Speaker 1: This is Mesters in Business with Very Results on Bloomberg Radio.
Speaker 1: Here this week on the podcast, my special guest is
Speaker 1: Max Chafkin. He is a journalist and a reporter and
Speaker 1: writer and has a new book out all about Peter
Speaker 1: Teel and Silicon Valley. It's quite fascinating. The book is
Speaker 1: called The Contrarian. Previously, I interviewed Ryan Holliday about his
Speaker 1: book on Peter Teel funding the Whole Hogan litigation against Hawker.
Speaker 1: That book was called Conspiracy. This book is really less
Speaker 1: focused on any single event and more of a deep
Speaker 1: dive into uh the life and times of Peter Teel.
Speaker 1: He's a fascinating character and the book is really quite
Speaker 1: quite interesting. I found the book intriguing, and I found
Speaker 1: my conversation with Max fascinating, and I think you will
Speaker 1: also so, with no further ado, my interview with Business
Speaker 1: Weeks Max Chafkin. This is Masters in Business with Very
Speaker 1: Results on Bloomberg Radio. My special guest this week is
Speaker 1: Max Chafkin. He is a features editor and tech reporter
Speaker 1: at Bloomberg Business Week. His work has also appeared in
Speaker 1: such August magazines as Fast Company, vamany Fair, The New
Speaker 1: York Times, magazine. He is the author of a fascinating
Speaker 1: new book, The Contrarian Peter Teel and Silicon Valley's Pursuit
Speaker 1: of Power. Normally here I say, guest, welcome to Bloomberg,
Speaker 1: but since you work here, I'm gonna say Max, welcome
Speaker 1: to Masters in Business. Thanks for having me, Barry, it's
Speaker 1: a pleasure to be here. Uh. And I have to say,
Speaker 1: this is a fascinating topic about a really interesting, eclectic
Speaker 1: person that even though there's been a decent amount written
Speaker 1: about him before this, there wasn't as much of a
Speaker 1: deep dive into his life. So so we're gonna get
Speaker 1: to that in a few minutes. Before we do, let's
Speaker 1: just start with your background. How did you get into journalism?
Speaker 1: What attracted you to this? Yeah, so my first job
Speaker 1: in journalism was at a magazine called Ink, which is
Speaker 1: a short business magazine. You know, I, I don't know.
Speaker 1: I was interested in Uh. I was interested in getting
Speaker 1: a job in journalism. And this is going back sixteen
Speaker 1: seventeen years ago. Um, and my father had worked in
Speaker 1: business his whole career. I've sort of been interested in
Speaker 1: in business and and any idea that like the store,
Speaker 1: the sort of business stories have something to say about,
Speaker 1: you know, the real world. Um. You know, I read
Speaker 1: Moneyball and you know, uh and the Michael Lewis book
Speaker 1: about the the the Oakland A's and and kind of
Speaker 1: the sort of business story behind the Oakland is being
Speaker 1: good at baseball. Anyway, I got this job at INC Magazine,
Speaker 1: small business magazine, and that was kind of how I
Speaker 1: got into it. And I the way I got into
Speaker 1: covering tech was, you know, back then tech was kind
Speaker 1: of this side show um and and I was like
Speaker 1: the young reporter. Uh So they kind of just let
Speaker 1: me like do whatever I wanted in terms of of
Speaker 1: of covering the tech companies because first of all, the
Speaker 1: basic view was that it wasn't very important and that
Speaker 1: you know. So so anyway, I got to encounter a
Speaker 1: lot of these folks, you know, including um teal you know,
Speaker 1: relatively early uh and got to kind of see watch this.
Speaker 1: You know. Obviously it's not the entire um. I didn't
Speaker 1: get to witness the entire evolution of silicon valid, but
Speaker 1: I got to see a really important part, you know,
Speaker 1: going from from that time two thousand five to today,
Speaker 1: where you know, the tech industry went from being kind
Speaker 1: of an economic side show where you know, back at
Speaker 1: my job at INC. You know, I had this more
Speaker 1: serve of senior writers telling me to you know, these
Speaker 1: companies are all stupid and um and they're all you know,
Speaker 1: they're losing money. And I went from being this kind
Speaker 1: of important but but really a side show to being
Speaker 1: you know, i'd argue, you know, the most important you know,
Speaker 1: economic engine in the United States, maybe even the world, um,
Speaker 1: you know, really important, maybe the most important cultural center,
Speaker 1: and I think increasingly, um you know, really the important
Speaker 1: political uh center of gravity. So it's it's amazing that
Speaker 1: people who witnessed the nineteen nineties so easily drew the
Speaker 1: wrong lesson, which is oh, a lot of these worthless
Speaker 1: the list companies have no revenue, no profits, they're worthless.
Speaker 1: But you can always pick those out. You have to
Speaker 1: look at the broader trend. And clearly in the nineties
Speaker 1: this isn't hindsight. Technology was changing everything. You didn't have
Speaker 1: to be a genius to figure that out, although you
Speaker 1: could see how people might miss it because of so
Speaker 1: many of the negative stories. Yeah. Yeah, And it's funny
Speaker 1: that the people who kind of who who thrived in
Speaker 1: the in that early period, including Peter Thiel, but also
Speaker 1: many others. You know, we're the we're the kind of
Speaker 1: contrarians who set who are arguing back then, actually, uh,
Speaker 1: the dot com boom was great, and we built all
Speaker 1: this infrastructure and and you heard these arguments back then
Speaker 1: that that we're mostly um dismissed. But but yeah, I
Speaker 1: mean now in retrospect, right, it looks like, um, yeah,
Speaker 1: they basically had it right, but then a bunch of
Speaker 1: there was a bunch of like sort of dumb money
Speaker 1: that that that got dumped into the industry and and
Speaker 1: kind of the party they pick up the drinks for
Speaker 1: everybody else. Listen. I've talked about this with other technologists
Speaker 1: and vcs. Before Global crossing and Metromedia, fiber and all
Speaker 1: that stuff that blew up. It got brought out of
Speaker 1: bankruptcy for pennies on the dollar, and that's how you
Speaker 1: ended up with the YouTube's and netflix is and uh
Speaker 1: facebooks of the world. But for that it wouldn't happen.
Speaker 1: So we're in a total agreement on technology. Let me
Speaker 1: ask you, do you recall the first time you met
Speaker 1: Peter tile tell us a little bit. So I was
Speaker 1: trying to think about this and I think it was, Uh,
Speaker 1: it's either two thousand seven or two thousand eight. So
Speaker 1: I was writing a story about Elon Musk. You know,
Speaker 1: Elon Musk at the time was kind of famous, but
Speaker 1: not that famous. He had started a company UM during
Speaker 1: the dot com boom that had um that had been
Speaker 1: sold for like three million bucks. He had been he
Speaker 1: was like one of the early kind of like dot
Speaker 1: Colm kids, and that's when he first encountered Teal. They
Speaker 1: met one another at PayPal and and they had this
Speaker 1: kind of very difficult kind of the relationship. They're like
Speaker 1: friend of these or something, and we can get into that,
Speaker 1: but any case, I was doing a story about musk
Speaker 1: Um who was distinguishing himself at the time because he
Speaker 1: was involved in company Tesla that you know, nobody was
Speaker 1: taking seriously because they were trying to make an electric
Speaker 1: sports car, which kind of seems like they were taking
Speaker 1: these um I'm trying to remember with the cars, right,
Speaker 1: They're taking these Lotus Alon mules, pulling out all the engines,
Speaker 1: putting in batteries and laptop batteries, and you know, nobody
Speaker 1: thought they were a serious point. Yeah, it was a
Speaker 1: hobbyist project essentially that he was trying to turn into
Speaker 1: something much bigger. And he also had this crazy rocket
Speaker 1: thing and and and that's when I talked to Teal
Speaker 1: I for the first time. Was just like a very
Speaker 1: quick interview about you know, what's up with this guy
Speaker 1: Elon musk uh and um and and I counted him,
Speaker 1: I guess basically a handful of times, you know, in
Speaker 1: the years that follows. The funny thing about him, So
Speaker 1: most people in Silicon Valley know who Peter Teal is.
Speaker 1: But I think most Americans and even a lot of
Speaker 1: people like who are who are involved in business like
Speaker 1: are not super aware of him because he was this
Speaker 1: like behind the scenes player. He was not not the
Speaker 1: front man, not the guy he only ran he he
Speaker 1: was the CEO of PayPal. But it was a pretty
Speaker 1: short tenure, just a couple of years. They got booked
Speaker 1: by eBay pretty early on, and he left like the
Speaker 1: day that um, you know, the day that Meg Whitman,
Speaker 1: you know, took the keys, uh, Teal was out the
Speaker 1: door and um. And so he had this kind of
Speaker 1: behind the scenes thing where where he was sort of secretly,
Speaker 1: you know, this really influential guy. You know, there's this
Speaker 1: sense in Silicon Valley especially you know in that period
Speaker 1: from like two thousand five to sixteen where you know
Speaker 1: kind of you know the game, you know, six Degrees
Speaker 1: of Kevin Bacon or something. But like every startup, one
Speaker 1: way or another pretty quickly comes back to Teal. And
Speaker 1: the way it came back to him was through this
Speaker 1: thing called the PayPal Mafia, which probably a lot of
Speaker 1: people have heard of, but I'll just summarize real quick.
Speaker 1: It was basically just these this gang of folks who
Speaker 1: had been involved in the early years of PayPal. They
Speaker 1: were all sort of working together um and making investments
Speaker 1: early on, including in um Facebook, but also you know
Speaker 1: LinkedIn the Reid Hoffman was Red Hoffman, Ela mus Peter Teal,
Speaker 1: who else was in the PayPal mass So the the
Speaker 1: YouTube founders are are members of the PayPal mafia. You
Speaker 1: also had a couple of vcs were not super well known,
Speaker 1: but a pretty important one is Keith R. Boy, who's
Speaker 1: been involved in you know, some of Jack Dorsey's Square,
Speaker 1: Jack Dorsey's company were Boy I think was was an
Speaker 1: executive there and as you know, has kind of been
Speaker 1: in the fintech world, uh in a big way over
Speaker 1: the last decade. Uh David Sacks another UM kind of
Speaker 1: well known venture capitalist. UM. You had who am I forgetting? Oh,
Speaker 1: the founders of yelp. Uh. So it's like, uh Max
Speaker 1: Levchin who started a firm which is this, you know,
Speaker 1: another kind of fintech thing that I think they went
Speaker 1: public within the last year. She had these guys who
Speaker 1: were all UM, really successful, really smart. UM. We're very much,
Speaker 1: very similar, kind of a lot of ideological enlignment. And
Speaker 1: there there are some exceptions. You know, Teal and Musk
Speaker 1: disagree with each other and a lot of things, but
Speaker 1: for the most part, UM, these guys are really into
Speaker 1: you know, the future and and and sort of the
Speaker 1: possibilities that are created by technology. Many of them very conservative.
Speaker 1: You know, Teal comes out of this kind of politically
Speaker 1: activist background. A lot of the early PayPal mafia guys.
Speaker 1: UM worked for this newspaper that that Peter Teel started
Speaker 1: at Stanford, the Stanford Review. UM. So it's this kind
Speaker 1: of ideological venture capital network where they're investing each other's companies.
Speaker 1: You have UM employees who bounced from you know, one
Speaker 1: company to the next to the next. If you want
Speaker 1: to like make your career in silicon Valley. You know,
Speaker 1: one way to do it, it's not the only way
Speaker 1: is to kind of get in with this with this
Speaker 1: group of people. Tell tell us about I love this phrase,
Speaker 1: the cult of disruption. So that's kind of the cool thing.
Speaker 1: What was attractive to me about, you know, writing about
Speaker 1: Teal and about the book, is that tel his influence.
Speaker 1: Of course, he has the money, the kind of conventional
Speaker 1: he he was an investor in the first outside investor
Speaker 1: in Facebook, co founder palanteer Co, you know, co founder
Speaker 1: PayPal um. But then there's this ideological thing where where
Speaker 1: Teal is kind of different from a lot of these
Speaker 1: other guys, and that he had a very clear sort
Speaker 1: of idea and that ability to articulate, um, you know,
Speaker 1: a vision for technology and and for for politics, and
Speaker 1: and that idea, which is probably best you know, kind
Speaker 1: of laid out in Teal's book zero to one, but
Speaker 1: which you can find you know, on YouTube videos and
Speaker 1: things like that, is more or less that technology companies
Speaker 1: are you know, the best hope for the future. Um.
Speaker 1: They are. There are the things they're gonna make the
Speaker 1: future happen. They're going to save the world. Um. And
Speaker 1: that the way that technology companies can thrive or are
Speaker 1: will will do best is if they try to get
Speaker 1: you know, basically as big as they can, as fast
Speaker 1: as they can, and if they are constantly trying to
Speaker 1: overturn norms and and in other words, now, in this view, right, um,
Speaker 1: it's really important to to sort of break with the herd.
Speaker 1: And so it's not just that if you're a startup
Speaker 1: it's good to sort of break the rules. It's it's
Speaker 1: okay to break the rules. That's that's not what this says.
Speaker 1: What Teal thinks is that breaking the rules and kind
Speaker 1: of changing um norms, changing perceptions even yeah, like even
Speaker 1: getting into a little bit of trouble is a social good.
Speaker 1: And that's kind of how progress happens. And we see
Speaker 1: that with Facebook, right the Facebook model motto was you know,
Speaker 1: move fast and break things, right like the idea of disruption.
Speaker 1: We normally, I think, conventionally have thought of disruption as
Speaker 1: being like, you know, bad thing you don't you get,
Speaker 1: the thing you yell your kids at for um. But
Speaker 1: but but Teel kind of rebranded it as as a
Speaker 1: as a social good, as something to be proud of,
Speaker 1: and kind of folds it gets folded into this sort
Speaker 1: of imperial capitalism, which again I think we see, you know,
Speaker 1: most clearly with Facebook, where the company just is this
Speaker 1: gigantic company swallowing competitors trying to get huge, you know,
Speaker 1: getting enormous and and um, and then you know, attempting
Speaker 1: to just sort of dominate. And so that view of
Speaker 1: technology as both rule breaking and kind of monopolistic that
Speaker 1: comes from from Peter Teel. And of course it's not
Speaker 1: a totally uh, you know, it's a controversial vision, right
Speaker 1: because like I'm not sure we want to have these
Speaker 1: giant tech monopolies or or you know, obviously, once once
Speaker 1: companies like Facebook get as big as they are, um,
Speaker 1: then that that propensity for rule breaking um becomes you know,
Speaker 1: a potential problem. So he comes out of the PayPal
Speaker 1: mafia having sold the company, uh to eBay, which eventually
Speaker 1: gets run by Meg Whitman. I don't remember if she
Speaker 1: was CEO doing the purchase. Was it was she was, yeah, yeah,
Speaker 1: and they had a rivalry and yeah, tell us about
Speaker 1: because you would think she like Meg Whitman. Meg Whitman
Speaker 1: is not exactly the sort of person you think is
Speaker 1: prickly and gonna be getting two spats with people. How
Speaker 1: did this become some sort of uh A challenged relationship.
Speaker 1: So with Teal, right, there's always a kind of a
Speaker 1: business dimension and an ideological dimension. Business dimension. Um. PayPal
Speaker 1: was growing quickly and in some ways is was a
Speaker 1: threat to eBay because like, if all the transactions are
Speaker 1: happening in PayPal, that that's gonna you know, could conceivably
Speaker 1: hurt eBay in the in the long run. Um. But
Speaker 1: but of course eBay has a lot of power over
Speaker 1: PayPal because at any point eBay could just try to
Speaker 1: shut it off. eBay had a competing payment service at
Speaker 1: the time, So there's this kind of tension that you
Speaker 1: often see in in in these tech businesses where you
Speaker 1: have a platform and then a company that's kind of
Speaker 1: ascendant within that platform. So that was going on. But
Speaker 1: but but of course there's a there's another dimension, which
Speaker 1: is that Whitman was kind of a conventional business figure.
Speaker 1: Right she I can't remember if she I think she
Speaker 1: has an m b A. Her her big um success
Speaker 1: before that was at Hasbro. She's not a technologist, right,
Speaker 1: She's somebody who's kind of like a normal business as
Speaker 1: Teal and his his peer sought, you know, kind of
Speaker 1: a square, and they saw themselves as being you know,
Speaker 1: the rebels. You know, they had been they had been
Speaker 1: involved in this conservative newspaper at Stanford was all about
Speaker 1: kind of sticking it in the eye of the establishment.
Speaker 1: And and women of course is not a politically you know,
Speaker 1: not that far away you know from Teal, she's kind
Speaker 1: of center right or whatever. Um. But but you know
Speaker 1: they are just but they just totally different sort of personality,
Speaker 1: generational viewpoints. They want you know, Teal and and his
Speaker 1: and his crew like they're really invested in the idea
Speaker 1: of kind of overturning you know, everything about you know,
Speaker 1: Meg Whitman's world, the world of m b A's and
Speaker 1: you know kind of normal Wall Street finance and um
Speaker 1: and you know, kind of normal business practice. They they
Speaker 1: thought they were you know, uh, you know, getting rid
Speaker 1: of all that or revolutionizing all of that. And the
Speaker 1: fact that they you know, they kind of succeeded, right
Speaker 1: they went public eventually they did sell themselves to eBay.
Speaker 1: But but but that that success us um, you know,
Speaker 1: then becomes one of the founding myths of Silicon Valley,
Speaker 1: where you see that same attitude, you know, we are
Speaker 1: different from those guys on the East Coast that you
Speaker 1: know nowadays they talk about the paper belt, right, the
Speaker 1: East Coast establishment, the media, the finance world. That's the
Speaker 1: paper belt. We're getting like the rust belt, we're getting
Speaker 1: rid of them. Where this new thing and that becomes
Speaker 1: kind of the one of as I said, like you know,
Speaker 1: the founding myth, the founding ideology that that kind of
Speaker 1: helps propel Facebook and Uber and many of these other companies,
Speaker 1: uh to to their amazing height. So we're gonna get
Speaker 1: to Facebook. I want to stick to this sort of
Speaker 1: rivalry he has not only with Meg Whitman, but with
Speaker 1: a fame VC Mike Moritz of Sequoia Capital. He's a
Speaker 1: California VC guy. He's not part of the rust belt.
Speaker 1: Paper belt. Why did they butt heads? Yeah, well so
Speaker 1: more it's at the time is and was you know,
Speaker 1: one of the most famous legend legend right. You know,
Speaker 1: he had a close relationship with Steve Jobs when he
Speaker 1: was a journalist. I had written this book about Apple
Speaker 1: and then had gone on to become an investor invested
Speaker 1: in Google. Um more, it's uh so there were there
Speaker 1: actually there were so many payments companies back then. Um
Speaker 1: And that's that's a thing that we've sort of all
Speaker 1: kind of forgot. Right. You just think PayPal, Wow, what
Speaker 1: a what a revolutionary idea, But it wasn't really a
Speaker 1: revolutionary idea. There were, you know, like dozens of these things.
Speaker 1: Every every major tech firm had a payments thing, every
Speaker 1: bank had a payments thing. And there are a bunch
Speaker 1: of independent startups, one of which was started by Elon Musk,
Speaker 1: which called x dot com, and Mike Morritz was his investor.
Speaker 1: More it's um had and I think has a kind
Speaker 1: of a more conventional view of what a startup is
Speaker 1: and what a Silicon Valley founder is supposed to be
Speaker 1: like than than Peter Teal. And so part of what
Speaker 1: happened is that, you know, the two companies merged, Musk
Speaker 1: became CEO and Teal basically got bounced out. And six
Speaker 1: months after that, Musk goes on his honeymoon. UM and
Speaker 1: while he's away, uh Teal and some of the his
Speaker 1: friends who who had who had started the company with
Speaker 1: him basically engineer a coup. They marched to Mike Moritz's
Speaker 1: office on Sandhill Road and they present him with letters
Speaker 1: of resignation for you know, most of the executive team
Speaker 1: and say, you know you gotta you gotta fire everybody
Speaker 1: and replace. You gotta fire sorry, you gotta fire Elon
Speaker 1: musk Um and bring in Peter or we're all gonna
Speaker 1: walk and more. It's Um agrees because basically had no choice.
Speaker 1: But of course that creates some some some I think
Speaker 1: bad blood, and then there's there's like a further h
Speaker 1: amount of bad blood where Teal Um. You know, people
Speaker 1: think of Teal as this sort of Silicon Valley guy
Speaker 1: as being you know, you know, big visionary, but he
Speaker 1: his his involvement with PayPal originally was as an investor.
Speaker 1: He had started a hedge fund and he kind of
Speaker 1: approached the management of the company like a hedge fund guy.
Speaker 1: So he he almost the entire time he's running PayPal,
Speaker 1: he was trying to sell he he he recognized that
Speaker 1: the company was on uncertain footing, they were losing money,
Speaker 1: it had a lot value. He wanted to sell a company.
Speaker 1: Morrits did not, because, of course, for a venture capitalist,
Speaker 1: once you have a hit, you really don't want to
Speaker 1: You don't want to sell early because your entire portfolio
Speaker 1: is kind of dependent on that hit, you know, going
Speaker 1: as big as possible So that was the second way
Speaker 1: that they butted heads, where where more it's you know,
Speaker 1: kind of comes to Seatial as this as as an operator,
Speaker 1: not not as a real entrepreneur. And til Um sees
Speaker 1: more it's as basically a sharp elbowed guy who's just
Speaker 1: trying to get his and and and and that becomes
Speaker 1: a conflict that helps set up um teal later in
Speaker 1: his career because when Tel started a venture capital fund,
Speaker 1: his the Founders Fund, the whole idea is like, we're
Speaker 1: different from uh, the Sequoia way. You know, Mike Morritts
Speaker 1: will fire founders, he'll you know, he doesn't let founders
Speaker 1: you know, run the company. Um. This is not an
Speaker 1: entirely fair critique, although they're especially given that he himself
Speaker 1: orchestrated the firing y Elon Musk from Elan Musk's company.
Speaker 1: But but as they saw it, you know Moretz was
Speaker 1: kind of and the kind of Sequoia way was about
Speaker 1: preserving sequoias, you know, internal rate of return. It wasn't
Speaker 1: about you know, helping the entrepreneur. Um and and they
Speaker 1: were going to be different and the and the founders
Speaker 1: fund approach, which again they really marketed as like the
Speaker 1: opposite of Sequoia, which at the time was and still is,
Speaker 1: you know, one of the big venture capital firms, as like,
Speaker 1: we are gonna We're gonna let you do what you want.
Speaker 1: You know, it's your company. We will never fire a
Speaker 1: founder um and and hence founders fund, hence founders fund,
Speaker 1: and hence you know, Mark Zuckerberg ending up as like,
Speaker 1: you know, the absolute dictator of this like a trillion
Speaker 1: dollar company, Facebook, with the A shares that he has
Speaker 1: a vastly disproportion of voting share, he really can't be
Speaker 1: deposed without his own permission. And and as long as
Speaker 1: you're bringing up, um, Facebook and Zuck Teal was one
Speaker 1: of the very first investors into Facebook, wasn't yeah yeah,
Speaker 1: first outside investor. I mean he he came in at
Speaker 1: the same time as Reid Hoffman, who's another one of
Speaker 1: his buddies. Um, but you know he he made a
Speaker 1: big the first significant investment in Facebook five dollars. If
Speaker 1: you've watched The Social network, um he there's a scene
Speaker 1: where Sean Parker, the Shawn Parker character played by Justin
Speaker 1: timber Leg and Jesse Eisenberg playing Mark Zuckerberg meet with
Speaker 1: this kind of suit VC who tells them to like, um,
Speaker 1: you know, change the company structure to fire the other
Speaker 1: guy at Wardo Savern. And that is Peter Teal. I mean,
Speaker 1: that's that that that character who just appears for about
Speaker 1: you know, fifteen seconds is Teal because Teal was this
Speaker 1: was the outside money, and Teal helps set in motion
Speaker 1: this chain chain of events that allowed Suckerberg to restructure
Speaker 1: the company so that he would be you know, in control,
Speaker 1: not just in control then, but you know, in control today.
Speaker 1: So let's talk a little bit about Teal the investor
Speaker 1: and tell the businessman. He's pretty obviously a fascinating and
Speaker 1: complex character, but he very much she as a contrarian
Speaker 1: from whence does this streak? I mean, there's a pretty
Speaker 1: clear path in Silicon Valley to how to succeed as
Speaker 1: an entrepreneur, how to succeed as a venture capitalist. Uh,
Speaker 1: that wasn't anything that was in need of reinventment, and
Speaker 1: yet he very much reinvent vented both of those fields.
Speaker 1: Why what motivated Yeah? So, I mean you can go
Speaker 1: way back. I mean he so his basic idea you
Speaker 1: said contrarianism, right, but and it' and it's it's really
Speaker 1: that you know, the majority is often wrong. That's his
Speaker 1: idea that like, when when you have these things that
Speaker 1: we as a society have agreed on, um a lot
Speaker 1: of the time, we're we're we're making those assumptions, are
Speaker 1: making those decisions based on sort of faulty assumptions where
Speaker 1: we're agreeing with things because we want to make our
Speaker 1: our friends, neighbors and colleagues happy. And Heal thinks we
Speaker 1: make mistakes that way. Um that comes you know, I
Speaker 1: think you go way back. You know, he was bullied
Speaker 1: as a child. You know, he bounced around a lot.
Speaker 1: I think I think he was always kind of him
Speaker 1: against the world as a kid. Um. But also it
Speaker 1: goes to this you know philosophy, French philosopher that he's
Speaker 1: really into Rhune Gerard Um who you know basically articulated
Speaker 1: a uh you know, a sort of philosophical version of
Speaker 1: of contrarianism that that Teal has really brought into. And
Speaker 1: what's interesting, So I think, you know the Teal approach.
Speaker 1: You can you obviously see why it's useful um in
Speaker 1: in in the world as a technology investor, because vcs
Speaker 1: make these high risk, you know, high reward bets and
Speaker 1: so you don't really want to bet on the consensus. Right,
Speaker 1: it's a there's low upside um. Uh. But also you know,
Speaker 1: Teal thinks it's more than that, right, Teal thinks this
Speaker 1: is like a potential life philosophy, and and that that
Speaker 1: sort of um finding areas of disagreement. He you know,
Speaker 1: in in um in job interviews, he he he asked people,
Speaker 1: you know, what is the thing that you believe that
Speaker 1: no one else believes? Right, He's like really interested in
Speaker 1: in in kind of breaking the norm and and and
Speaker 1: it's interested in this as as a life philosophy. The
Speaker 1: funny thing is right for somebody is all about you know,
Speaker 1: being different. Um. And I think this is related. A
Speaker 1: lot of what he's done is actually like sort of
Speaker 1: sell into bubbles rather than betting. He doesn't all he
Speaker 1: you know, he sometimes has bet against bubbles, especially when
Speaker 1: he was running his hedge fund in the in the
Speaker 1: two thousand's, But but often it's more like he sees
Speaker 1: something that's hot and he figures out a way to
Speaker 1: to make a play. So that was so PayPal was
Speaker 1: certainly one of those where there's this huge boom and
Speaker 1: Teal was an outsider and he kind of you know,
Speaker 1: finds his way to this brilliant coder, Max leve Chin
Speaker 1: and and and you know the rest of history. Same
Speaker 1: thing with Palanteer. We're Palanteers this now today, you know,
Speaker 1: government contract or, big data mining firm. And it really
Speaker 1: grew out of um Tel's insight, you know, after not
Speaker 1: eleven that Silicon Valley has something to sell the US
Speaker 1: government because the US government was really interested in data
Speaker 1: mining doing a better job of kind of we have
Speaker 1: all this information, we have aldest surveillance, thousands and thousands
Speaker 1: of hours of audio that we've picked up from the
Speaker 1: field that's potentially dangerous. What the hell do we do
Speaker 1: with it? Yeah, And Palanteer was more or less just yeah,
Speaker 1: you know an elevator pitch too that that was like
Speaker 1: directly aimed at that. And it took them, you know,
Speaker 1: a decade or so to kind of actually find a business.
Speaker 1: But so it's in a way Teal is good at
Speaker 1: at at at like spotting these trends and and and
Speaker 1: sort of seeing the ways that the herd is moving
Speaker 1: and then finding ways to maneuver so that he can
Speaker 1: he can profit from from that movement. And I think
Speaker 1: the the sort of Trump thing is another would be
Speaker 1: another instance of that where Teal was really early. UM. Now,
Speaker 1: now of course we could talk about the ethics and
Speaker 1: morality or whatever of this, but but just from a
Speaker 1: sort of cold calculation, Teal was very early in in
Speaker 1: in seeing that there was movement against kind of globalization,
Speaker 1: that there was the rise of this um really you know,
Speaker 1: hardcore right wing, especially on the Internet. And and you know,
Speaker 1: he saw Trump before many many other people. UM. Realized
Speaker 1: that that this was happening and that it was real,
Speaker 1: and and then that and that allowed him, you know,
Speaker 1: to get in early on Trump. So so let's combine
Speaker 1: the conversation of out of Facebook and the conversation about
Speaker 1: Trump with the deal you talk about the secret deal
Speaker 1: that was cut before the election. UM. Whereas a lot
Speaker 1: of people on the writer complaining that the tech world
Speaker 1: is biased against them and there's a liberal bias in
Speaker 1: reality that wasn't what was taking place behind the scenes
Speaker 1: about that, and I think people so you know, there's
Speaker 1: on the right over the last um, you know, five
Speaker 1: to ten years, UM, there's been a realization that first
Speaker 1: of all, Silicon Valley is very powerful, UM, which is true,
Speaker 1: and that a lot of liberal people work at these
Speaker 1: tech companies, which is also true. And so what they've
Speaker 1: done is kind of um taking the playbook that has
Speaker 1: often used against the media companies. Yeah, they're working the
Speaker 1: refs exactly right. And and so that pressure has been
Speaker 1: coming for a long time. It really it bubbled up
Speaker 1: in a big way before the election. Um. You know,
Speaker 1: there was this sort mini scandal. I talked about this
Speaker 1: in the book. There was like a mini scandal involving
Speaker 1: Facebook trying to kind of promote stories that the New
Speaker 1: York Times and CNN and such we're publishing, um and
Speaker 1: and and Zuckerberg basically had to um have a piece
Speaker 1: summit with with all these you know, key members of
Speaker 1: the right wing media establishment. Teal was a sort of
Speaker 1: broker there where where Zuckerberg said, look, I want to
Speaker 1: hear you guys, we are going to be unbiased, um
Speaker 1: and and and over the next you know, five years.
Speaker 1: Teal plays this role where when Facebook is under fire
Speaker 1: either from the right wing press UM or from Trump UM,
Speaker 1: Teal is there to kind of help Zuckerberg navigate navigate
Speaker 1: that world. So and and and the most important thing is,
Speaker 1: you know, anytime Zuckerberg is accused of being a you know,
Speaker 1: a liberal shill or whatever because he was because he
Speaker 1: was in favor of increased immigration. You know, he started
Speaker 1: this pro immigration group. You know, Zuckerberg can say, look
Speaker 1: look at my look at this guy on my board member.
Speaker 1: He's the longest serving board member. He's one of you know,
Speaker 1: one of my clothes friends. He's not just a he's
Speaker 1: not a rhino. He's not just a Republican. He is
Speaker 1: a hardcore Steve Bannon, Donald Trump republican. He has real
Speaker 1: credibility with with Trump world. And that was like the
Speaker 1: most important thing I think that that Peter Thiel gave Facebook,
Speaker 1: which is like allowing it to be somewhat insulated from
Speaker 1: attacks from Donald Trump. Now, in twenty nine, um Trump
Speaker 1: and his campaign were running these ads where they were
Speaker 1: kind of like they were really crossing the line factually right.
Speaker 1: They were claiming they were sort of making stuff up
Speaker 1: about UM, about Hunter Biden. There were these videos of
Speaker 1: Nancy Pelosi that had clearly been doctor to make it
Speaker 1: look like she you know, had some yeah, yeah, yeah,
Speaker 1: some kind of neurological problem. UM. And there was like
Speaker 1: real energy on the left to to do something about this.
Speaker 1: You had Elizabeth Warren and AOC saying, you know, Facebook
Speaker 1: is out of control. Um And and Zuckerberg, you know,
Speaker 1: flies to Washington, d C. This is right when he
Speaker 1: was um uh promoting Libra, you know, which is another
Speaker 1: kind of crypto crypto thing. That is, because you've you've
Speaker 1: already trusted Facebook with all your private data, you might
Speaker 1: as well trust them with your cryptocon So he gives
Speaker 1: this speech at Georgetown UM where he basically says, we're
Speaker 1: not going to regulate political speech. Politicians can lie. It's
Speaker 1: okay because you know that's that is. It is not
Speaker 1: our job as as a private company to do that.
Speaker 1: And you know the truth will out right and now
Speaker 1: that okay. So that that was the That was the
Speaker 1: That was kind of an explanation and a defense. And
Speaker 1: I would argue a kind of signaling of of intention.
Speaker 1: Um And then he uh, you know, later on in
Speaker 1: this trip, has a meeting with um you know, Donald Trump,
Speaker 1: uh and and Melania and Jared Kushner and Ivanka Trump
Speaker 1: and um And and him and his wife Priscilla Chan
Speaker 1: and Peter teel And and Peter Chiel's husband, um And
Speaker 1: in that meeting, you know, we don't know what the
Speaker 1: details of that meeting are UM. But but you know,
Speaker 1: after the meeting, to expressed to a friend that there
Speaker 1: was an understanding and I, as I reported in the book,
Speaker 1: there's an understanding reach that Zuckerberg would basically continue to
Speaker 1: take a hands off approach on UM, you know, on
Speaker 1: on on things that Trump said was going to give
Speaker 1: Trump a lot of leeway, which is something Trump really wanted,
Speaker 1: UM and was going to you know, basically do what
Speaker 1: he could to ensure that you know, conservative media didn't
Speaker 1: get you know, sideline at conservative media would thrive you know,
Speaker 1: on Facebook. But they went much further than that, because
Speaker 1: when you look at the most shared stories the top ten,
Speaker 1: it's done supposedly for for technology liberals shutting down conservative voices.
Speaker 1: Facebook is dominated by people like Ben Shapiro and Dan
Speaker 1: Bongino and all these like not just right wing conservatives,
Speaker 1: far right extremist groups. Uh. The algorithm seems to have
Speaker 1: been set up to maximize outrage. Facebook is an outrage
Speaker 1: manufacturing machine and that played right into this group's hands.
Speaker 1: Percent Now and and the phrase that was used in
Speaker 1: this conversation that I reported and was state sanctioned conservatism.
Speaker 1: The idea that Facebook would you know, basically promote these
Speaker 1: guys Ben Shapiro, Bongino and so on. Now the thing
Speaker 1: is okay, so Facebook, we have to say, first of all, um,
Speaker 1: Facebook denies this. Um, the top ten, top twenty every
Speaker 1: day is not debatable, right, a wild, wild disparrett you
Speaker 1: would think for a country that's pretty evenly split, if anything,
Speaker 1: Republicans are a minority, Conservatives are a minority. They dominate Facebook.
Speaker 1: How do you explain that? Well, I think so, I
Speaker 1: think it's it. It is a handful of things, like
Speaker 1: one of which is ideological and and and to the
Speaker 1: extent to which Zuckerberg I think was has been pushed
Speaker 1: to the right by Peter Teal and and you saw
Speaker 1: reporting by Bloomberg and E and others um during that
Speaker 1: time where you had folks like Shapiro, you know, running
Speaker 1: a foul of Facebook's rules, and Facebook stepping in to say,
Speaker 1: you know, yeah exactly, trying to trying to make sure
Speaker 1: that these important voices, um, you know, as Facebook saw
Speaker 1: it didn't get silence. You know. The other thing is money.
Speaker 1: And I think like a lot of a lot of
Speaker 1: people have spent a lot of time, including me, trying
Speaker 1: to figure out, okay, like what is Mark Zuckerberg really
Speaker 1: believe It's an important question because you know, Mark Zuckerberg
Speaker 1: has you know, as much power as like arguably anybody
Speaker 1: in human history. Um. And it's like not clear what
Speaker 1: he believes. It's kind of seems like to me like
Speaker 1: he just believes in Facebook and like in Facebook's bottom
Speaker 1: line and and these guys, you know, Shapiro Bongino, Um,
Speaker 1: they are very good for Facebook's bottom line and and
Speaker 1: and like having this you know rabid um you know
Speaker 1: outrage cycle. Of course is is is great news for Facebook.
Speaker 1: And and so I think I think that's part of
Speaker 1: it as well. And I think a third component is
Speaker 1: probably you know, failure on the left to to to
Speaker 1: kind of come up with any any kind of answer
Speaker 1: to this stuff. I mean probably part of the problem
Speaker 1: is and again I'm just kind of speculating, but you know,
Speaker 1: the mainstream left really embraced Facebook a lot of the
Speaker 1: stuff back in like two thousand eight, A lot of
Speaker 1: the sort of stuff that Trump was doing, um in
Speaker 1: sen in terms of like this like really specific targeting
Speaker 1: on Facebook, and you know that stuff was kind of
Speaker 1: pioneered by Barack Obama and the and the and the
Speaker 1: kind of group of tech workers who were pulled from
Speaker 1: Google and had very specific but it wasn't on a
Speaker 1: platform like Facebook. It was broad internet based, very targeted.
Speaker 1: He was very successful in that, and the left I
Speaker 1: think they got a little cocky and ignored social media, thinking, hey,
Speaker 1: we got this whole Google se o thing well, and
Speaker 1: I think so. I think that was part of it.
Speaker 1: But I also think that because the mainstream left like
Speaker 1: embraced Zuckerberg and embraced Facebook, I think that may have
Speaker 1: sidelined the kind of far like they're basically like the
Speaker 1: mainstream is always gonna be lamer than the than the
Speaker 1: crazy people, like in Facebook world, and so what you
Speaker 1: really had was like on Facebook, you had the kind
Speaker 1: of mainstream left are doing with the crazy right, and
Speaker 1: when that's happening, like the crazy people are always going
Speaker 1: to be more interesting, like you know, like these these
Speaker 1: like kind of center left people, like the Obama types
Speaker 1: are just gonna be like, you know, not as fun
Speaker 1: as Dan Bongino, who is you know, you know, obviously
Speaker 1: as you say, he's an extreme character, but he is
Speaker 1: a character, right, He's entertaining and he generates outrage. And
Speaker 1: I think that also kind of perpetuated this kind of
Speaker 1: outrage cycle that allowed you know, Republicans to um and
Speaker 1: and because not just Republicans, sorry, I mean far right
Speaker 1: you know, conservatives to to to you know, make such
Speaker 1: hay with Facebook. I mean, I think the alt right
Speaker 1: was really and and the alt right I think propelled
Speaker 1: Trump was it was a social media phenomenon. And they
Speaker 1: saw that, and and Tile saw that, and and that's
Speaker 1: part of the reason, you know, he was supportive of
Speaker 1: that world. So let me ask you a question that's
Speaker 1: impossible to answer, but I'm gonna throw it out anyway.
Speaker 1: Would Donald Trump have gotten elected without the support of
Speaker 1: pure teal? And what I mean by Teal is him
Speaker 1: and all of the people he worked with and works with,
Speaker 1: including Facebook, Zuckerberg, etcetera. Uh, can can Trump thanked Heal
Speaker 1: for his victories? I think if you include, if you
Speaker 1: throw in the like y network, I think the answer
Speaker 1: is a percent. Yes. I mean Trump has said like
Speaker 1: I don't think I would have gotten elected without social media. Um.
Speaker 1: But uh, but I think if we narrow it right
Speaker 1: just to Teal, Um, I think Teal had a big impact.
Speaker 1: And I don't know if you can say, you know,
Speaker 1: I think it's it's always hard to say like one
Speaker 1: to to narrow it down to one person, but um,
Speaker 1: you know, talked to people in who had been involved
Speaker 1: at the Trump campaign and Teal was very valuable to them.
Speaker 1: And the reason he was valuable is because you know,
Speaker 1: Trump obviously had a lot of energy. There's a lot
Speaker 1: of kind of um you know, grassroots type support, a lot.
Speaker 1: He had a lot of fans. He's a celebrity, but
Speaker 1: he hadn't attracted kind of the sort of establishment credibility
Speaker 1: like real businessman if you think back and business people, Um,
Speaker 1: if you think back to the UM, the r N C,
Speaker 1: R and C, like who else spoke. Besides, it was
Speaker 1: a surprisingly weak conference considering the winner of the election. Yeah,
Speaker 1: I mean you had like Chachi from Happy Days. You
Speaker 1: had like a bunch of guys, a bunch of real
Speaker 1: estate guys, like a bunch of whom are now indicted
Speaker 1: or you know, I have like seriously, but that's a
Speaker 1: long laundry list, folks, But mainstream business always at least
Speaker 1: here in New York. Look, we're both sitting in a
Speaker 1: studio in New York right now. New Yorkers didn't take
Speaker 1: Trump seriously because they know him as like a third
Speaker 1: or fourth tier. I'm not even saying anything critical. He's
Speaker 1: just not one of the giant developers, not a big
Speaker 1: guy in real estate. But that was his brand, and
Speaker 1: that was his reputation, and the rest of the country
Speaker 1: saw him very different. Yeah, and but and so I
Speaker 1: think Teal's presence helped bring around some of that, like
Speaker 1: the donor class, some of the kind of mainstream support
Speaker 1: um and and and the other thing is so at
Speaker 1: that at the convention, of course, Teal gave what I
Speaker 1: think was like really a historic speech. You know, I
Speaker 1: think it was a speech that made him profoundly uncomfortable,
Speaker 1: but he said, um, you know, I'm proud to be gay,
Speaker 1: and I'm proud to be an American and and that
Speaker 1: was historically significant. You know, the first time at Republican
Speaker 1: convention somebody you known openly gay person had spoken and
Speaker 1: acknowledged their um sexuality. And it wasn't just that he
Speaker 1: did it, but he got around you know, a huge ovation.
Speaker 1: It was a moment of I think legitimate um, you know,
Speaker 1: equality and a quality for a political party that has
Speaker 1: been and had been, you know, pretty hostile to the
Speaker 1: rights of gays and lesbians applauding Peter tell I think
Speaker 1: made a difference and and help help convey something about
Speaker 1: Trump that I think was valuable. And then the final
Speaker 1: thing is, you know, Tile hadn't donated to the campaign
Speaker 1: until mid October. He donated days after the Access Hollywood
Speaker 1: tape UM had come out, the tape where Trump was um,
Speaker 1: you know, quoted, you know, seeming to endure sexual assault.
Speaker 1: Now at the time, you know, there are all the
Speaker 1: all these like Republican figures were basically trying to get
Speaker 1: as far away from Trump as they could. They were like,
Speaker 1: I didn't really you know, because a lot of like um,
Speaker 1: a lot of people running away from what they saw
Speaker 1: as a just a total disaster. Trump's gonna lose. And
Speaker 1: and you know, two things happened. One of which was
Speaker 1: wiki leaks happened, and that I think, you know how
Speaker 1: changed the media cycle and and and helped Trump friends
Speaker 1: the Russians give props to them. And the second thing
Speaker 1: was Peter Teal, instead of running away, ran towards this
Speaker 1: and he makes a big donation one point to five million,
Speaker 1: which of course Chump changed for Peter Teal, but in
Speaker 1: in political terms, is a significant sum. And not only that,
Speaker 1: but gives a speech where he defends Trump and he says, um, listen,
Speaker 1: I'm not going to defend the comments, but but overall,
Speaker 1: you gotta look at the big picture, and he says,
Speaker 1: we need to take Trump um uh seriously, not literally,
Speaker 1: So don't listen to the literal comments, look at the
Speaker 1: broader image. And I think that first you're gonna believe
Speaker 1: me or you're lion eyes, because that's what that speech was.
Speaker 1: And shockingly, it was a very effective speed. I think
Speaker 1: it very much helped shape um public opinion. He actually
Speaker 1: cribbed it from an Atlantic from an Atlantic story, so
Speaker 1: I should give credit to that. But but in any case,
Speaker 1: it definitely helps shape opinion around Trump, and I think
Speaker 1: it helped not only um, you know, helped Trump kind
Speaker 1: of right the ship. But then post election, you know,
Speaker 1: we saw it actually a lot of business leaders you know,
Speaker 1: kind of participate in the honeymoon. They said, you know what,
Speaker 1: giving let's give this a shot and um, and there
Speaker 1: was there were a handful of meetings, you know, probably
Speaker 1: most famously this meeting of tech leaders um in mid December,
Speaker 1: that teal arrange where he had basically post election. After yeah,
Speaker 1: the CEOs of basically all of the big technology companies there,
Speaker 1: uh you know, the Microsoft, uh CEO, Google founders, and
Speaker 1: you know, it's basically the representatives from the you know,
Speaker 1: nine largest tech companies, which of course that that's like
Speaker 1: most of the big tech companies in the United States
Speaker 1: UM are all there, and they're all basically trying to
Speaker 1: trying to work with with Trump. And I think til,
Speaker 1: I mean, he literally organized that meeting, but I think
Speaker 1: he also helped create the conditions that allowed that to happen.
Speaker 1: And I think you have to say, like Trump maybe
Speaker 1: didn't do that much with that, and you know, those
Speaker 1: relationships were short lasting, but it definitely brought a bunch
Speaker 1: of people who had had before that been very critical
Speaker 1: of Trump to the table. Quite fascinating. Before we get
Speaker 1: to the tax stuff and the New Zealand stuff with
Speaker 1: Peter Teal and some of the other wacky things, I
Speaker 1: have to ask you how challenging was it to do
Speaker 1: this research because this is deeply reported. You know, this
Speaker 1: isn't just like very superficial. You clearly went down the
Speaker 1: rabbit hole. Yeah, it was very challenging because you know,
Speaker 1: Teal has made UM, has has carved out a lot
Speaker 1: of uh, you know, secrecy around himself. You know, didn't
Speaker 1: cooperate much. Did he talk to you So No, he
Speaker 1: didn't cooperate, But he also didn't um you know, I
Speaker 1: he wasn't helpful. Um and at times I think he
Speaker 1: was a little bit unhelpful, but but he didn't really
Speaker 1: he also didn't try to stop me. Uh I. Um,
Speaker 1: you know early in the process. I you know, as
Speaker 1: one does you know when you're doing like a journalistic
Speaker 1: project such this. In addition to talking to you know,
Speaker 1: former employees, friends, colleagues, you know, uh for classmates you
Speaker 1: know or whatever, I also you know, approached Teal and
Speaker 1: h and had you know, series of meetings with his
Speaker 1: you know PR people and and ultimately uh an off
Speaker 1: the record meeting in l A with with the man himself.
Speaker 1: And um, you know, to play that tape right now.
Speaker 1: How guarded was he or is he sort of Hey,
Speaker 1: this is off the record, and he felt comfortable being
Speaker 1: a little frank He was very guarded. Um, he is
Speaker 1: very guarded. I mean he's somebody who um you know
Speaker 1: that's the PERSONA. Yeah, he he really wants to play
Speaker 1: this behind the scenes role. He really doesn't like um,
Speaker 1: scrutiny of any kind when he you know, he does
Speaker 1: talk to the press. He actually appears, uh, he does
Speaker 1: speeches sometimes, but it's almost always um, in front of
Speaker 1: uh basically a friendly interview or somebody who's not going
Speaker 1: to to kind of push him on some of these
Speaker 1: kind of further out ideological things or push him on
Speaker 1: some of the business practices that something that his companies
Speaker 1: have been involved with, some of which are are pretty questionable. Um.
Speaker 1: And and of course I wanted to go there, and um,
Speaker 1: you had no choice, you had to go. Yeah, Yeah,
Speaker 1: I mean I just wanted to look. I wanted to
Speaker 1: you know, there had been there. Deal is an interesting
Speaker 1: guy because there is uh, there's there's sort of two
Speaker 1: myths around him. One is the um, he's like a
Speaker 1: villainous right wing billionaire. That's kind of like the left
Speaker 1: wing view. And then the right wing view is that
Speaker 1: he is this and and the view that's kind of
Speaker 1: common in Silicon Valley is that he is basically this
Speaker 1: libertarian hero. He's like, um, you know, combination of iron
Speaker 1: Rand and an iron Rand character. He's an intellectual and
Speaker 1: a builder John Galt for the modern New Europe. Yeah,
Speaker 1: and so and I wanted to you know, obviously both
Speaker 1: those stories have truth to them, and I think understanding
Speaker 1: where they come from is really interesting. But I wanted
Speaker 1: to do something that uh like hopefully complicated both stories
Speaker 1: and and and got actually at the at the real
Speaker 1: person and til I think is is really you know,
Speaker 1: has really invested in his own mythology and and at
Speaker 1: times that that's really interesting. Let's let's talk about some
Speaker 1: of the mythology where things that are a little out
Speaker 1: there are kind of intriguing. And let's start with the
Speaker 1: billion dollar I RA tell us about how any of
Speaker 1: us can have a billion dollars tax free. I'm glad
Speaker 1: we moved to the service portion of the of the show.
Speaker 1: Um So teal so roth Ira H. This was created
Speaker 1: in the in the nineties. It was designed as like
Speaker 1: a middle class uh thing for lower middle class. Uh.
Speaker 1: The idea is you put after tax dollars in and
Speaker 1: anything anything you make on your inside of your ira.
Speaker 1: Your roth ira is tax free. And they did this
Speaker 1: because they were trying without limitation. Uh. Well, so there
Speaker 1: are some really important that once it's in there, it's
Speaker 1: it's tax free, no limitation. They did try to have
Speaker 1: some limitations on how much you could put in the
Speaker 1: original contribution limit with two thousand dollars, I think it's
Speaker 1: about six thousand now there were there. They're pretty low
Speaker 1: income caps. I think around it's a little higher now,
Speaker 1: but around a hundred thousand makes sense if it's if
Speaker 1: it's if you're using pretax dollars. But if it's after
Speaker 1: tax dollars, is it just too expensive for the government?
Speaker 1: Who knows? So? So yeah, and and so what what
Speaker 1: Teal figure it out is that you can put in
Speaker 1: um you can you can buy shares and privately held
Speaker 1: venture back companies. Early on shares are pretty much causing zero,
Speaker 1: like a thousandth of a penny. So early on in PayPal,
Speaker 1: Teal uses a roth Ira now, which which he you know,
Speaker 1: at the time, I don't think he had much income,
Speaker 1: maybe no income at all um as as you know
Speaker 1: CEO at first as an investor in this company and
Speaker 1: then a CEO in a startup. So but he uses
Speaker 1: the roth Ira to buy shares in PayPal for like
Speaker 1: a thousandth of a penny, and over the next couple
Speaker 1: of years acquires more PayPal shares for fractions of a penny,
Speaker 1: and and and you know, and basically those shares then
Speaker 1: we're ultimately worth millions of dollars, um, tens of millions
Speaker 1: of dollars. Then he uses some of that money inside
Speaker 1: the roth ira to buy shares and palenteer, palenteer. Again,
Speaker 1: We're going from you know, a valuation of near zero
Speaker 1: to it's it's worth fifty billion dollars today. Um. Same
Speaker 1: thing with Facebook, right, Facebook buying buying early shares, and
Speaker 1: Facebook inside the roth ira, and then you know, those
Speaker 1: shares you know, ultimately are worth um. You know, at
Speaker 1: the end of twenty nineteen, Teel's roth ira had something
Speaker 1: like six billion dollars in it. Now. UM. Stock markets
Speaker 1: done pretty well since then, so and particularly technology companies,
Speaker 1: particularly kinds of companies that Peter Teal investment. So it's,
Speaker 1: you know, my guess is that is his roth ira,
Speaker 1: his tax free account is in is maybe around eight
Speaker 1: billion dollars something like that. Now maybe a little more.
Speaker 1: Um and uh and again it's it's it's this amazing
Speaker 1: you know kind of it's it's not really I guess
Speaker 1: it's a loophole. I don't know what to call it.
Speaker 1: It's just a very aggressive tax strategy. Now that thing
Speaker 1: about this is and if you depending on who you
Speaker 1: get your tax advice from, they might advise you not
Speaker 1: to do this because there is a specific rule UM
Speaker 1: that says you cannot buy shares and companies you control UM.
Speaker 1: So you can't. If you own a restaurant, you can't
Speaker 1: like put the restaurant inside the roth ir right, that's
Speaker 1: self dealing. Um. The great thing about these venture backed
Speaker 1: tech companies is although somebody like Peter Teal has effective
Speaker 1: control UM, he does not have legal control because you
Speaker 1: know there's an independent border directors. He only own the company.
Speaker 1: So so it's it's a very very aggressive interpretation of
Speaker 1: these statutes because effectively the CEO of a venture backed
Speaker 1: tech company has a lot of influence on the stock price,
Speaker 1: you know, on the share price of these companies, but
Speaker 1: influences in control exactly. That's that's the loophole. And we've
Speaker 1: seen so so so that you know, structure now has
Speaker 1: become very popular and silicon value like other people have.
Speaker 1: You know, this is a thing that wealth managers UM
Speaker 1: are now you have have made have made into a
Speaker 1: little cottage industry. And we even saw you know, when
Speaker 1: this first came out. So it's kind of heartbreaking to
Speaker 1: me because like this was in the book, which which
Speaker 1: was in a galley at that point, but Pro Publica
Speaker 1: broke this story. Um and uh. And and the way
Speaker 1: that the spin that you heard from some folks was
Speaker 1: was not like, oh, what an outrage, It was like,
Speaker 1: you know, how can I do that? And um and,
Speaker 1: which which I understand because I mean, everyone wants to
Speaker 1: pay less in taxes, but it really is quite a
Speaker 1: you know, a perversion of the original intent of the law,
Speaker 1: which was again to to help basically like lower and
Speaker 1: middle income people and and and not to just deprive
Speaker 1: the US government of a huge amount of tax revenue.
Speaker 1: So so let's look about something else that's a little
Speaker 1: bit out there, New Zealand. Why become a New Zealand citizen?
Speaker 1: What's that about? Well, so if you, if you, if
Speaker 1: you listen to what Til said, he really loves New Zealand,
Speaker 1: which I think is probably partly true. He's a big
Speaker 1: Lord of the Rings fan. I was gonna say, Peter
Speaker 1: Jackson fan, then yeah, um Lord of Rings films were
Speaker 1: were we're We're shot there and you'd still see a shire,
Speaker 1: there's the Hobbits, and let's be honest, like New Zealand
Speaker 1: is great. I mean it's it's a you know, a
Speaker 1: very nice place to to to visit. I mean a
Speaker 1: beautiful nature, great great cuisine. UM. I think the specific
Speaker 1: appeal to Teal when he got the New Zealand citizenship,
Speaker 1: and he did this in a in a really interesting way.
Speaker 1: I mean he was in secret um and it happened
Speaker 1: when Obama was president, and and you know, as my
Speaker 1: my senses and as I say in the book, that
Speaker 1: you know he was basically looking for a backup plan.
Speaker 1: I mean he was really worried about um, about Obama
Speaker 1: and about the Democrats. And I think you had you
Speaker 1: had all those concentration camps in Texas and they were
Speaker 1: gonna round everybody up, and right, I mean that was
Speaker 1: I'm not they were. This is legitimate what some of
Speaker 1: the far right was playing. And and and when you're
Speaker 1: Peter Teel and you have this enormous amount of money
Speaker 1: that's tied up in a UM it's it's legal, but
Speaker 1: but but a little bit on certain structure where at
Speaker 1: any moment the I R S could say because because
Speaker 1: of the control thing, right, UM, it leaves him a
Speaker 1: little bit vulnerable because you could go back and start
Speaker 1: looking for for violations. Maybe they're not real violation, maybe
Speaker 1: they're just bogus. You could bust his jobs if you
Speaker 1: want to. And and the way the IRA laws, the
Speaker 1: way these rules are structured, if you break one, if
Speaker 1: you do one, if you make one mistake within that IRA,
Speaker 1: they can take they can take the whole thing. They can,
Speaker 1: they can they could capture it. They can well they can.
Speaker 1: They have to collect taxes on the whole scenario is
Speaker 1: you lose your tax and even that you have the
Speaker 1: wherewithal to fight it. Eventually you'll negotiate it down. But
Speaker 1: so his worst case scenario is he might pay half
Speaker 1: the taxes he owes exactly. But I think what he
Speaker 1: was trying to do was find a friendlier jurisdiction and
Speaker 1: and back then or as a potential backup plan, right,
Speaker 1: not necessarily where he's gonna um, not necessarily like he's
Speaker 1: gonna go run away from Obama, but um but at
Speaker 1: the time, you know, New Zealand had a right wing government, um,
Speaker 1: and it was very it was very easy for him
Speaker 1: to acquire citizenship. I mean, he only spent uh twelve
Speaker 1: days or so in the country, uh to to get
Speaker 1: the citizenship and UM. And then I think it, you know,
Speaker 1: gives him a potential way to to at least as
Speaker 1: a negotiating point if he ends up negotiating with the U. S. Government. UM,
Speaker 1: being able to to you know, claim citizenship or whatever
Speaker 1: in a foreign country. I think UM was potentially helpful
Speaker 1: or just as a way to, hey, let me get
Speaker 1: away from these crazy liberals. And like the one of
Speaker 1: the you know, one of the big ideas that that
Speaker 1: Teal and his followers are into is this idea of exit,
Speaker 1: that that you that billionaires should potentially be willing to
Speaker 1: threaten to leave the United States in order to push policymakers,
Speaker 1: you know, in the direction that they want them to push,
Speaker 1: that you can vote or you can leave, and that
Speaker 1: that the threat of leaving is an important part of that,
Speaker 1: which I think is really I mean, it's certainly counter
Speaker 1: to like a normal notion of m patriotism or whatever
Speaker 1: if I want to buy into that, you know, or whatever,
Speaker 1: UM I do personally, but anyway, UM I but it's
Speaker 1: definitely like the idea is that you should be willing
Speaker 1: to kind of jurisdiction shop. And so that's what I
Speaker 1: think he was doing. After Trump was elected. My reporting
Speaker 1: says that basically hasn't been in the country since Trump
Speaker 1: took office. He's maybe he's maybe come back, you know,
Speaker 1: there's he's now renovating one of his properties. Maybe he
Speaker 1: went back, but as far as I can tell, he
Speaker 1: hasn't been there since in New Zealand. Yeah, quite quite interesting.
Speaker 1: Let's let's talk about something else that's a little surprising.
Speaker 1: And I just had a look up the name of
Speaker 1: Ryan Holiday's book, Conspiracy Peter Til Hull Colgan, Gawker and
Speaker 1: the Anatomy of Intrigue. So, uh, it's now come out.
Speaker 1: And and Holiday did some nice reporting a couple of
Speaker 1: years on this a couple of years ago that Teal
Speaker 1: is the one who funded the entire Hull Colgan litigation
Speaker 1: against Gawker because Gawker some years ago out of Teal
Speaker 1: as gay and then had the bad judgment to reproduce
Speaker 1: a and publishist X tape that was surreptitiously recorded of
Speaker 1: of Hulk Hogan and effectively Teal bankrupted Gowker. He apparently
Speaker 1: carries a grudge. Yeah, I'll say, yeah, this was as
Speaker 1: I as I talked about in the book, I mean,
Speaker 1: the whole Cogan case was not really isolated. He was
Speaker 1: trying basically all sorts of things. Uh. In the period
Speaker 1: between when that blog post outing him came out, which
Speaker 1: I believe was late two thousand seven, Um uh and
Speaker 1: uh and the and and the ultimate you know verdict,
Speaker 1: which is in sixteen UM basically was you know, there's
Speaker 1: there's sort of other litigation efforts there was you know,
Speaker 1: he had had hired private investigators. He also tried to
Speaker 1: kind of romance Hawker at one point. But but ultimately
Speaker 1: this Hogan thing was a real gift to Peter Teal
Speaker 1: because it was a very clear cut case. Gawker had
Speaker 1: published this um, this this sex tape that had been
Speaker 1: recorded without whold Cogan's knowledge or consent, which the violation
Speaker 1: and privacy and the and the great thing about that
Speaker 1: from from the sort of Peter Teel perspective is number one,
Speaker 1: it's not a free speech case, right, makes it easier,
Speaker 1: it's a little bit easier to make. And and number two,
Speaker 1: he gets it in front of a Florida jury. Um,
Speaker 1: you know, Hulk Hogan is like is from Tampa. He's
Speaker 1: like the famous person in Tampa. And you have this, uh,
Speaker 1: this celebrity bona fide celebrity going against this like as
Speaker 1: as Teal and his allies presented it as a sociopathic
Speaker 1: New York media company, and and and the and the
Speaker 1: case was pretty clear cut. So it's like not surprising
Speaker 1: that the jury, um, you know, opted to bankrupt Gawker, um.
Speaker 1: But what you know, what is surprising, of course, is
Speaker 1: that is that this billionaire was was the was the
Speaker 1: man behind it and a particularly the amount of time
Speaker 1: that passed and the way that he did it. He
Speaker 1: did it in secret. I mean, he didn't tell anybody.
Speaker 1: It only came out afterwards and after it happened, you know,
Speaker 1: he didn't he wasn't apologetic, right, he said, this is
Speaker 1: my proudest philanthropic moment. This is my great contribution, um
Speaker 1: to to the world, which is you know, that's pretty
Speaker 1: out there, right, it's it's it's a it's it's definitely
Speaker 1: um different. And I think it wont him a lot
Speaker 1: of fans, of course, on the on the right, because
Speaker 1: Gawker was seen as this like liberal media outlet. He
Speaker 1: was seen as a billionaire willing to you know, take
Speaker 1: it to the take it to the liberal media. Um.
Speaker 1: But of course it also I think critics rightly point
Speaker 1: out that like this has profound implications for freedom of
Speaker 1: the press and for for for other potentially chilling exactly. So,
Speaker 1: I want to continue discussing some of the specifics about
Speaker 1: teal because it's fascinating. But I always have been operating
Speaker 1: under the assumption that Silicon Valley is, you know, part
Speaker 1: of the triangle of power. It's New York, d C.
Speaker 1: And Silicon Valley as engines of of economy, technology, and government.
Speaker 1: What don't we know about Silicon Valley. Isn't it a
Speaker 1: given that they're a power player? Or are they more
Speaker 1: powerful than most Americans have realized? Well, I think there's
Speaker 1: still I mean, I agree with your assessment completely. I
Speaker 1: think that I think Silkic Valley is still has more
Speaker 1: power than than people realize. And I also think that
Speaker 1: Silicon that that certain aspects of the of the Silicon
Speaker 1: Valley ideology have really um kind of seeped into our
Speaker 1: culture in ways that we don't fully appreciate. So I mean,
Speaker 1: I mean, move fast and break things certainly one example,
Speaker 1: So this idea that disruption is a good, a social
Speaker 1: good that it needs to be embraced, um is I
Speaker 1: I'd argue that is a new thing that most that
Speaker 1: a lot of people have bought into, even people who
Speaker 1: are degrees away. Dimma, that's been around for decades. Um.
Speaker 1: But well yeah, but I think there's I think there's
Speaker 1: something a little bit different about UM. I mean it's
Speaker 1: been a while since I've read the Innovator's dilemma. But well,
Speaker 1: you just rub something then eventually you get disrupted. Yeah,
Speaker 1: it's only you know, most of these companies only last
Speaker 1: a certain on. Apple is a rarity that disrupted itself.
Speaker 1: But yeah, yeah, so I think that. So, but I
Speaker 1: think the idea that rule breaking in particular is something
Speaker 1: worth celebrating, is is new and different. And like the
Speaker 1: way we we're watching this attitude, um you know, Facebook,
Speaker 1: there's this whistleblower and we're we're suddenly like watching all
Speaker 1: this criticism of Facebook and sort of wondering why, like
Speaker 1: why is Mark Zuckerberg so indifferent to to use responsibilities
Speaker 1: to society. And it's like, well, that's because that's the
Speaker 1: whole point of this company and this ideology. UM. I also, um,
Speaker 1: I think that the um I think that this idea
Speaker 1: that technology companies so so one of Teal's big ideas, right,
Speaker 1: is that that these technology companies should are basically in
Speaker 1: a ruled world that that we that we would be
Speaker 1: better off. And this is something that is i'd say
Speaker 1: widely people buy into and including a lot of liberals
Speaker 1: and stuff, that like, basically technology is going to set
Speaker 1: us free. And I think and that it's yeah, well exactly,
Speaker 1: and I think they are you know, to assume that
Speaker 1: the people who run Facebook or Amazon or Google are
Speaker 1: benevolent overlords is really the height of naivete. It reminds
Speaker 1: me of I realized this a somewhat controversial thing to say,
Speaker 1: but like when I was reading the book Coke Land
Speaker 1: by Christopher Leonards Cooke Brothers and and Coke Industries in particular,
Speaker 1: the way Coke Industries had sort of um, you know,
Speaker 1: had this you know, really important industrial conglomer and they
Speaker 1: had really changed the conversation around regulation, particularly deregulation, to
Speaker 1: a point where like everyone sort of bought into that
Speaker 1: the story that they were telling. And I think the
Speaker 1: same thing, including liberals, right, And I think the same
Speaker 1: thing kind of happened has happened, and maybe it's continuing
Speaker 1: to happen with Silicon Valley, where we've sort of all
Speaker 1: bought into the idea that you know that that disruption
Speaker 1: is good, that tech companies should have more power, not
Speaker 1: less um and and you know, we're obviously we're in
Speaker 1: a reckoning right now. But I don't know, I think
Speaker 1: those ideas are still more or less ascendant, and it's
Speaker 1: it's still really outside the mainstream if you that's interesting.
Speaker 1: I'm surprised you think those ideas is still ascendant because
Speaker 1: there's a difference between saying, hey, here's how we've always
Speaker 1: done it, but we have a way to do it faster, better, smarter,
Speaker 1: versus just look at the three biggest companies that are
Speaker 1: kind of going through turmoil. Uber we work in there, nos,
Speaker 1: so have we seen peak disruption and now things are
Speaker 1: curling back? Maybe, although I would push back on some
Speaker 1: of that because I think so, Yeah, it's true that
Speaker 1: with Uber, we you know, the founder got bounced out
Speaker 1: and we now have little too frat boy Kinder Gendler Uber.
Speaker 1: But how much it's not making money that way? Uh
Speaker 1: it was expected to. But yeah, but how much has
Speaker 1: Uber really changed? I mean, we we like this labor
Speaker 1: model that Uber pioneered, so like you know that that
Speaker 1: is like, you know, completely and different to the um
Speaker 1: you know, to the to the needs of workers, I
Speaker 1: would argue has become it's it's not that labor model
Speaker 1: is not on the on the retreatomy, no healthcare, no,
Speaker 1: not necessarily any qualifications. And and so I don't know,
Speaker 1: like I think they're I think it's true that that
Speaker 1: we have become more tuned to some of the failings
Speaker 1: of the tech industry. I'm not sure that alright, So
Speaker 1: outright fraud is not allowed, disruption, no health care. Hey,
Speaker 1: maybe this guy's qualified to drive. Maybe he's not, but
Speaker 1: he's got a license. What more do you want? We're
Speaker 1: okay with that, and we work. What do we care?
Speaker 1: A bunch of you has lost a bunch of money, right, yeah, yeah, yeah,
Speaker 1: I think I mean that's pretty fair. I mean I again,
Speaker 1: and I also think, like, not just a bunch of you.
Speaker 1: Ce's mostly soft banking. People care about them much less
Speaker 1: than they do Benchmark or Sequoia or flat Iron or whoever. Right,
Speaker 1: And I think, you know, when we look at the
Speaker 1: big companies Facebook, Google, like it doesn't feel like there's
Speaker 1: really any serious I don't know, like it's it's it's
Speaker 1: it's not clear to me how Facebook could be reined in,
Speaker 1: and I don't think it's really clear to anybody how
Speaker 1: it could be brained in. Well, with the benefit of
Speaker 1: perfect hindsight, it's pretty clear hindsight that a lot of
Speaker 1: the is uh seminal purchases that were done, whether it's
Speaker 1: Instagram or WhatsApp, or go down the whole list of
Speaker 1: of some of their best properties. If people weren't asleep
Speaker 1: at the switch in the any trust department, that might
Speaker 1: not have been permitted. I suspect going forward, Facebook might
Speaker 1: encounter more difficulty trying to swallow a competitor, a Nason
Speaker 1: competitor early because arguably instant Listen, when you speak to
Speaker 1: the kids and you're closer in age than I am,
Speaker 1: they're not on Facebook, They're on Insta and Facebook is
Speaker 1: now for us old people. Um and I can't stand Facebook,
Speaker 1: so I'm not one of those old people. But I
Speaker 1: use what's app pretty regularly and I use some of
Speaker 1: their other stuff. Um. So, so what happens when the
Speaker 1: the next TikTok comes along that Facebook wants to buy,
Speaker 1: will they still be in that position? Will they be
Speaker 1: able to make that purchase? Yeah? Completely agree? I think
Speaker 1: I think you're right that there was you know, total
Speaker 1: will failure imagination there um and and yeah you would,
Speaker 1: you would think there will be more Google. I don't
Speaker 1: know what's gonna happen with I don't see does anyone
Speaker 1: really see Amazon getting split up or Google being broken
Speaker 1: into g drive and this and that, or or Apple
Speaker 1: being broken into a max side and a phone side
Speaker 1: and a service. None of that really looks likely. If
Speaker 1: if any of the big tech is going to suffer,
Speaker 1: the one that seems to be most vulnerable seems to
Speaker 1: be Facebook. Yeah, yeah, because they have these reputational problems.
Speaker 1: There's also a way you can imagine. I mean again,
Speaker 1: I don't think it's gonna happen, but you could imagine
Speaker 1: breaking up, like breaking Facebook into Instagram, and it's like
Speaker 1: not impossible. And clearly Till is behind the concept that
Speaker 1: bigger is better. Let these companies do what they're gonna do,
Speaker 1: and regulated the marketplace will sort it out. Let's stick
Speaker 1: with that concept and talk about palatier Um, which, ironically
Speaker 1: for a sort of anti government libertarian, he's essentially his
Speaker 1: biggest client is the U. S. Government and all the
Speaker 1: other governments. Palanteer got into quite a bit of trouble
Speaker 1: post election tell us about what the company is and
Speaker 1: how it's sort of ran a foul and seemed to
Speaker 1: have shaken it all. Yeah. So Palanteer was started by
Speaker 1: teal Um basically out of this, you know, this intuition
Speaker 1: that he could take some of the security technology that
Speaker 1: Paypala developed, well not even technology really an idea UM
Speaker 1: that Paypala developed, which was to use network analysis, so
Speaker 1: looking at who is connected to whom, um to figure
Speaker 1: out to how to do security any and he offered
Speaker 1: that to the U. S. Government got backing initially from
Speaker 1: the CIA, which was hugely um both hugely important for
Speaker 1: Palanteer because it kind of opened the door um fiz
Speaker 1: Yeah exactly too and gave him some money, but also
Speaker 1: legitimacy with government contracts. And then that legitimacy not only
Speaker 1: UM got them contracts with other it's the government including
Speaker 1: the U. S. Military, It got them legitimacy with the
Speaker 1: corporate world. Because if you're like a chief security officer
Speaker 1: at a big bank or whatever, the idea that you
Speaker 1: can have c I A grade you know, data mining technology,
Speaker 1: which is more or less what they were promising. You know,
Speaker 1: you two can have the same technology we used to
Speaker 1: get bin laden um to like you know, to to
Speaker 1: run your uh to to like come up with your
Speaker 1: trading strategy or or route out you know, bad behavior
Speaker 1: by your trader or something. Um. That was like a
Speaker 1: really compelling pitch. Now that pitch was not entirely true.
Speaker 1: I think, as I talked about the book, like I
Speaker 1: think the idea that Palanteer like was responsible for forgetting
Speaker 1: bin laden is like a huge stretch that that kind
Speaker 1: of creation of the media. But the narrative of like
Speaker 1: c I A grade data mining for the government has
Speaker 1: been for for government and for private enterprise has been
Speaker 1: hugely successful in the long run. Now, in sixteen though
Speaker 1: Palanteer was really in bad shape. It had it had
Speaker 1: lost out a bunch of on a bunch of big contracts.
Speaker 1: Um it was. It wasn't looking so good. A lot
Speaker 1: of the big companies that were doing business with it
Speaker 1: had had backed out and you know, gone in other directions.
Speaker 1: And then uh post Trump though, of course, things have
Speaker 1: really gone well. And Palatiner will say, hey, it has
Speaker 1: nothing to do with politics, um, just just just a
Speaker 1: matter of beating the bushes. And you know, and you
Speaker 1: know it's sometimes like everything just falls into place, and
Speaker 1: you know, my reporting and also you know, I think
Speaker 1: just normal rationality suggests that like having a major backer
Speaker 1: of the president, especially a president like Trump, who as
Speaker 1: we know, likes to get involved in the nitty gritty
Speaker 1: and you know, it's not totally averse to rewarding his
Speaker 1: friends and punishing his enemies. Um. You know, had had
Speaker 1: had a positive impact on the company and helped them
Speaker 1: win this eight hundred million dollar military contract and then
Speaker 1: you know, you know, dozens of other contracts worth you know,
Speaker 1: in the in the hundreds of millions, if not billions
Speaker 1: of dollars. And we've seen the company, you know, really
Speaker 1: go from being kind of substantial but not that big,
Speaker 1: you worth twenty billion dollars or so um to to
Speaker 1: now it's worth you know, fifty billion. They have these
Speaker 1: huge military contracts, um and and and during that time
Speaker 1: the product has improved a bit, so they've you know,
Speaker 1: they've managed to land some corporate deals and of course
Speaker 1: that's been great for Peter Teal who was uh the
Speaker 1: single largest shareholder owning owning a lot of those shares
Speaker 1: through the roth Ira so so nice tax advantage there.
Speaker 1: And uh and because of the way Palentteer structured um.
Speaker 1: The founders have this special class of share that's a
Speaker 1: that's a group that includes teal um that allows them
Speaker 1: to effectively, you know, control company. So so it's uh
Speaker 1: so he's kind of in the catbird seat. And I
Speaker 1: think I would argue that a huge reason for that
Speaker 1: is because of of his decision to support Trump early,
Speaker 1: which got him access to the White House, which got
Speaker 1: access to Palentteer, and you know, and kind of the
Speaker 1: rest is history. So before we get to our favorite questions,
Speaker 1: I have one other thing I have to get to.
Speaker 1: Let's talk about crypto. He was pretty early into looking
Speaker 1: at bitcoin and some of the other cryptocone sees what
Speaker 1: led him there and what is he doing that space
Speaker 1: count So yeah, I mean really early, he like from
Speaker 1: like nineties early, like way ahead of why are we
Speaker 1: relying on printed government dollars? Shouldn't it be free? It's
Speaker 1: kind of a libertarian fantasy. You can go back and
Speaker 1: I did you know reporting this book? But like that,
Speaker 1: you can go back to PayPal And the way they
Speaker 1: were talking about PayPal is really not that different from
Speaker 1: the way the not no crypto community has gotten pretty
Speaker 1: big and pretty diverse ideologically, but but it's it's the
Speaker 1: way the kind of ultra libertarian part of the cryptic narratives. Yeah,
Speaker 1: you know, so so that he was talking in like
Speaker 1: two thousand or thereabouts about giving everyone a Swiss bank
Speaker 1: account in their pocket. This idea that once you had
Speaker 1: money inside of PayPal would be impossible for governments to track,
Speaker 1: and in particular be impossible for um repressive governments to track.
Speaker 1: So when you so like, if you're in a country
Speaker 1: with current see controls, you know, there's really nothing stopping
Speaker 1: you from putting money in PayPal account and then using it.
Speaker 1: And and that is really similar. And he talked about
Speaker 1: how this was gonna road the sovereignty of the nation state.
Speaker 1: And this is really similar to how kind of the
Speaker 1: libertarian um part of of of the crypto world talks
Speaker 1: and and and kind of what's motivating some of the
Speaker 1: some of the crypto ideology. So I think it's it's
Speaker 1: not surprising at all that he got in, you know,
Speaker 1: on crypto early. He you know, for I don't know
Speaker 1: how much crypto he has now. I mean, he definitely
Speaker 1: had some crypto for a time. It's unclear if he
Speaker 1: if he's sold or not. Um uh, but he's also
Speaker 1: making investments in crypto companies and he's clearly, you know,
Speaker 1: pretty interested. There was like a little mini scandal earlier
Speaker 1: this year, at least in the crypto world. You may
Speaker 1: remember where Teal described bitcoin as potentially a an arm
Speaker 1: of the Chinese government. Where he sort of said that,
Speaker 1: um because because it hurts I. You know, it wasn't
Speaker 1: entirely clear, and all these crypto people kind of went
Speaker 1: berserk because he's on our team, he's an early believer,
Speaker 1: and and my suspicion there is what was happening is
Speaker 1: he was trying to shape regulation uh into a in
Speaker 1: a favorable, favorable way in the United States, warning essentially,
Speaker 1: if the US goes to sleep on crypto, if we
Speaker 1: don't move to kind of embrace and cultivate this industry,
Speaker 1: we're gonna lose to other countries, which iss China ends
Speaker 1: up tossing out all their miners. And none of that
Speaker 1: ended up being no, no, completely, It was exactly that.
Speaker 1: But it is exactly the same argument that Mark Zuckerberg
Speaker 1: has made in terms of like how we should regulate Facebook.
Speaker 1: The reason we should let be hands off on Facebook
Speaker 1: is because if we don't China and TikTok is gonna
Speaker 1: you know, become supreme and then we're all gonna be
Speaker 1: you know, living in a in like you know, G's
Speaker 1: world or something. Um. There are also also like some
Speaker 1: weird conspiracy theories and which I don't think are totally
Speaker 1: out of the remo possibility. Like Teal is a big
Speaker 1: time trader, you know, he's he's somebody who's always who
Speaker 1: very often has bets on both sides of a particular
Speaker 1: trend or a particular company, So it's possible you know,
Speaker 1: he was he was betting against Yeah, yeah, that that
Speaker 1: that that those comments were were aimed at a trade,
Speaker 1: like maybe he was trying to buy low. I don't know,
Speaker 1: but it was. It was definitely like an interesting moment.
Speaker 1: And I think, you know, Teal is always somebody worth watching,
Speaker 1: um because he knows kind of what's next, or he
Speaker 1: has very good ideas about what's next and you know,
Speaker 1: right now for for in his world that's crypto. So
Speaker 1: I mean, I think that's it's worth watching that space obviously,
Speaker 1: but also worth watching specifically what Teal does, what he
Speaker 1: says about it so so fascinating. All right, So while
Speaker 1: I I have you let me jump to my favorite
Speaker 1: questions that I asked all my guests, starting with tell us,
Speaker 1: what you've been streaming during uh the past eighteen months? Netflix?
Speaker 1: Amazon Prime podcast, What's keeping you? Yeah? So okay, So
Speaker 1: I mean I just finished I finished Squid Game literally
Speaker 1: two nights, surprisingly, surprisingly satisfying. I yeah, it was really good.
Speaker 1: Although I did I found it so stressful, um that
Speaker 1: I had to watch my wife and I had to watch,
Speaker 1: like Ted Lasso, we do a palid cleansing exactly as
Speaker 1: a rule, you can only we only watch one game
Speaker 1: per not except for the last two, which were like
Speaker 1: think the ninth one. The eighth one was thirty three
Speaker 1: minutes and then the ninth one was short. But you know,
Speaker 1: anytime you watch stuff over time like that, you really
Speaker 1: get the full flavor of it. I've been Also, I'm
Speaker 1: a huge I listened to a lot of podcasts, but
Speaker 1: um and right now I'm really into this really nerdy
Speaker 1: virology podcast. It's called This Weekend Virology, which um uh
Speaker 1: you know honestly like it's it did. The episodes are
Speaker 1: really long, um and and I think, uh, what does
Speaker 1: it cover? It's but it it covers the science behind viruses.
Speaker 1: But of course they've been talking about COVID all the time,
Speaker 1: and I think like really paying attention to what scientists
Speaker 1: have been saying has been a great way for me,
Speaker 1: you know, to be ahead, ahead of the curve. I mean,
Speaker 1: I think like these, um, you know, we're having this
Speaker 1: this conversation about booster. You know, they've been talking about
Speaker 1: this stuff for for months and and and and you
Speaker 1: get a perspective that is um more nuanced but also
Speaker 1: maybe more interesting than kind of the media narratives which
Speaker 1: tend to swing. So it's made me a little bit
Speaker 1: more kind of immune to like the latest freak out over. Yeah. Yeah,
Speaker 1: so so I tried to train Alexa and I couldn't
Speaker 1: get it to do it that if anybody on TV
Speaker 1: uses the phrase, I'm not an immunologist, but I want
Speaker 1: the TV muted, just just I don't care what that
Speaker 1: person has to say. What what else? Um, that's an
Speaker 1: interesting podcast? What tell me what else besides that in
Speaker 1: squid Game that's entertaining? Yeah? Yeah, so well I've been, Um,
Speaker 1: I've been. I run a lot, so I listened to
Speaker 1: all these crazy, crazy running podcasts. I also listen, you know,
Speaker 1: pretty religiously to the to the five thirty eight podcast
Speaker 1: Nate Silver, I know is controversial and people love to
Speaker 1: rag on him, but I think he's got a pretty
Speaker 1: decent track record. Respect he's done better than most. But
Speaker 1: I think his kind of like frame on politics is
Speaker 1: really useful. And it's another on where like, you know,
Speaker 1: when you pay super close attention to the polls, it
Speaker 1: kind of makes you a little bit more immune to
Speaker 1: the to the crazy swings in in in narrative, and
Speaker 1: especially because I'm a you know, I'm a journalist. You know,
Speaker 1: I work at Bloomberg. You know, it's good for me
Speaker 1: to like get that perspective because we as journalists are
Speaker 1: very you know, we're immersed in the narrative, right. It's
Speaker 1: like all we think about. The line I love is
Speaker 1: the um news is equal cap weighted when reality is
Speaker 1: market cat waited. Kind of fascinating. UM. Tell us about
Speaker 1: some of your early mentors who helped shape your career. Yeah,
Speaker 1: my mentor, my big mentor was this woman Jane Brenson,
Speaker 1: who was basically the editor of inc And who came
Speaker 1: out of the Wall Street Journal And she's just a
Speaker 1: really cool she's retired now. She's a really cool journalist.
Speaker 1: And UM. And you know, the thing I've been thinking,
Speaker 1: I was thinking about UM when I think about this question,
Speaker 1: was just you know, there was a point in my
Speaker 1: career where, UM, I had like an opportunity, like freelance opportunity.
Speaker 1: I wanted to pursue it. And I went to her
Speaker 1: she's my boss, as that can I do this? And
Speaker 1: she said, know, you can't do it, only you have
Speaker 1: to leave if you do it. Um, But but I
Speaker 1: want you to leave, and I'm gonna make it easy
Speaker 1: for you to. I'm gonna make it easy for you.
Speaker 1: I'm gonna structure. So basically, she kind of like allowed
Speaker 1: me to you know, spread my wings like like you know,
Speaker 1: move and in a way that I think, like, well,
Speaker 1: obviously helped my career, and it's made me feel very
Speaker 1: close to her. But it makes me think like that's whatever.
Speaker 1: That's a big part of mentorship is like at a
Speaker 1: certain point that these these these yeah, and and and
Speaker 1: not not necessarily reacting in a selfish way where you
Speaker 1: know probably would have been better. It's often better right
Speaker 1: to to to to push the mentees or whatever to
Speaker 1: stay in the in a position of support where they're
Speaker 1: helping you and and the fact that she's kind of
Speaker 1: pushed me away and helped me, Like, you know, I
Speaker 1: don't know, it's just anyway that we we've continued to
Speaker 1: have very strong relationships and since then. So, I know
Speaker 1: what it's like when you're writing a book and you
Speaker 1: don't have time to read. But this is book has
Speaker 1: been put away for a while. What have you been
Speaker 1: reading since you finished writing contrem I just so, I
Speaker 1: just finished a book called American Prometheus, which um is about.
Speaker 1: It's a biography of Robert Oppenheimer. Came out about fifteen
Speaker 1: years ago. Oppenheimer's the guy who created the bomb for
Speaker 1: you know what, He led the Los Alamos at lab
Speaker 1: that they created the bomb. The book is, first of all,
Speaker 1: it's really good. It has it's like kind of I
Speaker 1: hate this frame, but it honestly has interesting management lessons
Speaker 1: because like I think Oppenheimer's management style was like it
Speaker 1: is actually kind of similar to Elon Musk, Like he's
Speaker 1: sort of this you know, jack of all trades who's
Speaker 1: really good at inspiring you know, people to Anyway, I
Speaker 1: found it really interesting there. It also kind of has
Speaker 1: interesting things to say about this whole you know, conversation
Speaker 1: around cancel culture or whatever. You know. Oppenheimer famously was
Speaker 1: um you know, kind of blacklisted as a as a
Speaker 1: communist sympathizer, which he was to some extent. So anyway,
Speaker 1: there's there's just a lot of interesting stuff. It's about technology,
Speaker 1: it's about um, you know, about management, and anyway, just
Speaker 1: fascinating guy. And then another book, um that I've read
Speaker 1: pretty recently I really liked is the The Man Is
Speaker 1: Solved the Market the story you know, the Jim Jim
Speaker 1: Simons my saying Simon's right, Renaissance technology book and and
Speaker 1: just you know, the both like just explaining that I mean,
Speaker 1: I really love like explanatory journalism and just like explaining
Speaker 1: how renaissance technologies you know, works, and how they made money,
Speaker 1: and the and the kind of really cool, um you know,
Speaker 1: ways in which it brought like this kind of sophisticated
Speaker 1: math and stuff into into the finance world. I just
Speaker 1: found like just mind expanding and really cool. Amazing book.
Speaker 1: Terrible title because he didn't solve the moment. He just
Speaker 1: figured out how to use the markets to make bucket
Speaker 1: loads of money. And nobody, nobody has come close to
Speaker 1: the sort of returns that he's generated with a couple
Speaker 1: of billion dollars, but that's all he could run before
Speaker 1: he started to see returns attenuate. Yeah yeah, yeah, so
Speaker 1: so that's why they kicked out the outside investors early on. Uh,
Speaker 1: that book, it was fascinating and he just didn't amaze job.
Speaker 1: So I asked you before, we might as well talk
Speaker 1: about this here. So when Zuckerberg, Zuckerberger, Uckerman, when Zuckerman
Speaker 1: not Facebook, Ball Street Journal. When Zuckerman was writing the book,
Speaker 1: he reached out to a whole bunch of people who
Speaker 1: had worked with Simon's early on and found himself getting
Speaker 1: blocked by Simmons and said, hey, listen, this book is
Speaker 1: coming out with your assistance or without. You can either
Speaker 1: help shape it or just be unhappy with the result
Speaker 1: is and ended up getting, you know, twenty thirty hours
Speaker 1: of interview time with him. You tried that with Ed,
Speaker 1: got a little bit of of of gift from him,
Speaker 1: but not nearly. Simon's is, you know, much older the
Speaker 1: end of his career was and is now doing philanthropy,
Speaker 1: so he was more amenable to that. You didn't get
Speaker 1: that sort of qual Yeah, I think til is a
Speaker 1: little bit. I mean Simon's of course had been very secretive,
Speaker 1: and I read, I mean particularly like the introduction of
Speaker 1: the book describes his kind of back and forth with
Speaker 1: Simon's and all these people, you know, telling him forget it,
Speaker 1: you're totally you know, I can't talk to you. You're
Speaker 1: gonna which I really enjoyed, you know, and I found
Speaker 1: very inspiring just because of course, I you know, I
Speaker 1: ran into some of the same, um, the same things.
Speaker 1: I mean, Teal has been very closed off and and
Speaker 1: that was to me part of the opportunity to book
Speaker 1: because any time, you know, anytime someone is is closed
Speaker 1: off like that, it's a journalistic opportunity because they you know,
Speaker 1: there there's there's lots of stuff to say. Um. The
Speaker 1: other thing that kind of worked in my favor, um
Speaker 1: is that you know, venture capital is like a pretty
Speaker 1: it's a networking business, right, so, which which hurts me
Speaker 1: because everybody talked to somewhere down the line they may
Speaker 1: need to go to Peter Teal to ask for money.
Speaker 1: So even people who hate him are like unwilling to
Speaker 1: They don't want to like cut off any future, um,
Speaker 1: you know, any future investment, which is is particularly important
Speaker 1: because like the way these VC deals right work is
Speaker 1: that it's really important to have great competition. So even
Speaker 1: if you don't take money from Teal, you really want
Speaker 1: to have him as a potential backer to help, you know,
Speaker 1: create a sense of you know. So, so that works
Speaker 1: against you. But because he's all over the place, because
Speaker 1: they're you know, dozens hundreds of companies that he's an
Speaker 1: investor in. Um, all these companies have employees. There's just
Speaker 1: it's a pretty big network. So even if you're closed off,
Speaker 1: there are ways to you know, there are ways to
Speaker 1: to to sort of work your way inside because the
Speaker 1: network is so sprawling and you have people who are
Speaker 1: are who actually know a lot, but don't necessarily have
Speaker 1: like a super close relationship with deal. So so anyway,
Speaker 1: I think that that was helpful, especially at the beginning,
Speaker 1: because you're always sort of trying to work your way
Speaker 1: into the you know, into the inside. Fascinating. Uh, what
Speaker 1: sort of advice would you give to a recent college
Speaker 1: grad who is interested in the career in journalism? Oh? Um,
Speaker 1: I would say that, um, you should and this would
Speaker 1: be my advice for like any career. I guess you
Speaker 1: should try to read a lot of stuff. UM. I
Speaker 1: feel like people don't, Um, it's like the most obvious
Speaker 1: thing you can do. But like, but but like and
Speaker 1: this is I think you research, you want to go yeah,
Speaker 1: and and and and also just like and and read
Speaker 1: it for real, Like don't just try to like, okay,
Speaker 1: figure out what that book says, but like really actually
Speaker 1: read it, because because that's how like I think that's
Speaker 1: like pretty good advice for almost any career because but
Speaker 1: but particularly in journalism. I mean, you know, most good
Speaker 1: story ideas and stuff come from for me anyway, come
Speaker 1: from reading things. It's it's you know, talking to people
Speaker 1: is helpful, but a lot of times, like it's just
Speaker 1: some something I read and it's like that raises an
Speaker 1: interesting question and gets you to another question. And I
Speaker 1: just think people tend to It's also good to just
Speaker 1: be a little bit I think undirected, like again, like
Speaker 1: not just trying to figure out what something says, but
Speaker 1: like just just engage with it on an emotional level.
Speaker 1: And and like sometimes good things happen, sometimes not though
Speaker 1: sometimes you just you know, very very interesting. And and
Speaker 1: my final question in what do you know about the
Speaker 1: world of technology, venture capital, finance investing today that you
Speaker 1: wish you knew twenty years or so? Ago fifteen years
Speaker 1: or so. Yeah, yeah, I mean it's two things like
Speaker 1: one and this is they're kind of the opposite. So
Speaker 1: I don't know. But one is UM. Like that that
Speaker 1: that book, the Zuckerman book, was really mind expanding for
Speaker 1: me because it's all about the way the computers have
Speaker 1: had this you know, crazy impact on the world of money,
Speaker 1: and like I wish I knew and and and it's
Speaker 1: still happening, and there's still ways in which, like you know,
Speaker 1: you watch the look at this like Wall Street bet
Speaker 1: stuff where where there's interesting dynamics happening on social media
Speaker 1: and there's just like so many ways that algorithms are
Speaker 1: like driving you know, moving money and and doing so
Speaker 1: are are are are telling the story of our lives
Speaker 1: and like that, I mean I wish I knew more.
Speaker 1: I wish I knew more about that now, I wish
Speaker 1: I had been more tuned to it, you know, fifteen
Speaker 1: years ago. Um. The other thing is UM Networks, and
Speaker 1: it's this is like the opposite, but like like in
Speaker 1: Venture Capital, UM, so much of it is still just
Speaker 1: like a is happening on an interpersonal level. It's these
Speaker 1: like the teals world is completely you know, uh it's
Speaker 1: completely person a person, it's completely loyalty based. It's all
Speaker 1: about you know, who knows who, and and I think
Speaker 1: like understanding that or even though that's kind of the
Speaker 1: opposite of the computer thing, would have would have also
Speaker 1: helped me a great deal because really, especially in venture
Speaker 1: capital like still a very kind of old school business.
Speaker 1: It's not like, uh, I mean they're buying they're they're
Speaker 1: buying stock and companies that do computer stuff, but the
Speaker 1: way they're doing it is very very much about um, yeah,
Speaker 1: impressions and networks and and who you know and stuff.
Speaker 1: Very interesting. Well, thanks Max for being so generous with
Speaker 1: your time. We have been speaking with Max Jafkin. He
Speaker 1: is the author of the Contrarian Peter Teal and Silicon
Speaker 1: Valleys Pursuit of Power. If you enjoy this conversation, well
Speaker 1: be should and check out any of our previous uh
Speaker 1: nearly four hundred interviews we've done. You can find those
Speaker 1: at iTunes, Spotify, wherever you find your favorite podcast. We
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Speaker 1: Barry Ridholts. You've been listening to Masters in Business on
Speaker 1: Bloomberg Radio.