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Speaker 4: All right, guys, welcome back, Eyl. We are back in
Speaker 4: Gotham City. Another one, Yes, another one. This is going
Speaker 4: to be a fun episode. I met two of the gentlemen.
Speaker 4: I haven't met the third gentleman, untwol today. So David, Yes,
Speaker 4: pleasure to meet you.
Speaker 6: Pleasure to me too.
Speaker 4: I appreciate it. So Mike Novagratz, he's actually been on
Speaker 4: market Mondays a market Moneys. You remember that.
Speaker 3: I remember. I love it. Some publications loved it, Yeah
Speaker 3: for sure.
Speaker 4: Did you see what happened with that business inside and
Speaker 4: all these things? Yeah, what happened he's talking about x
Speaker 4: r P.
Speaker 3: Yeah.
Speaker 6: I seemed to put my foot in my mother.
Speaker 5: Every time I opened it, I was like, wait, we
Speaker 5: made it to business inside.
Speaker 7: Yes, that was good, but it was good. Thanks, good content,
Speaker 7: some death threats out of that. Things in Best Fast
Speaker 7: He's the best fast stage. Yes, touch that.
Speaker 4: And we got Mel Carter Mel and somebody that we
Speaker 4: met in Abu Dhabi kicked it with good guy, very
Speaker 4: good connector of energy.
Speaker 3: Yes, that's some mutual acquaintances.
Speaker 4: Quite a few boy Larry Larry, great guy, and David
Speaker 4: Berry to round out the trio. Yes. So this is
Speaker 4: a unique group of eclectic individuals that have come together
Speaker 4: to create a powerhouse podcast that you are going to
Speaker 4: display very soon.
Speaker 3: Very very soon.
Speaker 4: Business untitled, Business, Business untitled. So this is gonna be
Speaker 4: a no conversation. I want to talk about each one
Speaker 4: of you guys individually and show and your mindset on
Speaker 4: business and investing in a variety of different things. But
Speaker 4: first and foremost, thank you for joining us. Appreciate it,
Speaker 4: thank you for having us. Sorry, sorry, sorry, sorry we
Speaker 4: made you wait.
Speaker 3: It's only forty five minutes. But it's fine. That was good.
Speaker 4: Yeah, you're supposed to be on our shots.
Speaker 3: You're supposed to come on. That's why they see you hours.
Speaker 4: Fine, all right, So how did you guys come together?
Speaker 4: First and foremost, how did how does this group actually happen?
Speaker 4: Because you're all you're different ages.
Speaker 3: Right, I think that's the first denominator, amongst other things.
Speaker 4: So how do you guys come together and actually form
Speaker 4: a friendship? And then a business high level? We met
Speaker 4: at a party. Mike has to see my watch, which
Speaker 4: was like, really is a Richard me? Lay took my watch,
Speaker 4: left for like three days, took your watch off your wrists,
Speaker 4: like yeah, let me see this, and that became it
Speaker 4: was that watch right there.
Speaker 3: It wasn't this watch. It was the one he forced
Speaker 3: me to sell two years ago that I made a
Speaker 3: ship ton of money on, but good trade. But took
Speaker 3: my watch and I was like, the guy I just
Speaker 3: met left with my watch and.
Speaker 8: Everybody was like, Oh, don't worry, he's a billionaire, like
Speaker 8: he'll find and I'm like, cook, here I have to
Speaker 8: do with him to do it with my watch, and
Speaker 8: I legit didn't hear from him for like three days,
Speaker 8: and at the time it's like my most valuable possessions,
Speaker 8: like one hundred and forty grand.
Speaker 3: At the time, I'm like, what the the.
Speaker 8: Fun and then one day I get a call from him,
Speaker 8: like three days later, like hey, come pick up the watch.
Speaker 3: Then he invited me to his house and uh.
Speaker 8: I walked to the door and it was like, uh,
Speaker 8: this old building bank downstairs, and I remember thinking, this
Speaker 8: is where a billionaire lives.
Speaker 3: This is so weird.
Speaker 8: And I walked in the house and it was definitely
Speaker 8: a billionaire's fucking house. He gave me back my watch,
Speaker 8: showed me around his billionaire house, and I can't get
Speaker 8: rid of him ever since.
Speaker 3: That five years ago. That's so like, was that a
Speaker 3: test or did you?
Speaker 6: Just?
Speaker 3: Like right now?
Speaker 6: There was more involved, Like I was hanging out with him,
Speaker 6: Meek was there, Uh, Meek's friends. The weed they smoke
Speaker 6: is a lot stronger than the weed I was used
Speaker 6: to smoking. And so I was at a bar. I
Speaker 6: didn't know where I was.
Speaker 3: I don't smoke.
Speaker 6: I'm i resection, and so these guys had me smoking
Speaker 6: the chronic. I went home. Jesus, I got a chain.
Speaker 6: I gotta watch what the hell happened?
Speaker 4: He just because man? Because party was it?
Speaker 6: It was a I think it was a kickoff.
Speaker 3: Ruben's house.
Speaker 4: One yeah house party figure. So it's interesting because the
Speaker 4: usual typical party. If somebody takes your watch, that's not
Speaker 4: something that's welcomed. But I was running around looking for
Speaker 4: him like that. Oh you so you felt the way
Speaker 4: about it? I didn't you all to say away when
Speaker 4: he did? Were you concerned?
Speaker 3: Yes? And that's where everyone kept don't be concerned.
Speaker 4: How did you get his number? How did you get
Speaker 4: your number?
Speaker 3: I don't even think I had his number.
Speaker 6: And he called, he came by. It's very nice. And
Speaker 6: then we met again at this Super Bowl.
Speaker 4: Yeah, so you just got so high you didn't You
Speaker 4: didn't know what she was doing. You didn't know, you
Speaker 4: didn't know he was taking his watch. You didn't realize
Speaker 4: it that moment.
Speaker 6: I probably don't remember. I had the watch, I had
Speaker 6: the chain. I was like, I guys, got to go home, guys,
Speaker 6: and no one said anything, So I just went home. Man.
Speaker 3: Yeah, I had a full on panics scrambling with this guy.
Speaker 4: And then you guys been rocking ever since we met
Speaker 4: in Super Bowl, like a few months later, and that's
Speaker 4: when we really want of his brothers, you can tell
Speaker 4: that story.
Speaker 6: Yeah, when Dawn, they were supposed to be me and
Speaker 6: my three brothers and one couldn't come, and so we
Speaker 6: had an empty spot and mel was staying at the
Speaker 6: same hotel, and so we were like, you want to
Speaker 6: hang and he just kind of hung with us, and man,
Speaker 6: the baby was everywhere at that day.
Speaker 3: Who is the baby?
Speaker 6: The guy is everywhere? And that became a joke and
Speaker 6: he just started to having fun and I haven't been
Speaker 6: able to shake him since.
Speaker 5: All Right, So, now, Dave, how did you come into
Speaker 5: this mix? Because you don't pay As a type that's
Speaker 5: going to leave with a chain or watch.
Speaker 9: More, I would say I'm more responsible than Mike. But
Speaker 9: so I've known Mike for man thirty years or something
Speaker 9: since we wrestled in college and happened to meet. We
Speaker 9: wrestled for opposing teams, actually, but I had a friend
Speaker 9: that went to Princeton. I went to Colombian, So we
Speaker 9: met really early on. And uh about ten years after
Speaker 9: college when we had started families and such, and we
Speaker 9: had a lot of small world connections, and so we
Speaker 9: just started hanging out and almost like co raised our
Speaker 9: families together in a sense. So we've been on a
Speaker 9: hundred trips together and have done a lot of different
Speaker 9: business ventures and friendships and parties and things like that,
Speaker 9: and so no, sooner than Mike meet mel Than mel
Speaker 9: and I hit it off like a house on fire.
Speaker 9: That was probably first that when we went to the
Speaker 9: Jackson Hole, right, yea, So he showed up to Jackson Hole,
Speaker 9: saw my eazys love at first sight.
Speaker 6: And that was that, right, you got to ski. Yeah,
Speaker 6: he had a great outfit. He was one of the
Speaker 6: best guys on the mountain.
Speaker 9: But well, oh it is very important and since then
Speaker 9: we've really like we spent a lot of time together.
Speaker 3: To invested a lot of stuff together. Yeah, that's kind
Speaker 3: of been it.
Speaker 4: So yeah, Mike, let's trilleders down a little bit. You
Speaker 4: came on Market Mondays and we know that you're a billionaire.
Speaker 4: You talked about cryptop We never really got your full story.
Speaker 4: How does it When does it start? Like, how did
Speaker 4: you get to what did you do to get to
Speaker 4: where you are now?
Speaker 6: I was a middle class kid. My dad was in
Speaker 6: the Army. I went to Princeton. I was a wrestler.
Speaker 6: When I got out of school, I was a helicopter
Speaker 6: pot in the Army. And then I came to Wall
Speaker 6: Street and kind of a traditional career. I started Golden Zachs.
Speaker 6: I was lucky enough to become a partner there when
Speaker 6: I was pretty young. Then I helped start a company
Speaker 6: called Fortress, and Fortress was the first hedge fund private
Speaker 6: equity company to go public, and I did that with
Speaker 6: kind of Wes Eden. Soon I owned the Bucks and
Speaker 6: Pete Brigger.
Speaker 4: And so that was fun.
Speaker 6: That's when I really made real money. Left that, you know,
Speaker 6: had a family office where I started investing in lots
Speaker 6: of different things, and crypto became kind of the thing.
Speaker 6: Well yeah, well yeah, what was that twenty fifteen? And
Speaker 6: so it was kind of a three chapter Wall Street
Speaker 6: career because they're all variations of the same thing. It's
Speaker 6: try to understand what's happening in the world and bet
Speaker 6: on it and then talk about it. Like once you
Speaker 6: bet on it, you talk about it, so people understand
Speaker 6: what you're betting on and you can get more people
Speaker 6: to invest in it, indeed, because they educated and more enthusiastic.
Speaker 6: Why'd you switch from stocks to crypto? You know, I
Speaker 6: was in macro, which is currencies and commodities and stocks,
Speaker 6: and so it's really understanding the big cultural shifts, the
Speaker 6: big economic shifts, the big political shifts, and that's what
Speaker 6: bitcoin is. So bitcoin at its essence and cryptoi essence
Speaker 6: is a macro movement, and so it was very natural
Speaker 6: and I still trade macro. You know it's in five
Speaker 6: to ten years, you'll see every trader on Wall Street
Speaker 6: on their screen. They'll have stocks and currencies and the
Speaker 6: long bond and gold and silver and bitcoin and ethereum,
Speaker 6: just like it's all the same. And we already seen
Speaker 6: that conversions.
Speaker 5: So that your back. That's your background. Now you said
Speaker 5: you invest in a lot of things, right with the guys,
Speaker 5: So you're back.
Speaker 8: I'll started in music. Yeah, my background started in music.
Speaker 8: I started managing acts, trying to get into music. Big
Speaker 8: fan of Damon ash jay Z, what they was able
Speaker 8: to do with Rockefeller as a kid watching them, and
Speaker 8: I was like, I know I can't rap, so I'll
Speaker 8: find someone that could sing or rap and manage them.
Speaker 8: Did know how to do that neither, but figured it out.
Speaker 8: Started managing. Got my first deal with this kid, Jovanni
Speaker 8: and Atlantic Records. That didn't work out the way I
Speaker 8: hoped it would, but it got my foot in the door,
Speaker 8: and then later on kept managing found this act City Morgue.
Speaker 8: They ended up blowing up, was offered to be the
Speaker 8: senior vice president of A and R at Republic Records.
Speaker 8: I took that job, did that for like five years
Speaker 8: while running my label, Kari Ultra had a ton of
Speaker 8: success with the merch business and that I met Mike
Speaker 8: shortly after that, and I never forget. We used to
Speaker 8: kind of not kind We used to sit and go
Speaker 8: over my finances and at the time I think I
Speaker 8: had like I don't know, like one point something million
Speaker 8: dollars in cash and he was like, you have more
Speaker 8: cash than like a guy that's worth ten million dollars.
Speaker 8: And I was like, what into bank account? Yeah, And
Speaker 8: he was like, you need to invest some of this
Speaker 8: money and just invested in things that like, don't even
Speaker 8: think about it again, and it's just if it comes back,
Speaker 8: it comes back, if it don't whatever. Who he make
Speaker 8: some money, and you know, I just listened to him,
Speaker 8: and that's how I kind of looked at investing ever since,
Speaker 8: Like I'd just rather take whatever money I have when
Speaker 8: I get large chunks of money and put it into something.
Speaker 8: And some of them came back really great. Some of
Speaker 8: them I'm still waiting on to come back. Some may
Speaker 8: never come back, and but I get a lot of
Speaker 8: opportunities between Mike and Dave and you know, we'll touch
Speaker 8: on some of the other things that did.
Speaker 3: But that was my start. Music was my start.
Speaker 5: So that the financial literacy piece, like you met them,
Speaker 5: met him, Yeah, and you're starting to gauge it prior
Speaker 5: to like did you google who.
Speaker 8: He was and not just like maybe at night when
Speaker 8: I was like fucking trying to find him, but I
Speaker 8: had no idea.
Speaker 4: So you you said something I was interesting. You said
Speaker 4: that he told you you had more cash than somebody
Speaker 4: that was worth ten million dollars. Yeah, I want to
Speaker 4: talk about that, But first, what did you invest in?
Speaker 4: Like the S and P five said to invest in
Speaker 4: stay safety.
Speaker 8: I invested in like a lot of things alongside him,
Speaker 8: like I don't know who say yeah, like whoop phase clan.
Speaker 4: So you just thought it did you just went straight
Speaker 4: to yeah, to investing in company.
Speaker 3: Like private bitcoin. I invested in bigcoin to get the
Speaker 3: stock market.
Speaker 4: You just went straight to the big.
Speaker 8: Straight to invest in At the time, I think I
Speaker 8: invested in bigcoin like six grand, like uh.
Speaker 3: A bio company, like just a bunch of stuff spread
Speaker 3: out like.
Speaker 4: So this is like This is like one of these
Speaker 4: weird movies. You meet a random white guy, Nick milk
Speaker 4: Point that's high. He takes your watch. Three days later,
Speaker 4: he invites you to his penthouse in Manhatan. You open
Speaker 4: the door, it's like the Batman Chamber. And then he
Speaker 4: looked at your portfolio and he's like, this isn't what
Speaker 4: you should be doing. You should be investing. And then
Speaker 4: he tells you to invest in Phase Clan. Bitcoin, all
Speaker 4: just all kinds of just random things that just skyrot
Speaker 4: out out to whoop.
Speaker 3: You're like, this is like what Eddie Murphy could have
Speaker 3: been in trading places the Blessing of Day.
Speaker 8: Because Mike is like Mike is you know, you know,
Speaker 8: but Dave kind of like they both keep me kind
Speaker 8: of like Mike is like and David's like, no, come
Speaker 8: back down here real quick. But Dave is also like
Speaker 8: a super risk taker, so he I feel like Dave
Speaker 8: balances out me and Mike, you know what I'm saying,
Speaker 8: and like he's greater investing.
Speaker 3: He'll tell his story. So like my mind set on
Speaker 3: the investing just kept growing, growing and growing and growing.
Speaker 8: But the one thing I learned from both of them
Speaker 8: is just take a risk and don't be scared and
Speaker 8: don't think about the risks after how much ward comes back?
Speaker 4: How much of that money did you invest?
Speaker 3: I think maybe one point too off the table.
Speaker 4: Do you have one point to many dollars to your
Speaker 4: name right now?
Speaker 9: No?
Speaker 4: At that moment, yeah, you had that to your name.
Speaker 4: He comes and says and to watch and to watch,
Speaker 4: and he says, invest you should, and you invest every
Speaker 4: single thing you have everything.
Speaker 6: That's how I always listen to some degree, because he
Speaker 6: mel was lucky enough or smart enough to have a
Speaker 6: good income. So he was making money for you.
Speaker 3: I was making man, I knew If I knew he
Speaker 3: was all that money, would you make it back in
Speaker 3: a year?
Speaker 6: He wasn't burden furniture, Yeah, like you were.
Speaker 3: Gonna have to sell? Yeah.
Speaker 4: Yeah, So Mike, you said, ten guys with ten million
Speaker 4: don't have that much money in cash? How much money
Speaker 4: should How much money should a person have in cash?
Speaker 6: Again, so much depends on how old you are, what
Speaker 6: your lifestyle is, and what your income is. Right, So
Speaker 6: if you have no income, like you retire, you better
Speaker 6: have a bunch of cash because you gotta pay your rent,
Speaker 6: you gotta pay a car bill, you got to have
Speaker 6: it incidental expenses. But if you know you're making one
Speaker 6: hundred thousand a month, right, you pretty much can cover
Speaker 6: anything you need to deal with. So you can you
Speaker 6: can really run your investment portfolio with low cash and
Speaker 6: high risk and so so much because your your personal
Speaker 6: risk tolerance and your opportunity set. What I what I
Speaker 6: realized and one of the things that I wanted to
Speaker 6: kind of experiment with in some ways. I mean it
Speaker 6: wasn't a mental experiment. But there's not a ton of
Speaker 6: black wealth, period, right, thirteen percent of the population, one
Speaker 6: and a half percent of the wealth in this country.
Speaker 6: Until that changes, our country's kind of broken. And one
Speaker 6: of the ways you create health. His network, right, Melissa,
Speaker 6: stunningly good networker. You put him in any room and
Speaker 6: everyone likes him. I know, it's his big smile or
Speaker 6: dopey face, I don't know. And so you know, he
Speaker 6: went to the Milking conference. Next thing you know, he's
Speaker 6: going to Saudi r Abia. He's in the Mid East,
Speaker 6: and you know he's friends with everybody he met, you guys, right,
Speaker 6: So that ability network, Well, if you grow up in
Speaker 6: a bad zip code, you're networking with you know, people
Speaker 6: that are aren't creating a lot of wealth. You put
Speaker 6: them in a room with wealth creators. He's going to
Speaker 6: network and get opportunities. And so now he's bringing more
Speaker 6: opportunities to Dave, and either we're bringing to him. And
Speaker 6: so a little bit as guidance, a little bit is
Speaker 6: just introducing people to the networks of money, Right, how
Speaker 6: do you raise capital, how do you find ideas, how
Speaker 6: do you use your political connections to get stuff done?
Speaker 6: All of that process that lots of people that don't
Speaker 6: grow up with that never have access to. And that's
Speaker 6: a little bit the idea of the podcast.
Speaker 5: So we got your story. Yeah, we got my story, Dave,
Speaker 5: we got we got to get your story. So I
Speaker 5: know you said Columbia. Yeah, but your background is in
Speaker 5: developing real estate, right primarily. Yeah, So so explain to
Speaker 5: the people how you've come to prowse at this level.
Speaker 3: Yeah, you've done it.
Speaker 6: So I was. I went to Columbia. I was a
Speaker 6: wrestler there. That was a big part of my life.
Speaker 9: I went to law school afterwards, to Georgetown and actually
Speaker 9: passed the bar in New York and Jersey and practiced
Speaker 9: law for about three years in New York and you know,
Speaker 9: learned what I had too.
Speaker 6: From that.
Speaker 9: It was I think it was a really good base
Speaker 9: for understanding contracts, how to communicate clearly, and things like that.
Speaker 9: And from that went with my brother into real estate
Speaker 9: in the let's say like early mid nineties. My father
Speaker 9: had done development of affordable housing kind of real estate,
Speaker 9: so I was I was schooled. I had a little
Speaker 9: bit of background in it, and you know, understood some
Speaker 9: things and and and that was a really good time
Speaker 9: to start investing in real estate. Back that was one
Speaker 9: of those times like we're almost in now. So we
Speaker 9: started with apartments in North Jersey, moved from there to
Speaker 9: the city. We got into hotels in say, early two thousands.
Speaker 9: W Standard Chiltern Firehouse came after that. And really at
Speaker 9: that point in time, as I started broadening my investments,
Speaker 9: started looking into technology, other food and beverage and hospitality platforms,
Speaker 9: biotech at this point in time, you know, mushrooms, crypto
Speaker 9: and so like. In a sense, I've been entrepreneurial the
Speaker 9: whole time. And if really, I know, you guys had
Speaker 9: had Steve Harvey on once and I watched the thing
Speaker 9: and he had like these five rules, and I thought
Speaker 9: they were pretty interesting, right.
Speaker 6: I think you had said something about it, and.
Speaker 9: It was dream big, have imagination, and great gratitude, right,
Speaker 9: don't fear, you know, control your fear, and then have
Speaker 9: faith that's going to work out. And I think that's
Speaker 9: really what like entrepreneurism is about. And that's really how
Speaker 9: I've been living my life in a sense, in a
Speaker 9: business sense of like pushing into things even when I
Speaker 9: was uncomfortable using you know, I didn't use exactly those
Speaker 9: five mantras, but but essentially effectively doing that. And so
Speaker 9: that's what really allowed me to push in and just
Speaker 9: bring so many opportunities. You know. So when I got
Speaker 9: involved with for instance, catch with Mark and Eugene and
Speaker 9: and you know, one of their kind of like founding
Speaker 9: investors in that, it was really because I had put
Speaker 9: them in an opportunity earlier in the w hotel before
Speaker 9: they had started. And so it's that kind of thing
Speaker 9: that's always served me well in life. You know, same
Speaker 9: thing with Mel and you know many people Mike and
Speaker 9: I and we just kind of create this network and
Speaker 9: and so it's I guess it's it's real estate would
Speaker 9: be a big portion of what for sure, what I
Speaker 9: do and what I focus on, but I do have
Speaker 9: a bunch of other venture investments.
Speaker 6: That I also pursue.
Speaker 5: Yeah, I want to personally thank you for Catch. It's
Speaker 5: my it's my favorite restaurant. It's my kid's favorite.
Speaker 3: I heard you say that, like when I left here today,
Speaker 3: I said, what do you want to do today? She'said,
Speaker 3: can we go to Catch? I was like, interesting enough,
Speaker 3: I might know a guy.
Speaker 6: Get your table. Well that's that's all.
Speaker 9: That's all kudos and gratitude to Eugene Ram and Mark
Speaker 9: Burnbaum because it was really their entire brainchild in execution,
Speaker 9: but I was happy to be a part of it.
Speaker 4: So this is how Larry gets hooked up with Catch?
Speaker 6: Yeah, yeah, I hooked him up with Catch.
Speaker 9: Okay, yeah, because when the first time I met Larry,
Speaker 9: excuse me, we started talking, he started talking about restaurants
Speaker 9: and I just happened to drop.
Speaker 6: That name and he was like, that's my favorite restaurant,
Speaker 6: you know. And then I was like, oh I could
Speaker 6: dinner might happen.
Speaker 9: And then about a month and a half, two months later,
Speaker 9: we had dinner at Mike's house and that's where that started.
Speaker 4: So, all right, what do you guys look for when
Speaker 4: you are investing in these type of investments. Because we
Speaker 4: took a while stocks, that's relatively kind of easy to
Speaker 4: figure out. I don't want to say easy, but you know,
Speaker 4: when you're doing private companies, it's a lot more variables
Speaker 4: that go into play. You got to wait a lot longer.
Speaker 4: It's a lot lower chance that it is even going
Speaker 4: to work out. Yeah, So what's the thought process.
Speaker 6: Well, there's a whole I would say there's a whole
Speaker 6: spectrum there. Right, Like one of the big investments I
Speaker 6: have was in Bojangles and that was less risky. Right.
Speaker 6: Bojangles is an iconic brand in the South Fried chicken.
Speaker 6: You know, the company needed a little bit of management shuffle,
Speaker 6: needed to cut some expenses, and needed to expand, And
Speaker 6: so you put money in that and you think over
Speaker 6: the four or five year cycle, you're gonna get twenty
Speaker 6: plus percent returns and then sell it out five to
Speaker 6: ten years later, or maybe not if you can keep
Speaker 6: building it. So that's kind of a I would say
Speaker 6: a safer private investment. Something like the WOOP band, which
Speaker 6: measures heart rate variability, which all the athletes wear right
Speaker 6: and measures your sleep and to sleep, you get when
Speaker 6: I invested in that. It was a kid across the
Speaker 6: street came over and said, hey, you know, I played
Speaker 6: squash at Harvard. I'm doing this thing.
Speaker 3: You know.
Speaker 6: So you put one hundred grand in the start, then
Speaker 6: it starts doing well and you start putting more money in,
Speaker 6: and so that venture stuff smaller bets, you know, a little.
Speaker 4: Bit of a yo.
Speaker 6: Like in Atlantic City, you're hoping for the eleven. You
Speaker 6: better have trust the entrepreneur. He better be dynamic and
Speaker 6: be able to pivot if shit goes wrong, and you
Speaker 6: better have a pretty good idea that you're in the
Speaker 6: right space. Yeah, and those things are you know, one
Speaker 6: in three work, maybe one if you're great, one in
Speaker 6: three work if your average one in ten work.
Speaker 9: But it starts out with like to summer, Right, it's
Speaker 9: like good people, right, somebody you trust that's going to
Speaker 9: execute this. That's how I look at it is is
Speaker 9: this person going to put their all into it? Are
Speaker 9: they honestly they are working? Are they giving their everything
Speaker 9: to it? And then second with the business model, is
Speaker 9: it really something like in a space where if they
Speaker 9: do what they say, it's actually like a business with
Speaker 9: motes and fensible product right where it's not going to
Speaker 9: just be something that ten other competitors can just shave
Speaker 9: the margin.
Speaker 6: So is there something a little bit unique enough that
Speaker 6: this comes also back to network and just how privileged
Speaker 6: yard to have a good network and how you I
Speaker 6: was with my interns yesterday. I was like, dude, you
Speaker 6: guys got to work and build your network. All these
Speaker 6: people that you just finish this internship class with, stay
Speaker 6: in touch with the people you worked with. Stay in
Speaker 6: touch with because over time some are going to become
Speaker 6: stars and successes, and those guys are going to give
Speaker 6: you opportunities. We think of like Dave and I were
Speaker 6: the first capital they want investors in Peloton, and you know,
Speaker 6: we put a decent small, you know check a venture
Speaker 6: check in. It was probably two three hundred thousand dollars each.
Speaker 6: And at one point that three hundred thousand dollars was
Speaker 6: worth over one hundred million.
Speaker 4: Oh, the two hundred thousand dollars that you invested at
Speaker 4: one point was worth one hundred million.
Speaker 3: Yeah, two months before invested. I mean so after the
Speaker 3: IBO it went up to one hundred and forty nine dollars. Yeah,
Speaker 3: and so that made that Yeah.
Speaker 6: So again Ty, so we went over.
Speaker 3: My financials two months earlier out of got in right there.
Speaker 6: And maybe the interesting thing that's something like Peloton is
Speaker 6: you know, we met the guy through a school connection.
Speaker 6: He came and sought us out because he knew we
Speaker 6: had capital. Dave and another friend of ours, Dave Heller.
Speaker 6: They actually did the work and joined the board and
Speaker 6: helped him build the company. I was a free rider,
Speaker 6: and you know, it was a small investment to start with.
Speaker 6: Next thing, you know, it was significant capital for anybody.
Speaker 6: And so again it's a little bit what I was
Speaker 6: talking about with melgoing to the milking thing. Most people
Speaker 6: don't have networks, and so working and developing your network,
Speaker 6: getting into networks where you see opportunity is a good
Speaker 6: chunk of how people succeed.
Speaker 3: Ye.
Speaker 5: So there's a part there when we talk about molts,
Speaker 5: because you said that, and that's something we talk about
Speaker 5: with our audience a lot is finding the competitive advantage
Speaker 5: that separates you. So when you're looking at a company
Speaker 5: like Peloton, I mean use that example, like what molts
Speaker 5: are you looking for specifically inside of a company?
Speaker 9: Yeah, at that time, what I was really looking at,
Speaker 9: you know, I'd known John Foley and had a lot
Speaker 9: of faith in him. He was a really great entrepreneur
Speaker 9: and stationary. It was really like the stationary bike and
Speaker 9: home fitness market at that time had nothing that was
Speaker 9: blending it really into like the Internet and the digital
Speaker 9: culture and technology that was coming. And so I think
Speaker 9: what I saw there was was first mover advantage in
Speaker 9: a sense, and if he could create a little bit
Speaker 9: of a network effect with his bikes and with that programming,
Speaker 9: that that would be its moat in a sense right,
Speaker 9: because it was something that other people tried to compete with,
Speaker 9: some successfully the Mirror for instance, or Tonal, and.
Speaker 6: Others had tried and failed.
Speaker 9: But I think by having first mover advantage, and what
Speaker 9: happened there was interesting was we had to go on
Speaker 9: hyper speed because we had this problem where the delivery
Speaker 9: from China Taiwan actually was taking too long, and so
Speaker 9: like three months after we had raised the round, it
Speaker 9: was like, we need another round because we have to
Speaker 9: be able to purchase these things in advance, because nobody's
Speaker 9: going to wait one hundred and eighty days. So I
Speaker 9: think the moat there really was getting ahead of that
Speaker 9: market having first move advantage.
Speaker 5: Essentially okay, and so it I wonder when you're looking
Speaker 5: at the investment. Obviously had his peakings at one hundred
Speaker 5: and forty nine dollars. It's come down to like nine
Speaker 5: dollars now at a certain point that we have a discussion, like, guys,
Speaker 5: we might want to pull out the investment.
Speaker 3: How does that go?
Speaker 9: This is really interesting actually, and this is Mike and
Speaker 9: I had a lot of conversations about a lot of
Speaker 9: So what happened with Pelton was he actually Mike's you know,
Speaker 9: he's a macro trader, so when he is more I
Speaker 9: would say, inclined to at certain points lock a profit,
Speaker 9: take it off the table, you know. For me as
Speaker 9: an entrepreneur, I wrote it more part of my position
Speaker 9: longer than Mike. And it was really interesting because there
Speaker 9: was times first Suore in the beginning when he was.
Speaker 6: Like, God, damn it, why did I move so much
Speaker 6: of that? Because you know, it moved it when.
Speaker 4: It was like that seventy when it was still going on.
Speaker 6: When people asked me what was the worst trade of
Speaker 6: my career? I had hired a new CIO and I said,
Speaker 6: what do you think about this? Pelicon and our three
Speaker 6: hundred thousand words were seven million at the time, and
Speaker 6: he was like, dude, it's a freaking bike. And he
Speaker 6: did a twenty one page report that said I should
Speaker 6: sell it, and I was like, and I was making
Speaker 6: lots of money and other things, and I was like,
Speaker 6: you know, I've never had a twenty to one venture.
Speaker 6: Bet it was my first one. I was like, I'll
Speaker 6: just sell it and Dave and Dave Heller said, dude,
Speaker 6: don't sell it. Maybe take your basis off, but this
Speaker 6: thing's going to take off. And I didn't want to
Speaker 6: disappoint the new guy. I was busy with Ethereum, and
Speaker 6: I sold the damn.
Speaker 4: Thing, all of it, all of it, like an idiot.
Speaker 6: And certainly then that's that's seven million that I would
Speaker 6: have would have been like where one hundred and fifty
Speaker 6: million at one point and I was just watched and
Speaker 6: watched it, but it so when it started getting high,
Speaker 6: I was yelling at him. I was like, dude, you
Speaker 6: got to take some profit at one point, yeah, And
Speaker 6: so I was when he was like yeah, yeah, mister,
Speaker 6: seven dollars.
Speaker 9: Yeah, no, but I was and Mike was just on me,
Speaker 9: and this is the you know, the power of that friendship,
Speaker 9: and he was like, look, trust me, I've seen this movie.
Speaker 9: And so when it started getting into sixty seventy in
Speaker 9: that range on the way up, not the way, you know,
Speaker 9: I was like peeling or off peeling or off peeling
Speaker 9: it off. I was doing some other strategies where I
Speaker 9: was selling call options to like kind of lock in
Speaker 9: and then depending on if it hit that, i'd you know,
Speaker 9: release the stock or whatever. And so I sold a
Speaker 9: lot of mine in that time, like between like sixty
Speaker 9: and one hundred or something, and which even that was
Speaker 9: funny because when that thing, as you correctly pointed out,
Speaker 9: I think it had a high like one hundred and fifty,
Speaker 9: and I was like, my yeah.
Speaker 3: I didn't try our friendship, but there was the first
Speaker 3: day's been.
Speaker 6: Mad at me like twice in life once when I
Speaker 6: lost that one of them.
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Speaker 1: An illegal alien from Guatemala charged with raping a child
Speaker 1: in Massachusetts. An MS thirteen gang member from Al Salvador
Speaker 1: accused of murdering a Texas man of Venezuelan charged with
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Speaker 1: Donald J. Trump's leadership. I'm Christy nom the United States
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Speaker 1: one hundred thousand and illegal aliens have been arrested. If
Speaker 1: you were here illegally, you're next. You will be fine
Speaker 1: nearly one thousand dollars a day, imprisoned and deported. You
Speaker 1: will never return. But if you register using our CBP
Speaker 1: home app and leave now, you could be allowed to
Speaker 1: return legally. Do what's right.
Speaker 6: Leave now.
Speaker 1: Under President Trump, America's laws, border and families will.
Speaker 2: Be protected sponsored by the United States Department of Homeland Security.
Speaker 6: So I lost our two ten year old kids in
Speaker 6: the middle of Cape Town, South Africa.
Speaker 3: For three hours.
Speaker 6: I was like, oh my god, Dave's actually Matt. I
Speaker 6: know the wives are going to be mad at me,
Speaker 6: But when Dave got mad at me, I know I
Speaker 6: was I'm screwed, and the other one was like a
Speaker 6: passive aggressive when Peloton was at one fifty and I've
Speaker 6: been telling him at sixty and seventy and eighty and ninety,
Speaker 6: I just sell more, sell more, sell more.
Speaker 9: And when it was at like one, was like, but
Speaker 9: to be fair, it ended up really you know, really
Speaker 9: that mentality and bleeding that out. I mean I was
Speaker 9: done with eighty move eighty percent of my position in
Speaker 9: that range, and so then I could just ride the
Speaker 9: last twenty you know, really up and down to you know,
Speaker 9: I think I sold my last bit at fifteen or
Speaker 9: eighteen or something.
Speaker 6: It's eight or nine now, but it probably when you
Speaker 6: when he looks back on it with an average price
Speaker 6: of seventy, having bought it at one, you know, it's
Speaker 6: probably the best you know, one hundred dollars investment with
Speaker 6: three hundred thousand dollars, Yeah, you still get you get
Speaker 6: a couple of those in your life.
Speaker 5: Yeah, yeah, I'm bigg It's when I'm like, wow, one
Speaker 5: dollar investment, I mean two hundred thousand dollar investment, because
Speaker 5: I watched that. We have friends who are invested in
Speaker 5: and they bought coll options, and yeah, they believed in it.
Speaker 5: I'm like, oh, I'm trying to figure out what the
Speaker 5: mote is, right, because if somebody designs a bike that
Speaker 5: you could be competitive, it's tough.
Speaker 6: The thing you have to be careful with this. So
Speaker 6: I was just just on a show and was asked,
Speaker 6: what's the best investment advice you ever got? And it's
Speaker 6: that great fortunes you're made in trend. So if you
Speaker 6: bought Microsoft, you just stayed with it because they had
Speaker 6: such a moat. They have a monopoly and it just
Speaker 6: goes and goes and goes, and smart people. So on
Speaker 6: the one hand, great fortunes are made in trend. On
Speaker 6: the other hand, markets are fiery and full of anxiety
Speaker 6: and excitement, and we have these bubbles from time to time. Right,
Speaker 6: Crypto is a market that's prone to that. So in
Speaker 6: twenty seventeen there was an amazing bubble, then it crashed
Speaker 6: ninety five percent. There was another bubble in twenty twenty one.
Speaker 6: Peloton had its explosion based on the COVID bubble. Everyone's
Speaker 6: going to stay home and never leave again, and they're
Speaker 6: all going to exercise in their bathrooms, right, and so
Speaker 6: the insanity of price, So you've got to look at
Speaker 6: both do these companies have a mobile? When prices get insane,
Speaker 6: you just got to get you got to go to
Speaker 6: the sideline and say, I'm not going to have the top.
Speaker 6: I had an amazing run. I'm done. You know, beyond me,
Speaker 6: you can you can have any of these fatty things
Speaker 6: that happened. You've got to be able to sell.
Speaker 9: Ye.
Speaker 6: I was going to really quick saying.
Speaker 9: I think the moat for Peloton, though, was it was
Speaker 9: an opportunity where nobody was yet and if you could
Speaker 9: successfully execute first mover advantage to a scale, you started
Speaker 9: to get network effect, which they did with their trainers
Speaker 9: because they could tippeel all the best trainers because they
Speaker 9: had such a distribution platform, so Equinos for instance, couldn't
Speaker 9: compete with them, and that business just like music, you know,
Speaker 9: people follow trainers, right, a good trainer, So that I
Speaker 9: think was what the moat was.
Speaker 6: In a sense.
Speaker 8: And I think what Mike said, I kind of bought
Speaker 8: it over from the music industry. And then when I
Speaker 8: heard Mike and Dave always tell me, like, don't get
Speaker 8: too emotionally attached to investment, and I used to do
Speaker 8: that with music all the time, Like you know, the
Speaker 8: first artist I had, Like, no, one couldn't tell me
Speaker 8: this kid was going to be wasn't going to be
Speaker 8: justin Biava, right, And he's an amazingly talented kid still
Speaker 8: doing this thing to this day. But in my mind
Speaker 8: he was justin Biava and the rest of the world
Speaker 8: just biber I would say that wrong and the rest
Speaker 8: of the world just didn't get it yet.
Speaker 3: So to be his kid for five six, seven years.
Speaker 4: Just like you guys don't know.
Speaker 3: You guys don't know.
Speaker 8: And it turned out he wasn't right, but so, but
Speaker 8: that was just more me being emotionally attached to it
Speaker 8: and invest in so much already. It's kind of like
Speaker 8: when you're in the casino chasing that loss, trying to
Speaker 8: win it back, right, So I think with investing, I've.
Speaker 3: Learned like to when it's time to one just not to.
Speaker 8: Be emotionally attached to it and learn to cut your
Speaker 8: ties with it whenever the time is right or you
Speaker 8: feel this right.
Speaker 3: And not like hold on and Peloton's going to go
Speaker 3: to two hundred dollars.
Speaker 4: Because try to rationalize things to make yourself not feel stupid. Yeah,
Speaker 4: it's like, well I did the research, this has to work. Yeah,
Speaker 4: it's just a slumpingy economy. I'm gonna buy the dip.
Speaker 4: It didn't buy more dip, and didn't I buy more tips?
Speaker 4: And then it's like, well, you know, I'm looking at
Speaker 4: the charts. Then you start doing candlesticks. Then you start
Speaker 4: making your own philosophy on why it's there.
Speaker 3: Is another write a story that I just found out
Speaker 3: about this recently.
Speaker 8: So when I we started investing, Mike was like betting
Speaker 8: against Tesla, right, and on the downside, yeah he was too.
Speaker 3: They both win.
Speaker 4: When shorten at what point when the pandemic it.
Speaker 6: Was it was prett pandemic. Let me tell you it
Speaker 6: was not a good time to be shortened. No, I
Speaker 6: think it was during the pandemic. I think it was
Speaker 6: the summer of twenty when it moved from like and
Speaker 6: it was just going crazy. Yeah, it was moving and
Speaker 6: moved at that time. I want to say, from like
Speaker 6: four hundred to.
Speaker 8: A thousand, Like in that case I met against it
Speaker 8: with when our friends and lost like eighty thousand.
Speaker 6: Can I tell the story? Yeah, this is really crazy.
Speaker 9: So Mike and I have been shortening it and playing
Speaker 9: it short and like himself, and one day we come
Speaker 9: up to the Ampton's Mels in the car and we
Speaker 9: pull up to Mike's house and he looks at the
Speaker 9: driveway and he goes, damn for a couple of guys
Speaker 9: short Tesla, There's sure are a lot of Tesla's.
Speaker 6: In this driveway.
Speaker 9: It was like, and I sold all my provered, all
Speaker 9: my stuff the next day with it again because I'm like,
Speaker 9: this guy's right, like we're all driving Tesla's, Like what
Speaker 9: am I doing. I'm listening to some like investment advice
Speaker 9: I saw, like you know, CNBC or whatever and mean
Speaker 9: while you know, and it kept going up.
Speaker 4: So yeah, it was.
Speaker 6: It was a really interesting lesson.
Speaker 5: I mean, it's dope even at the highest levels that
Speaker 5: y'all some of the same things you're saying, like we're
Speaker 5: experiencing so but but you didn't give up on music, right,
Speaker 5: which is because we just had this conversation with Yogati
Speaker 5: and Shotty was talking about like, Yo, investment is the
Speaker 5: same thing as like getting a musical artist, Like you're
Speaker 5: putting the money up front and looking at it as investment.
Speaker 5: So it's interesting, Hey, you say you're not getting emotionally
Speaker 5: tied to it so recently like uh again, great, advice
Speaker 5: from Mike and Dave. Like recently I got into affordable
Speaker 5: housing and Mike is a part of it. One of
Speaker 5: my closest friends, Steven Manacherin and.
Speaker 8: His brother, we have this company where we're doing affordable housing,
Speaker 8: got some buildings in the Bronx. Dave was helping us
Speaker 8: with a property in Staten Island, so on and so forth,
Speaker 8: and I was just kind of like, like Mike said,
Speaker 8: all these opportunities was coming.
Speaker 3: My head was just spinning. I was like, I'm gonna
Speaker 3: do this. I'm gonna do this, and.
Speaker 8: Mike kind of was like listen and Dave actually both
Speaker 8: was kind of like, figure out a couple things, focus
Speaker 8: on those, and Mike specifically said, don't be like Mike,
Speaker 8: who two years ago, I was just doing way too much.
Speaker 3: And I was like, fuck, that's good advice.
Speaker 8: So I kind of like trimmed down everything and focused
Speaker 8: on three big things, which is my record label, second Estage,
Speaker 8: shout out to two and anybody else I signed in
Speaker 8: the records, so with a clean line of Bow Jangles,
Speaker 8: which is my company, Meiling Bow, and real estate. And
Speaker 8: I was like, those are the three things I'm going
Speaker 8: to focus on on a high level and stop like
Speaker 8: you know, selling wagou b can this, that, that and
Speaker 8: whatever else it was. But I'm still like investing in
Speaker 8: things that I just built the studio. My merch business
Speaker 8: does really well, like so it's just like still have
Speaker 8: things to bring me in cash. And but I'm focused
Speaker 8: on those three buckets in life.
Speaker 6: And like one of the things that's important, especially when
Speaker 6: you're younger, is to develop domain expertise. Like we were
Speaker 6: at the the phitys and concert last night and they
Speaker 6: kept bringing people on and I was like, who is
Speaker 6: that guy? And of course Mel knows every last person
Speaker 6: showing up there and what their songs were, and you know,
Speaker 6: are they in the upper landed down? And so you're
Speaker 6: not going to really be great at a vertical unless
Speaker 6: you got domain expertise. And so you'd be crazy to
Speaker 6: spend your whole life in music and say I'm not
Speaker 6: doing music anymore, right when you're starting to make the
Speaker 6: progress in music, and so you know, knock on wood second,
Speaker 6: the state becomes you know, the next quality control to
Speaker 6: shadow Coach K.
Speaker 5: I was gonna say that the relationship with Coach K
Speaker 5: because he's involved in both jngles investment as well Yeah,
Speaker 5: so you had the relationship with him and brought them off.
Speaker 8: So yeah, after Mike, Mike, and Dave actually bought both
Speaker 8: Jangles from like whatever standpoint the brand, the brand, the
Speaker 8: actual corporate brand, I was like, you know what, I'm
Speaker 8: gonna get into both Jangles, and I just kind of
Speaker 8: wanted to.
Speaker 3: One.
Speaker 8: There's a group of people who have access to even
Speaker 8: people like me now, right, because I'm like to have
Speaker 8: access to me now it means a little something because
Speaker 8: I could give you access like Larry. I bought Larry
Speaker 8: and introduced them to Mike, Dave and whoever else I'm
Speaker 8: I'm the type of person like I'm like excited to
Speaker 8: share my network with people because I strongly believe whatever's.
Speaker 3: For you is going to be for you.
Speaker 8: So like if you guys left here tomorrow and started
Speaker 8: a group chat, I'm okay with that because I want
Speaker 8: you to have access to them, I want them to
Speaker 8: have access to you, and we're still going to be friends.
Speaker 3: Do I think a lot of people don't understand that
Speaker 3: and it fucks with them.
Speaker 8: So when I had the opportunity for bo Jangles, I
Speaker 8: was kind of like, I want to bring some of
Speaker 8: my friends on board. Who probably wouldn't have this opportunity,
Speaker 8: just like I wouldn't have it if it wasn't for
Speaker 8: these guys. So I, you know, caught up Coach k
Speaker 8: I was like, hey, I'm doing this. I'm buying eighteen stares.
Speaker 8: It's going to make us like the largest black franchise
Speaker 8: or at Bojangles and just QSR.
Speaker 3: In general.
Speaker 8: I think we're like in the top twenty, right and
Speaker 8: we're the fifth largest franchise or in bo Jangles.
Speaker 3: And I called up him, Steve Carlis Saint LANDREI gabba.
Speaker 8: If I'm forgetting anybody, sorry, but you know, just like
Speaker 8: a cool little group, you know, along with Ben Black,
Speaker 8: Mike bay Berry, and we bought this.
Speaker 3: We bought this.
Speaker 8: Company for twenty five million dollars and you know, just
Speaker 8: it's my company along with Coach k. But I wanted
Speaker 8: to extend that to everyone in Coach k Is. He's
Speaker 8: one of us, now you know what I'm saying. Larry,
Speaker 8: like Larry's gotten Larry and Dave is actually closer than
Speaker 8: me and Larry, now you know what I'm saying. So
Speaker 8: it's just like I love, like what my success I've
Speaker 8: always said is people people believing in me and people
Speaker 8: me understanding people.
Speaker 3: So I'm always like, it's where we come from.
Speaker 8: Like you know what I'm saying, it's really hard to
Speaker 8: like meet guys like this or have certain opportunities. And
Speaker 8: when some people get it, they're like, oh, this is
Speaker 8: like I don't want to and I'm not, like, I'm
Speaker 8: the complete opposite.
Speaker 3: I want everyone one. Like you know what I'm saying,
Speaker 3: Like what comes out?
Speaker 6: Are you going to live life from a point of abundance? Yea,
Speaker 6: from scarcity and you're just happier when you live from abundance.
Speaker 9: Yeah, Mel Mel is one of the most generous person
Speaker 9: people I've ever met in that in that capacity, He's
Speaker 9: so generous with his time, with sharing his contact, with
Speaker 9: helping in any way. And I think it's a really
Speaker 9: I think it's unusually he's unusually generous, and it really works.
Speaker 9: It really is, like you know, it kind of pays
Speaker 9: it forward and he gets lots of opportunities. But I
Speaker 9: think it's a big part of his success is really
Speaker 9: that enthusiasm and generosity.
Speaker 5: Yeah, So Mike, you said something interesting. You said, Mel
Speaker 5: is now bringing more deals to us than we brought
Speaker 5: to him.
Speaker 3: So I'm like, Mel when you present, I'm sure people
Speaker 3: are presenting opportunity to see you.
Speaker 5: Now it's like, I know he's connected, So how do
Speaker 5: you decipher what's worthy of even presenting to the group.
Speaker 3: Believe it or not.
Speaker 8: Like I've learned so much that I could understand, like
Speaker 8: you know, like you said, who's the founder, you know
Speaker 8: what he's done before, just how much I actually believe
Speaker 8: in that person. And I like to think I just
Speaker 8: have a good read on people and what they truly
Speaker 8: stand for. And that's always took me places in my life,
Speaker 8: right because just like these guys, they're good guys, and
Speaker 8: Steven is a good guy. Ben Black, like I truly
Speaker 8: believe my crew of friends David afa is really good
Speaker 8: people who we have we're very much aligned in just life.
Speaker 8: And then there's another group of people that I have
Speaker 8: tons of access to that I just can't function with
Speaker 8: on an everyday basis because.
Speaker 3: Goals and hearts and minds and souls are just aren't aligned.
Speaker 8: So I try to and I think that gets a
Speaker 8: little bit emotional, but it's just like I try to
Speaker 8: read people and understand people. I would like to say
Speaker 8: I'm pretty decent at that, and that's the ones. I'm like,
Speaker 8: you know, we should take a look at this one.
Speaker 8: It sounds like a great eye idea too. I kind
Speaker 8: of believe in this person. And then he would vet it,
Speaker 8: and then Dave would vett it, and you know, they're
Speaker 8: both so different at vetting things, but it ends up
Speaker 8: the same all the time. So that's kind of like,
Speaker 8: I don't know if I answered your question, but that's
Speaker 8: that's that's how I kind of like gauge.
Speaker 4: It's a lot of shit I just don't even bring up.
Speaker 4: You know, let me ask you guys. Start with you, Mike,
Speaker 4: artificial intelligence. When the age of artificial intelligence, we saw
Speaker 4: all of the AI stocks and technology stocks just boom
Speaker 4: because of chat, GBT, the buzz around and everything. A
Speaker 4: lot of people are concerned, scared, you know, jobs are
Speaker 4: being lost currently, so this this downside, but there's also
Speaker 4: a lot of upside as well. What's your thoughts on
Speaker 4: AI and how are you actually implementing how are you
Speaker 4: personally using art? All you guys are playing So it's interesting.
Speaker 6: My my brother in law runs the TED conference and
Speaker 6: so the first day chat she came out. He was like, dude,
Speaker 6: you got to see this, And so we start playing
Speaker 6: with it and making, you know, do a Saturday Night
Speaker 6: Live skeitch about Saturday Night Live sketch about somebody, and
Speaker 6: you know, we're kind of running through that kind of
Speaker 6: deal with it. And I started talking to my investing friends,
Speaker 6: and in real quick it was Microsoft and and Nvidia
Speaker 6: those were going to be the two, and so it
Speaker 6: was almost consensus. It's one of those few things where
Speaker 6: every smart guy I talked to gave you the same answer,
Speaker 6: and they've worked. And so I would tell you that
Speaker 6: AI is going to be a bubble. Bubbles happen around
Speaker 6: things that will change the way the world operates. And
Speaker 6: so the Internet bubble happened in nineteen ninety nine, ten
Speaker 6: years before the Internet changed the world, because it was
Speaker 6: clear that it was going to change the world, and
Speaker 6: it was an easy story for people to understand. And
Speaker 6: so we will have an AI bubble. Bubbles don't last
Speaker 6: four months, they last eighteen months, twelve months, you know,
Speaker 6: sixteen months, somewhere in that zone, twelve to eighteen months.
Speaker 6: And so what's driving the stock market now is a
Speaker 6: small group of stocks in the video Microsoft, Google that
Speaker 6: are going to keep going higher because the story's too powerful.
Speaker 6: So that's the markets are going to get way ahead
Speaker 6: of where AI gets. In reality, AI is going to
Speaker 6: change the world. It's going to change how almost every
Speaker 6: business operates, and it already has. And I talked to
Speaker 6: the biggest hedge fund, quantitative hedge fund in the world.
Speaker 4: The CTO.
Speaker 3: It was funny. Guys showed up at a.
Speaker 6: Party of mine and I was like, what are you doing.
Speaker 6: He's like, I'm a head of engineering at this hedge fund.
Speaker 6: And I was like, how many people you have worked
Speaker 6: for you? It's like a thousand. I was like, oh,
Speaker 6: that hedge fund, right, And I was asked him about AI.
Speaker 6: He said, dude, we've been using AI for fifteen for
Speaker 6: ten years. You know, this new generation, this new adaption
Speaker 6: is going to really accelerate them. And it was interesting.
Speaker 6: He said, well, it's going to accelerate that. When you
Speaker 6: have these code driven funds, right, these quantitative funds, the
Speaker 6: code kind of goes stale every three to four years
Speaker 6: because you're changing theguage. And he said, so they're now
Speaker 6: going to use AI to refresh the code. It'll do
Speaker 6: it literally at six times the speed that they used
Speaker 6: to do it at and so saves them money, keeps
Speaker 6: them ahead of the game. And so in finance you're
Speaker 6: going to see more AI, but in almost every business,
Speaker 6: and you know, it's a scary world because you can
Speaker 6: see ourselves going more haves and have nots. Right, it's
Speaker 6: I always worry that the world is hurtling towards blade Runner, right,
Speaker 6: Ken Shasha Zayer has fourteen million people that live without electricity,
Speaker 6: yet we're talking about, hey, can I get an iPhone
Speaker 6: that sounds like her, that can you know, keep me
Speaker 6: company at night? And so it's I think it's going
Speaker 6: to be really fascinating to watch. Uh, it's going to
Speaker 6: be challenging to invest because some companies you know, are
Speaker 6: going to not have a moat and AI is going
Speaker 6: to eat them alive, and other companies are going to have. Well,
Speaker 6: the one thing about AI which is hard is it
Speaker 6: takes a huge amount of money right to get these
Speaker 6: language large language learning processing, so it's data, it's huge
Speaker 6: compute power, and so it's hard to be a startup.
Speaker 6: Like the startups are raising billions.
Speaker 4: But one thing what you mentioned the stock market, the
Speaker 4: NaSTA was flat for ten years, dot Com bubble, the
Speaker 4: stock market crash, so you said that those stocks will
Speaker 4: continue to go up. You don't think that a bubble
Speaker 4: would cause the stock market to fall.
Speaker 3: It goes first.
Speaker 6: The bubble goes up first, and then grashes. And I
Speaker 6: don't think we've seen a high end, but.
Speaker 4: The stock market eventually will catch up to the crash.
Speaker 6: Yeah, you're gonna What happens in every bubble is you
Speaker 6: finally reached the point where there's no one left to buy.
Speaker 6: And it usually happens run something symbolic like the Great
Speaker 6: two thousand and you know crash happened around the y
Speaker 6: two k right the Millennium turn. There was champagne being
Speaker 6: popped around the world. There was fireworks that went off
Speaker 6: twenty four hours right from and you remember this great
Speaker 6: we went from nineteen ninety nine to two thousand. The
Speaker 6: Dow Jones peaked January one, and the Nasdaq had sixty
Speaker 6: two more days. It was like March twentieth or March
Speaker 6: nineteenth where the Dow was going down in the nags
Speaker 6: that kept going up, and then it crashed, and it
Speaker 6: crashed with aol Time Warner. This symbolic the big old
Speaker 6: old school company buying the Internet company at a stupid
Speaker 6: price that was the last money in and then we
Speaker 6: had an eighty two percent crash of the Nasdaq, not
Speaker 6: a eighteen percent crash, eighty two percent high to low.
Speaker 6: And so bubbles go so much further than you think
Speaker 6: they're going to go, and then they crash all the
Speaker 6: way back down. And so we're not there yet. We're
Speaker 6: going to go a lot higher. NA Video and then
Speaker 6: Microsoft and in this idea of the world's going to
Speaker 6: change because we just started it, right, we started talking
Speaker 6: about this four months ago.
Speaker 5: Yeah, out of the AI, that's interesting and they don't
Speaker 5: want to hear and I want it both of you
Speaker 5: guys opinion on an app.
Speaker 3: But inside of that, it's like there are companies out
Speaker 3: are here you talked about too in Video, Microsoft, But.
Speaker 5: Inside of a bubble, there are always some that are
Speaker 5: going to survive the bubble and they last longer, right,
Speaker 5: So like there's the Amazon's the Apple, there's Yahoo for
Speaker 5: but there's also the Excite dot com that doesn't make
Speaker 5: it right, And so I wonder if you if you
Speaker 5: think there are companies that are on the come up
Speaker 5: or their startups that will come out of this bubble.
Speaker 5: I'm sure that I'm sure you have some thoughts on that,
Speaker 5: or should we be looking at it from a different perspective.
Speaker 5: You said something very important. This takes a lot of energy,
Speaker 5: it takes a lot of capital, but it also takes
Speaker 5: a lot of storage. So should we be looking in
Speaker 5: that data center type of situation where like these are
Speaker 5: investments we should be looking at as well.
Speaker 6: Yeah, listen, so we have a data center business at
Speaker 6: Galaxy where and it's been mostly for bitcoin mining, where like, okay,
Speaker 6: can we repurpose the other six center? Mega lots of capacity?
Speaker 6: And who's going to use those data centers?
Speaker 3: Right?
Speaker 6: So, like you know, the the elite businesses are going
Speaker 6: to stay with the elite data centers because they're not
Speaker 6: going to take any risk. But there's a whole bunch
Speaker 6: of different users of AI of data and so the
Speaker 6: answer is yes, But it's really granular and you got
Speaker 6: to kind of do your homework and there's not a
Speaker 6: macro bet on it. I don't think to say by
Speaker 6: all the data centers. I think you've got to be
Speaker 6: very careful to understand which ones are going to win.
Speaker 6: So you're getting it with Amazon because you get you know,
Speaker 6: the big cloud providers already have it, So you're getting
Speaker 6: with Amazon. You're getting it with Google, getting it with Microsoft.
Speaker 6: It's why those damn stocks just keep going. So I
Speaker 6: wanted you to tell because you didn't. You look like
Speaker 6: you was about to say something, but you didn't have
Speaker 6: an opportunity to say something.
Speaker 9: Well, just in AI, I was going to just say that.
Speaker 9: I think it's also like a term that's batted around
Speaker 9: in this way that it's like what really is AI?
Speaker 9: Because AI, to me, really is like machine learning where
Speaker 9: machines are teaching it. You know, a lot of what
Speaker 9: masks as AI in some ways it's just like complex
Speaker 9: algorithms attached to the large language model, right, But it's
Speaker 9: I think we're still a ways away from like I
Speaker 9: don't know where the definition of AI or the singularity
Speaker 9: actually becomes right, where it's actually thinking, making decisions, teaching itself,
Speaker 9: and how far away we are I do think, just
Speaker 9: to you know, it's it's a pretty scary proposition because
Speaker 9: I think it needs more ethical thought and moral thought
Speaker 9: around where it's going. I think as a society, it's
Speaker 9: too easy for us to just build Adam bombs and
Speaker 9: then oh shit, one goes off, you know, And so
Speaker 9: I think there's a lot of danger around I, you know,
Speaker 9: Harreriri wrote Sapiens and also had something like twenty three
Speaker 9: Lessons for the twenty first Century and some books, and
Speaker 9: in that like his theory is the Industrial revolution replaced bodies,
Speaker 9: and now the intelligence or digital revolution culminating ultimately with
Speaker 9: AI is going to replace minds, right, and so in
Speaker 9: the Industrial Revolution those jobs got replaced by programming jobs
Speaker 9: or the people that make the machines and things like that,
Speaker 9: and then you know, kind of where's the next thing.
Speaker 9: If so, I think it's I think there's a lot
Speaker 9: to think about it. I'm not answering from an investment
Speaker 9: standpoint as much as just and you know, for my
Speaker 9: personal company, I just look at like, is it in
Speaker 9: a spot right now where in the foreseeable future it's
Speaker 9: going to leverage a business return for me, it's going
Speaker 9: to either have less friction, more market or how am
Speaker 9: I applying it to the business in a way that's
Speaker 9: meaningful and not just like, oh, let's just you know,
Speaker 9: kind of put this new program in.
Speaker 6: And but it's hard not to think that in ten
Speaker 6: years every kid will have an AI tutor, right, Like,
Speaker 6: if you're rich, real rich, you hire a tutor for
Speaker 6: your kid and he comes over to your house for
Speaker 6: two hours a night or an hour two hours a week,
Speaker 6: and he sits with your kid, and he figured out
Speaker 6: where your kid is, what what what he needs, Like
Speaker 6: that's going to get replaced by and then the kids
Speaker 6: that grow up in flat Bush, maybe I'll have the
Speaker 6: same access to great education than the kids that grow
Speaker 6: up on the Upper east Side. It hasn't happened yet,
Speaker 6: Devil's Advocate though.
Speaker 9: When COVID came, I know it's not AI, but people
Speaker 9: started computer learning and scores went down.
Speaker 3: Could we have it?
Speaker 6: Could we haven't perfected or even kind of close to tutoring.
Speaker 8: So my experience for AI is funny because like I
Speaker 8: don't know very much about it, just like no one,
Speaker 8: no one really. I mean, it's probably a couple of
Speaker 8: guys that knows a lot about it. But I was
Speaker 8: in the process literally when I built that studio. A
Speaker 8: part of the reason for billing that studio was because
Speaker 8: I wanted to start a publishing company. I was in
Speaker 8: a raise like four or five million dollars to start
Speaker 8: this publishing company, and the AI talk started happening right
Speaker 8: around then. And a publishing company you primarily like sign
Speaker 8: produces song writer is you know, you may sign an
Speaker 8: artist and is publishing right, but you make your money
Speaker 8: from producers and songwriters. And I was like, you know what,
Speaker 8: I'm like connected in every label, I'll be able to
Speaker 8: play it. And I had this great blueprint. And then
Speaker 8: I heard songs that AI wrote right, like the Drake,
Speaker 8: the Weekend Song.
Speaker 3: I'm sure you guys heard that.
Speaker 8: I heard beats they produce, and I was like, Fuck,
Speaker 8: I don't know if I'm right about this, but I
Speaker 8: don't want to spend four or five million dollars building
Speaker 8: up a business for the next because publishing takes about
Speaker 8: three years before you hit that cycle if you do
Speaker 8: it completely right right where money's coming in.
Speaker 3: And I just didn't know where AI would be in
Speaker 3: the music industry.
Speaker 8: Three years from now, maybe AI's writing all songs and
Speaker 8: then there's no need for me to sign They buried
Speaker 8: to write songs anymore. Right, So I'm like, do I
Speaker 8: take a risk right now of developing and starting a
Speaker 8: new business based on like humans? Right that I'm realizing
Speaker 8: the very beginning stages of AI. They're doing it really
Speaker 8: really well. And maybe three years from now AI is
Speaker 8: writing songs for Beyonce or songs for you know whoever
Speaker 8: producing beats for Drake and I don't have the technology,
Speaker 8: and he said it's a lot of money to do that.
Speaker 3: So I literally completely stepped back from that business and.
Speaker 8: Decided to just focus on real estate, Bojangles and music
Speaker 8: and just traditionally, like from a label perspective, because not
Speaker 8: because I knew.
Speaker 3: It was just a gut feeling and I'm just like,
Speaker 3: you know what, instead of like.
Speaker 8: Using all this money to do something I'm already unsure
Speaker 8: about now, this AI thing put me in a position
Speaker 8: where I just want to kind of wait and see
Speaker 8: what happens, and I won't revisit that business. It's just
Speaker 8: kind of passed for me at this point. But that
Speaker 8: was my experience with AI recently, and again hopefully I'm wrong,
Speaker 8: because like you said, that had cost so many jobs,
Speaker 8: so many songwriters producers out of work, which is fifty
Speaker 8: percent of the music business. But from a label perspective,
Speaker 8: if I had to pay and I'm just making this up,
Speaker 8: if I had to pay Timbland.
Speaker 3: Two hundred thousand dollars.
Speaker 8: For a beat, and I could tell AI, hey, I
Speaker 8: need a beat that sounds like Timbland, and it cost
Speaker 8: me a fractic. Don't even cost me anything because I
Speaker 8: already paid for the program right effective as the label.
Speaker 3: I'm going to go with that. AI.
Speaker 8: So I'm I'm I looked at it from both perspectives
Speaker 8: and I just decided to completely backuate interests.
Speaker 3: Well, appreciate you guys.
Speaker 4: I know you got to run. How can they watch
Speaker 4: the podcast? When will the podcast be available?
Speaker 3: They better could answer that, that's it back to you. No,
Speaker 3: we uh, we're shooting. We have like four we're only
Speaker 3: doing seasons.
Speaker 8: No, we're doing twelve episodes each season and we have
Speaker 8: like maybe five done. We're going to finish up in September,
Speaker 8: and we'll be sure to let you guys know when,
Speaker 8: way or how, but it.
Speaker 6: Will becoming yell, yelling, scream.
Speaker 4: Okay, yeah, well guys, thanks to Ton the same and yeah,
Speaker 4: thank you guys. Appreciate this is a really insightful conversation.
Speaker 3: So a great one. Thank you, Thank you guys, and
Speaker 3: you guys will be on that ship sure, all right.
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