in 2009 i started investing we all look like geniuses why we're at the end of the cycle we invested after when the stock market was on the floor after the financial crisis and it's gone straight up since so everybody look there's a couple little blips in there but generally speaking there hasn't been like a major crash uh with the exception of the pandemic crash but that bounced right back and so you know it takes a decade to figure out if you're good at it and then if the market crashes again everybody feels like an in again the cycle starts again so you are now as a founder you are now inserting yourself into that casino yes and now you've got all these other forces pushing and pulling and you're growing let's say your company was growing 50 percent you feel like wow i'm successful i made a million dollars last year now i'm doing a million and a half and and the first thing that vc's going to say is how do we triple we're we're growing too slow see but that's like you said that beautifully uh is a rocket fuel it's uh in in the sense it's a kind of motivation it's a drive i mean it's a positive so if you want that yes if you want that if you want that if you want to go to navy seal school you're going to be in pain and they're going to put that hose in your face while you're underwater with your hands tied behind your back in the pool and you're gonna be choking and you may have to do cpr and you in like every couple of years tragically somebody dies in navy sales school yeah well it doesn't mean we're getting rid of the navy seals rocky if he dies he dies i don't know if you know what david goggins is by any chance i do i mean i don't know him personally but oh my lord so i'm i'm running 48 miles together with him in person in a month you're doing an ultra marathon with him and probably other stuff because he enjoys just breaking people making them cry so my god i'm so jelly so you know i well i offered we we agreed a while ago to do a podcast and he's like oh yeah come we'll do it this day and this is all the bay area uh i don't know where the hell he is but we're doing it and uh i don't think i'm supposed to say where it is it's not anywhere close to anywhere it's in the middle of nowhere but he seems to be in a bunch of different locations like he he's uh in oregon or something like that like what does he do for outside of writing books and being inspirational does he actually train people or like no no he's doing just he's a full-time insane like he fights forest fires like for a few months a year wow as a farmer like unpaid labor like he you know there's a bunch of people who are like him like navy seals and so on that kind of make a career out of motivational speak and all that yeah he's not interested in any of that he's literally interested in uh just doing hard shit all the time breaking himself breaking himself he seems like he wants to break himself and that that book is amazing and the audiobook's amazing when he's talking about how fat he was and how he just had to go and keep running and his like legs are broken and he's just super pain and he just goes through it it's really inspiring thing also are you going to videotape yourself doing this yeah i can't wait to see you get destroyed yeah well this guy is so entertaining for the lex audience the pain uh but the other inspiring thing is he's happily married oh good and there's a partnership there that's you know everybody finds a um this attention as a push and pull that's beautiful i think uh but and speaking of uh beautiful push and pull uh how about that transition yeah here we go uh you're in chemat uh on uh he's a friend of yours bessie besties yeah yeah good friend i mean he's there's very few people in my life him elon david sacks john brockman's very few people have supported me as much as those folks you know i'm a huge debt so he's also a co-host on the all in podcast we taped episode 21 today oh today every friday now they want to do every friday they're addicted like me and you are the podcast so you're going to release it when it's probably released as we're sitting here that's okay beautiful yeah i can't special guest on it we had draymond green from the warriors phone in so we had our first guest awesome yeah so it's really funny because he plays poker with us and we're all besties so yeah beautiful so uh you guys went pretty heated uh yesterday against each other versus rob uh on robinhood yes maybe uh there's just two things i want to ask first on the actual robinhood discussion and the wall street best discussion can you steal manna's argument what was the nature of the disagreement where so where yeah what what is the littlest because i don't think it's as big as spaces it came off as sounding what is the nature of the disagreement he felt that robin hood turned off trading because the hedge funds told them to and that they were bowing down to the pressure of the hedge funds that's not true but in a vacuum of information you know what happens to people's minds conspiracy theories abound and sometimes there is a conspiracy theory and sometimes there's just the appearance of impropriety or a bunch of related things like when you look at the trump situation with russia like was trump trying to coordinate with russia or were the russians just screwing with a bunch of like neophyte idiotic dipshits like you know donald trump jr who don't know any better and they don't know that you shouldn't meet with the russians and if you do meet with the russians you are probably a useful idiot you probably should tell the fbi like they're just a bunch of idiots in all likelihood who knows and it's a vacuum of information and there's a vacuum of information we don't know and the russians are trying to compromise everybody so would you call it a conspiracy or would you call it an attempted you know uh conspiracy there was no conspiracy here what it was was robin hood needed to raise billions of dollars to say solvent in all likelihood uh and they weren't allowed to talk about it so they were forced into not talking about it in all likelihood and had to come up with that money or shut down and then what got me upset with chamoth and we had a talk afterwards that people don't know about i'll talk about it here for the first time on sunday we had to have a little we had to air it out yeah in the episode after you guys sound like you've had a private you made up we had a private discussion just one on one and we said listen we love each other we're besties we've always been there for each other what happened here and what happened there is i'm fiercely loyal to my folks whether it's chamath or travis from uber or sax or whoever i'm just a loyal guy yes and i'm always ride or die with my founders if i invest in them even if they make a mistake and uber made plenty of mistakes i always went on cnbc on my podcast and said hey we're going to fix these things i'm in touch with the team mistakes were made we're going to solve them this is a group of people with great intent who want to make the world a better place and you know what i was hated for for a period of time with uber i was hated for it last week with robin hood i got a lot of blow back but i think in both of those cases eventually i was right uber's doing great stuff in the world robin hood's doing great stuff in the world and i like to be loyal to my investments and my partners to to just i feel like if you invest and you're on the team you know you have really three choices you can either fight for your team you can go silent uh or you can throw your team under the bus and i've watched investors throw the team that they invested in that made them a bunch of money under the bus not acceptable to me and being quiet it's not acceptable to me so i always ask the founder do you want me to is it okay if i go out and defend you publicly if they say yes i do it and then beautiful by the way because what else do we have in this world if not friendship it's loyalty means everything i grew up in brooklyn where if you were not loyal and you you know and you were not loyal to your crew then you were a ronin you were you know out there on your own flailing in the you know trust me you do not want to be on your own in 1970s 80s brooklyn manhattan like you need to have a crew with you i've gotten into you know you don't want to get into a fight with 10 guys and be alone or just be with you you need a crew to survive so i just learned or earlier my dad who owned a bar um just drilled into me being loyal and so for whatever reason i'm a bulldog when it comes to loyalty and chamoth came out and said you know these guys need to go to jail and they're scumbags and i and i'm trying to defend them and i'm in a position where i can't defend them because i don't have complete information there is no complete information it's in the heat of the moment and then it becomes the number one story yeah and it's my number three investment yeah and chamath has a competing company sophie yeah and he's killing my guys and then i started killing his guys yes and then all of a sudden we're like wait a second we're best friends yes and we're swinging our swords at each other and we're a group of the seven samurai who fight together when did we turn on each other and then everybody else who's on the pod the two davids who you know both on the spectrum a bit like a little aspergers or whatever no effects left none taken i'm not saying you know yeah there is a yeah if you're into a.i you know you might be somewhere not a coincidence yeah might not be coincidence anyway we upgraded the two david's firmware we're going to upgrade your firmware after this i'll give you yeah you haven't you're on the 1.5 you have the three emotions now or should we add fourth no you want to go with joy yeah i'm going to play 2.0 or you're the 2.0 you got the joy yeah how's it working difficult it's difficult you'll get there just let it happen lex just let the let the joy happen so anyway we just talked about it offline and we decided like listen we didn't pre-game that episode and i would happen to be skiing with my family i had taken the first like vacation since goddamn pandemic started and i was having a wonderful time and then this whole thing blows up i'm coming off the mountain just you know having a great time with my daughter skiing and you know and then i'm mixing it up with him and you know he had a short fuse about it because he was triggered he told me because he really feels like he's fighting to defend you know the everyman and i was like that's what my team's doing that's why they named the company robin hood yeah we're on the same side here and then over time we've started to see the explanation come out and you know people who are friends are going to have disagreements in the podcast it happened to happen very publicly and we didn't know it was going to become the number one story in the world if trump still had his twitter handle this would not have been a story trump would have said something about gamestop and he would have co-opted the entire conversation so in a way going back to our censorship discussion i might actually be in favor of trump being censored only because only because how delightful has it been since january 20th that we can all focus on something other than him yeah he was exhausting i mean the amount of cycles he took on our processors and now this is a little bit more of a distributed like this yeah everybody gets a chance to be the number one news story everybody gets a chance to discuss it but so on a scale of one to ten how much do you love uh chamath oh it's eleven i mean i love chamoth i mean we played cards last night we're besties and you know i would i would i would literally jump in front of a bullet for him i mean what's the lesson in that discussion because it was super i wouldn't i think the love was felt and the respect was felt throughout even when you guys are going pretty vicious on each other i uh is there a lesson to be learned do you regret any of that conversation i mean i think he he he told me that he regretted some things he said he said publicly on the podcast like listen i was a little hot i may have said things in the heat of the moment but i don't live with too much regret because i always think about intent it's one of the new nuance and intent have been totally lost the idea that we could have any of kind of a nuanced discussion about things seems to have been forgotten and the fact that people don't look at people's intent if you hurt somebody's feelings or you disrespect somebody or you you do something mean or whatever i always look at the intent you know and i've had people attack me and i look at the intent and i'm like that person feels bad about themselves or maybe i said something and i insulted them and that's why their blowbacks there so i was trying to think what's the intent of the person and then almost universally you talk to somebody and you find out you ascribe some crazy intent that's not there and they're like oh yeah you know what happened i got in a fight with my spouse and i didn't sleep last night and i've had a lot of anxiety about my business and i i just snapped and said something about you and it's like oh okay like i literally had somebody on twitter um this past summer i had said something um i was complaining about a new york times journalist uh and something i thought was wrong and this person was a fan of that journalist and they went i kid you not onto my social media account found a picture i'd taken about the how blue the sky was one day they reverse image search the tree line found the tree line on google image or somehow the reverse image search found a an old listing that some broker had listed on their like website of my house and then posted my home address the value of my home and uh doxxed me on twitter and i'm like what is going on here so i call the person yeah and i look them up and they work in private equity in boston and i look and i'm like this person works in my july fourth week so and i when i look at the person's linkedin we have seven people in common so going back to the ar conversation we'll go yeah i'm like okay this person literally just docks me i asked him to take it down they told me they won't take it down and then i look and i so then i dm back on instagram on twitter and i said by the way your boss susan and i know seven people in common yeah and these are the seven people here's a screenshot what is she going to think when i call her on monday and you've doxed me here's my phone number if you'd like to talk he calls me i said what's going on why would you do this he's like well i'm really pissed off about what you said about this person i was like you understand i've had like two or three stalkers like anybody who's a high profile like i am like or medium profile you're gonna have weird things happen you literally put my home address you put my family at risk what if i put your home address yeah on my i have four 400 000 followers or 300 000 you have like 300. what if i post your address he said well i wish you wouldn't do that i was like well i asked you kindly to take my address down and uh i said are you married do you i said i said how old do you like 25 or something he's like no i'm 42. it's like you're 42 years old i said are you married you have kids who's like yeah i just had a baby like six months ago i'm like you're home with your wife it's july 4th weekend you're doxing jason calaganism because you're upset at me because i said something about a new york times writer he said yeah this is the biggest mistake of my life i said i tell you what let's forget it ever happened and he wrote me back and he said i just wanted to thank you for how you handled it um my wife said i'm a complete fucking moron and uh he literally said to me my wife has a complete fucking moron and i'm really sorry blah blah blah blah and i wrote her back i said i wrote him back and i said my wife says the same thing to me all the time welcome to the club it's totally fine this this this the intent nuance it matters right and the person could be having a bad day and they do something stupid they regret and what am i gonna do cancel the guy or if i had called his boss he would have been fired immediately yeah and then i got to live with this guy got fired and he's a got a kid and what is this personal destruction why are we doing this to each other life's hard enough yeah life's hard right like just getting through the days hard yeah and and that little bit of empathy uh thinking about the intent of the person allows you to then sort of de-escalate this kind of conversation that social media wants to escalate yes so social media what we were saying yeah if if this in in my younger years i would have retweeted the guy's homepage and my address and would have called his boss and tried to get him fired or whatever and it's like now i'm just like what why are we attacking each other life is so hard i mean this is what the pandemic i think should make everybody realize is like look at that how hard it is life is hard and then just think about all the people suffering right now who are at home the single mom or dad with two or three kids at home in public school maybe they've been laid off and their kids aren't learning and they're in a tiny apartment i mean this has been brutal for a lot of people and not to mention people losing loved ones or maybe some people got corona and now their lungs are still not right i can ask you about love oh sure uh i'm feeling it you know like we're an hour or two here lex yeah you feel you're good we can become besties we're good we're good like we got a bromance going here alexa i feel it too if it's eric weinstein level but i feel like it's close yeah i'm feeling the love but you we talked about the there's music to my ears your whole rant on the the olympic nature of a startup is there a role like what role does love family friendship play in that brutal pursuit of excellence that is building a startup building a company or building any creating anything new in this world such a great question um and and totally unprepared for it uh because i no one would ever ask me about that so i think it's why you've you've got quite a following uh on your podcast is that you're able to ask these questions and um i could tell one story because uh you know i don't talk about i try not to talk about relationship with elon that often because you know he's so famous now yeah i mean when we met i used to go out to parties with him and people like oh my god you're jason calacas yeah and like who's your friend i'm like how's my friend elon he's and they'd be like what he's doing rocket ships but he's told this story publicly so i can tell it and it would never talk about anything that he hasn't already talked about publicly especially since he saw a high profile but it was a pretty funny moment um he there there was a moment in time when tesla almost went out of business and you've probably heard the story uh many times but it was during the financial crisis and uh they were running out of money and i said uh uh you know let's go get a steak and we're in la and we drove to boa and i had my orange tesla roadster and he had his p1 or p2 like the red one that i think is in space now um and we drove to the valet and we had a stake together and we're sitting there and i said you know i read the story and gawker or whatever you know and new york times here you only got like five weeks of money left in tesla because it's not true i was like oh thank god and he goes we have two weeks i'm like oh god i was like well what's going on with the rocket ship company yeah you know like you know i know you did the one last month and don't you have one coming up he's like yeah we got the third one coming up i was like well how's that going as well would blow that one up there's no more spacex i was like so two weeks of money left in tesla and spacex you blew up the first two rockets you blow up the third spacex is over he's like yeah i was like i can load you a couple million dollars i don't have like a ton um he's like it's okay our friend beep has loaned me some money and elon's been super public about this i would never tell the story unless he hadn't been but he was talking he never said who it was but somebody had loaned him money to keep him afloat he was he was functionally bankrupt i mean he had the equity in the companies but the equity was quickly becoming worth zero and the financial crisis and he's figuring out if he's going to go on vacation for christmas or not and he's on the phone trying to you know um you know save the save both companies and i said certainly there must be some good news and he takes that as blackberry to date this conversation there are no iphones he does blackberry and he starts swiping and he says don't tell anybody this is what i'm building and he shows me the model s and nobody knew that he was working on the model s we knew he was doing the the roadster and was trying to save the company and i looked at it and i was like that's gorgeous um it was the clay models so it's a full-size clay model so there's human beings standing around a clay version of this tiny little blackberry picture i'm scrolling through on the remember that little uh pad or the ball on the background scrolling through it i'm like this is fucking great and i just said to him it's like uh what's the range going to be as well i think we get 250 miles like 250 miles like yeah i think it'll be the safest car ever i said what is it going to cost he says i think this could cost eventually 50 60 000 i said elon if you make that car you'll change the god damn world you have to this company must survive because the roadsters for like 2 000 people in the united states this car is for every person in the united states every single person in the united states needs will want this car if it's fifty thousand dollars and maybe some of the people who you have twenty or thirty thousand dollars won't be able to afford it but they'll all want it it's gorgeous and he said you really think so i said yeah so i got home and i talked to my wife jade and i said you have the checkbook she does all the finances and stuff like that pays over the bills and whatever and i said um yeah don't tell anybody elon's making this great car and i wrote two checks for fifty thousand dollars and i just took a piece of paper and i wrote e comma uh love love the new car i'll take two and i signed it i kissed the two 50 000 checks put them in the envelope and i fedexed it to them for monday delivery and i said to jade that hundred thousand dollars is going to be gone in 48 hours because we'll pay for one or two days of payroll on tesla so we just added like instead of two weeks of roadways got 12 days yeah and uh the checks don't cash but then i read a story that he's closed the money saved the company in like the next week or two and a couple of months later uh the checks get cached and i'm like okay three years later i get an email your reservation number it's from tesla your reservation number is zero zero zero zero zero zero zero one and then five seconds later your reservation number is zero zero zero zero seventy three and i forward the number one to elon i said uh you know i can't take number one a signature number one i can't take that that's yours yeah it's like well i got five of them and besides you're the first person to ordered it and i was the first person who had seen you gonna give me the deterioration and then i know it was a very beautiful moment it was an incredible moment for both of us and we talk about it sometimes uh you know those moments in time and when you to your point about love the darkest moment but one of the darkest moments in his life probably that i think it was i could tell you it was the darkest period of his life for sure and he's been very public about how dark that was and i think you know this is why i have great sympathy for the entrepreneurs of the world like the suffering and the pain and when he talks about the suffering and the pain that all of these founders have felt and then we we're throwing rocks at them we're criticizing them as they try to change the world and save humanity and in tesla's case i mean they weren't you know they weren't like delivering pizza i mean they were trying to get us off of fossil fuels like this was a big heady mission to literally save the environment the planet humanity and the way they shorted that stock and they attacked him it was always perplexing to me why any human being who is standing on god's green earth would want to throw rocks at the guy who is trying to stem the dam of global warming that is about to engulf all of us how dare they throw rocks at that guy yeah there's so many people you throw rocks at there's somebody who's making the jewel vaporizer throw rocks at that scumbag no offense but like whoever's making the jewel things and you know selling pina colada flavor to 12 year olds like throw rocks at them somebody's doing something you know abhorrent but not e i mean and uh yeah anyway that car is you know up the road here sitting under a cover yeah with 20 000 miles on it in my garage and then the roadster number 16 is in the garage next to it and every day i walk by the two of them and i get a warm feeling in my heart because i know he did it yeah against all odds against all odds he pulled it off uh and it was that moment that month in that 2000 it was ja it was probably december january december of 2008 i think you know it's just 12 years ago when you think about 13 years ago it was dark i mean it was dark and they they almost had the same thing happen uh you know in the model 3 production in june of two years three years ago and i remember him just trying to get the model 3 out the door and the company almost crashed then most of these companies have you know these kind of moments um and i think friendship is you get what you give you get what you give and if you are there for people you're going to feel so good about having done that and then the the the reciprocation effect which you probably know very well is so great in the world that anytime you're kind to people you build this incredible bond and then what what are we at the end of the day lex besides a series of memories with the people we love that's all it is it's just a series of memories and moments it's just moments you ever see blade runner yes of course do you remember what rucker harrah says at the end all of these memories gone like tears in the rain yeah i mean that's our existence it just all goes away at some point it's just these drops of rain each each of those memories just like one snowflake or one drop of rain and they're all lost at some point but they're here now and that's why we have to be there for each other that's why i feel like what i do is so important in this world and i get such great meaning out of it just being a friend just having these conversations what you're doing on your podcast just talking to intelligent people and spreading the word and the disciple the gospel of what they're saying and amplifying it you're inspiring so many people every podcast you get 500 000 people a million people watch these videos and there's some kid in sri lanka or some little girl in afghanistan who's going to stumble upon this on youtube and they're going to change the world in the next century because it's not just about america our story is almost over right like we we were the story of the last two or three hundred years i hope it keeps going but there's all these other places in the world sao paulo and and africa where people now have access to these videos and somebody will have this video and go elon did it oh and that guy jason was his friend and oh and then lex does those interviews with the oh yeah i could do it too your little magical moment of love amidst the suffering with elon because you've talked about it you'll have these ripple effects it's fascinating to think about it so weird to come in new entrepreneurs being born new yeah more love being put out there in uh more support through these rough times when you're people are trying to create new things i mean that's a that's a beautiful thing that's a beautiful i i'm glad you think of friendship in this way i'm deeply uh grateful that you're loyal every time you invest you are here's the thing it costs you nothing to make this investment either the the amount of time it takes to be bitter or angry uh sitting at home uh to be disappointed you could just channel that same amount of energy into being loyal loving kind and there for people it just only takes the intention right the water is gonna those emotions are gonna flow right like sam would always tell me when i was struggling in my life and i talked to him he'd say you know jason your brain is spewing all these ideas imagine you're standing sitting by a river and the river is all your ideas you are not a slave to any one of these ideas they're just whipping by like each of those little waves in the river you can pick one of those ideas out and look at it and examine it and either keep it or throw it back in the river and let it go and i was like wow sam that was like of my entire friendship with sam harris that was like the one moment where i was just like oh my god all my life i've wondered about all these thoughts in my head insecurities you know imposter syndrome like i didn't go to mit you know i'm not the smartest guy but somehow i made a career writing little 50k checks and now you know three million dollar checks but whatever you know little checks and being a journalist and doing this little podcast and it said it's added up to something and i kind of i'm proud of it i'm 50 and i'm kind of proud of what i did and i and i wake up every morning i could retire and i say i kind of like what i do i kind of like having the conversation and writing the check and then being on somebody's team and i got offered to be in these giant mega funds and they said jason you're an idiot you're investing 60 companies a year you know 500k at a time you put 30 million dollars a year to work come work with us write 150 million dollar check and then you can go to aspen and cabo and coachella and not work but why are you doing all this work it's like well the 50 million dollar check is like it's like a formality it's just like being an atm like the companies are already huge by that time i really want to meet the two people with the idea i want to meet them in year one yes i want to meet them on day zero yeah i want to be the guy who wrote the first second or third check i want a guy with the 3 000th check the last check that's fucking boring and make that basic human connection and also either be with me into the rough times be with them with that first i mean the first early successes i mean that's a beautiful so great when they when when when a founder and that team get product market fit and you just know it's going to work oh man lex it's when when com would email me and they'd say we added you know the company's been growing and we're not going to go out of business but we added some sleep stuff and then we added this other function and uh we have a streak now and uh we grew 10x in the last you know three months and uh we're good you know i was like ah that's nice it's real nice it's like it's a nice feeling when you well because so many of them die we talked about that j curve early imagine it's like um it's like all these baby turtles going out to the ocean and the seagulls are ripping them to shreds and then their sharks are eating them but then like a couple of the turtles make it and they become wise old 100 year old turtles yeah you know and you're like yep i remember when you catched and like all of your brothers and sisters were ripped to shreds by the seagulls and you made it into the water and then you made it out into the deep water it's a pretty great feeling i think there's no better way to end it there it is the talk of the cruelty of life that's suffering that is life and the love amidst the suffering jason absolutely i've been a fan of yours for a long time you're one of the most special people in silicon valley thanks lex and maybe you'll also call me in one of the rough times oh yeah i'm sure there'll be many there will be yeah you know there's one expression nobody gets there alone nobody gets there alone and anybody who thinks that they got there alone is delusional and kidding themselves and they will at some point wake up and realize oh shit there were a lot of people help me get here i need to write a couple of gratitude letters i got a gratitude letter the other day from a friend of mine who i helped and it was one of the you know about these gratitude letters people are writing it turns out martin seligman in um uh was it authentic happiness anyway the guy who really studied happiness and joy turns out one of the greatest amplifiers of joy in your life is to thank somebody for doing something for you and somebody who had helped just wrote me a letter and i got on christmas and i had the stack of christmas cards and i hadn't opened them and it's the second week of january and i was just getting to like the last stack and i opened it up and i almost missed it this incredibly heartwarming letter about how meaningful like certain things i had done to help along the way and how he'd always always appreciated my counsel and i was just like well this happened 25 years ago and you wrote this letter now and it just hit me like a ton of bricks i was just like wow you know if you're hearing this there's probably 10 people who are really instrumental in your lives in your lives go ahead and call them on the phone write them an email or even better just write a letter and send it to them and just tell them you're thankful and let me tell you something the amplification of joy in your life will go 100x 100x when you tell somebody you love them and that you really appreciate them and that what they did for you was magical so just then you can look it up gratitude gratitude is like one of these incredible forces amen i'm grateful for being on the pod i'm grateful you've wasted all this time with me i love it thanks for listening to this conversation with jason kolokanis and thank you to our sponsors brave browser linode linux virtual machines four sigmatic mushroom coffee and rev speech detects service click the sponsor links to get a discount to support this podcast and now let me leave you with some words from the man himself jason kilikanis the number one reason a startup shuts down is not running out of money the number one reason a startup fails is that the founder gives up thank you for listening and hope to see you next time