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Speaker 1: You're listening to Fox Sports. Welcome in the latest episode

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Speaker 1: of Wins and Losses. I'm excited to be under way

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Speaker 1: here because I think we have got a fantastic guest

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Speaker 1: that is going to take us through a lot of

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Speaker 1: really interesting things about the rise of the Internet, the

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Speaker 1: rise of business based on the Internet, and also big

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Speaker 1: tech in general. And he is David Sacks. He has

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Speaker 1: got an incredible history. I don't actually know where you're

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Speaker 1: from or where you grew up. He's a partner at

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Speaker 1: Craft Invests in all different sorts of tech companies and

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Speaker 1: beyond out there. But where did you grow up? David? Like?

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Speaker 1: What was your background? And thanks for coming on with us. Yeah,

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Speaker 1: great to be here. Clay Um, I was born in kipt, Africa,

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Speaker 1: and my parents immigrated the United States fast five years old.

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Speaker 1: We actually moved to Memphis, Tennessee, and that's where I

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Speaker 1: basically grew up until I left for college. All Right,

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Speaker 1: I had no idea. So Memphis, Tennessee. How much of

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Speaker 1: a culture shock can you member? I can't imagine. The

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Speaker 1: conveyor belt between South Africa and Memphis, Tennessee is very common.

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Speaker 1: How did that end up? Your location in the United States? Yeah.

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Speaker 1: You know, it's interesting. My dad's a doctor and they

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Speaker 1: wanted to immigrate from South Africa. They didn't agree with

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Speaker 1: the political situation there back in the nineteen seventies, and uh,

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Speaker 1: he got a job at the University of Tennessee Medical

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Speaker 1: Center practicing and teaching, and so that's we end up

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Speaker 1: moving too. Yeah, it was a pretty big culture shock.

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Speaker 1: Are you a sports fan? Did growing up in Memphis

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Speaker 1: in any way sort of an embed itself in you

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Speaker 1: as a college football college basketball fan or you sort

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Speaker 1: of not that interested in sports as a kid growing up? Well,

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Speaker 1: there are only two real sports in Memphis at that time.

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Speaker 1: There was Memphis State Tigers basketball. That was huge. Um,

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Speaker 1: everyone looked forward to that. I remember one year we

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Speaker 1: went to the Final four with I think Keith Lee

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Speaker 1: was sort of the start player then. And the other sport,

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Speaker 1: if you want to call it out in Memphis was wrestling.

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Speaker 1: Every money was wrestling at the miss South Coliseum and

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Speaker 1: those are really the only two big sports in Memphis

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Speaker 1: at that time. Obviously it changed, but did you go

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Speaker 1: to those old school wrestling matches? You know, my parents

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Speaker 1: would never let me go, unfortunately, but I remember, you know,

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Speaker 1: Jerry the King Lawler was time and I would watch

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Speaker 1: that stuff on TV. And you know, as a fan now,

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Speaker 1: as a kid growing up in Nashville, the Nashville Memphis

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Speaker 1: rivalry was very real. Did you feel it in Memphis

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Speaker 1: when you were growing up? Were you aware that as

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Speaker 1: a Memphian you were feuding constantly with Nashvillians a little bit?

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Speaker 1: You know, our high school football team would eventually, you

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Speaker 1: know what, sometimes going to the state finals and play

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Speaker 1: against teams from Nashville. So yeah, there was a little bit.

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Speaker 1: Where did you go away to college from Memphis? I

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Speaker 1: went to Stanford as an undergrad, all right, So how

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Speaker 1: much of a culture shock was that? All right? So

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Speaker 1: you you come from South Africa, you then end up

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Speaker 1: in Memphis and you make the trip out to Palo Alto.

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Speaker 1: Stanford was a lot different place then, certainly than it

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Speaker 1: is now, but that wasn't a very common route. How

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Speaker 1: did you pick Stanford? Is the place you wanted to

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Speaker 1: go to? Yeah? It's interesting. I mean Stanford, I mean,

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Speaker 1: to be honest, this is the best school and that

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Speaker 1: I got into, and I had a great reputea and um,

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Speaker 1: it seemed like a great place to go to school.

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Speaker 1: The campus is sort of really idyllic, like you said,

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Speaker 1: being in Palo Alto, fantastic weather. Uh, it seemed like

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Speaker 1: this an amazing place. And yeah, it was a pretty

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Speaker 1: big culture shock because the campus was very liberal. In

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Speaker 1: Memphis is uh or Tennessee in general sort of a

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Speaker 1: little bit more conservative. So there was a difference there.

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Speaker 1: But um, but the you know, the important thing about

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Speaker 1: going to Stanford in the early nineties for me was

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Speaker 1: that it got me into the whole tech scene when

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Speaker 1: I graduated, and that that end up being very important

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Speaker 1: for my career. By the way, I wanted to go

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Speaker 1: to Stanford Law School. They didn't let me in. I

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Speaker 1: had never been to California until I was in college,

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Speaker 1: like twenty one or twenty two, and the first time

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Speaker 1: I went to the Stanford campus, it really is heaven

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Speaker 1: on Earth. I mean it is an incredible, uh incredible place.

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Speaker 1: So so you graduate from Stanford, and do you remember

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Speaker 1: the first time you ever got on the Internet? By

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Speaker 1: the way, good question. Um, I don't remember that. I

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Speaker 1: guess you know, it must have been in the mid nineties.

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Speaker 1: People are starting to use Yahoo. Um, maybe I was

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Speaker 1: in law school, you know. After Stanford, I went to

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Speaker 1: law school at the University of Chicago, and it must

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Speaker 1: have been around that time. And you know, I thought

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Speaker 1: I had missed the whole internet thing because I had

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Speaker 1: friends at Stanford who graduated, which that was the year

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Speaker 1: that Netscape went public, and it kind of ushered in

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Speaker 1: the commercial and there were a bunch of you know,

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Speaker 1: really interesting companies getting started around then. There was you know,

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Speaker 1: eBay and Amazon and Yahoo, and if you went to

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Speaker 1: graduate from Stanford you would get easily pulled into all that.

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Speaker 1: But because I graduated ninety four, I kind of felt

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Speaker 1: like I missed it, and I actually ended up in

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Speaker 1: law school. And it wasn't until when an old friend

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Speaker 1: of mine from Stanford called me up and told me

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Speaker 1: about a startup he was founding, uh called Confinity but

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Speaker 1: eventually got renamed PayPal, and that was Peter Teel, and

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Speaker 1: so Peter kind of pulled me back to paol Alto

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Speaker 1: in um so Stanford. It actually ended up being very important,

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Speaker 1: but it took five years from me to come back

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Speaker 1: and do internet stuff. How did you like law school?

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Speaker 1: Law school was great. I mean your Chicago was a

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Speaker 1: very serious place and um you know, it was rigorous

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Speaker 1: and a lot of great teachers and I enjoyed it,

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Speaker 1: you know, but by after three years of it, I

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Speaker 1: felt like I was ready to do something else. It

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Speaker 1: wasn't a desire of mine to do law, but inell

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Speaker 1: actually I thought it was really interesting, and you know,

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Speaker 1: I enjoyed experience. Did you ever practice at all as

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Speaker 1: as a part of a big firm? Did you do

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Speaker 1: anything legal related? I also obviously went to law school

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Speaker 1: at Vanderbilt, as as most listeners will know, and I

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Speaker 1: kind of had the sense early on that law was

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Speaker 1: not for me. It sounds like you kind of did

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Speaker 1: as well. But did you go into any sort of

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Speaker 1: big firm lifestyle or any actual practice of law after

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Speaker 1: you graduated? You know, I spent a summer at a

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Speaker 1: at a big law firm, and that kind of reinforced

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Speaker 1: the decision for me that I wanted to do. You know.

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Speaker 1: Part of it was always that I was interested in business,

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Speaker 1: but I always felt like I wanted to be the

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Speaker 1: decision maker, you know, and not not sort of the

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Speaker 1: person carrying out the instructions. And you know, lawyers are

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Speaker 1: ultimately advisors to the principle, uh and you know many

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Speaker 1: of them do, you know, fantastic work. But I always

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Speaker 1: felt like I wanted to be on the other side

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Speaker 1: of the table and and do something more directly in business.

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Speaker 1: Would you advise, because I get asked this question all

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Speaker 1: the time, would you advise kids who think, hey, I

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Speaker 1: don't necessarily want to be a lawyer to go to

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Speaker 1: law school. If we got a one year old who's

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Speaker 1: listening right now and they're going to college, is it

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Speaker 1: a move that you would make again? Would you advise

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Speaker 1: your own kids or kids who ask you for advice

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Speaker 1: whether it go to law school or not. No, I

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Speaker 1: would tell him not to because I think the only

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Speaker 1: reason to law school these days is if you really

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Speaker 1: enjoy the law and want to be a lawyer. You know,

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Speaker 1: maybe you want to practice law, or you want to

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Speaker 1: be a clerk for a judge, or you know, maybe

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Speaker 1: become a judge or an elected official or something like that.

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Speaker 1: I think the reason to go to law school today

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Speaker 1: is because you're really just in the law now. Back

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Speaker 1: when I did it and you did it, there are

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Speaker 1: a lot of people who did it because I think

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Speaker 1: there weren't as many options or it wasn't as clear

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Speaker 1: what you should do. There are a lot more people

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Speaker 1: back in those days. We're talking you know years ago

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Speaker 1: who went to law school knowing they'll go into business.

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Speaker 1: And I just think that today there's so many more options.

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Speaker 1: If you want to do that, you can just do

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Speaker 1: it directly, you know, spending three years of law school

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Speaker 1: and all the expense of that. Uh, there's just much

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Speaker 1: more direct ways of getting into business now. You know,

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Speaker 1: in the mid nineties, even though I had some entree

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Speaker 1: entrepreneurial instincts and desire to do something in business, I

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Speaker 1: really had no idea how to do it. It wasn't clear,

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Speaker 1: like how do you start a company? And so as

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Speaker 1: a result, you kind of end up going to law

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Speaker 1: school as the next step. Uh. But but but today

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Speaker 1: I wouldn't encourage it. Okay, So you mentioned you leave

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Speaker 1: law school and go back to work for a company

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Speaker 1: that would become PayPal. I imagine a lot of people

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Speaker 1: are somewhat familiar with PayPal. I've read a lot of

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Speaker 1: the corporate history of PayPal because I find it to

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Speaker 1: be pretty fascinating. What how would you describe it for

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Speaker 1: people out there? You go in at nine, what is

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Speaker 1: the experience? Like? Who were you working with? I think

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Speaker 1: you mentioned Peter Teal uh and what did you guys

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Speaker 1: end up achieving. Yeah. I mean, it was a really

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Speaker 1: incredible group of people who today are kind of known

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Speaker 1: as the Papal Mafia. That you know, people like Peter

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Speaker 1: Til and Elon Musk and Max Levchin and Reed Hoffman,

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Speaker 1: and the list goes on and on. Chad Hurley and

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Speaker 1: Steve chen who founded YouTube Rule off Photos our CFO

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Speaker 1: who went on to become the head of Sequoia, was

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Speaker 1: a famous venture capital firm. So a lot of really

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Speaker 1: incredible people were part of that founding team. And um

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Speaker 1: and you know today Papals a hundred billion dollar, you know,

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Speaker 1: publicly listed company, so it's, you know, twenty years later,

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Speaker 1: it's a very important company still today. But it was

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Speaker 1: really a pretty incredible group of people. When I joined in,

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Speaker 1: it was about six months before the dot com crash,

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Speaker 1: and Papal was primarily built. Although it was founded the

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Speaker 1: year before the dot com crash, it was primarily built

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Speaker 1: after and in the wake of the dot com crash,

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Speaker 1: And it was a very tough environ ronament lots, you know,

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Speaker 1: all these other startups are going out of business all

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Speaker 1: around us, and somehow we managed to persevere and create

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Speaker 1: you know, a successful outcome, and by early two thousand two.

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Speaker 1: We were the first company, first tech company tai Po

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Speaker 1: since the dot com crash. Uh And like I said, today, it's,

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Speaker 1: you know, a hundred billion dollar publicly traded company. Okay,

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Speaker 1: So what do you attribute um there being such an

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Speaker 1: unbelievable amount of talent? The so called PayPal mafia. You

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Speaker 1: ran through a lot of those guys who not only

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Speaker 1: were successful in building PayPal into a company that could

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Speaker 1: go public in two thousand two and survived the dot

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Speaker 1: com implosion when everything else crashes, what attracted that amount

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Speaker 1: of talent to that particular company at that point in time.

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Speaker 1: It's interesting. I think the most important thing to realize

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Speaker 1: is that although these people and these names are sort

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Speaker 1: of celebrated today, they were kind of nobody's back then.

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Speaker 1: And you know, we were all pretty young at the

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Speaker 1: start of our careers. You know, when PayPal I p

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Speaker 1: owed in two thousand two, the I was the average

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Speaker 1: age on the S one, which is the sort of

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Speaker 1: corporate finaling documents, and I was twenty nine years old,

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Speaker 1: So you know, we weren't even thirty years old yet.

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Speaker 1: This this executive team, this founding team, and one of

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Speaker 1: the ways that we all came together is through friendship networks.

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Speaker 1: You know, Peter Teal recruited his friends who had worked

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Speaker 1: at sorry who had gone to school with him at Stanford.

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Speaker 1: That was the case with me. Max Levchin, who was

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Speaker 1: the CTO, he recruited fellow engineers that he had gone

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Speaker 1: to school with that you have I And that was

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Speaker 1: pretty much how the team was collected and came together.

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Speaker 1: Is we recruited our friends, and the main reason for

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Speaker 1: that is nobody else would would work for us. Joining

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Speaker 1: a startup in the early two thousand's was considered a

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Speaker 1: very risky thing to do, and it was really hard

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Speaker 1: to convince people to join this fledgling company. So how

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Speaker 1: did you meet Peter Tell at Stanford? Do you remember

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Speaker 1: the first time you guys met? What drew you together? Yeah?

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Speaker 1: So I met Peter at at Stanford. I was undergrad.

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Speaker 1: He was actually in law school at that time because

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Speaker 1: he's a few there had founded the Stanford Review, which

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Speaker 1: was the conservative, you know slash libertarian student newspaper on campus.

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Speaker 1: And I ended up becoming a writer and then the

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Speaker 1: editor in chief of the Stanford Review. And um, so

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Speaker 1: we you know, sort of bonded initially over politics and

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Speaker 1: our take on what was happening on campus. And then,

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Speaker 1: as you know, after that back in we ended up

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Speaker 1: writing a book together about what was happening at Stanford,

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Speaker 1: and that was sort of the beginning of a friendship

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Speaker 1: that you know, Persevers took to this day. What's your

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Speaker 1: favorite thing that you guys published as a part of

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Speaker 1: the Stanford Review? Was there an article you wrote? Was

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Speaker 1: there an article somebody else wrote while you were an editor.

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Speaker 1: Do you recall something where you thought, man, we really

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Speaker 1: nailed it here and maybe had an impact that we

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Speaker 1: weren't anticipating being able to us. Well, you know, back

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Speaker 1: in the this is going back to the late eighties

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Speaker 1: early nineties, there was this huge debate at Stanford over

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Speaker 1: the cannon the reading list, and there was a big

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Speaker 1: protest on campus that became very famous where the protesters

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Speaker 1: started chanting, hey, hey, ho ho, Western culture has got

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Speaker 1: to go, and there was this sense that there was

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Speaker 1: this protest movement to overturn and throw out what they

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Speaker 1: called the dead white males of the curriculum. And they succeeded.

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Speaker 1: I mean, they really ended up kind of purging the

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Speaker 1: cannon of these classic works and replacing it with something

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Speaker 1: very different, and that was really the beginning of this

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Speaker 1: sort of cultural revolution on campus that kind of persists

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Speaker 1: until today. And I think a lot of the political

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Speaker 1: changes that you've seen in our society over the last

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Speaker 1: you know, thirty years, or really downstream of the changes

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Speaker 1: that happened on campus, because what happens the last thirty

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Speaker 1: years is that they've been successfully graduating waves of um

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Speaker 1: of students who've been in doctrine into the cityology, and

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Speaker 1: those students have gone on to populate many of the

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Speaker 1: institutions in our in our culture. And so if you

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Speaker 1: think about you know, whether it's will capitalism or you know,

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Speaker 1: any of these other institutions that are kind of pushing

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Speaker 1: this idea of wokens today that all started on campus

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Speaker 1: in the late eighties early nineties. We called it political

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Speaker 1: correctness back then, but it was the same idea. Two

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Speaker 1: thousand two, PayPal goes public, Uh, stock took off. I

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Speaker 1: remember I went back and look before we talked, because

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Speaker 1: I was like, man, I think that stock was still

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Speaker 1: because people, what, you're right, the dot com implosion had happened,

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Speaker 1: but you guys had built back up to a really

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Speaker 1: impressive spot. Was there something that you bought or something

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Speaker 1: you were excited to buy. Do you remember a purchase

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Speaker 1: after I'm assuming you had some decent wealth, probably for

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Speaker 1: the first time in your life, certainly on that level. Yeah.

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Speaker 1: You know, Um, Peter and I both did the very

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Speaker 1: cliche thing which I now cringe a little bit at doing,

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Speaker 1: which is buying a Ferrari. Um. Yeah, you know what

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Speaker 1: kind of Ferrari did you get? Like and and and

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Speaker 1: and this is before like it was kind of probably

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Speaker 1: commonplace for a lot of these Silicon Valley companies to

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Speaker 1: be going public, Like did you just go into a

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Speaker 1: dealership in Silicon Valley? Yeah, pretty much, I think I

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Speaker 1: got I got a three five five Spider. It was

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Speaker 1: like one of those you know, it was like a

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Speaker 1: black convertible. It was a really cool car. Um. But

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Speaker 1: you know, it's like I felt like it was like

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Speaker 1: driving an egg, you know it was. It was so delicate.

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Speaker 1: I felt like, you know, I was going to mess

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Speaker 1: it up every time I drove it, and uh, you know,

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Speaker 1: eventually eventually got rid of it. But what was the

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Speaker 1: girl reaction to you having a Ferrari? Like was that

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Speaker 1: something that was impressive? Did you always hear about rich

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Speaker 1: guys driving fancy cars, and sometimes you got poor guys

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Speaker 1: who drive fancy cars to try to look like rich guys.

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Speaker 1: Net positive or net negative return on value in terms

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Speaker 1: of impressions on women when you have a Ferrari. Yeah,

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Speaker 1: you know, I don't think it really helped me that much. UM.

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Speaker 1: So I don't Yeah, I don't think it helped me

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Speaker 1: that much. Um. But you know, you know, I was

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Speaker 1: only thirty years old at that time, so it was

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Speaker 1: a kind that that you do when you're young, and um, yeah,

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Speaker 1: you know, I guess I enjoyed it for a couple

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Speaker 1: of years and then, uh, you know, I ended up

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Speaker 1: ended up selling it. I actually got instead, uh one

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Speaker 1: of the first test loos that Elon made, um, and

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Speaker 1: that that was an interesting car. Hey, what's up everybody?

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Speaker 1: It's me three time Pro Bowlertle Warrington, and I couldn't

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Speaker 1: be more excited to announce a new podcast, call Up

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Speaker 1: on Game. What is Up on Game? You asked, along

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Speaker 1: with my fellow Pro bowler T J. Huschman, Zada and

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Speaker 1: Super Bowl champion. Yep, that's right, Plexico Burris. You can

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Speaker 1: only name a show with that type of talent on

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Speaker 1: it Up on Game. We're going to be daring our

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Speaker 1: real life experiences loaded with teachable moments. Listen to up

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Speaker 1: On Game with Me, LaVar Arrington, T J. Hutchman's Outa

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Speaker 1: and Plexico Birds on the I Heart Radio app, Apple

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Speaker 1: podcast or wherever you get your podcast from. So I

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Speaker 1: don't even know anything about that. When did that? Was

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Speaker 1: that like an early model Tesla? I mean he's like

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Speaker 1: kind of almost making out of the back of the

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Speaker 1: studio somewhere. Yeah, I mean the first version of the

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Speaker 1: Tesla was called the Roadster and it was the first

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Speaker 1: car that Ellen made, and it was more of a

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Speaker 1: sports car and it it was in the body of

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Speaker 1: they used like the body of I think it was

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Speaker 1: like an old I want to say, Fiat or something

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Speaker 1: like that. It was a really small car. It was

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Speaker 1: a two seater and didn't have a lot of features.

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Speaker 1: It didn't even have power steering. It was pretty hard

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Speaker 1: to draw, I've to be honest, but elon. But it

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Speaker 1: was very quick. It had that speed from the electric batteries. Basically,

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Speaker 1: you know, the torque was there was no gear shifting,

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Speaker 1: and the torque felt, you know, almost unlimited, and so

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Speaker 1: it was a very fast car. But it was small

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Speaker 1: and kind of hard to drive, but it got test

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Speaker 1: off the ground. What Ellen did is I think he

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Speaker 1: sold maybe thousand of those cars, um and you know,

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Speaker 1: the idea was, we're, you know, we're going to sell

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Speaker 1: a sports car because he could charge a lot of

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Speaker 1: money for them, and then on the heels of that

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Speaker 1: he would make a mass market car. And that's what

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Speaker 1: he did is you know, I think he stopped production

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Speaker 1: of the Roaster after maybe a thousand they sold about

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Speaker 1: thousand of them, and then use that money build the

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Speaker 1: Tesla Model Less, which was their first real mainstream car,

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Speaker 1: and that was a really fantastic car that was easily

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Speaker 1: the best car I'd driven till that time. And you know,

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Speaker 1: since then they've gone on to the Model three and

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Speaker 1: not a lie and Tesla has become the most valuable

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Speaker 1: car company in the world. Tesla is an interesting story,

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Speaker 1: and I think, and I'm curious if you were the

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Speaker 1: same way. One of the things that fascinates me about

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Speaker 1: a lot of the guys who made money at PayPal

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Speaker 1: is many people make tens of millions of dollars and

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Speaker 1: they throw up the peace sign and they say, Okay,

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Speaker 1: I've got money to be able to basically do whatever

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Speaker 1: I want for the rest of my life, But I'm

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Speaker 1: not interested in pushing all that money back into the

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Speaker 1: center of the table and make bigger bets going forward.

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Speaker 1: It seems like a lot of the PayPal guys and

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Speaker 1: maybe it's the psychology of the company in general, the

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Speaker 1: risk taking culture. I'm curious how you would analyze it.

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Speaker 1: Almost looked at the money that you guys made at

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Speaker 1: PayPal as table stakes that allowed you to up your

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Speaker 1: wagers on things that were even more important to you.

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Speaker 1: Did you have a conscious decision about making that kind

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Speaker 1: of choice, because certainly you've gone on to other companies,

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Speaker 1: and it's easy for somebody who has a success on

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Speaker 1: the level of payper how to say, Hey, you know,

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Speaker 1: I've made my money. I can have a really comfortable life.

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Speaker 1: You guys, it seems like a lot of you said, Okay,

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Speaker 1: I've got the table stakes to do what I really

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Speaker 1: wanted to do. Conscious decision, unconscious? Am I analyzing the

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Speaker 1: larger culture in your mind correctly? Yeah? I think that's right.

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Speaker 1: I mean, nobody felt out of that original PayPal crew.

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Speaker 1: Nobody felt like, oh, let's just retired now. They all

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Speaker 1: went on to do, you know, greater things, And I

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Speaker 1: think that's why the paper Mafia's kind of remembered today

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Speaker 1: is not just for PayPal, but what they all did afterwards. Um,

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Speaker 1: you know Ellen famously that really his entire fortune on

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Speaker 1: Tesla and SpaceX. He was, you know, a few weeks

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Speaker 1: away from going bankrupt and you know, ended up just

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Speaker 1: back in two thousand eight in the financial crisis and

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Speaker 1: put his last dime into Tesla and SpaceX to save

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Speaker 1: those companies and then ultimately succeeded. And that's why he's

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Speaker 1: the world's riches man today, or one of them, is

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Speaker 1: because he really double triple down and kind of risked

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Speaker 1: every penny he had on those ventures. But everybody else

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Speaker 1: in the group really went on to do really impressive

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Speaker 1: things as well. I mean, Peter went on to become

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Speaker 1: of VC. He wrote the first check as an angel

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Speaker 1: investor into Facebook. I think it's a five mins houseand

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Speaker 1: dollar check, and then that turned into billions. And then

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Speaker 1: he was the founding investor at Volunteer, which is now

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Speaker 1: a successful public company, and you know, also founded Founders Funds,

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Speaker 1: a VC firm has done very well. Mass Love Tune

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Speaker 1: is the CTO of PayPal, founded a firm which is

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Speaker 1: now publicly traded company, went publishing the last year that's

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Speaker 1: worth you know, billions, um, and so on down the line.

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Speaker 1: I mean everyone went on to do different things. I

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Speaker 1: after PayPal, created another internet company called Yammer, which was

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Speaker 1: an enterprise software company. It was one of the first

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Speaker 1: enterprise software companies to use viral tactics that I had

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Speaker 1: learned at PayPal. So yeah, we all went on to

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Speaker 1: do different things. And I think it's partly a function

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Speaker 1: the fact that we were all very young and still

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Speaker 1: had a lot of ambition, and nobody felt like they

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Speaker 1: had hit some number or something where they were just

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Speaker 1: going to retire. Is it difficult to when you have

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Speaker 1: a big, big hit like you guys did with PayPal?

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Speaker 1: Is it difficult to decide what the next step you're

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Speaker 1: going to take is in any way because you're almost

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Speaker 1: over analyzing it and trying to equal or have that

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Speaker 1: same kind of success you mentioned Yammer. How many things

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Speaker 1: did you look at in a significant way from a

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Speaker 1: business opportunity perspective before you made the leap there? And

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Speaker 1: what was it that made you make that choice? Yes?

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Speaker 1: So for me, I mean I think you raised a

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Speaker 1: good point, which is, you know, once you've had a success,

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Speaker 1: you know, is there a danger of kind of over

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Speaker 1: analyzing the next thing and being reticent to have a failure,

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Speaker 1: you know, because now you've had a success and it

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Speaker 1: could be the opposite to right where you expect everything.

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Speaker 1: I mean, it's just you're going to be uh analyzed

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Speaker 1: in some way based on your prior success. And I'm

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Speaker 1: just kind of fascinated by how you make the decision

431
00:23:09,320 --> 00:23:13,399
Speaker 1: to take the next opportunity. Yes, So for me, it's

432
00:23:13,440 --> 00:23:16,240
Speaker 1: it's always about the product. And what happens is I

433
00:23:16,280 --> 00:23:18,560
Speaker 1: get a product idea and I start, you know, turning

434
00:23:18,560 --> 00:23:20,919
Speaker 1: it over my head and start developing the idea, and

435
00:23:20,960 --> 00:23:23,920
Speaker 1: I get kind of obsessed with it. And so it's

436
00:23:23,960 --> 00:23:26,639
Speaker 1: my passion for the product that drives everything else, and

437
00:23:26,760 --> 00:23:30,960
Speaker 1: I don't worry so much about what the business outcome

438
00:23:31,040 --> 00:23:33,040
Speaker 1: is going to be. I just try to design the

439
00:23:33,080 --> 00:23:35,800
Speaker 1: best product and try to figure out how to get

440
00:23:35,840 --> 00:23:37,880
Speaker 1: it into as many fuel as hands as possible, solve

441
00:23:37,960 --> 00:23:42,800
Speaker 1: the distribution problem, and and kind of let that drive

442
00:23:42,840 --> 00:23:44,520
Speaker 1: it and then let the shift fall where they may

443
00:23:44,560 --> 00:23:47,200
Speaker 1: in terms of the actual financial outcome. I think it's

444
00:23:47,880 --> 00:23:51,600
Speaker 1: not healthy to be thinking so much about, you know,

445
00:23:51,640 --> 00:23:54,439
Speaker 1: how much money you're going to make, because that's not

446
00:23:54,520 --> 00:23:57,120
Speaker 1: something that's going to fuel you on a daily basis when,

447
00:23:57,359 --> 00:24:00,679
Speaker 1: especially when times get tough, you really want to have

448
00:24:00,880 --> 00:24:03,960
Speaker 1: passion for the idea and the mission of the company

449
00:24:04,359 --> 00:24:06,639
Speaker 1: and the product, and that's the thing that's going to

450
00:24:06,720 --> 00:24:10,240
Speaker 1: motivate you on a daily basis. So you sell uh

451
00:24:10,400 --> 00:24:14,440
Speaker 1: yammer for over a billion dollars basically four years after

452
00:24:14,520 --> 00:24:19,280
Speaker 1: its founding. Microsoft buys it. And then I'm kind of

453
00:24:19,320 --> 00:24:23,040
Speaker 1: fascinated by your move into venture capital. But before we

454
00:24:23,080 --> 00:24:26,760
Speaker 1: talk about that, are you noticing along the line you

455
00:24:26,800 --> 00:24:29,919
Speaker 1: get to Silicon Valley in ninety nine, you're right there

456
00:24:29,960 --> 00:24:33,800
Speaker 1: at the heartbeat of this culture. Zuckerberg is gonna move

457
00:24:33,840 --> 00:24:37,440
Speaker 1: Facebook out there, uh, and it continues to grow and

458
00:24:37,520 --> 00:24:41,399
Speaker 1: become an incredible incubator of so many different ideas. Is

459
00:24:41,440 --> 00:24:45,119
Speaker 1: the culture substantially evolving as you see it? Do you

460
00:24:45,200 --> 00:24:47,840
Speaker 1: like the evolution that you're seeing in Silicon Valley? Do

461
00:24:47,880 --> 00:24:52,159
Speaker 1: you dislike it? Well, the culture Silicon Valley is always

462
00:24:52,160 --> 00:24:55,760
Speaker 1: a really important contributor to the sasum of all the

463
00:24:55,760 --> 00:24:59,399
Speaker 1: companies that were there historically. And so you know, I

464
00:24:59,440 --> 00:25:03,359
Speaker 1: really sell when when I moved back to Silicon Valley

465
00:25:03,600 --> 00:25:07,439
Speaker 1: back to PayPal, it really felt like the center of

466
00:25:07,440 --> 00:25:09,920
Speaker 1: the universe. You would drive along the one on one

467
00:25:09,960 --> 00:25:13,640
Speaker 1: freeway and you would see all these office buildings, these shiny,

468
00:25:13,840 --> 00:25:17,600
Speaker 1: gleaming new office buildings that had just been constructed in

469
00:25:17,600 --> 00:25:19,399
Speaker 1: the last couple of years, and they all had the

470
00:25:19,440 --> 00:25:23,600
Speaker 1: logos of companies that didn't exist a few years before.

471
00:25:24,040 --> 00:25:27,000
Speaker 1: And it really felt like something magical was happening where

472
00:25:27,040 --> 00:25:31,440
Speaker 1: you could build these incredible companies so quickly, and there

473
00:25:31,480 --> 00:25:33,440
Speaker 1: was nowhere else in the world you could really do that.

474
00:25:33,480 --> 00:25:36,639
Speaker 1: There was, you know, there was nowhere else where you

475
00:25:36,680 --> 00:25:38,880
Speaker 1: could find the money to do it, where you get

476
00:25:38,960 --> 00:25:42,560
Speaker 1: vcs to write you these checks so quickly, you know,

477
00:25:42,680 --> 00:25:44,960
Speaker 1: without spending months thinking about it. They could do it

478
00:25:44,960 --> 00:25:47,479
Speaker 1: in days or weeks, and you could find the talent

479
00:25:47,560 --> 00:25:49,879
Speaker 1: that you needed to build these companies. So it was

480
00:25:49,920 --> 00:25:54,200
Speaker 1: really a magical place. And what happened between say two

481
00:25:54,240 --> 00:25:59,840
Speaker 1: thousand and over that twenty year period is that looking

482
00:26:00,320 --> 00:26:03,119
Speaker 1: just kind of getting it got bigger and bigger. If

483
00:26:03,160 --> 00:26:06,040
Speaker 1: you go back to the ninety nineties, it was sort

484
00:26:06,080 --> 00:26:10,320
Speaker 1: of clustered around Palo Alto, but you know, it got

485
00:26:10,359 --> 00:26:12,840
Speaker 1: it kept growing to the point where it included San

486
00:26:12,840 --> 00:26:16,320
Speaker 1: Francisco and the East Bay, and then it went south

487
00:26:16,359 --> 00:26:20,919
Speaker 1: to San Jose, and so Silicon Valley really became Silicon Bay,

488
00:26:20,960 --> 00:26:23,479
Speaker 1: and it kept getting bigger and bigger, and it created

489
00:26:23,520 --> 00:26:25,800
Speaker 1: this sort of bounty of riches for the city of

490
00:26:25,800 --> 00:26:29,600
Speaker 1: San Francisco, even though the city itself had really done

491
00:26:29,640 --> 00:26:33,360
Speaker 1: nothing to encourage Silicon Valley, and in fact, I had

492
00:26:33,400 --> 00:26:36,720
Speaker 1: a lot of policies and politicians who were hostile to

493
00:26:36,840 --> 00:26:41,680
Speaker 1: the tech industry. It you know, made San Francisco this

494
00:26:42,040 --> 00:26:45,640
Speaker 1: beneficiary of these incredible riches. And we can talk more

495
00:26:45,640 --> 00:26:48,760
Speaker 1: about that. But then what happened, I think during COVID,

496
00:26:48,840 --> 00:26:50,960
Speaker 1: and this is really new, this is the last couple

497
00:26:50,960 --> 00:26:54,399
Speaker 1: of years, is that because of COVID, and you know,

498
00:26:54,480 --> 00:26:58,280
Speaker 1: that started this whole era of remote work and distributed work.

499
00:26:58,640 --> 00:27:00,760
Speaker 1: People started doing their jobs from home and then they

500
00:27:00,760 --> 00:27:03,199
Speaker 1: realized that they could do these jobs from anywhere. And

501
00:27:03,240 --> 00:27:05,040
Speaker 1: so this whole tech industry of the last couple of

502
00:27:05,119 --> 00:27:08,480
Speaker 1: years has decentralized a lot, and you started to see

503
00:27:08,560 --> 00:27:14,600
Speaker 1: the rise of tech hubs in places like Austin and Miami. Um,

504
00:27:14,640 --> 00:27:17,520
Speaker 1: you know, New York City has gotten strong. L A

505
00:27:17,600 --> 00:27:21,359
Speaker 1: and Seattle were already somewhat strong. But you're seeing now

506
00:27:21,760 --> 00:27:26,680
Speaker 1: tech emerge everywhere and it's not just Silicon Valley anymore.

507
00:27:26,680 --> 00:27:29,320
Speaker 1: And I'd say maybe fifty of the companies we invest

508
00:27:29,359 --> 00:27:32,879
Speaker 1: in today are still in Silicon Valley or the Bay Area,

509
00:27:33,200 --> 00:27:36,879
Speaker 1: but the other fift are increasingly in a distributed number

510
00:27:36,920 --> 00:27:39,320
Speaker 1: of locations. And I think it's really good for the

511
00:27:39,359 --> 00:27:43,200
Speaker 1: country actually, that this wealth and prosperity that's being created

512
00:27:43,200 --> 00:27:45,399
Speaker 1: by the new economy is not just going to be

513
00:27:45,480 --> 00:27:47,000
Speaker 1: in the Bay Area, but that's going to be all

514
00:27:47,040 --> 00:27:49,640
Speaker 1: over the United States. Yeah, I'll give you By the way,

515
00:27:49,640 --> 00:27:52,040
Speaker 1: we're talking to David sachs Uh, this is wins and Losses.

516
00:27:52,040 --> 00:27:54,639
Speaker 1: I'm Clay Travis. I'll give you an example of that, David.

517
00:27:54,680 --> 00:27:56,520
Speaker 1: I spent a lot of time going out to l

518
00:27:56,600 --> 00:28:00,600
Speaker 1: a UM obviously because Fox was based there for Fox Sports,

519
00:28:00,640 --> 00:28:03,120
Speaker 1: and spent months and months out there, and I would

520
00:28:03,119 --> 00:28:05,919
Speaker 1: go around and look at everybody's houses in l a

521
00:28:06,600 --> 00:28:08,359
Speaker 1: and then I, you know, you see how much they cost.

522
00:28:08,960 --> 00:28:11,880
Speaker 1: And then I'd come back to the Nashville area and

523
00:28:12,040 --> 00:28:14,520
Speaker 1: I would be like, you know, my house that that

524
00:28:14,560 --> 00:28:18,720
Speaker 1: we initially bought here, uh, would cost millions and millions

525
00:28:18,720 --> 00:28:21,600
Speaker 1: of dollars in l a and it was a fraction

526
00:28:21,600 --> 00:28:24,440
Speaker 1: of that in Nashville, right. Um, And what I've seen

527
00:28:24,480 --> 00:28:27,199
Speaker 1: with COVID is it accelerated things to such an extent

528
00:28:27,560 --> 00:28:30,919
Speaker 1: that now there's not as big of a difference. You know,

529
00:28:30,960 --> 00:28:33,280
Speaker 1: a lot of people are cashing out in California, in

530
00:28:33,320 --> 00:28:36,440
Speaker 1: New York, in the Chicago area and moving to where

531
00:28:36,480 --> 00:28:39,800
Speaker 1: I live in the Nashville area. And the prices have

532
00:28:39,960 --> 00:28:43,720
Speaker 1: skyrocketed in Nashville. And I think that's because the top

533
00:28:43,720 --> 00:28:47,320
Speaker 1: ten percent of income earners, to your point, have realized

534
00:28:47,360 --> 00:28:49,920
Speaker 1: that they can basically live anywhere in the United States

535
00:28:49,920 --> 00:28:53,720
Speaker 1: and do their same job, and absent COVID, many of

536
00:28:53,760 --> 00:28:56,040
Speaker 1: them would not have risk that, right. You would never

537
00:28:56,080 --> 00:28:58,880
Speaker 1: have said, oh, okay, I'm gonna go ahead and relocate

538
00:28:58,920 --> 00:29:01,240
Speaker 1: and do my job that I had been doing in California,

539
00:29:01,320 --> 00:29:03,840
Speaker 1: in Nashville or in Austin or a place like that.

540
00:29:04,320 --> 00:29:07,120
Speaker 1: And uh. And certainly people who are running hedge funds

541
00:29:07,120 --> 00:29:09,520
Speaker 1: in New York are finally saying, screw it, I'm not

542
00:29:09,520 --> 00:29:12,080
Speaker 1: gonna pay you know, fifteen percent state income tax and

543
00:29:12,120 --> 00:29:14,280
Speaker 1: I can go to Florida pay nothing, being better weather,

544
00:29:14,520 --> 00:29:16,960
Speaker 1: get a bigger place. But it seems like in many

545
00:29:17,120 --> 00:29:22,080
Speaker 1: of these areas that lack of similarity in housing prices

546
00:29:22,120 --> 00:29:24,520
Speaker 1: has vanished, right, Um, And I think it's reflective of

547
00:29:24,560 --> 00:29:27,080
Speaker 1: what you're saying, which is people with high level talent

548
00:29:27,160 --> 00:29:30,800
Speaker 1: and frankly high level incomes being more evenly distributed across

549
00:29:30,800 --> 00:29:33,120
Speaker 1: the country than they might have been in the earth

550
00:29:33,160 --> 00:29:36,840
Speaker 1: in the late nineties and the early two thousand's for sure. Yeah,

551
00:29:36,880 --> 00:29:38,600
Speaker 1: I think I think that's right, and I think it's

552
00:29:38,600 --> 00:29:41,360
Speaker 1: all been enabled by this cultural shift that we don't

553
00:29:41,400 --> 00:29:44,280
Speaker 1: all have to meet in person almost all of my

554
00:29:44,320 --> 00:29:47,360
Speaker 1: meetings these days or by zoom. Yeah, you know, the

555
00:29:47,360 --> 00:29:50,600
Speaker 1: factors that I invest in, they are fine with meeting

556
00:29:50,760 --> 00:29:53,840
Speaker 1: by zoom and in fact, they like it better. It

557
00:29:53,920 --> 00:29:56,600
Speaker 1: saves everyone, you know, a bunch of drive time and

558
00:29:56,800 --> 00:29:59,760
Speaker 1: I can be wherever I am and um, and they

559
00:29:59,760 --> 00:30:02,080
Speaker 1: can be in a different city. So everything kind of

560
00:30:02,080 --> 00:30:05,280
Speaker 1: moved to zoom in in the VC industry. I'm not

561
00:30:05,280 --> 00:30:07,480
Speaker 1: sure that's totally true. If you're if you're trying to

562
00:30:07,480 --> 00:30:09,640
Speaker 1: build a company, I think there is some value in

563
00:30:09,960 --> 00:30:12,960
Speaker 1: having people under the same roof working together, but certainly

564
00:30:13,000 --> 00:30:16,720
Speaker 1: for a VC everything's moved to zoom And so if

565
00:30:17,240 --> 00:30:19,959
Speaker 1: that's the case, if if you're somebody who who's kind

566
00:30:19,960 --> 00:30:22,840
Speaker 1: of a knowledge work and do your job remotely from anywhere.

567
00:30:23,160 --> 00:30:25,400
Speaker 1: Now you're kind of freed up to live anywhere you want.

568
00:30:25,440 --> 00:30:27,360
Speaker 1: You don't have to just live in the in the

569
00:30:27,560 --> 00:30:31,360
Speaker 1: in your sort of industry town and um and so yeah,

570
00:30:31,360 --> 00:30:33,720
Speaker 1: there's been a lot more decentralization. I mean, it used

571
00:30:33,720 --> 00:30:36,000
Speaker 1: to be that if you wanted to do tech in

572
00:30:36,040 --> 00:30:37,960
Speaker 1: a serious way, you have to go to the Bay Area.

573
00:30:38,120 --> 00:30:41,560
Speaker 1: If you wanted to do entertainment in a serious way,

574
00:30:41,600 --> 00:30:44,120
Speaker 1: you have to go to l A or finance was

575
00:30:44,160 --> 00:30:46,680
Speaker 1: in New York, um, and so on down the line.

576
00:30:47,000 --> 00:30:49,959
Speaker 1: But now people are liberated. And so I think cities

577
00:30:50,480 --> 00:30:54,959
Speaker 1: are starting to realize that they're competing for knowledge workers. Um,

578
00:30:55,000 --> 00:30:57,360
Speaker 1: you know, not just companies anymore. You know, cities used

579
00:30:57,440 --> 00:31:00,440
Speaker 1: to compete to get the company headquarters is to move

580
00:31:00,480 --> 00:31:03,040
Speaker 1: to their city. Now they're kind of competing for individual

581
00:31:03,080 --> 00:31:06,520
Speaker 1: knowledge workers to make that decision. And the low tax

582
00:31:06,560 --> 00:31:09,960
Speaker 1: states or no tax states like Florida and Texas um

583
00:31:10,120 --> 00:31:13,719
Speaker 1: are just seeing you know, there are incredible beneficiaries of that.

584
00:31:14,200 --> 00:31:16,600
Speaker 1: And if you look at the migration stats across the

585
00:31:16,680 --> 00:31:19,480
Speaker 1: United States, all the states that are growing right now

586
00:31:19,640 --> 00:31:23,640
Speaker 1: are basically the zero tax or low tax states and

587
00:31:23,680 --> 00:31:26,680
Speaker 1: the states that are seeing the biggest outflows, or California,

588
00:31:26,760 --> 00:31:29,840
Speaker 1: New York and the other states that have very high taxes.

589
00:31:29,960 --> 00:31:33,640
Speaker 1: So it's it's a it's a really big change. We're

590
00:31:33,640 --> 00:31:36,240
Speaker 1: talking to David Sachs. All right, so you now do

591
00:31:36,400 --> 00:31:39,719
Speaker 1: venture capital. I'm not an expert at venture campit capital

592
00:31:39,720 --> 00:31:41,480
Speaker 1: at all. I know just enough to be good enough

593
00:31:41,520 --> 00:31:43,280
Speaker 1: at content that I can build a business and be

594
00:31:43,320 --> 00:31:45,440
Speaker 1: able to sell it, but I wouldn't be great at

595
00:31:45,520 --> 00:31:50,120
Speaker 1: spreadsheets or anything like that. Um, what percentage of companies

596
00:31:50,160 --> 00:31:54,080
Speaker 1: that you look at do you end up investing in? Uh,

597
00:31:54,480 --> 00:31:57,400
Speaker 1: by the time they go through their fundraising rounds, Like

598
00:31:57,440 --> 00:32:00,360
Speaker 1: what kind of hit rate would have fund like yours have?

599
00:32:00,600 --> 00:32:03,080
Speaker 1: In terms of the personage of companies that you're investing in,

600
00:32:04,560 --> 00:32:08,840
Speaker 1: I mean, if you probably one in a thousands. But yeah,

601
00:32:08,960 --> 00:32:11,120
Speaker 1: but I mean obviously that's not me. I can't take

602
00:32:11,480 --> 00:32:14,360
Speaker 1: a thousand meetings without doing crazy. So we have a

603
00:32:15,160 --> 00:32:17,720
Speaker 1: we have a team, you know, close to forty people

604
00:32:17,760 --> 00:32:22,000
Speaker 1: now and between all of them, they look at thousands

605
00:32:22,040 --> 00:32:26,480
Speaker 1: of companies every year for us to make you know, um,

606
00:32:26,920 --> 00:32:29,960
Speaker 1: one to two dozen investments at various stages. So it

607
00:32:30,040 --> 00:32:32,120
Speaker 1: might be a little better hit rate than that. It

608
00:32:32,200 --> 00:32:35,920
Speaker 1: might be more like one something like that. But that

609
00:32:36,000 --> 00:32:38,640
Speaker 1: doesn't mean that every company we go deep on, right.

610
00:32:38,680 --> 00:32:41,239
Speaker 1: It might mean that we take a meeting, or it

611
00:32:41,320 --> 00:32:44,440
Speaker 1: might just be that they send us their information. But

612
00:32:44,520 --> 00:32:46,880
Speaker 1: our top of funnel, when we measure it is is

613
00:32:46,920 --> 00:32:51,600
Speaker 1: thousands of companies. Um, what is your biggest hit? What

614
00:32:51,760 --> 00:32:53,720
Speaker 1: is the company that you invested in as a venture

615
00:32:53,760 --> 00:32:56,360
Speaker 1: capital investor? And it has been an absolute home run

616
00:32:58,080 --> 00:33:01,200
Speaker 1: well before. So I started Craft in two thousand seventeen,

617
00:33:01,200 --> 00:33:04,560
Speaker 1: about five years ago to institute size and professionalize what

618
00:33:04,600 --> 00:33:06,880
Speaker 1: I was doing. But I've been investing, you know, pretty

619
00:33:06,960 --> 00:33:10,040
Speaker 1: much since you know, after we sold PayPal in two

620
00:33:10,080 --> 00:33:14,040
Speaker 1: thousand two. Probably the biggest hit to day would be

621
00:33:14,360 --> 00:33:19,120
Speaker 1: investing in Facebook back in She's Camember exactly what year

622
00:33:19,160 --> 00:33:20,479
Speaker 1: it was, and it was like two five or two

623
00:33:20,480 --> 00:33:22,480
Speaker 1: thousand and six that you know, what kind of valuation

624
00:33:22,480 --> 00:33:25,800
Speaker 1: would Facebook have had at the time that you invested. Well,

625
00:33:25,840 --> 00:33:28,200
Speaker 1: I invested in a in the growth round, So I

626
00:33:28,240 --> 00:33:31,560
Speaker 1: wasn't as early as Peter Peter invested like at a

627
00:33:31,600 --> 00:33:34,200
Speaker 1: five million dollar valuation. I think by the time I invested,

628
00:33:34,200 --> 00:33:36,560
Speaker 1: it was sort of at a at a five million

629
00:33:36,560 --> 00:33:39,960
Speaker 1: million dollar valuation or something like that UM and then

630
00:33:39,960 --> 00:33:43,200
Speaker 1: it went public at fifty fifty billion dollar valuation. Today

631
00:33:43,200 --> 00:33:46,680
Speaker 1: it's about five billion. You know, there were some other

632
00:33:46,680 --> 00:33:50,479
Speaker 1: ones too. I mean I invested in UM, Valanteer, invest

633
00:33:50,520 --> 00:33:56,840
Speaker 1: in Airbnb, slack Um, SpaceX you know Elon's company, which

634
00:33:56,880 --> 00:34:00,960
Speaker 1: has done phenomenally. Would you invest in Tesla? You know,

635
00:34:01,760 --> 00:34:03,600
Speaker 1: I don't know how I missed that, but I bought

636
00:34:03,600 --> 00:34:05,880
Speaker 1: one of the original tests by the non investment company,

637
00:34:05,880 --> 00:34:08,000
Speaker 1: and that was did you look at the Tesla? I'm

638
00:34:08,000 --> 00:34:09,719
Speaker 1: just kind of curious. Did you look at any of

639
00:34:09,719 --> 00:34:12,520
Speaker 1: the VC money when they raised and say, hey, I'm

640
00:34:12,560 --> 00:34:15,120
Speaker 1: consciously not going to make that choice, Like, yeah, I'm

641
00:34:15,160 --> 00:34:17,319
Speaker 1: just kind of curious. You liked the car uh and

642
00:34:17,400 --> 00:34:20,120
Speaker 1: obviously your friends with Elen. I'm just sure curious how

643
00:34:20,200 --> 00:34:23,120
Speaker 1: you didn't end up in there. Well I didn't. I

644
00:34:23,120 --> 00:34:25,680
Speaker 1: didn't look at it. I wasn't a professional VC or anything,

645
00:34:25,719 --> 00:34:27,480
Speaker 1: so I didn't look at it. You know, he never

646
00:34:27,520 --> 00:34:30,160
Speaker 1: presented it to me. He certainly could have called him

647
00:34:30,200 --> 00:34:32,000
Speaker 1: up and said hey, could I invest? I actually did

648
00:34:32,000 --> 00:34:35,080
Speaker 1: that with SpaceX UM. I emailed him and said, you know, hey,

649
00:34:35,080 --> 00:34:38,000
Speaker 1: can I invest? Me? Said sure, so I invested personally,

650
00:34:38,000 --> 00:34:41,080
Speaker 1: and then we invested as a VC later. Um. You know,

651
00:34:41,120 --> 00:34:42,560
Speaker 1: I don't know why I didn't occurred to me. I

652
00:34:42,560 --> 00:34:45,160
Speaker 1: just I guess I just thought that the idea of

653
00:34:45,200 --> 00:34:49,320
Speaker 1: a new car company was so far outside the realm

654
00:34:49,680 --> 00:34:53,279
Speaker 1: of what I thought I knew about investing, you know,

655
00:34:53,360 --> 00:34:57,320
Speaker 1: because all the other investment selves making were software investments

656
00:34:57,600 --> 00:35:01,400
Speaker 1: or tech investment. And I guess what i'd realize is

657
00:35:01,400 --> 00:35:05,360
Speaker 1: that was basically creating an iPad on wheels, and I

658
00:35:05,360 --> 00:35:07,000
Speaker 1: should have just seen it as a car company. I

659
00:35:07,000 --> 00:35:10,040
Speaker 1: should have really seen it as like a fundamental tech innovation.

660
00:35:10,760 --> 00:35:13,120
Speaker 1: And so I guess we has to have the innovation,

661
00:35:13,120 --> 00:35:16,719
Speaker 1: the imagination to see what a radical innovation it would be.

662
00:35:17,400 --> 00:35:21,160
Speaker 1: And I'm curious. So those are a lot of hits, obviously, Tesla,

663
00:35:21,200 --> 00:35:24,719
Speaker 1: maybe not a not a hit. What's the worst decision

664
00:35:24,760 --> 00:35:27,680
Speaker 1: you've made in terms of not investing or investing in

665
00:35:27,719 --> 00:35:29,959
Speaker 1: your like? So I'll give you an example, small level.

666
00:35:30,520 --> 00:35:32,440
Speaker 1: I don't even know if you know this. I decided

667
00:35:32,920 --> 00:35:36,799
Speaker 1: that I would get into the pants business early on

668
00:35:36,840 --> 00:35:39,160
Speaker 1: when I launched out Kick, and the idea I think

669
00:35:39,280 --> 00:35:41,719
Speaker 1: was the right one, which was I don't want to

670
00:35:41,800 --> 00:35:47,280
Speaker 1: be uh reliant upon advertising dollars to monetize my business.

671
00:35:47,400 --> 00:35:50,399
Speaker 1: I would rather my content business. I would rather own

672
00:35:50,560 --> 00:35:54,160
Speaker 1: businesses that I could advertise against instead of having to

673
00:35:54,200 --> 00:35:57,319
Speaker 1: go out hat in hand always selling ad dollars, right,

674
00:35:57,719 --> 00:36:01,319
Speaker 1: and so find things that over lap with, uh, the

675
00:36:01,400 --> 00:36:04,200
Speaker 1: audience that I'm already reaching from a content perspective, things

676
00:36:04,200 --> 00:36:06,440
Speaker 1: that they would want to buy. And you know, at

677
00:36:06,480 --> 00:36:08,680
Speaker 1: some point when you're staring trying to tell the difference

678
00:36:08,719 --> 00:36:11,880
Speaker 1: between you know, one pantone color and another one, like

679
00:36:11,920 --> 00:36:15,200
Speaker 1: the difference between auburn orange and Tennessee orange for somebody

680
00:36:15,400 --> 00:36:18,280
Speaker 1: frankly who maybe a little bit color blind and also

681
00:36:18,400 --> 00:36:21,880
Speaker 1: certainly is not is not fashion savvy, uh, you know,

682
00:36:22,040 --> 00:36:24,560
Speaker 1: and and shipping them in and tie dying and the

683
00:36:24,600 --> 00:36:27,839
Speaker 1: sizing and pants are really actually a complicated business. So

684
00:36:27,920 --> 00:36:30,960
Speaker 1: I lost like fifty thou dollars pretty fast in pants,

685
00:36:31,000 --> 00:36:32,640
Speaker 1: and I was like, this is such a stupid idea.

686
00:36:32,719 --> 00:36:35,040
Speaker 1: You know, you see athletes who go broke, and you know,

687
00:36:35,040 --> 00:36:37,000
Speaker 1: if they did a documentary on me, wo'd be like

688
00:36:37,239 --> 00:36:40,040
Speaker 1: Clay Travis decided going to the pants business. He lost money.

689
00:36:40,280 --> 00:36:43,520
Speaker 1: Was there anything you got into on a bad perspective

690
00:36:43,680 --> 00:36:45,120
Speaker 1: or you were like, this is just such a stupid

691
00:36:45,120 --> 00:36:47,719
Speaker 1: business that I ended up getting involved in and or

692
00:36:47,760 --> 00:36:50,840
Speaker 1: something that you looked at, looked at heavily, then passed

693
00:36:50,840 --> 00:36:54,880
Speaker 1: on and it ended up being wildly successful. Yeah, I

694
00:36:54,880 --> 00:36:57,560
Speaker 1: mean there's definitely things that I've invested in that haven't worked.

695
00:36:57,640 --> 00:37:00,759
Speaker 1: I mean, this is this is absolutely a bad average game.

696
00:37:00,800 --> 00:37:03,799
Speaker 1: And nobody that's you know, a thousand what's a good

697
00:37:03,840 --> 00:37:05,920
Speaker 1: what's a good batting average? In the VC business? Like,

698
00:37:05,960 --> 00:37:08,560
Speaker 1: what are you shooting for? I know, your returns overall,

699
00:37:08,880 --> 00:37:11,400
Speaker 1: but what kind of hit rate should you have if

700
00:37:11,400 --> 00:37:15,319
Speaker 1: you're doing a good job in VC investing, Well, it's

701
00:37:15,360 --> 00:37:18,080
Speaker 1: probably like baseball and if you're batting three something, you're

702
00:37:18,120 --> 00:37:22,240
Speaker 1: like Hall of Fame r um. Yeah, I mean really,

703
00:37:22,440 --> 00:37:25,040
Speaker 1: although it's not just um, I mean, you'll appreciate this.

704
00:37:25,200 --> 00:37:28,560
Speaker 1: It's not just batting average. It's also slugging. Slugging because

705
00:37:28,560 --> 00:37:30,719
Speaker 1: you can hit you can hit like a thousand home

706
00:37:30,800 --> 00:37:33,279
Speaker 1: runs on one swing, right, as opposed to just being

707
00:37:33,320 --> 00:37:36,000
Speaker 1: able to maximize, you know, one run. You can get

708
00:37:36,040 --> 00:37:39,560
Speaker 1: a thousand runs on a swing exactly. And and that's

709
00:37:39,719 --> 00:37:43,839
Speaker 1: and that's really what that's one of the biggest um

710
00:37:44,000 --> 00:37:46,759
Speaker 1: things about the VC business that's kind of nonintuitive to

711
00:37:46,840 --> 00:37:50,120
Speaker 1: people is that it's not about how many losers that

712
00:37:50,239 --> 00:37:54,239
Speaker 1: you have. It's about the magnitude of your winners. And sometimes,

713
00:37:54,280 --> 00:37:56,960
Speaker 1: you know, you can be wrong about everything, but that

714
00:37:57,200 --> 00:38:00,400
Speaker 1: one decision you were right about ends up with turning

715
00:38:00,680 --> 00:38:03,960
Speaker 1: you know, ten times your funds. So, um, that tends

716
00:38:04,000 --> 00:38:05,480
Speaker 1: to be that if you look at kind of the

717
00:38:05,560 --> 00:38:09,680
Speaker 1: great VC funds, it's not about how often they were right,

718
00:38:09,719 --> 00:38:14,319
Speaker 1: it's about the magnitude of their winners. And UM, so yeah,

719
00:38:14,400 --> 00:38:16,040
Speaker 1: but I mean I think we've had a pretty good

720
00:38:16,080 --> 00:38:19,240
Speaker 1: batting average. You know, I've been in about twenty five

721
00:38:19,600 --> 00:38:23,880
Speaker 1: unicorn companies. Um. You know, we defined unicorns companies that

722
00:38:24,000 --> 00:38:29,640
Speaker 1: end up being worth a billion dollars or more. And um,

723
00:38:29,680 --> 00:38:31,880
Speaker 1: you know that the most recent one for us was

724
00:38:31,880 --> 00:38:35,400
Speaker 1: was crypto. Um we you know, we made some crypto

725
00:38:35,440 --> 00:38:39,200
Speaker 1: investments back in two thousand, seventeen, two eight, and they

726
00:38:39,360 --> 00:38:42,399
Speaker 1: returned our first fund. So you know that was sort

727
00:38:42,440 --> 00:38:45,719
Speaker 1: of like a forty or fifty x investment in five

728
00:38:45,800 --> 00:38:48,960
Speaker 1: years based on making you know, based on investing in crypto.

729
00:38:49,840 --> 00:38:53,680
Speaker 1: I think you also invested in a movie, right, Um,

730
00:38:53,840 --> 00:38:55,680
Speaker 1: thank you for smoking am I right about this? How

731
00:38:55,680 --> 00:38:59,320
Speaker 1: did that happen? Uh? And and have you gotten involved

732
00:38:59,440 --> 00:39:03,439
Speaker 1: in other creative endeavors, which are certainly different than trying

733
00:39:03,440 --> 00:39:07,319
Speaker 1: to analyze software companies or tech related funds. Yeah. Yeah,

734
00:39:07,320 --> 00:39:09,319
Speaker 1: I guess that you're If you're looking for me to

735
00:39:09,400 --> 00:39:13,320
Speaker 1: identify a bad investment, I'd say anything in the movie industry. Now. Actually,

736
00:39:13,360 --> 00:39:16,120
Speaker 1: we didn't lose money on Thinking for Smoking. We actually

737
00:39:16,640 --> 00:39:18,640
Speaker 1: did fine. It ended up being one of the big

738
00:39:18,719 --> 00:39:22,800
Speaker 1: hits of I think two thousand five, two thousand six. Um,

739
00:39:22,840 --> 00:39:26,040
Speaker 1: this is an independent movie. I financed it along with

740
00:39:26,080 --> 00:39:29,239
Speaker 1: a few friends. Peter and e la On all contributed

741
00:39:29,280 --> 00:39:31,840
Speaker 1: and they were executive producers. This was a script I

742
00:39:31,880 --> 00:39:35,040
Speaker 1: found that was written by Jason Weightman, who ended up

743
00:39:35,040 --> 00:39:38,319
Speaker 1: directing the movie, based on a book by Christopher Buckley.

744
00:39:38,360 --> 00:39:42,120
Speaker 1: And um, I just thought it was a fantastic So, yeah,

745
00:39:42,160 --> 00:39:43,960
Speaker 1: this is this is amazing to me, Like, so, how

746
00:39:43,960 --> 00:39:47,200
Speaker 1: do you find a script? Right? Like? So, uh, you

747
00:39:47,239 --> 00:39:50,120
Speaker 1: are thinking, after you've made some money in PayPal, hey,

748
00:39:50,160 --> 00:39:52,680
Speaker 1: I like movie. Certainly at Stanford you've talked about the

749
00:39:52,680 --> 00:39:56,239
Speaker 1: culture of political correctness and whatnot. Were you thinking, hey,

750
00:39:56,280 --> 00:40:00,399
Speaker 1: maybe I'll get involved in the entertainment industry in some way. Yeah,

751
00:40:00,480 --> 00:40:02,640
Speaker 1: I mean it was just sort of an unfuneral venture

752
00:40:02,719 --> 00:40:05,320
Speaker 1: for me where I decided to create a movie production

753
00:40:05,360 --> 00:40:08,040
Speaker 1: company and it was like a startup, you know, We're like,

754
00:40:08,120 --> 00:40:10,680
Speaker 1: let's let's see, let's understand what it takes to make

755
00:40:10,680 --> 00:40:13,200
Speaker 1: a movie. Let's try and make a better one. And

756
00:40:13,239 --> 00:40:16,239
Speaker 1: we went out looking at projects and we probably looked

757
00:40:16,280 --> 00:40:19,799
Speaker 1: at a thousand scripts, and I thought that Jason had

758
00:40:19,800 --> 00:40:23,040
Speaker 1: written the best one I had seen, and someone had

759
00:40:23,080 --> 00:40:25,120
Speaker 1: given it to me as a writing sample for him actually,

760
00:40:25,680 --> 00:40:27,360
Speaker 1: and the question I asked was, wait, why is the

761
00:40:27,360 --> 00:40:29,279
Speaker 1: writing sample? Why why don't we just make this? And

762
00:40:29,600 --> 00:40:33,239
Speaker 1: the reason why is because the lights have been fragmented.

763
00:40:33,640 --> 00:40:38,720
Speaker 1: Warner Brothers owned the book and Jason script was actually

764
00:40:38,719 --> 00:40:42,160
Speaker 1: owned by Milk Gibson's company Icon, And anyway, we spent

765
00:40:42,280 --> 00:40:44,880
Speaker 1: something like two years trying to unravel the right situation

766
00:40:44,920 --> 00:40:47,719
Speaker 1: and acquire all the rights, and we finally did that.

767
00:40:47,920 --> 00:40:50,000
Speaker 1: Then we could make it as an intendent movie, and

768
00:40:50,040 --> 00:40:52,440
Speaker 1: we did that, and we took it to the Frounto

769
00:40:52,480 --> 00:40:55,920
Speaker 1: Film Festival and Sun Dance and ended up being a

770
00:40:55,920 --> 00:40:58,880
Speaker 1: pretty big hit um in terms, you know, as a

771
00:40:58,960 --> 00:41:01,359
Speaker 1: hit creatively want a lot of awards, and it did

772
00:41:01,360 --> 00:41:06,000
Speaker 1: something like the box office on an eight million dollar budget,

773
00:41:06,160 --> 00:41:07,840
Speaker 1: and you know, it's one of these kind of cult

774
00:41:07,880 --> 00:41:13,359
Speaker 1: movies that's and it launched Jason Reitman's career. He's ended

775
00:41:13,440 --> 00:41:17,920
Speaker 1: up becoming a very very big director in Hollywood. The

776
00:41:17,960 --> 00:41:19,759
Speaker 1: you know, my takeaway from it though, is in terms

777
00:41:19,800 --> 00:41:23,200
Speaker 1: of business is that you know, we did a little better,

778
00:41:23,280 --> 00:41:25,759
Speaker 1: but not much than just get our money back. And

779
00:41:25,800 --> 00:41:27,719
Speaker 1: so it made a lot of money, but it mainly

780
00:41:27,760 --> 00:41:31,680
Speaker 1: made money for Fox, uh, you know, the Fox Searchlight

781
00:41:31,719 --> 00:41:34,719
Speaker 1: movie studio. And that kind of taught me a lot

782
00:41:34,760 --> 00:41:38,360
Speaker 1: about the movie business, which is is controlled by gatekeepers.

783
00:41:38,440 --> 00:41:41,879
Speaker 1: There's a handful of studios and they really make all

784
00:41:41,920 --> 00:41:45,560
Speaker 1: the money. And you know, we as this sort of entrepreneur,

785
00:41:45,640 --> 00:41:48,399
Speaker 1: as the producer who took all the risk, this is

786
00:41:48,440 --> 00:41:53,000
Speaker 1: not really a reward for that risk, and um, you know,

787
00:41:53,120 --> 00:41:57,399
Speaker 1: very it's very different than the internet business, where you're

788
00:41:57,400 --> 00:41:59,879
Speaker 1: taking you're taking a similar kind of risk, very hard

789
00:42:00,120 --> 00:42:02,920
Speaker 1: execute you know, a huge chance of failure, but at

790
00:42:02,960 --> 00:42:06,439
Speaker 1: least when you hit it, there's a giant reward there.

791
00:42:06,680 --> 00:42:09,480
Speaker 1: And so that was a big lesson for me. And

792
00:42:09,680 --> 00:42:11,480
Speaker 1: on the heels of things for smoking, that's what I

793
00:42:11,480 --> 00:42:14,959
Speaker 1: actually created yammer is. I was like, well, look I'm

794
00:42:14,960 --> 00:42:17,440
Speaker 1: gonna do something super risky. At least I want to

795
00:42:17,480 --> 00:42:19,759
Speaker 1: be in a position to get rewarded for it if

796
00:42:19,800 --> 00:42:23,160
Speaker 1: it works. Fox Sports Radio has the best sports talk

797
00:42:23,200 --> 00:42:25,920
Speaker 1: lineup in the nation. Catch all of our shows at

798
00:42:25,960 --> 00:42:29,279
Speaker 1: Fox sports Radio dot com and within the I Heart

799
00:42:29,400 --> 00:42:32,680
Speaker 1: Radio app. Search f s R to listen live. So

800
00:42:33,280 --> 00:42:36,120
Speaker 1: let's talk big picture. Now, you've been in Silicon Valley

801
00:42:36,160 --> 00:42:37,680
Speaker 1: for a long time. And by the way, that's fascinating.

802
00:42:37,680 --> 00:42:39,800
Speaker 1: Do you think you'll ever fund any other movies? Maybe

803
00:42:39,800 --> 00:42:42,680
Speaker 1: because you're just so committed to the idea that it's

804
00:42:42,680 --> 00:42:45,600
Speaker 1: getting out there, um, as opposed to the you know,

805
00:42:45,719 --> 00:42:50,279
Speaker 1: remunerative return that you might be able to recoup. Yes,

806
00:42:50,400 --> 00:42:51,560
Speaker 1: And I think that's the way you have to look

807
00:42:51,560 --> 00:42:53,960
Speaker 1: at it. I actually have another movie that's um in

808
00:42:54,000 --> 00:42:56,960
Speaker 1: the can, so to speak. Um. It's called dolly Land.

809
00:42:57,040 --> 00:43:00,920
Speaker 1: It's a movie about the painter salvad Or Dolly Ben Kingsley,

810
00:43:01,080 --> 00:43:05,200
Speaker 1: you know, the multi Academy Award winner plays Dolly. It's

811
00:43:05,239 --> 00:43:07,399
Speaker 1: directed by a great director named Mary Here and it's

812
00:43:07,440 --> 00:43:11,359
Speaker 1: actually done. We made it as an independent movie over

813
00:43:11,400 --> 00:43:14,440
Speaker 1: the past year and we're taking it too film festivals

814
00:43:14,520 --> 00:43:18,360
Speaker 1: later this year. And I think we've been accepted to

815
00:43:18,719 --> 00:43:21,160
Speaker 1: Toronto Film Festival, and there's a couple others we're looking at.

816
00:43:21,680 --> 00:43:24,080
Speaker 1: So it's exciting. I mean, we're gonna take to the

817
00:43:24,080 --> 00:43:28,040
Speaker 1: Film Festival and try to sell it and see what happens. Um,

818
00:43:28,080 --> 00:43:31,400
Speaker 1: you know, I hope it makes money. But you know,

819
00:43:31,480 --> 00:43:33,719
Speaker 1: I've I've gotten used to the idea that, you know,

820
00:43:33,760 --> 00:43:35,640
Speaker 1: it's very, very hard to make money in the movie business.

821
00:43:35,680 --> 00:43:37,680
Speaker 1: It's not why I do it. I do it because

822
00:43:37,840 --> 00:43:40,799
Speaker 1: I love movies and I like the subject matter, and um,

823
00:43:40,840 --> 00:43:44,200
Speaker 1: it's a passion project for everyone who's involved. So so yeah,

824
00:43:44,239 --> 00:43:47,120
Speaker 1: I you know, I'm still sort of interest in the

825
00:43:47,160 --> 00:43:49,560
Speaker 1: movie business and do it. But it's you obvious see

826
00:43:49,560 --> 00:43:51,440
Speaker 1: it as a hobby or you're going to be disappointed.

827
00:43:51,480 --> 00:43:55,360
Speaker 1: I think our actors harder to manage than other employees.

828
00:43:57,320 --> 00:44:00,560
Speaker 1: It's case by case. Um, most of them are very

829
00:44:00,560 --> 00:44:03,200
Speaker 1: professional and are a delight to work with, and then

830
00:44:03,520 --> 00:44:06,279
Speaker 1: you have a handful who are known as difficult. But

831
00:44:06,400 --> 00:44:09,440
Speaker 1: to be honest, UM, the ones who are difficult, they

832
00:44:09,600 --> 00:44:11,640
Speaker 1: don't last that long. I mean there's a kind of

833
00:44:11,680 --> 00:44:15,280
Speaker 1: old uh saying in Hollywood is a life's too short list.

834
00:44:15,480 --> 00:44:17,640
Speaker 1: And if you're an actor, you really don't want to

835
00:44:17,640 --> 00:44:21,920
Speaker 1: get on the lots too short lists? Are you? We're

836
00:44:21,920 --> 00:44:25,279
Speaker 1: talking to David David Sacks about wins and losses in

837
00:44:25,400 --> 00:44:28,640
Speaker 1: his career across a variety of fields. All right, let's

838
00:44:28,640 --> 00:44:32,480
Speaker 1: talk um, big picture here on tech. One reason I'm

839
00:44:32,520 --> 00:44:34,359
Speaker 1: so excited to talk to you and I appreciate all

840
00:44:34,360 --> 00:44:37,719
Speaker 1: the time you've given us, is for what I do, UM,

841
00:44:37,760 --> 00:44:40,319
Speaker 1: and I testified in Congress about this, uh, in front

842
00:44:40,360 --> 00:44:44,080
Speaker 1: of the House Judiciary Subcommittee. I can see the power

843
00:44:44,640 --> 00:44:47,879
Speaker 1: of Facebook for what they can do. I can see

844
00:44:47,880 --> 00:44:50,680
Speaker 1: the power of Twitter just for the content that we

845
00:44:50,760 --> 00:44:53,240
Speaker 1: created OutKick. You know, I can go in and look

846
00:44:53,680 --> 00:44:57,360
Speaker 1: at the charts and tell you basically, hey, the algorithm

847
00:44:57,440 --> 00:45:00,440
Speaker 1: is favoring us today or this month. Hey, they decided

848
00:45:00,480 --> 00:45:02,920
Speaker 1: they don't like what we're writing, and they are writing

849
00:45:03,040 --> 00:45:07,960
Speaker 1: us off of the algorithm page UM. And it seems,

850
00:45:08,080 --> 00:45:11,640
Speaker 1: based on my experience, that the bias always runs against

851
00:45:11,800 --> 00:45:14,920
Speaker 1: us whenever we write something favorable. I'll give you an example.

852
00:45:15,560 --> 00:45:17,600
Speaker 1: When we had Donald Trump on for the first time

853
00:45:17,640 --> 00:45:20,040
Speaker 1: on my sports talk radio show. We wrote a bunch

854
00:45:20,040 --> 00:45:23,560
Speaker 1: of articles about it at OutKick. Our traffic basically vanished

855
00:45:23,600 --> 00:45:27,279
Speaker 1: on social media literally within a day. Or two of

856
00:45:27,360 --> 00:45:29,919
Speaker 1: all of those articles, and it was Trump primarily talking

857
00:45:29,960 --> 00:45:33,200
Speaker 1: about sports going up on OutKick. It was clear that

858
00:45:33,239 --> 00:45:35,680
Speaker 1: we have been flagged in some way. Certainly the same

859
00:45:35,719 --> 00:45:37,719
Speaker 1: thing has happened when we wrote about masks or we

860
00:45:37,760 --> 00:45:41,839
Speaker 1: wrote about covid um. From a business perspective, not from

861
00:45:41,840 --> 00:45:46,359
Speaker 1: a political perspective. Does that make sense that they would

862
00:45:46,400 --> 00:45:48,879
Speaker 1: be behaving, these big tech companies, and I'm talking about

863
00:45:48,880 --> 00:45:53,480
Speaker 1: OutKick specifically in a way that clearly is discriminatory in

864
00:45:53,600 --> 00:45:57,439
Speaker 1: terms of the distribution of articles from sites like mine.

865
00:45:57,560 --> 00:45:59,440
Speaker 1: Does that make sense to you from a not from

866
00:45:59,440 --> 00:46:02,520
Speaker 1: a you know what's better for the country perspective? Does

867
00:46:02,520 --> 00:46:06,120
Speaker 1: it make sense from a business perspective? No, I don't

868
00:46:06,160 --> 00:46:09,000
Speaker 1: think so. I mean, I think they're doing it because

869
00:46:09,200 --> 00:46:14,080
Speaker 1: for ideological reasons. And um, now what I think what

870
00:46:14,200 --> 00:46:17,840
Speaker 1: happens is they start with a business rationale that seems

871
00:46:17,840 --> 00:46:21,319
Speaker 1: to make sense. So for example, they will let's say

872
00:46:21,320 --> 00:46:25,279
Speaker 1: you're a social media site, and uh, you start with

873
00:46:25,320 --> 00:46:28,160
Speaker 1: the content moderation department, because there's a certain kinds of

874
00:46:28,200 --> 00:46:30,640
Speaker 1: content that just shouldn't beyond there. I mean, people threatening

875
00:46:30,760 --> 00:46:36,719
Speaker 1: violence or you know, harassing other users, or using profanity

876
00:46:36,800 --> 00:46:39,040
Speaker 1: or obscenity, and they don't want that to be part

877
00:46:39,040 --> 00:46:41,360
Speaker 1: of their social networks. So they create a content moderation

878
00:46:41,440 --> 00:46:44,600
Speaker 1: team to basically take down that stuff, and you know,

879
00:46:45,400 --> 00:46:47,279
Speaker 1: no one really has a problem with that. But then

880
00:46:47,320 --> 00:46:49,560
Speaker 1: the problem is that the people actually doing the content

881
00:46:49,600 --> 00:46:54,720
Speaker 1: moderation have an ideological bias and they start indulging that bias.

882
00:46:54,880 --> 00:46:57,400
Speaker 1: And the fact the matter is that if you're in

883
00:46:57,440 --> 00:47:01,920
Speaker 1: Silicon Valley, you know, the for failing orthodoxy is everyone

884
00:47:02,000 --> 00:47:05,279
Speaker 1: kind of drinks from the same monocultural sound. They all

885
00:47:05,320 --> 00:47:08,320
Speaker 1: have the same political views. This stuff has been pulled

886
00:47:08,360 --> 00:47:12,279
Speaker 1: many times and you can sit and so half the

887
00:47:12,320 --> 00:47:15,960
Speaker 1: time ton't even realize what they're doing when they indulge

888
00:47:16,000 --> 00:47:18,720
Speaker 1: in in this bias. But yeah, the bias absolutely creeps

889
00:47:18,760 --> 00:47:22,600
Speaker 1: in and then it starts to become official policy. Um.

890
00:47:22,640 --> 00:47:25,360
Speaker 1: I think something similar has happened that at Google, where

891
00:47:26,080 --> 00:47:29,480
Speaker 1: you know, you've got the search algorithm, and the search

892
00:47:29,520 --> 00:47:32,720
Speaker 1: algorithm might produce some results that seem offensive to people,

893
00:47:32,840 --> 00:47:36,680
Speaker 1: so they introduce, you know, what they call human interventions.

894
00:47:37,160 --> 00:47:39,920
Speaker 1: But then as soon as you allow humans the process,

895
00:47:39,960 --> 00:47:44,040
Speaker 1: they carry with them their preconceived biases and they start

896
00:47:44,120 --> 00:47:47,600
Speaker 1: indulging those biases, and the problem is that none of

897
00:47:47,680 --> 00:47:52,600
Speaker 1: us have any transparency into those decisions. And I think

898
00:47:52,840 --> 00:47:55,759
Speaker 1: we have a right to know when we're being down

899
00:47:55,880 --> 00:48:00,360
Speaker 1: ranked or the algorithms sort of supporting our content we

900
00:48:00,400 --> 00:48:02,600
Speaker 1: should ever right, or or we've been kicked off one

901
00:48:02,600 --> 00:48:06,120
Speaker 1: of these networks. There's no explanation that comes with us,

902
00:48:06,160 --> 00:48:09,200
Speaker 1: and I think we should have due process rights to

903
00:48:09,320 --> 00:48:13,759
Speaker 1: at least know why, to know when and why we've

904
00:48:13,760 --> 00:48:17,200
Speaker 1: been down ranked or downvoad or something like that. And

905
00:48:17,320 --> 00:48:20,120
Speaker 1: is that the idea behind the idea of an open

906
00:48:20,200 --> 00:48:24,920
Speaker 1: algorithm marketplace effectively so that we could go in and

907
00:48:24,920 --> 00:48:26,759
Speaker 1: I'm just using out kick as an example, which is

908
00:48:26,760 --> 00:48:30,600
Speaker 1: owned by Fox now. But when you're down ranked, if

909
00:48:30,680 --> 00:48:34,640
Speaker 1: you are a business that is reliant on advertising, that

910
00:48:34,680 --> 00:48:36,920
Speaker 1: can take money directly out of your pocket, and the

911
00:48:37,040 --> 00:48:40,359
Speaker 1: lesson that they are instructing to business owners is you

912
00:48:40,440 --> 00:48:43,120
Speaker 1: play games and share content that we want to be

913
00:48:43,239 --> 00:48:46,200
Speaker 1: shared or else. Right, there's an implicit threat from a

914
00:48:46,239 --> 00:48:50,319
Speaker 1: business perspective that is hanging over the algorithmic problems that

915
00:48:50,360 --> 00:48:54,000
Speaker 1: can arise. What's a solution? Not necessarily again from a

916
00:48:54,000 --> 00:48:57,480
Speaker 1: political perspective, but you just kind of kind of walked

917
00:48:57,520 --> 00:48:59,400
Speaker 1: through us if you were just trying to be as

918
00:48:59,400 --> 00:49:02,320
Speaker 1: open and trans parent as possible. Is it a public

919
00:49:02,320 --> 00:49:06,839
Speaker 1: algorithm so that everybody could see what results are occurring? Well,

920
00:49:06,880 --> 00:49:09,320
Speaker 1: this is what Elon has suggested with respect to Twitter,

921
00:49:09,360 --> 00:49:11,560
Speaker 1: as he says that he wants to open source the algorithm.

922
00:49:11,840 --> 00:49:14,000
Speaker 1: And so the idea is, yeah, you would be able

923
00:49:14,000 --> 00:49:17,080
Speaker 1: to see how the algorithm works, and if there's a

924
00:49:17,160 --> 00:49:20,480
Speaker 1: human intervention, you would know that. And so that does

925
00:49:20,560 --> 00:49:23,120
Speaker 1: give you, well, first of all, it gives you an

926
00:49:23,160 --> 00:49:27,080
Speaker 1: assurance that they're not putting their thumb on the scale

927
00:49:27,920 --> 00:49:32,279
Speaker 1: and discriminating against certain people because of their their viewpoints.

928
00:49:33,040 --> 00:49:35,279
Speaker 1: But also it would give you some due process to

929
00:49:35,400 --> 00:49:37,839
Speaker 1: know that when there's an intervention against you, at least

930
00:49:37,840 --> 00:49:41,040
Speaker 1: know what's happened. Um. So that that's that's why Elan

931
00:49:41,080 --> 00:49:45,360
Speaker 1: has been pushing that idea of of open sourcing the algorithm. Um.

932
00:49:45,400 --> 00:49:47,399
Speaker 1: I think it's a great idea. I mean, we need

933
00:49:47,440 --> 00:49:50,960
Speaker 1: more transparency around the decision these big tech companies are

934
00:49:51,000 --> 00:49:54,319
Speaker 1: making because frankly, they have enormous power. I mean, by

935
00:49:54,360 --> 00:49:57,720
Speaker 1: and large, they are monopolies and they controlled the public square.

936
00:49:58,000 --> 00:50:01,000
Speaker 1: The public square has been privatized. Um. You know when

937
00:50:01,000 --> 00:50:04,400
Speaker 1: the founders at the trainers in the Constitution started the country,

938
00:50:05,320 --> 00:50:07,319
Speaker 1: the town square was a place you would go to

939
00:50:07,760 --> 00:50:09,600
Speaker 1: it like the courthouse steps, and you pull out of

940
00:50:09,600 --> 00:50:12,360
Speaker 1: soapbox and could talk and people gather around to listen.

941
00:50:12,400 --> 00:50:15,040
Speaker 1: That's what the town square meant today. The town square.

942
00:50:15,040 --> 00:50:17,320
Speaker 1: All these giants social networks. I mean, that is where

943
00:50:17,600 --> 00:50:21,720
Speaker 1: people assemble, that is where political speech occurs. And yet

944
00:50:22,000 --> 00:50:25,799
Speaker 1: there are no limitations on their ability to you know,

945
00:50:25,880 --> 00:50:28,160
Speaker 1: to d platform you or discriminate against you. And they

946
00:50:28,200 --> 00:50:31,319
Speaker 1: don't even they're not even obligated to provide any transparency

947
00:50:31,360 --> 00:50:33,960
Speaker 1: around that. And so I think we need more to

948
00:50:34,239 --> 00:50:40,320
Speaker 1: process on these big monopolistic companies when they restrict our speech.

949
00:50:41,400 --> 00:50:43,440
Speaker 1: I'll give you an example. By the way, Google News

950
00:50:43,520 --> 00:50:47,120
Speaker 1: obviously drives a lot of traffic. Um No, people out

951
00:50:47,120 --> 00:50:50,080
Speaker 1: there may not realize it, but Google News is wildly influential.

952
00:50:50,920 --> 00:50:53,839
Speaker 1: When Fox bought out Kick, they went back through all

953
00:50:53,840 --> 00:50:56,360
Speaker 1: these social media relationships and I've been saying for a

954
00:50:56,360 --> 00:50:59,280
Speaker 1: long time, yeah, we're registered with Google News, but never

955
00:50:59,400 --> 00:51:02,239
Speaker 1: our store. He's come up even stories where we might

956
00:51:02,320 --> 00:51:05,560
Speaker 1: break news other people right will show up on the

957
00:51:05,560 --> 00:51:08,440
Speaker 1: Google News alerts. We won't. Fox did a deep dive

958
00:51:08,600 --> 00:51:10,959
Speaker 1: and they said, oh, you've been mischaracterized, and you hadn't

959
00:51:10,960 --> 00:51:14,320
Speaker 1: been showing up in Google news for years. It's amazing

960
00:51:14,400 --> 00:51:18,520
Speaker 1: how often the mischaracterization seems to only run one way, right,

961
00:51:18,600 --> 00:51:22,440
Speaker 1: like uh, and and so I'm incredibly skeptical that at

962
00:51:22,480 --> 00:51:26,480
Speaker 1: some point someone at Google wasn't it was you know, unhappy,

963
00:51:26,560 --> 00:51:29,040
Speaker 1: and they just decided, Hey, I'm gonna move the OutKick

964
00:51:29,520 --> 00:51:32,920
Speaker 1: algorithm you know, feeder or whatever over into this little

965
00:51:32,920 --> 00:51:35,799
Speaker 1: box where it will kind of disappear. Um. And if

966
00:51:35,840 --> 00:51:39,319
Speaker 1: you're a independent business, you don't have the resources or

967
00:51:39,360 --> 00:51:44,160
Speaker 1: the relationships to even get things like that rectified. And uh.

968
00:51:44,200 --> 00:51:46,160
Speaker 1: And that's why I think the idea that Ellen is

969
00:51:46,160 --> 00:51:50,120
Speaker 1: trying to put in place could be so potentially influential,

970
00:51:50,480 --> 00:51:53,880
Speaker 1: which is just, hey, we're gonna have content neutral policies

971
00:51:54,080 --> 00:51:56,359
Speaker 1: and people will have optics on things. And and David,

972
00:51:56,360 --> 00:51:57,799
Speaker 1: I don't know if you paid attention to it. I'm

973
00:51:57,800 --> 00:52:00,520
Speaker 1: sure you did. But you know, the day that Ellen

974
00:52:00,560 --> 00:52:04,959
Speaker 1: announces that he's reached acquisition terms, suddenly my Twitter feed

975
00:52:05,040 --> 00:52:07,960
Speaker 1: comes alive and I'm adding tens of thousands of followers

976
00:52:08,040 --> 00:52:10,840
Speaker 1: at a rapid rate. It's hard for me to believe

977
00:52:10,920 --> 00:52:13,640
Speaker 1: that in some way Twitter is not trying to bury

978
00:52:13,680 --> 00:52:17,400
Speaker 1: the evidence of what they've been doing. So when neutral

979
00:52:17,440 --> 00:52:20,120
Speaker 1: engineers come back and start to look at the algorithms

980
00:52:20,120 --> 00:52:23,840
Speaker 1: they have in place, there's not necessarily the same evidence

981
00:52:23,880 --> 00:52:26,080
Speaker 1: that there would have been if somebody like Elon weren't

982
00:52:26,120 --> 00:52:30,040
Speaker 1: acquiring the company. It's gonna be really interesting to see

983
00:52:30,120 --> 00:52:32,439
Speaker 1: what happens if Elon is able to close this deal.

984
00:52:32,520 --> 00:52:34,160
Speaker 1: I guess they're still still up in the air with

985
00:52:34,320 --> 00:52:36,520
Speaker 1: us going to happen, but it'll be really interesting to

986
00:52:36,520 --> 00:52:40,320
Speaker 1: see what comes out after he acquires the company because

987
00:52:40,440 --> 00:52:44,480
Speaker 1: we just don't have any visibility into how they moderate

988
00:52:44,680 --> 00:52:49,000
Speaker 1: content or upfold or down rank content, how the algorithm

989
00:52:49,000 --> 00:52:53,200
Speaker 1: works with them. Again, the manual trending topics is wildly influential,

990
00:52:53,239 --> 00:52:55,680
Speaker 1: and I think that's a total cesspool. By the way,

991
00:52:55,680 --> 00:52:58,360
Speaker 1: for somebody who does what I do. Uh, they decide

992
00:52:58,400 --> 00:53:01,120
Speaker 1: what trends, they decide how they are going to characterize

993
00:53:01,120 --> 00:53:05,200
Speaker 1: what trends in a positive or negative fashion. Um, it's

994
00:53:05,320 --> 00:53:08,799
Speaker 1: just such a rigged game. And do you think that one?

995
00:53:09,239 --> 00:53:12,440
Speaker 1: See my theory is one unrigged game, right. So if

996
00:53:12,480 --> 00:53:16,160
Speaker 1: Elon is able to acquire h Test, sorry, acquire Twitter,

997
00:53:16,920 --> 00:53:20,200
Speaker 1: what I think would happen is if there are wildly

998
00:53:20,280 --> 00:53:23,759
Speaker 1: divergent results that suddenly start to happen at Twitter, and

999
00:53:23,800 --> 00:53:25,920
Speaker 1: we can see a discrepancy between what's going on on

1000
00:53:25,920 --> 00:53:28,200
Speaker 1: Twitter and what's going on on Facebook and what's going

1001
00:53:28,200 --> 00:53:30,920
Speaker 1: on on Instagram and all these different social media outlets,

1002
00:53:31,600 --> 00:53:34,200
Speaker 1: then it puts a lot of pressure on these other

1003
00:53:34,320 --> 00:53:38,080
Speaker 1: companies to also be honest and transparent about what they're doing.

1004
00:53:38,320 --> 00:53:41,400
Speaker 1: Is there a logic to that, based on your knowledge

1005
00:53:41,440 --> 00:53:44,279
Speaker 1: of how tech companies work, that that could occur, that

1006
00:53:44,280 --> 00:53:48,840
Speaker 1: that influence could become substantial. I think so, because Ellen,

1007
00:53:49,080 --> 00:53:51,000
Speaker 1: I mean, this is what's so important about what Elon

1008
00:53:51,160 --> 00:53:53,200
Speaker 1: is doing is that he's drawing a line in the

1009
00:53:53,239 --> 00:53:56,360
Speaker 1: sand here and he's opposing censorship, and he's also setting

1010
00:53:56,360 --> 00:53:59,000
Speaker 1: an example for all these other companies. One of the

1011
00:53:59,640 --> 00:54:03,319
Speaker 1: things about the censorship that's taken place that's so discouraging

1012
00:54:03,440 --> 00:54:05,240
Speaker 1: is the way that it all seems to be done

1013
00:54:05,800 --> 00:54:09,359
Speaker 1: in unison. So when Trump was sent off Twitter back

1014
00:54:09,400 --> 00:54:11,920
Speaker 1: in January, they all did it. Every site did it

1015
00:54:12,320 --> 00:54:15,360
Speaker 1: within days of that decision. So they all seem to

1016
00:54:15,360 --> 00:54:18,160
Speaker 1: be acting in concert, in lockstep. I've called it a

1017
00:54:18,200 --> 00:54:21,240
Speaker 1: speech cartel. If they were getting together for the purpose

1018
00:54:21,320 --> 00:54:24,960
Speaker 1: of fixing prices, let's say advertising prices, everybody would be

1019
00:54:25,120 --> 00:54:27,040
Speaker 1: up in arms saying that's illegal. But if they get

1020
00:54:27,080 --> 00:54:30,359
Speaker 1: together for the purpose of fixing speech and what you

1021
00:54:30,400 --> 00:54:32,239
Speaker 1: can't say or what you can't which, by the way,

1022
00:54:32,320 --> 00:54:34,720
Speaker 1: is so much more dangerous than from a from a

1023
00:54:34,719 --> 00:54:39,719
Speaker 1: democracy perspective than fixing advertising costs. Absolutely. I mean, look

1024
00:54:39,800 --> 00:54:43,120
Speaker 1: at the employees of these companies have enormous power over

1025
00:54:43,400 --> 00:54:46,680
Speaker 1: our public discourse and public debate. They were never elected

1026
00:54:47,000 --> 00:54:50,239
Speaker 1: to have that power. And back twenty years ago when

1027
00:54:50,280 --> 00:54:53,040
Speaker 1: I was doing Internet stuff, we never believe when we

1028
00:54:53,040 --> 00:54:55,560
Speaker 1: were creating these platforms, we never believed it was our

1029
00:54:55,640 --> 00:54:58,560
Speaker 1: job to put our thumb on the scale and prefer

1030
00:54:58,640 --> 00:55:01,239
Speaker 1: certain views over others. We just thought it was our

1031
00:55:01,320 --> 00:55:04,479
Speaker 1: job to let the users communicate with each other. And

1032
00:55:04,600 --> 00:55:08,440
Speaker 1: somehow that mission changed, And now the employees these companies

1033
00:55:08,640 --> 00:55:13,120
Speaker 1: have gone from being umpires to basically being participants, to

1034
00:55:13,239 --> 00:55:17,560
Speaker 1: being partisans in the marketplace of ideas. And I think

1035
00:55:17,640 --> 00:55:21,200
Speaker 1: what you hear from Elan is listen, I'm a moderate.

1036
00:55:21,239 --> 00:55:23,799
Speaker 1: I'm going to restore the balance. I'm gonna let the

1037
00:55:23,880 --> 00:55:26,839
Speaker 1: users communicate the way that they want to. I'm gonna

1038
00:55:26,880 --> 00:55:31,520
Speaker 1: be nonpartisan. I'm going to be a fair referee, and

1039
00:55:31,640 --> 00:55:34,279
Speaker 1: that's what's so powerful about what he's doing, and hope

1040
00:55:34,280 --> 00:55:37,799
Speaker 1: it will set an example for these other companies you

1041
00:55:37,840 --> 00:55:40,759
Speaker 1: mentioned dolly Land, which I'll be interested to see as

1042
00:55:40,800 --> 00:55:43,600
Speaker 1: well as a passion project. It's not necessarily being done

1043
00:55:43,640 --> 00:55:46,319
Speaker 1: to make money. One of the arguments that I've made

1044
00:55:46,360 --> 00:55:48,680
Speaker 1: for a while. And maybe Ellen is doing this, I'm

1045
00:55:48,680 --> 00:55:53,160
Speaker 1: curious if you think he's doing it is in the

1046
00:55:53,239 --> 00:55:56,279
Speaker 1: passion project being brought to bear. In the world of

1047
00:55:56,400 --> 00:56:00,200
Speaker 1: larger media, I think, to a large extent me media

1048
00:56:00,239 --> 00:56:02,319
Speaker 1: in the United States is broken. And what I mean

1049
00:56:02,360 --> 00:56:05,400
Speaker 1: by that is you've got the CNNs, the msnbc S,

1050
00:56:05,400 --> 00:56:08,920
Speaker 1: the New York Times, the Washington Post, and their narrative

1051
00:56:08,960 --> 00:56:13,040
Speaker 1: bias to me is so clear, and you have one alternative,

1052
00:56:13,160 --> 00:56:16,480
Speaker 1: which is basically Rupert Murdoch and Fox. In fact, if

1053
00:56:16,560 --> 00:56:21,000
Speaker 1: Rupert Murdoch didn't exist, there would be almost no It's

1054
00:56:21,040 --> 00:56:23,920
Speaker 1: crazy to think about, but there would be almost no

1055
00:56:24,480 --> 00:56:28,440
Speaker 1: full fruition of media outlets in the country. Right. It's

1056
00:56:28,480 --> 00:56:31,640
Speaker 1: basically one man and his family who said, Hey, we're

1057
00:56:31,640 --> 00:56:33,640
Speaker 1: gonna create Fox News, and we're gonna buy the Wall

1058
00:56:33,680 --> 00:56:35,759
Speaker 1: Street Journal and we'll run the New York Post and

1059
00:56:35,960 --> 00:56:37,920
Speaker 1: now they bought out kick and they have these different

1060
00:56:37,960 --> 00:56:41,520
Speaker 1: assets that are trying to fight back a battle, not necessarily,

1061
00:56:41,520 --> 00:56:44,040
Speaker 1: in my opinion, on a right wing basis, but just

1062
00:56:44,280 --> 00:56:47,040
Speaker 1: for the seventy of the country that isn't gone insane.

1063
00:56:47,760 --> 00:56:50,640
Speaker 1: It feels like to some extent there is an opportunity

1064
00:56:50,719 --> 00:56:53,600
Speaker 1: for passion projects and media which may not return a

1065
00:56:53,600 --> 00:56:57,120
Speaker 1: lot of money, but do have massive influence. Do you

1066
00:56:57,160 --> 00:56:59,640
Speaker 1: think that's what Ellen is doing with Twitter? Is it

1067
00:56:59,800 --> 00:57:02,479
Speaker 1: his passion project? Is it a version of dolly Land

1068
00:57:02,520 --> 00:57:04,560
Speaker 1: for him? Or do you think he's looking at it

1069
00:57:04,600 --> 00:57:07,719
Speaker 1: as a big money maker. I think, first and foremost,

1070
00:57:07,760 --> 00:57:09,759
Speaker 1: like you said, it's a passion project. I think that

1071
00:57:09,840 --> 00:57:11,879
Speaker 1: this is about the principle of free speech for him.

1072
00:57:11,920 --> 00:57:14,360
Speaker 1: When he says that he's going to restore Twitter to

1073
00:57:14,440 --> 00:57:18,320
Speaker 1: being an open town square, that really is his main motivation.

1074
00:57:18,520 --> 00:57:21,360
Speaker 1: And it always starts with the mission for him. I

1075
00:57:21,360 --> 00:57:23,800
Speaker 1: think he's got enough money, you wouldn't just be doing

1076
00:57:23,800 --> 00:57:27,280
Speaker 1: this as a business deal. Now. The history of Elon's

1077
00:57:27,320 --> 00:57:31,680
Speaker 1: ventures is that he starts with the mission and you know,

1078
00:57:31,760 --> 00:57:34,040
Speaker 1: the passion project, as you say, but over time he

1079
00:57:34,080 --> 00:57:36,320
Speaker 1: figures out how to make them a great business certainly

1080
00:57:36,360 --> 00:57:39,160
Speaker 1: that's the case with Tesla. The passion project there was

1081
00:57:39,200 --> 00:57:41,880
Speaker 1: to move the world to sustainable energy. So but in

1082
00:57:41,920 --> 00:57:44,000
Speaker 1: the process of doing that, he's created the world's best

1083
00:57:44,040 --> 00:57:47,120
Speaker 1: car with SpaceX. He wants to get people of the Mars.

1084
00:57:47,160 --> 00:57:49,400
Speaker 1: I mean, that really is the mission. But in the

1085
00:57:49,400 --> 00:57:52,040
Speaker 1: process of doing that, he's figured out, you know, Starlink

1086
00:57:52,040 --> 00:57:55,440
Speaker 1: and how to make that a great business. Um so

1087
00:57:55,520 --> 00:57:58,400
Speaker 1: I think he will figure out how to make Twitter

1088
00:57:58,480 --> 00:58:00,320
Speaker 1: into a great business. But I have no doubt that

1089
00:58:00,320 --> 00:58:05,080
Speaker 1: it's all about the passion rim politics. Obviously, you're involved

1090
00:58:05,120 --> 00:58:09,280
Speaker 1: in donating money. What's the best thing that national politics

1091
00:58:09,320 --> 00:58:14,120
Speaker 1: could do in your mind to advance American business interests?

1092
00:58:14,440 --> 00:58:16,840
Speaker 1: How much like the Biden administration to me is just

1093
00:58:16,880 --> 00:58:20,120
Speaker 1: a disaster in all respects. But a lot of politicians,

1094
00:58:20,200 --> 00:58:22,080
Speaker 1: it seems to me the best outcome would just be

1095
00:58:22,120 --> 00:58:26,800
Speaker 1: don't do anything. Unfortunately, because of where we are, what

1096
00:58:26,920 --> 00:58:31,480
Speaker 1: can and should America be doing to advance entrepreneurial and

1097
00:58:31,560 --> 00:58:37,080
Speaker 1: capitalistic interests so that we maintain uh leadership in risk

1098
00:58:37,120 --> 00:58:42,600
Speaker 1: taking around the world. Well, the the entrepreneurial energy in

1099
00:58:42,640 --> 00:58:47,240
Speaker 1: America is strong. I mean, this is historically our great advantage.

1100
00:58:47,400 --> 00:58:51,280
Speaker 1: It's our d n a right our cultural DNA exactly.

1101
00:58:51,320 --> 00:58:53,920
Speaker 1: I mean Americans are willing to take risks, are not

1102
00:58:54,000 --> 00:58:56,880
Speaker 1: afraid of failure. If they do fail, they kind of

1103
00:58:57,480 --> 00:59:01,400
Speaker 1: dust themselves off and try again. There's the huge stigma

1104
00:59:01,480 --> 00:59:03,680
Speaker 1: in our culture the way there is in Europe. If

1105
00:59:03,680 --> 00:59:07,600
Speaker 1: you fail and you got vcs people like us who

1106
00:59:07,600 --> 00:59:10,160
Speaker 1: are willing to write a check and if it's a zero,

1107
00:59:10,320 --> 00:59:12,520
Speaker 1: so be it. We're not going to come break your

1108
00:59:12,560 --> 00:59:15,600
Speaker 1: kneecaps or even be too upset about it. You just

1109
00:59:15,640 --> 00:59:18,600
Speaker 1: don't have that mentality in other parts of the world.

1110
00:59:18,760 --> 00:59:21,440
Speaker 1: So that's what's strong there. And I think what you

1111
00:59:21,520 --> 00:59:25,800
Speaker 1: need from government is to create a stable environment with

1112
00:59:25,920 --> 00:59:30,120
Speaker 1: sound money and low taxes and reasonable spending levels just

1113
00:59:30,280 --> 00:59:33,040
Speaker 1: to not break the golden goose. And you know the

1114
00:59:33,040 --> 00:59:35,760
Speaker 1: prominent washing right now is they're really threatened to break

1115
00:59:35,800 --> 00:59:38,920
Speaker 1: the golden goose. I mean inflations out of control as

1116
00:59:38,960 --> 00:59:42,680
Speaker 1: a result of this hyper spending um and the money printing.

1117
00:59:42,840 --> 00:59:45,360
Speaker 1: I mean, you had the FED and if you were

1118
00:59:45,440 --> 00:59:47,520
Speaker 1: running so sorry to cut off that, you're exactly right

1119
00:59:47,560 --> 00:59:49,320
Speaker 1: on this. If you're a business guy, you have to

1120
00:59:49,360 --> 00:59:52,520
Speaker 1: make a profit in order to that's how capitalism works.

1121
00:59:53,000 --> 00:59:56,200
Speaker 1: If you were running the government, and you saw the

1122
00:59:56,240 --> 00:59:59,440
Speaker 1: books that the government is putting out on a yearly basis.

1123
01:00:00,520 --> 01:00:03,920
Speaker 1: I mean, obviously the business would go bankrupt with the

1124
01:00:03,960 --> 01:00:07,360
Speaker 1: books that the government is putting out right now, how

1125
01:00:07,360 --> 01:00:10,200
Speaker 1: long can this continue? You know, modern modern monetary theory,

1126
01:00:10,240 --> 01:00:12,040
Speaker 1: the idea was, Hey, we can print as much money

1127
01:00:12,080 --> 01:00:15,240
Speaker 1: as we want, there's no consequences. We're seeing consequences. We've

1128
01:00:15,240 --> 01:00:18,440
Speaker 1: got a thirty trillion dollar national debt now and we

1129
01:00:18,560 --> 01:00:21,640
Speaker 1: basically added twenty trillion dollars in the last you know,

1130
01:00:21,920 --> 01:00:25,840
Speaker 1: ten twelve years. When you look from a business perspective

1131
01:00:25,840 --> 01:00:29,439
Speaker 1: at the nation's books, where are we in and how

1132
01:00:29,480 --> 01:00:33,360
Speaker 1: troubled would you be? Purely from a business perspective on that,

1133
01:00:34,280 --> 01:00:38,360
Speaker 1: I think it's terrifying. We owe something like a GDP now,

1134
01:00:38,400 --> 01:00:42,200
Speaker 1: I mean we basically, oh more than the entire amount

1135
01:00:42,200 --> 01:00:44,840
Speaker 1: of the output of our economy in our national debt,

1136
01:00:45,000 --> 01:00:47,800
Speaker 1: and what do we get all of that debt um?

1137
01:00:47,880 --> 01:00:49,840
Speaker 1: So it's it's really pretty scary. And I agree with

1138
01:00:49,840 --> 01:00:52,600
Speaker 1: you about m m T. I mean, that's the latest

1139
01:00:52,680 --> 01:00:55,120
Speaker 1: group of so called experts that I think are gonna

1140
01:00:55,120 --> 01:00:58,680
Speaker 1: be massively discredited. Uh. They claimed for years that we

1141
01:00:58,680 --> 01:01:00,560
Speaker 1: can print as much money as we want and spend

1142
01:01:00,560 --> 01:01:02,440
Speaker 1: as much you want, because I guess we were the

1143
01:01:02,440 --> 01:01:05,240
Speaker 1: world's reserve currency. That be no price to pay for that.

1144
01:01:05,640 --> 01:01:07,920
Speaker 1: And it's true that interest rates stayed low for a

1145
01:01:07,960 --> 01:01:10,720
Speaker 1: long time, but now they've rocked it up, and inflation

1146
01:01:10,760 --> 01:01:13,760
Speaker 1: has rocketed it up, and you're seeing it. Ordinary Americans

1147
01:01:13,760 --> 01:01:16,000
Speaker 1: feel a lot poorer because their wages is not kept

1148
01:01:16,040 --> 01:01:18,400
Speaker 1: up with inflation. And we've had a stock market crash

1149
01:01:18,480 --> 01:01:20,920
Speaker 1: because now the stock market is starting to price in,

1150
01:01:21,480 --> 01:01:23,840
Speaker 1: you know, much higher interest rates that are gonna be

1151
01:01:23,840 --> 01:01:28,600
Speaker 1: necessary to tame the inflation. So it was just very irresponsible. Um.

1152
01:01:28,640 --> 01:01:30,840
Speaker 1: I mean, it's the fun at a law that you

1153
01:01:30,960 --> 01:01:34,280
Speaker 1: cannot spend more than you make, not for very long

1154
01:01:34,960 --> 01:01:38,040
Speaker 1: and um yeah, we just need fiscal sanity to return

1155
01:01:38,080 --> 01:01:42,000
Speaker 1: to Washington. You mentioned experts, uh, And I appreciate your time,

1156
01:01:42,080 --> 01:01:44,640
Speaker 1: and I know how busy you are. To me, one

1157
01:01:44,680 --> 01:01:47,760
Speaker 1: of the great lessons of the past several years has

1158
01:01:47,800 --> 01:01:51,440
Speaker 1: been how wrong experts can be. The experts who told

1159
01:01:51,440 --> 01:01:54,680
Speaker 1: this modern monetary theory there were going to be no consequences,

1160
01:01:54,680 --> 01:01:58,720
Speaker 1: certainly the experts surrounding so much of COVID. Uh. One

1161
01:01:58,720 --> 01:02:01,480
Speaker 1: of the reasons why I love capitalism is you really

1162
01:02:01,480 --> 01:02:03,040
Speaker 1: do have to put your money where your mouth is,

1163
01:02:03,280 --> 01:02:07,160
Speaker 1: and you have to place bets based on things like logic,

1164
01:02:07,280 --> 01:02:11,560
Speaker 1: based on numbers. Um, where are we in the field

1165
01:02:11,600 --> 01:02:14,800
Speaker 1: of so called experts right now? Were you someone who

1166
01:02:14,840 --> 01:02:18,440
Speaker 1: believed I think probably the answer is no. On conventional

1167
01:02:18,480 --> 01:02:21,720
Speaker 1: wisdom in the first place, which is a business opportunity

1168
01:02:21,800 --> 01:02:25,440
Speaker 1: is really about recognizing that the conventional wisdom is wrong oftentimes,

1169
01:02:25,520 --> 01:02:28,919
Speaker 1: or else everybody would be doing what you're doing isn't

1170
01:02:29,320 --> 01:02:32,200
Speaker 1: isn't what you do basically the exact opposite of what

1171
01:02:32,320 --> 01:02:36,120
Speaker 1: experts do. Yes, because if you listen to the experts

1172
01:02:36,120 --> 01:02:39,200
Speaker 1: with respect to any business opportunity, they will always tell

1173
01:02:39,200 --> 01:02:41,680
Speaker 1: you us a bad idea that because yes, they are

1174
01:02:41,880 --> 01:02:44,440
Speaker 1: fully ingrained in the old way of doing things and

1175
01:02:44,520 --> 01:02:47,640
Speaker 1: they they don't have the imagination to see that things

1176
01:02:47,640 --> 01:02:49,919
Speaker 1: could be done in a completely different way. I mean, look,

1177
01:02:49,960 --> 01:02:52,200
Speaker 1: we would never have found it PayPal if we had

1178
01:02:52,200 --> 01:02:56,760
Speaker 1: listened to all those payment experts back in and in fact,

1179
01:02:56,880 --> 01:02:59,280
Speaker 1: part of the reason we created PayPal is because we

1180
01:02:59,280 --> 01:03:01,640
Speaker 1: didn't know that much about payments. We weren't beholden to

1181
01:03:01,680 --> 01:03:04,480
Speaker 1: the old way of doing things. So you're listening to

1182
01:03:04,560 --> 01:03:08,960
Speaker 1: experts is something that really runs against the grain of

1183
01:03:09,000 --> 01:03:13,720
Speaker 1: an entrepreneur. And this whole idea of listening to authority

1184
01:03:13,760 --> 01:03:17,920
Speaker 1: because those people in power have some sort of credentials,

1185
01:03:18,040 --> 01:03:21,040
Speaker 1: and that you should automatically listen to them and not

1186
01:03:21,160 --> 01:03:24,720
Speaker 1: consult your own faculties, your own common sense. That's an

1187
01:03:24,720 --> 01:03:27,480
Speaker 1: idea that I think is gonna be offensive to any entrepreneur.

1188
01:03:27,920 --> 01:03:30,240
Speaker 1: And I think we've seen that now with politics over

1189
01:03:30,240 --> 01:03:32,680
Speaker 1: the last couple of years. I mean, everything the experts

1190
01:03:32,760 --> 01:03:36,720
Speaker 1: told us about COVID, for example, was just completely wrong.

1191
01:03:37,400 --> 01:03:39,560
Speaker 1: And I mean we're told so many things and then

1192
01:03:39,600 --> 01:03:42,240
Speaker 1: they also not not to be right. So you know,

1193
01:03:42,840 --> 01:03:45,800
Speaker 1: having a healthy distrust of experts is a good idea

1194
01:03:45,840 --> 01:03:49,480
Speaker 1: in business or politics. I think it's also the case

1195
01:03:49,920 --> 01:03:53,080
Speaker 1: that everything that they told us and allowed us to

1196
01:03:53,120 --> 01:03:56,800
Speaker 1: discuss on social media very often ended up being wrong.

1197
01:03:56,960 --> 01:03:59,600
Speaker 1: And when I kind of diagnose it, I'm curious what

1198
01:03:59,640 --> 01:04:01,640
Speaker 1: you think about this As we come to a close here.

1199
01:04:01,680 --> 01:04:03,920
Speaker 1: We've been talking with David Sachs. A lot of this

1200
01:04:04,000 --> 01:04:08,360
Speaker 1: comes down to risk analysis. Many people are really really

1201
01:04:08,400 --> 01:04:13,200
Speaker 1: bad at analyzing risk, both financial and personal. And it

1202
01:04:13,320 --> 01:04:16,040
Speaker 1: seems to me that you talked about the American DNA,

1203
01:04:16,120 --> 01:04:18,760
Speaker 1: and I agree with you is based on taking risk.

1204
01:04:18,840 --> 01:04:20,680
Speaker 1: I mean, you don't get on a ship and decided

1205
01:04:20,680 --> 01:04:22,440
Speaker 1: to come to a new land and then get in

1206
01:04:22,440 --> 01:04:24,360
Speaker 1: a covered wagon and go all the way to the

1207
01:04:24,360 --> 01:04:28,000
Speaker 1: west coast because you have a high if you don't

1208
01:04:28,040 --> 01:04:31,000
Speaker 1: have a high risk tolerance. Right, it seems like our

1209
01:04:31,120 --> 01:04:35,320
Speaker 1: national risk tolerance in a social media era is being

1210
01:04:35,440 --> 01:04:39,000
Speaker 1: totally destroyed to the point where you saw all the

1211
01:04:39,000 --> 01:04:40,760
Speaker 1: time in the early days of COVID, well, if it

1212
01:04:40,800 --> 01:04:43,160
Speaker 1: saves just one life, well, if it saves just one life,

1213
01:04:43,160 --> 01:04:46,120
Speaker 1: we would have never committed airplanes. We certainly wouldn't have

1214
01:04:46,160 --> 01:04:49,440
Speaker 1: emitted cars. Um. How much of this is just a

1215
01:04:49,480 --> 01:04:55,360
Speaker 1: failure to understand basic risk in both personal business and life. Yeah,

1216
01:04:55,400 --> 01:04:57,120
Speaker 1: I mean I think I think you you saw this

1217
01:04:57,200 --> 01:05:00,280
Speaker 1: during COVID as there was a total suspension of cost

1218
01:05:00,320 --> 01:05:04,360
Speaker 1: benefit analysis in favor of this sort of zero COVID

1219
01:05:04,480 --> 01:05:07,520
Speaker 1: thinking this idea that we can completely stamp out COVID,

1220
01:05:07,560 --> 01:05:12,120
Speaker 1: which was just not possible, very clearly not possible, And

1221
01:05:12,480 --> 01:05:16,400
Speaker 1: there was a total refusal to to to apply cost

1222
01:05:16,440 --> 01:05:20,040
Speaker 1: benefits on any of these lockdowns. I mean, we I

1223
01:05:20,040 --> 01:05:22,360
Speaker 1: think it's very clear now that that whole policy of

1224
01:05:22,480 --> 01:05:26,440
Speaker 1: lockdowns it cratered the economy was devastating the economy, but

1225
01:05:26,480 --> 01:05:29,240
Speaker 1: it didn't do anything to stop COVID. And no one

1226
01:05:29,600 --> 01:05:32,320
Speaker 1: about the or the kids in school with the mass,

1227
01:05:32,880 --> 01:05:35,280
Speaker 1: you know, and and the remote learning. I mean, we

1228
01:05:35,400 --> 01:05:39,120
Speaker 1: lost an entire year of schooling for so many kids

1229
01:05:39,120 --> 01:05:41,560
Speaker 1: in this country, and no one really thought to apply

1230
01:05:41,640 --> 01:05:46,280
Speaker 1: cost benefit to that, you know, negligibile benefit if any,

1231
01:05:46,360 --> 01:05:47,840
Speaker 1: and the costs I think we're gonna be feeling for

1232
01:05:47,880 --> 01:05:51,320
Speaker 1: a generation. So yeah, we need to bring back benefit costs.

1233
01:05:51,440 --> 01:05:53,280
Speaker 1: I think we have to bring back as assumption of risk.

1234
01:05:53,520 --> 01:05:56,760
Speaker 1: You know that there's a tradition this country that you're

1235
01:05:56,800 --> 01:06:00,680
Speaker 1: allowed to do risky things. Uh, you know, if you're

1236
01:06:00,680 --> 01:06:03,880
Speaker 1: willing to assume the risk. And and we saw this

1237
01:06:04,000 --> 01:06:07,560
Speaker 1: workout I think very well in Florida, where they basically

1238
01:06:07,560 --> 01:06:11,480
Speaker 1: got on with their lives so much more quickly the country, Um,

1239
01:06:11,520 --> 01:06:14,000
Speaker 1: because they allowed people to make their own choices. And

1240
01:06:14,040 --> 01:06:16,560
Speaker 1: if you wanted to go out to a restaurant and

1241
01:06:16,680 --> 01:06:19,760
Speaker 1: risk get in COVID, that was your choice. Um. So

1242
01:06:19,920 --> 01:06:22,479
Speaker 1: we've got to bring back these basic ideas. And I think,

1243
01:06:23,200 --> 01:06:24,320
Speaker 1: you know, I don't know if it's just that the

1244
01:06:24,360 --> 01:06:27,920
Speaker 1: media culture doesn't really get it but but you're allowed

1245
01:06:27,920 --> 01:06:29,400
Speaker 1: to do whiskey things in this country. You know, if

1246
01:06:29,400 --> 01:06:32,560
Speaker 1: it doesn't work out for you, that's your choice, such

1247
01:06:32,600 --> 01:06:37,200
Speaker 1: as buying our ferrari. Alright, last question for you, uh uh,

1248
01:06:37,840 --> 01:06:39,480
Speaker 1: what advice would you give. There's a lot of people

1249
01:06:39,480 --> 01:06:42,000
Speaker 1: who are young that listen to these podcasts, this Wins

1250
01:06:42,000 --> 01:06:46,520
Speaker 1: and Losses podcast because they're trying to build their own culture,

1251
01:06:46,600 --> 01:06:50,560
Speaker 1: their own idea, their own worldview. For someone who wants

1252
01:06:50,560 --> 01:06:53,520
Speaker 1: to get into business today, let's say that they are

1253
01:06:53,560 --> 01:06:55,680
Speaker 1: out there and they're sixteen years old listening to this

1254
01:06:55,840 --> 01:06:58,000
Speaker 1: right now, what do you wish you had known when

1255
01:06:58,040 --> 01:07:00,480
Speaker 1: you were sixteen? What would you be telling young people

1256
01:07:00,520 --> 01:07:04,000
Speaker 1: they need to be doing today to prepare themselves to

1257
01:07:04,080 --> 01:07:06,680
Speaker 1: make the kinds of decisions that you had the opportunity

1258
01:07:06,720 --> 01:07:10,040
Speaker 1: to make in your twenties, thirties and forties. I mean,

1259
01:07:10,080 --> 01:07:12,920
Speaker 1: the main thing I would have done differently was just

1260
01:07:12,960 --> 01:07:15,680
Speaker 1: get into business faster. Like we talked about, I kind

1261
01:07:15,680 --> 01:07:18,440
Speaker 1: of I took some time and went to law school,

1262
01:07:18,480 --> 01:07:20,920
Speaker 1: and UM, I just didn't know how to get into it.

1263
01:07:21,040 --> 01:07:25,960
Speaker 1: And I think that what's great about UM entrepreneurialism today

1264
01:07:26,240 --> 01:07:30,320
Speaker 1: is there's so many opportunities. There's incubators. Now there's young

1265
01:07:30,360 --> 01:07:32,840
Speaker 1: startups you can join. I just would have gotten into

1266
01:07:32,840 --> 01:07:35,760
Speaker 1: it a lot sooner, and so I still think going

1267
01:07:35,800 --> 01:07:38,000
Speaker 1: to college is probably a good thing to do. I

1268
01:07:38,000 --> 01:07:41,800
Speaker 1: wouldn't necessarily encourage anyone to drop out, although certainly a

1269
01:07:41,800 --> 01:07:44,960
Speaker 1: lot of great entrepreneurs have had success dropping out, like Zuckerberg,

1270
01:07:45,080 --> 01:07:48,280
Speaker 1: like Bill Gates, so on. But but I would say

1271
01:07:48,320 --> 01:07:50,400
Speaker 1: just get into it as quickly as possible. What you

1272
01:07:50,440 --> 01:07:54,760
Speaker 1: really want to do is go work at a startup

1273
01:07:54,840 --> 01:07:57,640
Speaker 1: where you can really learn, where there's some great founders,

1274
01:07:58,160 --> 01:08:00,920
Speaker 1: and it almost doesn't matter what's the job is that

1275
01:08:00,960 --> 01:08:04,520
Speaker 1: you get. The important thing is who you're associated with.

1276
01:08:04,760 --> 01:08:07,680
Speaker 1: And you know, I learned so much working with people

1277
01:08:07,720 --> 01:08:10,920
Speaker 1: like Peter Till and Elon Musk at my first startup

1278
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Speaker 1: at PayPal, and that enabled me to go on and

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Speaker 1: then found my own companies and become an investor. So

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Speaker 1: you really want to just work with the smartest people

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Speaker 1: you can possibly find and do that as quickly as possible.

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Speaker 1: Outstanding stuff, David Sachs. This has been a phenomenal discussion

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Speaker 1: wins and Losses with Clay Travis. I hope everybody enjoyed it.

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Speaker 1: Thank you guys, there's now forty seven of these, I believe,

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Speaker 1: so if you enjoyed this one, check out the other

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Speaker 1: forty six. Thank you, thank you, quite appreciate it.