WEBVTT - Clay Talks With David Sacks 0:00:01.200 --> 0:00:05.920 You're listening to Fox Sports. Welcome in the latest episode 0:00:05.920 --> 0:00:08.799 of Wins and Losses. I'm excited to be under way 0:00:08.880 --> 0:00:11.080 here because I think we have got a fantastic guest 0:00:11.160 --> 0:00:13.880 that is going to take us through a lot of 0:00:13.920 --> 0:00:17.239 really interesting things about the rise of the Internet, the 0:00:17.400 --> 0:00:21.840 rise of business based on the Internet, and also big 0:00:21.880 --> 0:00:25.560 tech in general. And he is David Sacks. He has 0:00:25.600 --> 0:00:29.600 got an incredible history. I don't actually know where you're 0:00:29.720 --> 0:00:33.040 from or where you grew up. He's a partner at 0:00:33.120 --> 0:00:36.680 Craft Invests in all different sorts of tech companies and 0:00:36.760 --> 0:00:40.120 beyond out there. But where did you grow up? David? Like? 0:00:40.400 --> 0:00:43.280 What was your background? And thanks for coming on with us. Yeah, 0:00:43.560 --> 0:00:47.120 great to be here. Clay Um, I was born in kipt, Africa, 0:00:47.520 --> 0:00:50.160 and my parents immigrated the United States fast five years old. 0:00:50.200 --> 0:00:53.080 We actually moved to Memphis, Tennessee, and that's where I 0:00:53.120 --> 0:00:55.760 basically grew up until I left for college. All Right, 0:00:55.800 --> 0:00:58.720 I had no idea. So Memphis, Tennessee. How much of 0:00:58.720 --> 0:01:01.120 a culture shock can you member? I can't imagine. The 0:01:01.160 --> 0:01:04.920 conveyor belt between South Africa and Memphis, Tennessee is very common. 0:01:05.280 --> 0:01:09.240 How did that end up? Your location in the United States? Yeah. 0:01:09.360 --> 0:01:11.679 You know, it's interesting. My dad's a doctor and they 0:01:11.720 --> 0:01:14.880 wanted to immigrate from South Africa. They didn't agree with 0:01:14.920 --> 0:01:19.320 the political situation there back in the nineteen seventies, and uh, 0:01:19.360 --> 0:01:21.959 he got a job at the University of Tennessee Medical 0:01:22.040 --> 0:01:25.920 Center practicing and teaching, and so that's we end up 0:01:25.959 --> 0:01:28.320 moving too. Yeah, it was a pretty big culture shock. 0:01:29.080 --> 0:01:31.880 Are you a sports fan? Did growing up in Memphis 0:01:31.920 --> 0:01:34.760 in any way sort of an embed itself in you 0:01:34.920 --> 0:01:38.360 as a college football college basketball fan or you sort 0:01:38.360 --> 0:01:41.600 of not that interested in sports as a kid growing up? Well, 0:01:41.600 --> 0:01:44.800 there are only two real sports in Memphis at that time. 0:01:44.880 --> 0:01:49.120 There was Memphis State Tigers basketball. That was huge. Um, 0:01:49.160 --> 0:01:52.160 everyone looked forward to that. I remember one year we 0:01:52.200 --> 0:01:54.600 went to the Final four with I think Keith Lee 0:01:54.680 --> 0:01:59.000 was sort of the start player then. And the other sport, 0:01:59.240 --> 0:02:01.800 if you want to call it out in Memphis was wrestling. 0:02:02.840 --> 0:02:05.560 Every money was wrestling at the miss South Coliseum and 0:02:05.560 --> 0:02:08.440 those are really the only two big sports in Memphis 0:02:08.520 --> 0:02:11.960 at that time. Obviously it changed, but did you go 0:02:12.080 --> 0:02:15.880 to those old school wrestling matches? You know, my parents 0:02:15.880 --> 0:02:18.640 would never let me go, unfortunately, but I remember, you know, 0:02:18.720 --> 0:02:21.919 Jerry the King Lawler was time and I would watch 0:02:21.960 --> 0:02:24.840 that stuff on TV. And you know, as a fan now, 0:02:24.880 --> 0:02:27.520 as a kid growing up in Nashville, the Nashville Memphis 0:02:27.639 --> 0:02:30.880 rivalry was very real. Did you feel it in Memphis 0:02:30.880 --> 0:02:32.799 when you were growing up? Were you aware that as 0:02:32.840 --> 0:02:37.399 a Memphian you were feuding constantly with Nashvillians a little bit? 0:02:37.480 --> 0:02:39.679 You know, our high school football team would eventually, you 0:02:39.720 --> 0:02:42.040 know what, sometimes going to the state finals and play 0:02:42.080 --> 0:02:44.360 against teams from Nashville. So yeah, there was a little bit. 0:02:44.639 --> 0:02:47.720 Where did you go away to college from Memphis? I 0:02:47.960 --> 0:02:51.480 went to Stanford as an undergrad, all right, So how 0:02:51.560 --> 0:02:53.920 much of a culture shock was that? All right? So 0:02:54.000 --> 0:02:57.359 you you come from South Africa, you then end up 0:02:57.400 --> 0:03:00.520 in Memphis and you make the trip out to Palo Alto. 0:03:00.560 --> 0:03:03.640 Stanford was a lot different place then, certainly than it 0:03:03.760 --> 0:03:07.639 is now, but that wasn't a very common route. How 0:03:07.639 --> 0:03:09.639 did you pick Stanford? Is the place you wanted to 0:03:09.680 --> 0:03:13.400 go to? Yeah? It's interesting. I mean Stanford, I mean, 0:03:13.440 --> 0:03:14.800 to be honest, this is the best school and that 0:03:14.840 --> 0:03:18.639 I got into, and I had a great reputea and um, 0:03:18.680 --> 0:03:20.320 it seemed like a great place to go to school. 0:03:20.360 --> 0:03:23.440 The campus is sort of really idyllic, like you said, 0:03:23.520 --> 0:03:28.040 being in Palo Alto, fantastic weather. Uh, it seemed like 0:03:28.120 --> 0:03:30.760 this an amazing place. And yeah, it was a pretty 0:03:30.800 --> 0:03:33.320 big culture shock because the campus was very liberal. In 0:03:33.560 --> 0:03:37.200 Memphis is uh or Tennessee in general sort of a 0:03:37.200 --> 0:03:40.200 little bit more conservative. So there was a difference there. 0:03:40.280 --> 0:03:43.480 But um, but the you know, the important thing about 0:03:43.480 --> 0:03:46.160 going to Stanford in the early nineties for me was 0:03:46.280 --> 0:03:48.320 that it got me into the whole tech scene when 0:03:48.320 --> 0:03:51.600 I graduated, and that that end up being very important 0:03:51.640 --> 0:03:53.520 for my career. By the way, I wanted to go 0:03:53.560 --> 0:03:55.680 to Stanford Law School. They didn't let me in. I 0:03:55.720 --> 0:03:58.720 had never been to California until I was in college, 0:03:58.760 --> 0:04:01.280 like twenty one or twenty two, and the first time 0:04:01.280 --> 0:04:04.240 I went to the Stanford campus, it really is heaven 0:04:04.240 --> 0:04:08.000 on Earth. I mean it is an incredible, uh incredible place. 0:04:08.560 --> 0:04:12.840 So so you graduate from Stanford, and do you remember 0:04:12.840 --> 0:04:14.320 the first time you ever got on the Internet? By 0:04:14.320 --> 0:04:20.440 the way, good question. Um, I don't remember that. I 0:04:20.480 --> 0:04:22.400 guess you know, it must have been in the mid nineties. 0:04:22.440 --> 0:04:26.440 People are starting to use Yahoo. Um, maybe I was 0:04:26.480 --> 0:04:28.200 in law school, you know. After Stanford, I went to 0:04:28.240 --> 0:04:32.839 law school at the University of Chicago, and it must 0:04:32.839 --> 0:04:35.480 have been around that time. And you know, I thought 0:04:35.520 --> 0:04:38.480 I had missed the whole internet thing because I had 0:04:38.520 --> 0:04:42.000 friends at Stanford who graduated, which that was the year 0:04:42.120 --> 0:04:45.200 that Netscape went public, and it kind of ushered in 0:04:45.320 --> 0:04:49.159 the commercial and there were a bunch of you know, 0:04:49.240 --> 0:04:52.359 really interesting companies getting started around then. There was you know, 0:04:52.440 --> 0:04:55.520 eBay and Amazon and Yahoo, and if you went to 0:04:56.200 --> 0:04:59.919 graduate from Stanford you would get easily pulled into all that. 0:05:00.520 --> 0:05:03.400 But because I graduated ninety four, I kind of felt 0:05:03.400 --> 0:05:05.560 like I missed it, and I actually ended up in 0:05:05.640 --> 0:05:10.640 law school. And it wasn't until when an old friend 0:05:10.640 --> 0:05:14.440 of mine from Stanford called me up and told me 0:05:14.480 --> 0:05:18.680 about a startup he was founding, uh called Confinity but 0:05:18.720 --> 0:05:22.919 eventually got renamed PayPal, and that was Peter Teel, and 0:05:23.040 --> 0:05:26.040 so Peter kind of pulled me back to paol Alto 0:05:26.200 --> 0:05:31.039 in um so Stanford. It actually ended up being very important, 0:05:31.080 --> 0:05:33.360 but it took five years from me to come back 0:05:33.400 --> 0:05:36.080 and do internet stuff. How did you like law school? 0:05:37.880 --> 0:05:39.760 Law school was great. I mean your Chicago was a 0:05:39.839 --> 0:05:44.960 very serious place and um you know, it was rigorous 0:05:45.000 --> 0:05:47.920 and a lot of great teachers and I enjoyed it, 0:05:48.000 --> 0:05:50.520 you know, but by after three years of it, I 0:05:50.560 --> 0:05:52.920 felt like I was ready to do something else. It 0:05:52.960 --> 0:05:56.560 wasn't a desire of mine to do law, but inell 0:05:56.560 --> 0:05:59.480 actually I thought it was really interesting, and you know, 0:05:59.520 --> 0:06:02.520 I enjoyed experience. Did you ever practice at all as 0:06:02.600 --> 0:06:04.200 as a part of a big firm? Did you do 0:06:04.240 --> 0:06:07.400 anything legal related? I also obviously went to law school 0:06:07.480 --> 0:06:10.400 at Vanderbilt, as as most listeners will know, and I 0:06:10.480 --> 0:06:12.520 kind of had the sense early on that law was 0:06:12.600 --> 0:06:14.280 not for me. It sounds like you kind of did 0:06:14.320 --> 0:06:16.359 as well. But did you go into any sort of 0:06:16.360 --> 0:06:19.560 big firm lifestyle or any actual practice of law after 0:06:19.600 --> 0:06:22.599 you graduated? You know, I spent a summer at a 0:06:22.600 --> 0:06:25.440 at a big law firm, and that kind of reinforced 0:06:25.600 --> 0:06:29.760 the decision for me that I wanted to do. You know. 0:06:29.880 --> 0:06:32.760 Part of it was always that I was interested in business, 0:06:32.800 --> 0:06:34.640 but I always felt like I wanted to be the 0:06:34.720 --> 0:06:37.719 decision maker, you know, and not not sort of the 0:06:37.760 --> 0:06:41.440 person carrying out the instructions. And you know, lawyers are 0:06:41.480 --> 0:06:45.680 ultimately advisors to the principle, uh and you know many 0:06:45.720 --> 0:06:49.160 of them do, you know, fantastic work. But I always 0:06:49.160 --> 0:06:50.520 felt like I wanted to be on the other side 0:06:50.560 --> 0:06:54.040 of the table and and do something more directly in business. 0:06:54.640 --> 0:06:56.840 Would you advise, because I get asked this question all 0:06:56.880 --> 0:07:00.080 the time, would you advise kids who think, hey, I 0:07:00.080 --> 0:07:02.640 don't necessarily want to be a lawyer to go to 0:07:02.720 --> 0:07:05.119 law school. If we got a one year old who's 0:07:05.160 --> 0:07:07.880 listening right now and they're going to college, is it 0:07:07.960 --> 0:07:10.640 a move that you would make again? Would you advise 0:07:10.720 --> 0:07:13.280 your own kids or kids who ask you for advice 0:07:13.440 --> 0:07:16.080 whether it go to law school or not. No, I 0:07:16.120 --> 0:07:18.080 would tell him not to because I think the only 0:07:18.120 --> 0:07:20.680 reason to law school these days is if you really 0:07:20.840 --> 0:07:22.880 enjoy the law and want to be a lawyer. You know, 0:07:23.000 --> 0:07:25.040 maybe you want to practice law, or you want to 0:07:25.040 --> 0:07:27.440 be a clerk for a judge, or you know, maybe 0:07:27.760 --> 0:07:30.360 become a judge or an elected official or something like that. 0:07:30.680 --> 0:07:32.360 I think the reason to go to law school today 0:07:32.440 --> 0:07:34.440 is because you're really just in the law now. Back 0:07:34.880 --> 0:07:37.720 when I did it and you did it, there are 0:07:37.720 --> 0:07:41.200 a lot of people who did it because I think 0:07:41.200 --> 0:07:44.880 there weren't as many options or it wasn't as clear 0:07:44.960 --> 0:07:46.760 what you should do. There are a lot more people 0:07:46.760 --> 0:07:50.200 back in those days. We're talking you know years ago 0:07:51.080 --> 0:07:53.520 who went to law school knowing they'll go into business. 0:07:53.720 --> 0:07:57.160 And I just think that today there's so many more options. 0:07:57.200 --> 0:07:58.480 If you want to do that, you can just do 0:07:58.520 --> 0:08:02.320 it directly, you know, spending three years of law school 0:08:02.760 --> 0:08:05.560 and all the expense of that. Uh, there's just much 0:08:05.600 --> 0:08:08.200 more direct ways of getting into business now. You know, 0:08:08.280 --> 0:08:12.400 in the mid nineties, even though I had some entree 0:08:12.880 --> 0:08:16.720 entrepreneurial instincts and desire to do something in business, I 0:08:16.760 --> 0:08:19.920 really had no idea how to do it. It wasn't clear, 0:08:19.960 --> 0:08:22.880 like how do you start a company? And so as 0:08:22.880 --> 0:08:24.800 a result, you kind of end up going to law 0:08:24.840 --> 0:08:29.840 school as the next step. Uh. But but but today 0:08:29.840 --> 0:08:33.400 I wouldn't encourage it. Okay, So you mentioned you leave 0:08:33.520 --> 0:08:35.880 law school and go back to work for a company 0:08:35.920 --> 0:08:39.120 that would become PayPal. I imagine a lot of people 0:08:39.200 --> 0:08:42.200 are somewhat familiar with PayPal. I've read a lot of 0:08:42.200 --> 0:08:45.079 the corporate history of PayPal because I find it to 0:08:45.080 --> 0:08:48.080 be pretty fascinating. What how would you describe it for 0:08:48.120 --> 0:08:51.360 people out there? You go in at nine, what is 0:08:51.400 --> 0:08:54.079 the experience? Like? Who were you working with? I think 0:08:54.080 --> 0:08:57.480 you mentioned Peter Teal uh and what did you guys 0:08:57.840 --> 0:09:01.360 end up achieving. Yeah. I mean, it was a really 0:09:01.360 --> 0:09:04.800 incredible group of people who today are kind of known 0:09:04.840 --> 0:09:08.600 as the Papal Mafia. That you know, people like Peter 0:09:08.679 --> 0:09:14.199 Til and Elon Musk and Max Levchin and Reed Hoffman, 0:09:14.520 --> 0:09:17.079 and the list goes on and on. Chad Hurley and 0:09:17.200 --> 0:09:21.360 Steve chen who founded YouTube Rule off Photos our CFO 0:09:21.400 --> 0:09:23.400 who went on to become the head of Sequoia, was 0:09:23.440 --> 0:09:26.680 a famous venture capital firm. So a lot of really 0:09:26.720 --> 0:09:32.679 incredible people were part of that founding team. And um 0:09:32.720 --> 0:09:35.720 and you know today Papals a hundred billion dollar, you know, 0:09:35.800 --> 0:09:38.640 publicly listed company, so it's, you know, twenty years later, 0:09:38.679 --> 0:09:41.680 it's a very important company still today. But it was 0:09:41.679 --> 0:09:44.360 really a pretty incredible group of people. When I joined in, 0:09:45.200 --> 0:09:47.440 it was about six months before the dot com crash, 0:09:47.840 --> 0:09:52.400 and Papal was primarily built. Although it was founded the 0:09:52.480 --> 0:09:55.640 year before the dot com crash, it was primarily built 0:09:55.920 --> 0:09:58.720 after and in the wake of the dot com crash, 0:09:58.760 --> 0:10:01.440 And it was a very tough environ ronament lots, you know, 0:10:01.480 --> 0:10:03.839 all these other startups are going out of business all 0:10:03.880 --> 0:10:08.280 around us, and somehow we managed to persevere and create 0:10:08.679 --> 0:10:13.200 you know, a successful outcome, and by early two thousand two. 0:10:13.360 --> 0:10:17.680 We were the first company, first tech company tai Po 0:10:17.800 --> 0:10:21.040 since the dot com crash. Uh And like I said, today, it's, 0:10:21.160 --> 0:10:24.280 you know, a hundred billion dollar publicly traded company. Okay, 0:10:24.320 --> 0:10:27.600 So what do you attribute um there being such an 0:10:27.679 --> 0:10:31.240 unbelievable amount of talent? The so called PayPal mafia. You 0:10:31.320 --> 0:10:33.800 ran through a lot of those guys who not only 0:10:33.840 --> 0:10:37.040 were successful in building PayPal into a company that could 0:10:37.040 --> 0:10:39.880 go public in two thousand two and survived the dot 0:10:39.920 --> 0:10:44.040 com implosion when everything else crashes, what attracted that amount 0:10:44.080 --> 0:10:47.600 of talent to that particular company at that point in time. 0:10:49.280 --> 0:10:51.920 It's interesting. I think the most important thing to realize 0:10:52.000 --> 0:10:55.160 is that although these people and these names are sort 0:10:55.160 --> 0:10:58.000 of celebrated today, they were kind of nobody's back then. 0:10:58.320 --> 0:11:00.520 And you know, we were all pretty young at the 0:11:00.520 --> 0:11:02.800 start of our careers. You know, when PayPal I p 0:11:02.960 --> 0:11:06.079 owed in two thousand two, the I was the average 0:11:06.120 --> 0:11:08.160 age on the S one, which is the sort of 0:11:08.160 --> 0:11:10.680 corporate finaling documents, and I was twenty nine years old, 0:11:10.800 --> 0:11:14.040 So you know, we weren't even thirty years old yet. 0:11:14.040 --> 0:11:18.000 This this executive team, this founding team, and one of 0:11:18.040 --> 0:11:21.280 the ways that we all came together is through friendship networks. 0:11:21.320 --> 0:11:24.800 You know, Peter Teal recruited his friends who had worked 0:11:24.840 --> 0:11:27.760 at sorry who had gone to school with him at Stanford. 0:11:27.760 --> 0:11:31.040 That was the case with me. Max Levchin, who was 0:11:31.120 --> 0:11:34.320 the CTO, he recruited fellow engineers that he had gone 0:11:34.360 --> 0:11:36.920 to school with that you have I And that was 0:11:36.960 --> 0:11:40.760 pretty much how the team was collected and came together. 0:11:41.120 --> 0:11:44.200 Is we recruited our friends, and the main reason for 0:11:44.200 --> 0:11:46.720 that is nobody else would would work for us. Joining 0:11:46.720 --> 0:11:49.840 a startup in the early two thousand's was considered a 0:11:49.960 --> 0:11:53.400 very risky thing to do, and it was really hard 0:11:53.440 --> 0:11:57.080 to convince people to join this fledgling company. So how 0:11:57.120 --> 0:11:59.200 did you meet Peter Tell at Stanford? Do you remember 0:11:59.200 --> 0:12:02.960 the first time you guys met? What drew you together? Yeah? 0:12:02.960 --> 0:12:05.680 So I met Peter at at Stanford. I was undergrad. 0:12:05.720 --> 0:12:07.440 He was actually in law school at that time because 0:12:07.440 --> 0:12:11.720 he's a few there had founded the Stanford Review, which 0:12:11.760 --> 0:12:17.520 was the conservative, you know slash libertarian student newspaper on campus. 0:12:17.800 --> 0:12:20.480 And I ended up becoming a writer and then the 0:12:20.559 --> 0:12:24.280 editor in chief of the Stanford Review. And um, so 0:12:24.679 --> 0:12:28.240 we you know, sort of bonded initially over politics and 0:12:28.360 --> 0:12:32.280 our take on what was happening on campus. And then, 0:12:32.720 --> 0:12:36.320 as you know, after that back in we ended up 0:12:36.360 --> 0:12:39.760 writing a book together about what was happening at Stanford, 0:12:40.320 --> 0:12:43.280 and that was sort of the beginning of a friendship 0:12:43.360 --> 0:12:47.040 that you know, Persevers took to this day. What's your 0:12:47.080 --> 0:12:49.079 favorite thing that you guys published as a part of 0:12:49.080 --> 0:12:51.320 the Stanford Review? Was there an article you wrote? Was 0:12:51.320 --> 0:12:53.480 there an article somebody else wrote while you were an editor. 0:12:53.520 --> 0:12:55.920 Do you recall something where you thought, man, we really 0:12:56.000 --> 0:12:58.240 nailed it here and maybe had an impact that we 0:12:58.240 --> 0:13:02.640 weren't anticipating being able to us. Well, you know, back 0:13:02.640 --> 0:13:04.840 in the this is going back to the late eighties 0:13:04.920 --> 0:13:08.520 early nineties, there was this huge debate at Stanford over 0:13:09.360 --> 0:13:11.840 the cannon the reading list, and there was a big 0:13:11.840 --> 0:13:15.640 protest on campus that became very famous where the protesters 0:13:15.640 --> 0:13:19.360 started chanting, hey, hey, ho ho, Western culture has got 0:13:19.360 --> 0:13:22.959 to go, and there was this sense that there was 0:13:23.000 --> 0:13:27.920 this protest movement to overturn and throw out what they 0:13:27.960 --> 0:13:32.800 called the dead white males of the curriculum. And they succeeded. 0:13:32.840 --> 0:13:35.040 I mean, they really ended up kind of purging the 0:13:35.080 --> 0:13:38.760 cannon of these classic works and replacing it with something 0:13:38.960 --> 0:13:42.839 very different, and that was really the beginning of this 0:13:42.920 --> 0:13:47.160 sort of cultural revolution on campus that kind of persists 0:13:47.320 --> 0:13:50.800 until today. And I think a lot of the political 0:13:50.880 --> 0:13:54.280 changes that you've seen in our society over the last 0:13:55.200 --> 0:13:59.319 you know, thirty years, or really downstream of the changes 0:13:59.360 --> 0:14:02.640 that happened on campus, because what happens the last thirty 0:14:02.720 --> 0:14:09.760 years is that they've been successfully graduating waves of um 0:14:09.880 --> 0:14:13.000 of students who've been in doctrine into the cityology, and 0:14:13.040 --> 0:14:15.840 those students have gone on to populate many of the 0:14:15.840 --> 0:14:19.720 institutions in our in our culture. And so if you 0:14:19.760 --> 0:14:23.320 think about you know, whether it's will capitalism or you know, 0:14:23.760 --> 0:14:26.440 any of these other institutions that are kind of pushing 0:14:26.480 --> 0:14:30.160 this idea of wokens today that all started on campus 0:14:30.640 --> 0:14:33.040 in the late eighties early nineties. We called it political 0:14:33.040 --> 0:14:36.680 correctness back then, but it was the same idea. Two 0:14:36.680 --> 0:14:40.760 thousand two, PayPal goes public, Uh, stock took off. I 0:14:40.800 --> 0:14:43.280 remember I went back and look before we talked, because 0:14:43.280 --> 0:14:45.000 I was like, man, I think that stock was still 0:14:45.120 --> 0:14:47.760 because people, what, you're right, the dot com implosion had happened, 0:14:47.800 --> 0:14:50.880 but you guys had built back up to a really 0:14:50.920 --> 0:14:55.200 impressive spot. Was there something that you bought or something 0:14:55.240 --> 0:14:57.320 you were excited to buy. Do you remember a purchase 0:14:57.800 --> 0:15:01.200 after I'm assuming you had some decent wealth, probably for 0:15:01.240 --> 0:15:05.320 the first time in your life, certainly on that level. Yeah. 0:15:05.360 --> 0:15:07.720 You know, Um, Peter and I both did the very 0:15:07.800 --> 0:15:10.960 cliche thing which I now cringe a little bit at doing, 0:15:11.040 --> 0:15:15.880 which is buying a Ferrari. Um. Yeah, you know what 0:15:16.000 --> 0:15:18.400 kind of Ferrari did you get? Like and and and 0:15:18.400 --> 0:15:20.440 and this is before like it was kind of probably 0:15:20.480 --> 0:15:23.240 commonplace for a lot of these Silicon Valley companies to 0:15:23.280 --> 0:15:25.760 be going public, Like did you just go into a 0:15:25.760 --> 0:15:29.520 dealership in Silicon Valley? Yeah, pretty much, I think I 0:15:29.760 --> 0:15:32.720 got I got a three five five Spider. It was 0:15:32.760 --> 0:15:34.400 like one of those you know, it was like a 0:15:34.400 --> 0:15:37.840 black convertible. It was a really cool car. Um. But 0:15:37.920 --> 0:15:39.320 you know, it's like I felt like it was like 0:15:39.440 --> 0:15:43.160 driving an egg, you know it was. It was so delicate. 0:15:43.200 --> 0:15:44.760 I felt like, you know, I was going to mess 0:15:44.760 --> 0:15:47.600 it up every time I drove it, and uh, you know, 0:15:47.680 --> 0:15:50.680 eventually eventually got rid of it. But what was the 0:15:50.800 --> 0:15:53.800 girl reaction to you having a Ferrari? Like was that 0:15:53.960 --> 0:15:55.920 something that was impressive? Did you always hear about rich 0:15:55.960 --> 0:15:58.480 guys driving fancy cars, and sometimes you got poor guys 0:15:58.480 --> 0:16:00.840 who drive fancy cars to try to look like rich guys. 0:16:01.240 --> 0:16:04.760 Net positive or net negative return on value in terms 0:16:04.760 --> 0:16:08.600 of impressions on women when you have a Ferrari. Yeah, 0:16:08.640 --> 0:16:11.120 you know, I don't think it really helped me that much. UM. 0:16:11.440 --> 0:16:13.720 So I don't Yeah, I don't think it helped me 0:16:13.800 --> 0:16:17.080 that much. Um. But you know, you know, I was 0:16:17.120 --> 0:16:20.000 only thirty years old at that time, so it was 0:16:20.040 --> 0:16:23.760 a kind that that you do when you're young, and um, yeah, 0:16:23.840 --> 0:16:25.280 you know, I guess I enjoyed it for a couple 0:16:25.280 --> 0:16:27.680 of years and then, uh, you know, I ended up 0:16:27.840 --> 0:16:31.280 ended up selling it. I actually got instead, uh one 0:16:31.320 --> 0:16:35.040 of the first test loos that Elon made, um, and 0:16:35.120 --> 0:16:38.120 that that was an interesting car. Hey, what's up everybody? 0:16:38.160 --> 0:16:41.240 It's me three time Pro Bowlertle Warrington, and I couldn't 0:16:41.240 --> 0:16:44.640 be more excited to announce a new podcast, call Up 0:16:44.720 --> 0:16:47.680 on Game. What is Up on Game? You asked, along 0:16:47.720 --> 0:16:51.080 with my fellow Pro bowler T J. Huschman, Zada and 0:16:51.240 --> 0:16:55.200 Super Bowl champion. Yep, that's right, Plexico Burris. You can 0:16:55.240 --> 0:16:57.720 only name a show with that type of talent on 0:16:57.760 --> 0:17:00.520 it Up on Game. We're going to be daring our 0:17:00.600 --> 0:17:05.520 real life experiences loaded with teachable moments. Listen to up 0:17:05.520 --> 0:17:08.880 On Game with Me, LaVar Arrington, T J. Hutchman's Outa 0:17:08.960 --> 0:17:12.439 and Plexico Birds on the I Heart Radio app, Apple 0:17:12.560 --> 0:17:18.879 podcast or wherever you get your podcast from. So I 0:17:18.920 --> 0:17:20.840 don't even know anything about that. When did that? Was 0:17:20.880 --> 0:17:23.680 that like an early model Tesla? I mean he's like 0:17:23.760 --> 0:17:26.040 kind of almost making out of the back of the 0:17:27.000 --> 0:17:31.040 studio somewhere. Yeah, I mean the first version of the 0:17:31.080 --> 0:17:34.960 Tesla was called the Roadster and it was the first 0:17:34.960 --> 0:17:37.600 car that Ellen made, and it was more of a 0:17:37.640 --> 0:17:43.439 sports car and it it was in the body of 0:17:43.720 --> 0:17:46.960 they used like the body of I think it was 0:17:47.000 --> 0:17:49.600 like an old I want to say, Fiat or something 0:17:49.680 --> 0:17:52.639 like that. It was a really small car. It was 0:17:52.680 --> 0:17:56.359 a two seater and didn't have a lot of features. 0:17:56.640 --> 0:17:59.600 It didn't even have power steering. It was pretty hard 0:17:59.640 --> 0:18:02.879 to draw, I've to be honest, but elon. But it 0:18:02.960 --> 0:18:08.280 was very quick. It had that speed from the electric batteries. Basically, 0:18:08.480 --> 0:18:11.160 you know, the torque was there was no gear shifting, 0:18:11.640 --> 0:18:14.639 and the torque felt, you know, almost unlimited, and so 0:18:14.680 --> 0:18:17.000 it was a very fast car. But it was small 0:18:17.040 --> 0:18:19.600 and kind of hard to drive, but it got test 0:18:19.720 --> 0:18:21.679 off the ground. What Ellen did is I think he 0:18:21.800 --> 0:18:26.879 sold maybe thousand of those cars, um and you know, 0:18:26.920 --> 0:18:29.000 the idea was, we're, you know, we're going to sell 0:18:29.040 --> 0:18:31.520 a sports car because he could charge a lot of 0:18:31.520 --> 0:18:33.879 money for them, and then on the heels of that 0:18:33.920 --> 0:18:36.679 he would make a mass market car. And that's what 0:18:36.800 --> 0:18:39.440 he did is you know, I think he stopped production 0:18:39.480 --> 0:18:41.840 of the Roaster after maybe a thousand they sold about 0:18:41.880 --> 0:18:44.720 thousand of them, and then use that money build the 0:18:45.040 --> 0:18:49.240 Tesla Model Less, which was their first real mainstream car, 0:18:49.920 --> 0:18:53.720 and that was a really fantastic car that was easily 0:18:53.760 --> 0:18:57.320 the best car I'd driven till that time. And you know, 0:18:57.800 --> 0:18:59.800 since then they've gone on to the Model three and 0:19:00.000 --> 0:19:03.280 not a lie and Tesla has become the most valuable 0:19:03.280 --> 0:19:06.720 car company in the world. Tesla is an interesting story, 0:19:07.359 --> 0:19:09.119 and I think, and I'm curious if you were the 0:19:09.160 --> 0:19:11.240 same way. One of the things that fascinates me about 0:19:11.400 --> 0:19:13.400 a lot of the guys who made money at PayPal 0:19:13.800 --> 0:19:17.520 is many people make tens of millions of dollars and 0:19:17.560 --> 0:19:20.200 they throw up the peace sign and they say, Okay, 0:19:20.240 --> 0:19:22.879 I've got money to be able to basically do whatever 0:19:22.920 --> 0:19:25.000 I want for the rest of my life, But I'm 0:19:25.040 --> 0:19:27.520 not interested in pushing all that money back into the 0:19:27.560 --> 0:19:31.240 center of the table and make bigger bets going forward. 0:19:31.640 --> 0:19:33.679 It seems like a lot of the PayPal guys and 0:19:33.840 --> 0:19:36.240 maybe it's the psychology of the company in general, the 0:19:36.320 --> 0:19:38.879 risk taking culture. I'm curious how you would analyze it. 0:19:39.359 --> 0:19:41.600 Almost looked at the money that you guys made at 0:19:41.600 --> 0:19:45.280 PayPal as table stakes that allowed you to up your 0:19:45.320 --> 0:19:48.560 wagers on things that were even more important to you. 0:19:48.960 --> 0:19:52.040 Did you have a conscious decision about making that kind 0:19:52.080 --> 0:19:55.760 of choice, because certainly you've gone on to other companies, 0:19:56.200 --> 0:19:58.800 and it's easy for somebody who has a success on 0:19:58.880 --> 0:20:01.439 the level of payper how to say, Hey, you know, 0:20:01.520 --> 0:20:04.000 I've made my money. I can have a really comfortable life. 0:20:04.680 --> 0:20:06.639 You guys, it seems like a lot of you said, Okay, 0:20:06.680 --> 0:20:08.720 I've got the table stakes to do what I really 0:20:08.760 --> 0:20:12.320 wanted to do. Conscious decision, unconscious? Am I analyzing the 0:20:12.400 --> 0:20:17.320 larger culture in your mind correctly? Yeah? I think that's right. 0:20:17.520 --> 0:20:21.440 I mean, nobody felt out of that original PayPal crew. 0:20:21.560 --> 0:20:24.600 Nobody felt like, oh, let's just retired now. They all 0:20:24.800 --> 0:20:27.480 went on to do, you know, greater things, And I 0:20:27.520 --> 0:20:30.480 think that's why the paper Mafia's kind of remembered today 0:20:30.600 --> 0:20:34.680 is not just for PayPal, but what they all did afterwards. Um, 0:20:34.720 --> 0:20:38.879 you know Ellen famously that really his entire fortune on 0:20:39.000 --> 0:20:42.000 Tesla and SpaceX. He was, you know, a few weeks 0:20:42.040 --> 0:20:45.359 away from going bankrupt and you know, ended up just 0:20:45.440 --> 0:20:48.040 back in two thousand eight in the financial crisis and 0:20:48.480 --> 0:20:52.040 put his last dime into Tesla and SpaceX to save 0:20:52.080 --> 0:20:56.320 those companies and then ultimately succeeded. And that's why he's 0:20:57.480 --> 0:20:59.479 the world's riches man today, or one of them, is 0:20:59.520 --> 0:21:04.320 because he really double triple down and kind of risked 0:21:04.359 --> 0:21:08.120 every penny he had on those ventures. But everybody else 0:21:08.119 --> 0:21:10.359 in the group really went on to do really impressive 0:21:10.400 --> 0:21:13.440 things as well. I mean, Peter went on to become 0:21:13.480 --> 0:21:16.679 of VC. He wrote the first check as an angel 0:21:16.720 --> 0:21:19.040 investor into Facebook. I think it's a five mins houseand 0:21:19.040 --> 0:21:22.000 dollar check, and then that turned into billions. And then 0:21:22.040 --> 0:21:25.080 he was the founding investor at Volunteer, which is now 0:21:25.080 --> 0:21:28.679 a successful public company, and you know, also founded Founders Funds, 0:21:28.760 --> 0:21:32.360 a VC firm has done very well. Mass Love Tune 0:21:32.480 --> 0:21:35.520 is the CTO of PayPal, founded a firm which is 0:21:35.560 --> 0:21:39.360 now publicly traded company, went publishing the last year that's 0:21:39.400 --> 0:21:42.880 worth you know, billions, um, and so on down the line. 0:21:42.920 --> 0:21:45.840 I mean everyone went on to do different things. I 0:21:46.320 --> 0:21:50.320 after PayPal, created another internet company called Yammer, which was 0:21:50.600 --> 0:21:53.760 an enterprise software company. It was one of the first 0:21:53.840 --> 0:21:57.240 enterprise software companies to use viral tactics that I had 0:21:57.320 --> 0:21:59.760 learned at PayPal. So yeah, we all went on to 0:22:00.200 --> 0:22:03.720 do different things. And I think it's partly a function 0:22:03.760 --> 0:22:06.280 the fact that we were all very young and still 0:22:06.320 --> 0:22:09.560 had a lot of ambition, and nobody felt like they 0:22:09.600 --> 0:22:12.760 had hit some number or something where they were just 0:22:12.800 --> 0:22:16.679 going to retire. Is it difficult to when you have 0:22:16.760 --> 0:22:19.480 a big, big hit like you guys did with PayPal? 0:22:20.480 --> 0:22:24.240 Is it difficult to decide what the next step you're 0:22:24.280 --> 0:22:27.360 going to take is in any way because you're almost 0:22:27.400 --> 0:22:31.520 over analyzing it and trying to equal or have that 0:22:31.600 --> 0:22:34.359 same kind of success you mentioned Yammer. How many things 0:22:34.400 --> 0:22:36.639 did you look at in a significant way from a 0:22:36.640 --> 0:22:40.359 business opportunity perspective before you made the leap there? And 0:22:40.440 --> 0:22:44.760 what was it that made you make that choice? Yes? 0:22:44.880 --> 0:22:46.320 So for me, I mean I think you raised a 0:22:46.320 --> 0:22:49.760 good point, which is, you know, once you've had a success, 0:22:49.800 --> 0:22:51.680 you know, is there a danger of kind of over 0:22:51.720 --> 0:22:55.640 analyzing the next thing and being reticent to have a failure, 0:22:55.840 --> 0:22:58.440 you know, because now you've had a success and it 0:22:58.480 --> 0:23:00.840 could be the opposite to right where you expect everything. 0:23:00.840 --> 0:23:03.920 I mean, it's just you're going to be uh analyzed 0:23:03.960 --> 0:23:07.280 in some way based on your prior success. And I'm 0:23:07.320 --> 0:23:09.280 just kind of fascinated by how you make the decision 0:23:09.320 --> 0:23:13.399 to take the next opportunity. Yes, So for me, it's 0:23:13.440 --> 0:23:16.240 it's always about the product. And what happens is I 0:23:16.280 --> 0:23:18.560 get a product idea and I start, you know, turning 0:23:18.560 --> 0:23:20.919 it over my head and start developing the idea, and 0:23:20.960 --> 0:23:23.920 I get kind of obsessed with it. And so it's 0:23:23.960 --> 0:23:26.639 my passion for the product that drives everything else, and 0:23:26.760 --> 0:23:30.960 I don't worry so much about what the business outcome 0:23:31.040 --> 0:23:33.040 is going to be. I just try to design the 0:23:33.080 --> 0:23:35.800 best product and try to figure out how to get 0:23:35.840 --> 0:23:37.880 it into as many fuel as hands as possible, solve 0:23:37.960 --> 0:23:42.800 the distribution problem, and and kind of let that drive 0:23:42.840 --> 0:23:44.520 it and then let the shift fall where they may 0:23:44.560 --> 0:23:47.200 in terms of the actual financial outcome. I think it's 0:23:47.880 --> 0:23:51.600 not healthy to be thinking so much about, you know, 0:23:51.640 --> 0:23:54.439 how much money you're going to make, because that's not 0:23:54.520 --> 0:23:57.120 something that's going to fuel you on a daily basis when, 0:23:57.359 --> 0:24:00.679 especially when times get tough, you really want to have 0:24:00.880 --> 0:24:03.960 passion for the idea and the mission of the company 0:24:04.359 --> 0:24:06.639 and the product, and that's the thing that's going to 0:24:06.720 --> 0:24:10.240 motivate you on a daily basis. So you sell uh 0:24:10.400 --> 0:24:14.440 yammer for over a billion dollars basically four years after 0:24:14.520 --> 0:24:19.280 its founding. Microsoft buys it. And then I'm kind of 0:24:19.320 --> 0:24:23.040 fascinated by your move into venture capital. But before we 0:24:23.080 --> 0:24:26.760 talk about that, are you noticing along the line you 0:24:26.800 --> 0:24:29.919 get to Silicon Valley in ninety nine, you're right there 0:24:29.960 --> 0:24:33.800 at the heartbeat of this culture. Zuckerberg is gonna move 0:24:33.840 --> 0:24:37.440 Facebook out there, uh, and it continues to grow and 0:24:37.520 --> 0:24:41.399 become an incredible incubator of so many different ideas. Is 0:24:41.440 --> 0:24:45.119 the culture substantially evolving as you see it? Do you 0:24:45.200 --> 0:24:47.840 like the evolution that you're seeing in Silicon Valley? Do 0:24:47.880 --> 0:24:52.159 you dislike it? Well, the culture Silicon Valley is always 0:24:52.160 --> 0:24:55.760 a really important contributor to the sasum of all the 0:24:55.760 --> 0:24:59.399 companies that were there historically. And so you know, I 0:24:59.440 --> 0:25:03.359 really sell when when I moved back to Silicon Valley 0:25:03.600 --> 0:25:07.439 back to PayPal, it really felt like the center of 0:25:07.440 --> 0:25:09.920 the universe. You would drive along the one on one 0:25:09.960 --> 0:25:13.640 freeway and you would see all these office buildings, these shiny, 0:25:13.840 --> 0:25:17.600 gleaming new office buildings that had just been constructed in 0:25:17.600 --> 0:25:19.399 the last couple of years, and they all had the 0:25:19.440 --> 0:25:23.600 logos of companies that didn't exist a few years before. 0:25:24.040 --> 0:25:27.000 And it really felt like something magical was happening where 0:25:27.040 --> 0:25:31.440 you could build these incredible companies so quickly, and there 0:25:31.480 --> 0:25:33.440 was nowhere else in the world you could really do that. 0:25:33.480 --> 0:25:36.639 There was, you know, there was nowhere else where you 0:25:36.680 --> 0:25:38.880 could find the money to do it, where you get 0:25:38.960 --> 0:25:42.560 vcs to write you these checks so quickly, you know, 0:25:42.680 --> 0:25:44.960 without spending months thinking about it. They could do it 0:25:44.960 --> 0:25:47.479 in days or weeks, and you could find the talent 0:25:47.560 --> 0:25:49.879 that you needed to build these companies. So it was 0:25:49.920 --> 0:25:54.200 really a magical place. And what happened between say two 0:25:54.240 --> 0:25:59.840 thousand and over that twenty year period is that looking 0:26:00.320 --> 0:26:03.119 just kind of getting it got bigger and bigger. If 0:26:03.160 --> 0:26:06.040 you go back to the ninety nineties, it was sort 0:26:06.080 --> 0:26:10.320 of clustered around Palo Alto, but you know, it got 0:26:10.359 --> 0:26:12.840 it kept growing to the point where it included San 0:26:12.840 --> 0:26:16.320 Francisco and the East Bay, and then it went south 0:26:16.359 --> 0:26:20.919 to San Jose, and so Silicon Valley really became Silicon Bay, 0:26:20.960 --> 0:26:23.479 and it kept getting bigger and bigger, and it created 0:26:23.520 --> 0:26:25.800 this sort of bounty of riches for the city of 0:26:25.800 --> 0:26:29.600 San Francisco, even though the city itself had really done 0:26:29.640 --> 0:26:33.360 nothing to encourage Silicon Valley, and in fact, I had 0:26:33.400 --> 0:26:36.720 a lot of policies and politicians who were hostile to 0:26:36.840 --> 0:26:41.680 the tech industry. It you know, made San Francisco this 0:26:42.040 --> 0:26:45.640 beneficiary of these incredible riches. And we can talk more 0:26:45.640 --> 0:26:48.760 about that. But then what happened, I think during COVID, 0:26:48.840 --> 0:26:50.960 and this is really new, this is the last couple 0:26:50.960 --> 0:26:54.399 of years, is that because of COVID, and you know, 0:26:54.480 --> 0:26:58.280 that started this whole era of remote work and distributed work. 0:26:58.640 --> 0:27:00.760 People started doing their jobs from home and then they 0:27:00.760 --> 0:27:03.199 realized that they could do these jobs from anywhere. And 0:27:03.240 --> 0:27:05.040 so this whole tech industry of the last couple of 0:27:05.119 --> 0:27:08.480 years has decentralized a lot, and you started to see 0:27:08.560 --> 0:27:14.600 the rise of tech hubs in places like Austin and Miami. Um, 0:27:14.640 --> 0:27:17.520 you know, New York City has gotten strong. L A 0:27:17.600 --> 0:27:21.359 and Seattle were already somewhat strong. But you're seeing now 0:27:21.760 --> 0:27:26.680 tech emerge everywhere and it's not just Silicon Valley anymore. 0:27:26.680 --> 0:27:29.320 And I'd say maybe fifty of the companies we invest 0:27:29.359 --> 0:27:32.879 in today are still in Silicon Valley or the Bay Area, 0:27:33.200 --> 0:27:36.879 but the other fift are increasingly in a distributed number 0:27:36.920 --> 0:27:39.320 of locations. And I think it's really good for the 0:27:39.359 --> 0:27:43.200 country actually, that this wealth and prosperity that's being created 0:27:43.200 --> 0:27:45.399 by the new economy is not just going to be 0:27:45.480 --> 0:27:47.000 in the Bay Area, but that's going to be all 0:27:47.040 --> 0:27:49.640 over the United States. Yeah, I'll give you By the way, 0:27:49.640 --> 0:27:52.040 we're talking to David sachs Uh, this is wins and Losses. 0:27:52.040 --> 0:27:54.639 I'm Clay Travis. I'll give you an example of that, David. 0:27:54.680 --> 0:27:56.520 I spent a lot of time going out to l 0:27:56.600 --> 0:28:00.600 a UM obviously because Fox was based there for Fox Sports, 0:28:00.640 --> 0:28:03.120 and spent months and months out there, and I would 0:28:03.119 --> 0:28:05.919 go around and look at everybody's houses in l a 0:28:06.600 --> 0:28:08.359 and then I, you know, you see how much they cost. 0:28:08.960 --> 0:28:11.880 And then I'd come back to the Nashville area and 0:28:12.040 --> 0:28:14.520 I would be like, you know, my house that that 0:28:14.560 --> 0:28:18.720 we initially bought here, uh, would cost millions and millions 0:28:18.720 --> 0:28:21.600 of dollars in l a and it was a fraction 0:28:21.600 --> 0:28:24.440 of that in Nashville, right. Um, And what I've seen 0:28:24.480 --> 0:28:27.199 with COVID is it accelerated things to such an extent 0:28:27.560 --> 0:28:30.919 that now there's not as big of a difference. You know, 0:28:30.960 --> 0:28:33.280 a lot of people are cashing out in California, in 0:28:33.320 --> 0:28:36.440 New York, in the Chicago area and moving to where 0:28:36.480 --> 0:28:39.800 I live in the Nashville area. And the prices have 0:28:39.960 --> 0:28:43.720 skyrocketed in Nashville. And I think that's because the top 0:28:43.720 --> 0:28:47.320 ten percent of income earners, to your point, have realized 0:28:47.360 --> 0:28:49.920 that they can basically live anywhere in the United States 0:28:49.920 --> 0:28:53.720 and do their same job, and absent COVID, many of 0:28:53.760 --> 0:28:56.040 them would not have risk that, right. You would never 0:28:56.080 --> 0:28:58.880 have said, oh, okay, I'm gonna go ahead and relocate 0:28:58.920 --> 0:29:01.240 and do my job that I had been doing in California, 0:29:01.320 --> 0:29:03.840 in Nashville or in Austin or a place like that. 0:29:04.320 --> 0:29:07.120 And uh. And certainly people who are running hedge funds 0:29:07.120 --> 0:29:09.520 in New York are finally saying, screw it, I'm not 0:29:09.520 --> 0:29:12.080 gonna pay you know, fifteen percent state income tax and 0:29:12.120 --> 0:29:14.280 I can go to Florida pay nothing, being better weather, 0:29:14.520 --> 0:29:16.960 get a bigger place. But it seems like in many 0:29:17.120 --> 0:29:22.080 of these areas that lack of similarity in housing prices 0:29:22.120 --> 0:29:24.520 has vanished, right, Um, And I think it's reflective of 0:29:24.560 --> 0:29:27.080 what you're saying, which is people with high level talent 0:29:27.160 --> 0:29:30.800 and frankly high level incomes being more evenly distributed across 0:29:30.800 --> 0:29:33.120 the country than they might have been in the earth 0:29:33.160 --> 0:29:36.840 in the late nineties and the early two thousand's for sure. Yeah, 0:29:36.880 --> 0:29:38.600 I think I think that's right, and I think it's 0:29:38.600 --> 0:29:41.360 all been enabled by this cultural shift that we don't 0:29:41.400 --> 0:29:44.280 all have to meet in person almost all of my 0:29:44.320 --> 0:29:47.360 meetings these days or by zoom. Yeah, you know, the 0:29:47.360 --> 0:29:50.600 factors that I invest in, they are fine with meeting 0:29:50.760 --> 0:29:53.840 by zoom and in fact, they like it better. It 0:29:53.920 --> 0:29:56.600 saves everyone, you know, a bunch of drive time and 0:29:56.800 --> 0:29:59.760 I can be wherever I am and um, and they 0:29:59.760 --> 0:30:02.080 can be in a different city. So everything kind of 0:30:02.080 --> 0:30:05.280 moved to zoom in in the VC industry. I'm not 0:30:05.280 --> 0:30:07.480 sure that's totally true. If you're if you're trying to 0:30:07.480 --> 0:30:09.640 build a company, I think there is some value in 0:30:09.960 --> 0:30:12.960 having people under the same roof working together, but certainly 0:30:13.000 --> 0:30:16.720 for a VC everything's moved to zoom And so if 0:30:17.240 --> 0:30:19.959 that's the case, if if you're somebody who who's kind 0:30:19.960 --> 0:30:22.840 of a knowledge work and do your job remotely from anywhere. 0:30:23.160 --> 0:30:25.400 Now you're kind of freed up to live anywhere you want. 0:30:25.440 --> 0:30:27.360 You don't have to just live in the in the 0:30:27.560 --> 0:30:31.360 in your sort of industry town and um and so yeah, 0:30:31.360 --> 0:30:33.720 there's been a lot more decentralization. I mean, it used 0:30:33.720 --> 0:30:36.000 to be that if you wanted to do tech in 0:30:36.040 --> 0:30:37.960 a serious way, you have to go to the Bay Area. 0:30:38.120 --> 0:30:41.560 If you wanted to do entertainment in a serious way, 0:30:41.600 --> 0:30:44.120 you have to go to l A or finance was 0:30:44.160 --> 0:30:46.680 in New York, um, and so on down the line. 0:30:47.000 --> 0:30:49.959 But now people are liberated. And so I think cities 0:30:50.480 --> 0:30:54.959 are starting to realize that they're competing for knowledge workers. Um, 0:30:55.000 --> 0:30:57.360 you know, not just companies anymore. You know, cities used 0:30:57.440 --> 0:31:00.440 to compete to get the company headquarters is to move 0:31:00.480 --> 0:31:03.040 to their city. Now they're kind of competing for individual 0:31:03.080 --> 0:31:06.520 knowledge workers to make that decision. And the low tax 0:31:06.560 --> 0:31:09.960 states or no tax states like Florida and Texas um 0:31:10.120 --> 0:31:13.719 are just seeing you know, there are incredible beneficiaries of that. 0:31:14.200 --> 0:31:16.600 And if you look at the migration stats across the 0:31:16.680 --> 0:31:19.480 United States, all the states that are growing right now 0:31:19.640 --> 0:31:23.640 are basically the zero tax or low tax states and 0:31:23.680 --> 0:31:26.680 the states that are seeing the biggest outflows, or California, 0:31:26.760 --> 0:31:29.840 New York and the other states that have very high taxes. 0:31:29.960 --> 0:31:33.640 So it's it's a it's a really big change. We're 0:31:33.640 --> 0:31:36.240 talking to David Sachs. All right, so you now do 0:31:36.400 --> 0:31:39.719 venture capital. I'm not an expert at venture campit capital 0:31:39.720 --> 0:31:41.480 at all. I know just enough to be good enough 0:31:41.520 --> 0:31:43.280 at content that I can build a business and be 0:31:43.320 --> 0:31:45.440 able to sell it, but I wouldn't be great at 0:31:45.520 --> 0:31:50.120 spreadsheets or anything like that. Um, what percentage of companies 0:31:50.160 --> 0:31:54.080 that you look at do you end up investing in? Uh, 0:31:54.480 --> 0:31:57.400 by the time they go through their fundraising rounds, Like 0:31:57.440 --> 0:32:00.360 what kind of hit rate would have fund like yours have? 0:32:00.600 --> 0:32:03.080 In terms of the personage of companies that you're investing in, 0:32:04.560 --> 0:32:08.840 I mean, if you probably one in a thousands. But yeah, 0:32:08.960 --> 0:32:11.120 but I mean obviously that's not me. I can't take 0:32:11.480 --> 0:32:14.360 a thousand meetings without doing crazy. So we have a 0:32:15.160 --> 0:32:17.720 we have a team, you know, close to forty people 0:32:17.760 --> 0:32:22.000 now and between all of them, they look at thousands 0:32:22.040 --> 0:32:26.480 of companies every year for us to make you know, um, 0:32:26.920 --> 0:32:29.960 one to two dozen investments at various stages. So it 0:32:30.040 --> 0:32:32.120 might be a little better hit rate than that. It 0:32:32.200 --> 0:32:35.920 might be more like one something like that. But that 0:32:36.000 --> 0:32:38.640 doesn't mean that every company we go deep on, right. 0:32:38.680 --> 0:32:41.239 It might mean that we take a meeting, or it 0:32:41.320 --> 0:32:44.440 might just be that they send us their information. But 0:32:44.520 --> 0:32:46.880 our top of funnel, when we measure it is is 0:32:46.920 --> 0:32:51.600 thousands of companies. Um, what is your biggest hit? What 0:32:51.760 --> 0:32:53.720 is the company that you invested in as a venture 0:32:53.760 --> 0:32:56.360 capital investor? And it has been an absolute home run 0:32:58.080 --> 0:33:01.200 well before. So I started Craft in two thousand seventeen, 0:33:01.200 --> 0:33:04.560 about five years ago to institute size and professionalize what 0:33:04.600 --> 0:33:06.880 I was doing. But I've been investing, you know, pretty 0:33:06.960 --> 0:33:10.040 much since you know, after we sold PayPal in two 0:33:10.080 --> 0:33:14.040 thousand two. Probably the biggest hit to day would be 0:33:14.360 --> 0:33:19.120 investing in Facebook back in She's Camember exactly what year 0:33:19.160 --> 0:33:20.479 it was, and it was like two five or two 0:33:20.480 --> 0:33:22.480 thousand and six that you know, what kind of valuation 0:33:22.480 --> 0:33:25.800 would Facebook have had at the time that you invested. Well, 0:33:25.840 --> 0:33:28.200 I invested in a in the growth round, So I 0:33:28.240 --> 0:33:31.560 wasn't as early as Peter Peter invested like at a 0:33:31.600 --> 0:33:34.200 five million dollar valuation. I think by the time I invested, 0:33:34.200 --> 0:33:36.560 it was sort of at a at a five million 0:33:36.560 --> 0:33:39.960 million dollar valuation or something like that UM and then 0:33:39.960 --> 0:33:43.200 it went public at fifty fifty billion dollar valuation. Today 0:33:43.200 --> 0:33:46.680 it's about five billion. You know, there were some other 0:33:46.680 --> 0:33:50.479 ones too. I mean I invested in UM, Valanteer, invest 0:33:50.520 --> 0:33:56.840 in Airbnb, slack Um, SpaceX you know Elon's company, which 0:33:56.880 --> 0:34:00.960 has done phenomenally. Would you invest in Tesla? You know, 0:34:01.760 --> 0:34:03.600 I don't know how I missed that, but I bought 0:34:03.600 --> 0:34:05.880 one of the original tests by the non investment company, 0:34:05.880 --> 0:34:08.000 and that was did you look at the Tesla? I'm 0:34:08.000 --> 0:34:09.719 just kind of curious. Did you look at any of 0:34:09.719 --> 0:34:12.520 the VC money when they raised and say, hey, I'm 0:34:12.560 --> 0:34:15.120 consciously not going to make that choice, Like, yeah, I'm 0:34:15.160 --> 0:34:17.319 just kind of curious. You liked the car uh and 0:34:17.400 --> 0:34:20.120 obviously your friends with Elen. I'm just sure curious how 0:34:20.200 --> 0:34:23.120 you didn't end up in there. Well I didn't. I 0:34:23.120 --> 0:34:25.680 didn't look at it. I wasn't a professional VC or anything, 0:34:25.719 --> 0:34:27.480 so I didn't look at it. You know, he never 0:34:27.520 --> 0:34:30.160 presented it to me. He certainly could have called him 0:34:30.200 --> 0:34:32.000 up and said hey, could I invest? I actually did 0:34:32.000 --> 0:34:35.080 that with SpaceX UM. I emailed him and said, you know, hey, 0:34:35.080 --> 0:34:38.000 can I invest? Me? Said sure, so I invested personally, 0:34:38.000 --> 0:34:41.080 and then we invested as a VC later. Um. You know, 0:34:41.120 --> 0:34:42.560 I don't know why I didn't occurred to me. I 0:34:42.560 --> 0:34:45.160 just I guess I just thought that the idea of 0:34:45.200 --> 0:34:49.320 a new car company was so far outside the realm 0:34:49.680 --> 0:34:53.279 of what I thought I knew about investing, you know, 0:34:53.360 --> 0:34:57.320 because all the other investment selves making were software investments 0:34:57.600 --> 0:35:01.400 or tech investment. And I guess what i'd realize is 0:35:01.400 --> 0:35:05.360 that was basically creating an iPad on wheels, and I 0:35:05.360 --> 0:35:07.000 should have just seen it as a car company. I 0:35:07.000 --> 0:35:10.040 should have really seen it as like a fundamental tech innovation. 0:35:10.760 --> 0:35:13.120 And so I guess we has to have the innovation, 0:35:13.120 --> 0:35:16.719 the imagination to see what a radical innovation it would be. 0:35:17.400 --> 0:35:21.160 And I'm curious. So those are a lot of hits, obviously, Tesla, 0:35:21.200 --> 0:35:24.719 maybe not a not a hit. What's the worst decision 0:35:24.760 --> 0:35:27.680 you've made in terms of not investing or investing in 0:35:27.719 --> 0:35:29.959 your like? So I'll give you an example, small level. 0:35:30.520 --> 0:35:32.440 I don't even know if you know this. I decided 0:35:32.920 --> 0:35:36.799 that I would get into the pants business early on 0:35:36.840 --> 0:35:39.160 when I launched out Kick, and the idea I think 0:35:39.280 --> 0:35:41.719 was the right one, which was I don't want to 0:35:41.800 --> 0:35:47.280 be uh reliant upon advertising dollars to monetize my business. 0:35:47.400 --> 0:35:50.399 I would rather my content business. I would rather own 0:35:50.560 --> 0:35:54.160 businesses that I could advertise against instead of having to 0:35:54.200 --> 0:35:57.319 go out hat in hand always selling ad dollars, right, 0:35:57.719 --> 0:36:01.319 and so find things that over lap with, uh, the 0:36:01.400 --> 0:36:04.200 audience that I'm already reaching from a content perspective, things 0:36:04.200 --> 0:36:06.440 that they would want to buy. And you know, at 0:36:06.480 --> 0:36:08.680 some point when you're staring trying to tell the difference 0:36:08.719 --> 0:36:11.880 between you know, one pantone color and another one, like 0:36:11.920 --> 0:36:15.200 the difference between auburn orange and Tennessee orange for somebody 0:36:15.400 --> 0:36:18.280 frankly who maybe a little bit color blind and also 0:36:18.400 --> 0:36:21.880 certainly is not is not fashion savvy, uh, you know, 0:36:22.040 --> 0:36:24.560 and and shipping them in and tie dying and the 0:36:24.600 --> 0:36:27.839 sizing and pants are really actually a complicated business. So 0:36:27.920 --> 0:36:30.960 I lost like fifty thou dollars pretty fast in pants, 0:36:31.000 --> 0:36:32.640 and I was like, this is such a stupid idea. 0:36:32.719 --> 0:36:35.040 You know, you see athletes who go broke, and you know, 0:36:35.040 --> 0:36:37.000 if they did a documentary on me, wo'd be like 0:36:37.239 --> 0:36:40.040 Clay Travis decided going to the pants business. He lost money. 0:36:40.280 --> 0:36:43.520 Was there anything you got into on a bad perspective 0:36:43.680 --> 0:36:45.120 or you were like, this is just such a stupid 0:36:45.120 --> 0:36:47.719 business that I ended up getting involved in and or 0:36:47.760 --> 0:36:50.840 something that you looked at, looked at heavily, then passed 0:36:50.840 --> 0:36:54.880 on and it ended up being wildly successful. Yeah, I 0:36:54.880 --> 0:36:57.560 mean there's definitely things that I've invested in that haven't worked. 0:36:57.640 --> 0:37:00.759 I mean, this is this is absolutely a bad average game. 0:37:00.800 --> 0:37:03.799 And nobody that's you know, a thousand what's a good 0:37:03.840 --> 0:37:05.920 what's a good batting average? In the VC business? Like, 0:37:05.960 --> 0:37:08.560 what are you shooting for? I know, your returns overall, 0:37:08.880 --> 0:37:11.400 but what kind of hit rate should you have if 0:37:11.400 --> 0:37:15.319 you're doing a good job in VC investing, Well, it's 0:37:15.360 --> 0:37:18.080 probably like baseball and if you're batting three something, you're 0:37:18.120 --> 0:37:22.240 like Hall of Fame r um. Yeah, I mean really, 0:37:22.440 --> 0:37:25.040 although it's not just um, I mean, you'll appreciate this. 0:37:25.200 --> 0:37:28.560 It's not just batting average. It's also slugging. Slugging because 0:37:28.560 --> 0:37:30.719 you can hit you can hit like a thousand home 0:37:30.800 --> 0:37:33.279 runs on one swing, right, as opposed to just being 0:37:33.320 --> 0:37:36.000 able to maximize, you know, one run. You can get 0:37:36.040 --> 0:37:39.560 a thousand runs on a swing exactly. And and that's 0:37:39.719 --> 0:37:43.839 and that's really what that's one of the biggest um 0:37:44.000 --> 0:37:46.759 things about the VC business that's kind of nonintuitive to 0:37:46.840 --> 0:37:50.120 people is that it's not about how many losers that 0:37:50.239 --> 0:37:54.239 you have. It's about the magnitude of your winners. And sometimes, 0:37:54.280 --> 0:37:56.960 you know, you can be wrong about everything, but that 0:37:57.200 --> 0:38:00.400 one decision you were right about ends up with turning 0:38:00.680 --> 0:38:03.960 you know, ten times your funds. So, um, that tends 0:38:04.000 --> 0:38:05.480 to be that if you look at kind of the 0:38:05.560 --> 0:38:09.680 great VC funds, it's not about how often they were right, 0:38:09.719 --> 0:38:14.319 it's about the magnitude of their winners. And UM, so yeah, 0:38:14.400 --> 0:38:16.040 but I mean I think we've had a pretty good 0:38:16.080 --> 0:38:19.240 batting average. You know, I've been in about twenty five 0:38:19.600 --> 0:38:23.880 unicorn companies. Um. You know, we defined unicorns companies that 0:38:24.000 --> 0:38:29.640 end up being worth a billion dollars or more. And um, 0:38:29.680 --> 0:38:31.880 you know that the most recent one for us was 0:38:31.880 --> 0:38:35.400 was crypto. Um we you know, we made some crypto 0:38:35.440 --> 0:38:39.200 investments back in two thousand, seventeen, two eight, and they 0:38:39.360 --> 0:38:42.399 returned our first fund. So you know that was sort 0:38:42.440 --> 0:38:45.719 of like a forty or fifty x investment in five 0:38:45.800 --> 0:38:48.960 years based on making you know, based on investing in crypto. 0:38:49.840 --> 0:38:53.680 I think you also invested in a movie, right, Um, 0:38:53.840 --> 0:38:55.680 thank you for smoking am I right about this? How 0:38:55.680 --> 0:38:59.320 did that happen? Uh? And and have you gotten involved 0:38:59.440 --> 0:39:03.439 in other creative endeavors, which are certainly different than trying 0:39:03.440 --> 0:39:07.319 to analyze software companies or tech related funds. Yeah. Yeah, 0:39:07.320 --> 0:39:09.319 I guess that you're If you're looking for me to 0:39:09.400 --> 0:39:13.320 identify a bad investment, I'd say anything in the movie industry. Now. Actually, 0:39:13.360 --> 0:39:16.120 we didn't lose money on Thinking for Smoking. We actually 0:39:16.640 --> 0:39:18.640 did fine. It ended up being one of the big 0:39:18.719 --> 0:39:22.800 hits of I think two thousand five, two thousand six. Um, 0:39:22.840 --> 0:39:26.040 this is an independent movie. I financed it along with 0:39:26.080 --> 0:39:29.239 a few friends. Peter and e la On all contributed 0:39:29.280 --> 0:39:31.840 and they were executive producers. This was a script I 0:39:31.880 --> 0:39:35.040 found that was written by Jason Weightman, who ended up 0:39:35.040 --> 0:39:38.319 directing the movie, based on a book by Christopher Buckley. 0:39:38.360 --> 0:39:42.120 And um, I just thought it was a fantastic So, yeah, 0:39:42.160 --> 0:39:43.960 this is this is amazing to me, Like, so, how 0:39:43.960 --> 0:39:47.200 do you find a script? Right? Like? So, uh, you 0:39:47.239 --> 0:39:50.120 are thinking, after you've made some money in PayPal, hey, 0:39:50.160 --> 0:39:52.680 I like movie. Certainly at Stanford you've talked about the 0:39:52.680 --> 0:39:56.239 culture of political correctness and whatnot. Were you thinking, hey, 0:39:56.280 --> 0:40:00.399 maybe I'll get involved in the entertainment industry in some way. Yeah, 0:40:00.480 --> 0:40:02.640 I mean it was just sort of an unfuneral venture 0:40:02.719 --> 0:40:05.320 for me where I decided to create a movie production 0:40:05.360 --> 0:40:08.040 company and it was like a startup, you know, We're like, 0:40:08.120 --> 0:40:10.680 let's let's see, let's understand what it takes to make 0:40:10.680 --> 0:40:13.200 a movie. Let's try and make a better one. And 0:40:13.239 --> 0:40:16.239 we went out looking at projects and we probably looked 0:40:16.280 --> 0:40:19.799 at a thousand scripts, and I thought that Jason had 0:40:19.800 --> 0:40:23.040 written the best one I had seen, and someone had 0:40:23.080 --> 0:40:25.120 given it to me as a writing sample for him actually, 0:40:25.680 --> 0:40:27.360 and the question I asked was, wait, why is the 0:40:27.360 --> 0:40:29.279 writing sample? Why why don't we just make this? And 0:40:29.600 --> 0:40:33.239 the reason why is because the lights have been fragmented. 0:40:33.640 --> 0:40:38.720 Warner Brothers owned the book and Jason script was actually 0:40:38.719 --> 0:40:42.160 owned by Milk Gibson's company Icon, And anyway, we spent 0:40:42.280 --> 0:40:44.880 something like two years trying to unravel the right situation 0:40:44.920 --> 0:40:47.719 and acquire all the rights, and we finally did that. 0:40:47.920 --> 0:40:50.000 Then we could make it as an intendent movie, and 0:40:50.040 --> 0:40:52.440 we did that, and we took it to the Frounto 0:40:52.480 --> 0:40:55.920 Film Festival and Sun Dance and ended up being a 0:40:55.920 --> 0:40:58.880 pretty big hit um in terms, you know, as a 0:40:58.960 --> 0:41:01.359 hit creatively want a lot of awards, and it did 0:41:01.360 --> 0:41:06.000 something like the box office on an eight million dollar budget, 0:41:06.160 --> 0:41:07.840 and you know, it's one of these kind of cult 0:41:07.880 --> 0:41:13.359 movies that's and it launched Jason Reitman's career. He's ended 0:41:13.440 --> 0:41:17.920 up becoming a very very big director in Hollywood. The 0:41:17.960 --> 0:41:19.759 you know, my takeaway from it though, is in terms 0:41:19.800 --> 0:41:23.200 of business is that you know, we did a little better, 0:41:23.280 --> 0:41:25.759 but not much than just get our money back. And 0:41:25.800 --> 0:41:27.719 so it made a lot of money, but it mainly 0:41:27.760 --> 0:41:31.680 made money for Fox, uh, you know, the Fox Searchlight 0:41:31.719 --> 0:41:34.719 movie studio. And that kind of taught me a lot 0:41:34.760 --> 0:41:38.360 about the movie business, which is is controlled by gatekeepers. 0:41:38.440 --> 0:41:41.879 There's a handful of studios and they really make all 0:41:41.920 --> 0:41:45.560 the money. And you know, we as this sort of entrepreneur, 0:41:45.640 --> 0:41:48.399 as the producer who took all the risk, this is 0:41:48.440 --> 0:41:53.000 not really a reward for that risk, and um, you know, 0:41:53.120 --> 0:41:57.399 very it's very different than the internet business, where you're 0:41:57.400 --> 0:41:59.879 taking you're taking a similar kind of risk, very hard 0:42:00.120 --> 0:42:02.920 execute you know, a huge chance of failure, but at 0:42:02.960 --> 0:42:06.439 least when you hit it, there's a giant reward there. 0:42:06.680 --> 0:42:09.480 And so that was a big lesson for me. And 0:42:09.680 --> 0:42:11.480 on the heels of things for smoking, that's what I 0:42:11.480 --> 0:42:14.959 actually created yammer is. I was like, well, look I'm 0:42:14.960 --> 0:42:17.440 gonna do something super risky. At least I want to 0:42:17.480 --> 0:42:19.759 be in a position to get rewarded for it if 0:42:19.800 --> 0:42:23.160 it works. Fox Sports Radio has the best sports talk 0:42:23.200 --> 0:42:25.920 lineup in the nation. Catch all of our shows at 0:42:25.960 --> 0:42:29.279 Fox sports Radio dot com and within the I Heart 0:42:29.400 --> 0:42:32.680 Radio app. Search f s R to listen live. So 0:42:33.280 --> 0:42:36.120 let's talk big picture. Now, you've been in Silicon Valley 0:42:36.160 --> 0:42:37.680 for a long time. And by the way, that's fascinating. 0:42:37.680 --> 0:42:39.800 Do you think you'll ever fund any other movies? Maybe 0:42:39.800 --> 0:42:42.680 because you're just so committed to the idea that it's 0:42:42.680 --> 0:42:45.600 getting out there, um, as opposed to the you know, 0:42:45.719 --> 0:42:50.279 remunerative return that you might be able to recoup. Yes, 0:42:50.400 --> 0:42:51.560 And I think that's the way you have to look 0:42:51.560 --> 0:42:53.960 at it. I actually have another movie that's um in 0:42:54.000 --> 0:42:56.960 the can, so to speak. Um. It's called dolly Land. 0:42:57.040 --> 0:43:00.920 It's a movie about the painter salvad Or Dolly Ben Kingsley, 0:43:01.080 --> 0:43:05.200 you know, the multi Academy Award winner plays Dolly. It's 0:43:05.239 --> 0:43:07.399 directed by a great director named Mary Here and it's 0:43:07.440 --> 0:43:11.359 actually done. We made it as an independent movie over 0:43:11.400 --> 0:43:14.440 the past year and we're taking it too film festivals 0:43:14.520 --> 0:43:18.360 later this year. And I think we've been accepted to 0:43:18.719 --> 0:43:21.160 Toronto Film Festival, and there's a couple others we're looking at. 0:43:21.680 --> 0:43:24.080 So it's exciting. I mean, we're gonna take to the 0:43:24.080 --> 0:43:28.040 Film Festival and try to sell it and see what happens. Um, 0:43:28.080 --> 0:43:31.400 you know, I hope it makes money. But you know, 0:43:31.480 --> 0:43:33.719 I've I've gotten used to the idea that, you know, 0:43:33.760 --> 0:43:35.640 it's very, very hard to make money in the movie business. 0:43:35.680 --> 0:43:37.680 It's not why I do it. I do it because 0:43:37.840 --> 0:43:40.799 I love movies and I like the subject matter, and um, 0:43:40.840 --> 0:43:44.200 it's a passion project for everyone who's involved. So so yeah, 0:43:44.239 --> 0:43:47.120 I you know, I'm still sort of interest in the 0:43:47.160 --> 0:43:49.560 movie business and do it. But it's you obvious see 0:43:49.560 --> 0:43:51.440 it as a hobby or you're going to be disappointed. 0:43:51.480 --> 0:43:55.360 I think our actors harder to manage than other employees. 0:43:57.320 --> 0:44:00.560 It's case by case. Um, most of them are very 0:44:00.560 --> 0:44:03.200 professional and are a delight to work with, and then 0:44:03.520 --> 0:44:06.279 you have a handful who are known as difficult. But 0:44:06.400 --> 0:44:09.440 to be honest, UM, the ones who are difficult, they 0:44:09.600 --> 0:44:11.640 don't last that long. I mean there's a kind of 0:44:11.680 --> 0:44:15.280 old uh saying in Hollywood is a life's too short list. 0:44:15.480 --> 0:44:17.640 And if you're an actor, you really don't want to 0:44:17.640 --> 0:44:21.920 get on the lots too short lists? Are you? We're 0:44:21.920 --> 0:44:25.279 talking to David David Sacks about wins and losses in 0:44:25.400 --> 0:44:28.640 his career across a variety of fields. All right, let's 0:44:28.640 --> 0:44:32.480 talk um, big picture here on tech. One reason I'm 0:44:32.520 --> 0:44:34.359 so excited to talk to you and I appreciate all 0:44:34.360 --> 0:44:37.719 the time you've given us, is for what I do, UM, 0:44:37.760 --> 0:44:40.319 and I testified in Congress about this, uh, in front 0:44:40.360 --> 0:44:44.080 of the House Judiciary Subcommittee. I can see the power 0:44:44.640 --> 0:44:47.879 of Facebook for what they can do. I can see 0:44:47.880 --> 0:44:50.680 the power of Twitter just for the content that we 0:44:50.760 --> 0:44:53.240 created OutKick. You know, I can go in and look 0:44:53.680 --> 0:44:57.360 at the charts and tell you basically, hey, the algorithm 0:44:57.440 --> 0:45:00.440 is favoring us today or this month. Hey, they decided 0:45:00.480 --> 0:45:02.920 they don't like what we're writing, and they are writing 0:45:03.040 --> 0:45:07.960 us off of the algorithm page UM. And it seems, 0:45:08.080 --> 0:45:11.640 based on my experience, that the bias always runs against 0:45:11.800 --> 0:45:14.920 us whenever we write something favorable. I'll give you an example. 0:45:15.560 --> 0:45:17.600 When we had Donald Trump on for the first time 0:45:17.640 --> 0:45:20.040 on my sports talk radio show. We wrote a bunch 0:45:20.040 --> 0:45:23.560 of articles about it at OutKick. Our traffic basically vanished 0:45:23.600 --> 0:45:27.279 on social media literally within a day. Or two of 0:45:27.360 --> 0:45:29.919 all of those articles, and it was Trump primarily talking 0:45:29.960 --> 0:45:33.200 about sports going up on OutKick. It was clear that 0:45:33.239 --> 0:45:35.680 we have been flagged in some way. Certainly the same 0:45:35.719 --> 0:45:37.719 thing has happened when we wrote about masks or we 0:45:37.760 --> 0:45:41.839 wrote about covid um. From a business perspective, not from 0:45:41.840 --> 0:45:46.359 a political perspective. Does that make sense that they would 0:45:46.400 --> 0:45:48.879 be behaving, these big tech companies, and I'm talking about 0:45:48.880 --> 0:45:53.480 OutKick specifically in a way that clearly is discriminatory in 0:45:53.600 --> 0:45:57.439 terms of the distribution of articles from sites like mine. 0:45:57.560 --> 0:45:59.440 Does that make sense to you from a not from 0:45:59.440 --> 0:46:02.520 a you know what's better for the country perspective? Does 0:46:02.520 --> 0:46:06.120 it make sense from a business perspective? No, I don't 0:46:06.160 --> 0:46:09.000 think so. I mean, I think they're doing it because 0:46:09.200 --> 0:46:14.080 for ideological reasons. And um, now what I think what 0:46:14.200 --> 0:46:17.840 happens is they start with a business rationale that seems 0:46:17.840 --> 0:46:21.319 to make sense. So for example, they will let's say 0:46:21.320 --> 0:46:25.279 you're a social media site, and uh, you start with 0:46:25.320 --> 0:46:28.160 the content moderation department, because there's a certain kinds of 0:46:28.200 --> 0:46:30.640 content that just shouldn't beyond there. I mean, people threatening 0:46:30.760 --> 0:46:36.719 violence or you know, harassing other users, or using profanity 0:46:36.800 --> 0:46:39.040 or obscenity, and they don't want that to be part 0:46:39.040 --> 0:46:41.360 of their social networks. So they create a content moderation 0:46:41.440 --> 0:46:44.600 team to basically take down that stuff, and you know, 0:46:45.400 --> 0:46:47.279 no one really has a problem with that. But then 0:46:47.320 --> 0:46:49.560 the problem is that the people actually doing the content 0:46:49.600 --> 0:46:54.720 moderation have an ideological bias and they start indulging that bias. 0:46:54.880 --> 0:46:57.400 And the fact the matter is that if you're in 0:46:57.440 --> 0:47:01.920 Silicon Valley, you know, the for failing orthodoxy is everyone 0:47:02.000 --> 0:47:05.279 kind of drinks from the same monocultural sound. They all 0:47:05.320 --> 0:47:08.320 have the same political views. This stuff has been pulled 0:47:08.360 --> 0:47:12.279 many times and you can sit and so half the 0:47:12.320 --> 0:47:15.960 time ton't even realize what they're doing when they indulge 0:47:16.000 --> 0:47:18.720 in in this bias. But yeah, the bias absolutely creeps 0:47:18.760 --> 0:47:22.600 in and then it starts to become official policy. Um. 0:47:22.640 --> 0:47:25.360 I think something similar has happened that at Google, where 0:47:26.080 --> 0:47:29.480 you know, you've got the search algorithm, and the search 0:47:29.520 --> 0:47:32.720 algorithm might produce some results that seem offensive to people, 0:47:32.840 --> 0:47:36.680 so they introduce, you know, what they call human interventions. 0:47:37.160 --> 0:47:39.920 But then as soon as you allow humans the process, 0:47:39.960 --> 0:47:44.040 they carry with them their preconceived biases and they start 0:47:44.120 --> 0:47:47.600 indulging those biases, and the problem is that none of 0:47:47.680 --> 0:47:52.600 us have any transparency into those decisions. And I think 0:47:52.840 --> 0:47:55.759 we have a right to know when we're being down 0:47:55.880 --> 0:48:00.360 ranked or the algorithms sort of supporting our content we 0:48:00.400 --> 0:48:02.600 should ever right, or or we've been kicked off one 0:48:02.600 --> 0:48:06.120 of these networks. There's no explanation that comes with us, 0:48:06.160 --> 0:48:09.200 and I think we should have due process rights to 0:48:09.320 --> 0:48:13.759 at least know why, to know when and why we've 0:48:13.760 --> 0:48:17.200 been down ranked or downvoad or something like that. And 0:48:17.320 --> 0:48:20.120 is that the idea behind the idea of an open 0:48:20.200 --> 0:48:24.920 algorithm marketplace effectively so that we could go in and 0:48:24.920 --> 0:48:26.759 I'm just using out kick as an example, which is 0:48:26.760 --> 0:48:30.600 owned by Fox now. But when you're down ranked, if 0:48:30.680 --> 0:48:34.640 you are a business that is reliant on advertising, that 0:48:34.680 --> 0:48:36.920 can take money directly out of your pocket, and the 0:48:37.040 --> 0:48:40.359 lesson that they are instructing to business owners is you 0:48:40.440 --> 0:48:43.120 play games and share content that we want to be 0:48:43.239 --> 0:48:46.200 shared or else. Right, there's an implicit threat from a 0:48:46.239 --> 0:48:50.319 business perspective that is hanging over the algorithmic problems that 0:48:50.360 --> 0:48:54.000 can arise. What's a solution? Not necessarily again from a 0:48:54.000 --> 0:48:57.480 political perspective, but you just kind of kind of walked 0:48:57.520 --> 0:48:59.400 through us if you were just trying to be as 0:48:59.400 --> 0:49:02.320 open and trans parent as possible. Is it a public 0:49:02.320 --> 0:49:06.839 algorithm so that everybody could see what results are occurring? Well, 0:49:06.880 --> 0:49:09.320 this is what Elon has suggested with respect to Twitter, 0:49:09.360 --> 0:49:11.560 as he says that he wants to open source the algorithm. 0:49:11.840 --> 0:49:14.000 And so the idea is, yeah, you would be able 0:49:14.000 --> 0:49:17.080 to see how the algorithm works, and if there's a 0:49:17.160 --> 0:49:20.480 human intervention, you would know that. And so that does 0:49:20.560 --> 0:49:23.120 give you, well, first of all, it gives you an 0:49:23.160 --> 0:49:27.080 assurance that they're not putting their thumb on the scale 0:49:27.920 --> 0:49:32.279 and discriminating against certain people because of their their viewpoints. 0:49:33.040 --> 0:49:35.279 But also it would give you some due process to 0:49:35.400 --> 0:49:37.839 know that when there's an intervention against you, at least 0:49:37.840 --> 0:49:41.040 know what's happened. Um. So that that's that's why Elan 0:49:41.080 --> 0:49:45.360 has been pushing that idea of of open sourcing the algorithm. Um. 0:49:45.400 --> 0:49:47.399 I think it's a great idea. I mean, we need 0:49:47.440 --> 0:49:50.960 more transparency around the decision these big tech companies are 0:49:51.000 --> 0:49:54.319 making because frankly, they have enormous power. I mean, by 0:49:54.360 --> 0:49:57.720 and large, they are monopolies and they controlled the public square. 0:49:58.000 --> 0:50:01.000 The public square has been privatized. Um. You know when 0:50:01.000 --> 0:50:04.400 the founders at the trainers in the Constitution started the country, 0:50:05.320 --> 0:50:07.319 the town square was a place you would go to 0:50:07.760 --> 0:50:09.600 it like the courthouse steps, and you pull out of 0:50:09.600 --> 0:50:12.360 soapbox and could talk and people gather around to listen. 0:50:12.400 --> 0:50:15.040 That's what the town square meant today. The town square. 0:50:15.040 --> 0:50:17.320 All these giants social networks. I mean, that is where 0:50:17.600 --> 0:50:21.720 people assemble, that is where political speech occurs. And yet 0:50:22.000 --> 0:50:25.799 there are no limitations on their ability to you know, 0:50:25.880 --> 0:50:28.160 to d platform you or discriminate against you. And they 0:50:28.200 --> 0:50:31.319 don't even they're not even obligated to provide any transparency 0:50:31.360 --> 0:50:33.960 around that. And so I think we need more to 0:50:34.239 --> 0:50:40.320 process on these big monopolistic companies when they restrict our speech. 0:50:41.400 --> 0:50:43.440 I'll give you an example. By the way, Google News 0:50:43.520 --> 0:50:47.120 obviously drives a lot of traffic. Um No, people out 0:50:47.120 --> 0:50:50.080 there may not realize it, but Google News is wildly influential. 0:50:50.920 --> 0:50:53.839 When Fox bought out Kick, they went back through all 0:50:53.840 --> 0:50:56.360 these social media relationships and I've been saying for a 0:50:56.360 --> 0:50:59.280 long time, yeah, we're registered with Google News, but never 0:50:59.400 --> 0:51:02.239 our store. He's come up even stories where we might 0:51:02.320 --> 0:51:05.560 break news other people right will show up on the 0:51:05.560 --> 0:51:08.440 Google News alerts. We won't. Fox did a deep dive 0:51:08.600 --> 0:51:10.959 and they said, oh, you've been mischaracterized, and you hadn't 0:51:10.960 --> 0:51:14.320 been showing up in Google news for years. It's amazing 0:51:14.400 --> 0:51:18.520 how often the mischaracterization seems to only run one way, right, 0:51:18.600 --> 0:51:22.440 like uh, and and so I'm incredibly skeptical that at 0:51:22.480 --> 0:51:26.480 some point someone at Google wasn't it was you know, unhappy, 0:51:26.560 --> 0:51:29.040 and they just decided, Hey, I'm gonna move the OutKick 0:51:29.520 --> 0:51:32.920 algorithm you know, feeder or whatever over into this little 0:51:32.920 --> 0:51:35.799 box where it will kind of disappear. Um. And if 0:51:35.840 --> 0:51:39.319 you're a independent business, you don't have the resources or 0:51:39.360 --> 0:51:44.160 the relationships to even get things like that rectified. And uh. 0:51:44.200 --> 0:51:46.160 And that's why I think the idea that Ellen is 0:51:46.160 --> 0:51:50.120 trying to put in place could be so potentially influential, 0:51:50.480 --> 0:51:53.880 which is just, hey, we're gonna have content neutral policies 0:51:54.080 --> 0:51:56.359 and people will have optics on things. And and David, 0:51:56.360 --> 0:51:57.799 I don't know if you paid attention to it. I'm 0:51:57.800 --> 0:52:00.520 sure you did. But you know, the day that Ellen 0:52:00.560 --> 0:52:04.959 announces that he's reached acquisition terms, suddenly my Twitter feed 0:52:05.040 --> 0:52:07.960 comes alive and I'm adding tens of thousands of followers 0:52:08.040 --> 0:52:10.840 at a rapid rate. It's hard for me to believe 0:52:10.920 --> 0:52:13.640 that in some way Twitter is not trying to bury 0:52:13.680 --> 0:52:17.400 the evidence of what they've been doing. So when neutral 0:52:17.440 --> 0:52:20.120 engineers come back and start to look at the algorithms 0:52:20.120 --> 0:52:23.840 they have in place, there's not necessarily the same evidence 0:52:23.880 --> 0:52:26.080 that there would have been if somebody like Elon weren't 0:52:26.120 --> 0:52:30.040 acquiring the company. It's gonna be really interesting to see 0:52:30.120 --> 0:52:32.439 what happens if Elon is able to close this deal. 0:52:32.520 --> 0:52:34.160 I guess they're still still up in the air with 0:52:34.320 --> 0:52:36.520 us going to happen, but it'll be really interesting to 0:52:36.520 --> 0:52:40.320 see what comes out after he acquires the company because 0:52:40.440 --> 0:52:44.480 we just don't have any visibility into how they moderate 0:52:44.680 --> 0:52:49.000 content or upfold or down rank content, how the algorithm 0:52:49.000 --> 0:52:53.200 works with them. Again, the manual trending topics is wildly influential, 0:52:53.239 --> 0:52:55.680 and I think that's a total cesspool. By the way, 0:52:55.680 --> 0:52:58.360 for somebody who does what I do. Uh, they decide 0:52:58.400 --> 0:53:01.120 what trends, they decide how they are going to characterize 0:53:01.120 --> 0:53:05.200 what trends in a positive or negative fashion. Um, it's 0:53:05.320 --> 0:53:08.799 just such a rigged game. And do you think that one? 0:53:09.239 --> 0:53:12.440 See my theory is one unrigged game, right. So if 0:53:12.480 --> 0:53:16.160 Elon is able to acquire h Test, sorry, acquire Twitter, 0:53:16.920 --> 0:53:20.200 what I think would happen is if there are wildly 0:53:20.280 --> 0:53:23.759 divergent results that suddenly start to happen at Twitter, and 0:53:23.800 --> 0:53:25.920 we can see a discrepancy between what's going on on 0:53:25.920 --> 0:53:28.200 Twitter and what's going on on Facebook and what's going 0:53:28.200 --> 0:53:30.920 on on Instagram and all these different social media outlets, 0:53:31.600 --> 0:53:34.200 then it puts a lot of pressure on these other 0:53:34.320 --> 0:53:38.080 companies to also be honest and transparent about what they're doing. 0:53:38.320 --> 0:53:41.400 Is there a logic to that, based on your knowledge 0:53:41.440 --> 0:53:44.279 of how tech companies work, that that could occur, that 0:53:44.280 --> 0:53:48.840 that influence could become substantial. I think so, because Ellen, 0:53:49.080 --> 0:53:51.000 I mean, this is what's so important about what Elon 0:53:51.160 --> 0:53:53.200 is doing is that he's drawing a line in the 0:53:53.239 --> 0:53:56.360 sand here and he's opposing censorship, and he's also setting 0:53:56.360 --> 0:53:59.000 an example for all these other companies. One of the 0:53:59.640 --> 0:54:03.319 things about the censorship that's taken place that's so discouraging 0:54:03.440 --> 0:54:05.240 is the way that it all seems to be done 0:54:05.800 --> 0:54:09.359 in unison. So when Trump was sent off Twitter back 0:54:09.400 --> 0:54:11.920 in January, they all did it. Every site did it 0:54:12.320 --> 0:54:15.360 within days of that decision. So they all seem to 0:54:15.360 --> 0:54:18.160 be acting in concert, in lockstep. I've called it a 0:54:18.200 --> 0:54:21.240 speech cartel. If they were getting together for the purpose 0:54:21.320 --> 0:54:24.960 of fixing prices, let's say advertising prices, everybody would be 0:54:25.120 --> 0:54:27.040 up in arms saying that's illegal. But if they get 0:54:27.080 --> 0:54:30.359 together for the purpose of fixing speech and what you 0:54:30.400 --> 0:54:32.239 can't say or what you can't which, by the way, 0:54:32.320 --> 0:54:34.720 is so much more dangerous than from a from a 0:54:34.719 --> 0:54:39.719 democracy perspective than fixing advertising costs. Absolutely. I mean, look 0:54:39.800 --> 0:54:43.120 at the employees of these companies have enormous power over 0:54:43.400 --> 0:54:46.680 our public discourse and public debate. They were never elected 0:54:47.000 --> 0:54:50.239 to have that power. And back twenty years ago when 0:54:50.280 --> 0:54:53.040 I was doing Internet stuff, we never believe when we 0:54:53.040 --> 0:54:55.560 were creating these platforms, we never believed it was our 0:54:55.640 --> 0:54:58.560 job to put our thumb on the scale and prefer 0:54:58.640 --> 0:55:01.239 certain views over others. We just thought it was our 0:55:01.320 --> 0:55:04.479 job to let the users communicate with each other. And 0:55:04.600 --> 0:55:08.440 somehow that mission changed, And now the employees these companies 0:55:08.640 --> 0:55:13.120 have gone from being umpires to basically being participants, to 0:55:13.239 --> 0:55:17.560 being partisans in the marketplace of ideas. And I think 0:55:17.640 --> 0:55:21.200 what you hear from Elan is listen, I'm a moderate. 0:55:21.239 --> 0:55:23.799 I'm going to restore the balance. I'm gonna let the 0:55:23.880 --> 0:55:26.839 users communicate the way that they want to. I'm gonna 0:55:26.880 --> 0:55:31.520 be nonpartisan. I'm going to be a fair referee, and 0:55:31.640 --> 0:55:34.279 that's what's so powerful about what he's doing, and hope 0:55:34.280 --> 0:55:37.799 it will set an example for these other companies you 0:55:37.840 --> 0:55:40.759 mentioned dolly Land, which I'll be interested to see as 0:55:40.800 --> 0:55:43.600 well as a passion project. It's not necessarily being done 0:55:43.640 --> 0:55:46.319 to make money. One of the arguments that I've made 0:55:46.360 --> 0:55:48.680 for a while. And maybe Ellen is doing this, I'm 0:55:48.680 --> 0:55:53.160 curious if you think he's doing it is in the 0:55:53.239 --> 0:55:56.279 passion project being brought to bear. In the world of 0:55:56.400 --> 0:56:00.200 larger media, I think, to a large extent me media 0:56:00.239 --> 0:56:02.319 in the United States is broken. And what I mean 0:56:02.360 --> 0:56:05.400 by that is you've got the CNNs, the msnbc S, 0:56:05.400 --> 0:56:08.920 the New York Times, the Washington Post, and their narrative 0:56:08.960 --> 0:56:13.040 bias to me is so clear, and you have one alternative, 0:56:13.160 --> 0:56:16.480 which is basically Rupert Murdoch and Fox. In fact, if 0:56:16.560 --> 0:56:21.000 Rupert Murdoch didn't exist, there would be almost no It's 0:56:21.040 --> 0:56:23.920 crazy to think about, but there would be almost no 0:56:24.480 --> 0:56:28.440 full fruition of media outlets in the country. Right. It's 0:56:28.480 --> 0:56:31.640 basically one man and his family who said, Hey, we're 0:56:31.640 --> 0:56:33.640 gonna create Fox News, and we're gonna buy the Wall 0:56:33.680 --> 0:56:35.759 Street Journal and we'll run the New York Post and 0:56:35.960 --> 0:56:37.920 now they bought out kick and they have these different 0:56:37.960 --> 0:56:41.520 assets that are trying to fight back a battle, not necessarily, 0:56:41.520 --> 0:56:44.040 in my opinion, on a right wing basis, but just 0:56:44.280 --> 0:56:47.040 for the seventy of the country that isn't gone insane. 0:56:47.760 --> 0:56:50.640 It feels like to some extent there is an opportunity 0:56:50.719 --> 0:56:53.600 for passion projects and media which may not return a 0:56:53.600 --> 0:56:57.120 lot of money, but do have massive influence. Do you 0:56:57.160 --> 0:56:59.640 think that's what Ellen is doing with Twitter? Is it 0:56:59.800 --> 0:57:02.479 his passion project? Is it a version of dolly Land 0:57:02.520 --> 0:57:04.560 for him? Or do you think he's looking at it 0:57:04.600 --> 0:57:07.719 as a big money maker. I think, first and foremost, 0:57:07.760 --> 0:57:09.759 like you said, it's a passion project. I think that 0:57:09.840 --> 0:57:11.879 this is about the principle of free speech for him. 0:57:11.920 --> 0:57:14.360 When he says that he's going to restore Twitter to 0:57:14.440 --> 0:57:18.320 being an open town square, that really is his main motivation. 0:57:18.520 --> 0:57:21.360 And it always starts with the mission for him. I 0:57:21.360 --> 0:57:23.800 think he's got enough money, you wouldn't just be doing 0:57:23.800 --> 0:57:27.280 this as a business deal. Now. The history of Elon's 0:57:27.320 --> 0:57:31.680 ventures is that he starts with the mission and you know, 0:57:31.760 --> 0:57:34.040 the passion project, as you say, but over time he 0:57:34.080 --> 0:57:36.320 figures out how to make them a great business certainly 0:57:36.360 --> 0:57:39.160 that's the case with Tesla. The passion project there was 0:57:39.200 --> 0:57:41.880 to move the world to sustainable energy. So but in 0:57:41.920 --> 0:57:44.000 the process of doing that, he's created the world's best 0:57:44.040 --> 0:57:47.120 car with SpaceX. He wants to get people of the Mars. 0:57:47.160 --> 0:57:49.400 I mean, that really is the mission. But in the 0:57:49.400 --> 0:57:52.040 process of doing that, he's figured out, you know, Starlink 0:57:52.040 --> 0:57:55.440 and how to make that a great business. Um so 0:57:55.520 --> 0:57:58.400 I think he will figure out how to make Twitter 0:57:58.480 --> 0:58:00.320 into a great business. But I have no doubt that 0:58:00.320 --> 0:58:05.080 it's all about the passion rim politics. Obviously, you're involved 0:58:05.120 --> 0:58:09.280 in donating money. What's the best thing that national politics 0:58:09.320 --> 0:58:14.120 could do in your mind to advance American business interests? 0:58:14.440 --> 0:58:16.840 How much like the Biden administration to me is just 0:58:16.880 --> 0:58:20.120 a disaster in all respects. But a lot of politicians, 0:58:20.200 --> 0:58:22.080 it seems to me the best outcome would just be 0:58:22.120 --> 0:58:26.800 don't do anything. Unfortunately, because of where we are, what 0:58:26.920 --> 0:58:31.480 can and should America be doing to advance entrepreneurial and 0:58:31.560 --> 0:58:37.080 capitalistic interests so that we maintain uh leadership in risk 0:58:37.120 --> 0:58:42.600 taking around the world. Well, the the entrepreneurial energy in 0:58:42.640 --> 0:58:47.240 America is strong. I mean, this is historically our great advantage. 0:58:47.400 --> 0:58:51.280 It's our d n a right our cultural DNA exactly. 0:58:51.320 --> 0:58:53.920 I mean Americans are willing to take risks, are not 0:58:54.000 --> 0:58:56.880 afraid of failure. If they do fail, they kind of 0:58:57.480 --> 0:59:01.400 dust themselves off and try again. There's the huge stigma 0:59:01.480 --> 0:59:03.680 in our culture the way there is in Europe. If 0:59:03.680 --> 0:59:07.600 you fail and you got vcs people like us who 0:59:07.600 --> 0:59:10.160 are willing to write a check and if it's a zero, 0:59:10.320 --> 0:59:12.520 so be it. We're not going to come break your 0:59:12.560 --> 0:59:15.600 kneecaps or even be too upset about it. You just 0:59:15.640 --> 0:59:18.600 don't have that mentality in other parts of the world. 0:59:18.760 --> 0:59:21.440 So that's what's strong there. And I think what you 0:59:21.520 --> 0:59:25.800 need from government is to create a stable environment with 0:59:25.920 --> 0:59:30.120 sound money and low taxes and reasonable spending levels just 0:59:30.280 --> 0:59:33.040 to not break the golden goose. And you know the 0:59:33.040 --> 0:59:35.760 prominent washing right now is they're really threatened to break 0:59:35.800 --> 0:59:38.920 the golden goose. I mean inflations out of control as 0:59:38.960 --> 0:59:42.680 a result of this hyper spending um and the money printing. 0:59:42.840 --> 0:59:45.360 I mean, you had the FED and if you were 0:59:45.440 --> 0:59:47.520 running so sorry to cut off that, you're exactly right 0:59:47.560 --> 0:59:49.320 on this. If you're a business guy, you have to 0:59:49.360 --> 0:59:52.520 make a profit in order to that's how capitalism works. 0:59:53.000 --> 0:59:56.200 If you were running the government, and you saw the 0:59:56.240 --> 0:59:59.440 books that the government is putting out on a yearly basis. 1:00:00.520 --> 1:00:03.920 I mean, obviously the business would go bankrupt with the 1:00:03.960 --> 1:00:07.360 books that the government is putting out right now, how 1:00:07.360 --> 1:00:10.200 long can this continue? You know, modern modern monetary theory, 1:00:10.240 --> 1:00:12.040 the idea was, Hey, we can print as much money 1:00:12.080 --> 1:00:15.240 as we want, there's no consequences. We're seeing consequences. We've 1:00:15.240 --> 1:00:18.440 got a thirty trillion dollar national debt now and we 1:00:18.560 --> 1:00:21.640 basically added twenty trillion dollars in the last you know, 1:00:21.920 --> 1:00:25.840 ten twelve years. When you look from a business perspective 1:00:25.840 --> 1:00:29.439 at the nation's books, where are we in and how 1:00:29.480 --> 1:00:33.360 troubled would you be? Purely from a business perspective on that, 1:00:34.280 --> 1:00:38.360 I think it's terrifying. We owe something like a GDP now, 1:00:38.400 --> 1:00:42.200 I mean we basically, oh more than the entire amount 1:00:42.200 --> 1:00:44.840 of the output of our economy in our national debt, 1:00:45.000 --> 1:00:47.800 and what do we get all of that debt um? 1:00:47.880 --> 1:00:49.840 So it's it's really pretty scary. And I agree with 1:00:49.840 --> 1:00:52.600 you about m m T. I mean, that's the latest 1:00:52.680 --> 1:00:55.120 group of so called experts that I think are gonna 1:00:55.120 --> 1:00:58.680 be massively discredited. Uh. They claimed for years that we 1:00:58.680 --> 1:01:00.560 can print as much money as we want and spend 1:01:00.560 --> 1:01:02.440 as much you want, because I guess we were the 1:01:02.440 --> 1:01:05.240 world's reserve currency. That be no price to pay for that. 1:01:05.640 --> 1:01:07.920 And it's true that interest rates stayed low for a 1:01:07.960 --> 1:01:10.720 long time, but now they've rocked it up, and inflation 1:01:10.760 --> 1:01:13.760 has rocketed it up, and you're seeing it. Ordinary Americans 1:01:13.760 --> 1:01:16.000 feel a lot poorer because their wages is not kept 1:01:16.040 --> 1:01:18.400 up with inflation. And we've had a stock market crash 1:01:18.480 --> 1:01:20.920 because now the stock market is starting to price in, 1:01:21.480 --> 1:01:23.840 you know, much higher interest rates that are gonna be 1:01:23.840 --> 1:01:28.600 necessary to tame the inflation. So it was just very irresponsible. Um. 1:01:28.640 --> 1:01:30.840 I mean, it's the fun at a law that you 1:01:30.960 --> 1:01:34.280 cannot spend more than you make, not for very long 1:01:34.960 --> 1:01:38.040 and um yeah, we just need fiscal sanity to return 1:01:38.080 --> 1:01:42.000 to Washington. You mentioned experts, uh, And I appreciate your time, 1:01:42.080 --> 1:01:44.640 and I know how busy you are. To me, one 1:01:44.680 --> 1:01:47.760 of the great lessons of the past several years has 1:01:47.800 --> 1:01:51.440 been how wrong experts can be. The experts who told 1:01:51.440 --> 1:01:54.680 this modern monetary theory there were going to be no consequences, 1:01:54.680 --> 1:01:58.720 certainly the experts surrounding so much of COVID. Uh. One 1:01:58.720 --> 1:02:01.480 of the reasons why I love capitalism is you really 1:02:01.480 --> 1:02:03.040 do have to put your money where your mouth is, 1:02:03.280 --> 1:02:07.160 and you have to place bets based on things like logic, 1:02:07.280 --> 1:02:11.560 based on numbers. Um, where are we in the field 1:02:11.600 --> 1:02:14.800 of so called experts right now? Were you someone who 1:02:14.840 --> 1:02:18.440 believed I think probably the answer is no. On conventional 1:02:18.480 --> 1:02:21.720 wisdom in the first place, which is a business opportunity 1:02:21.800 --> 1:02:25.440 is really about recognizing that the conventional wisdom is wrong oftentimes, 1:02:25.520 --> 1:02:28.919 or else everybody would be doing what you're doing isn't 1:02:29.320 --> 1:02:32.200 isn't what you do basically the exact opposite of what 1:02:32.320 --> 1:02:36.120 experts do. Yes, because if you listen to the experts 1:02:36.120 --> 1:02:39.200 with respect to any business opportunity, they will always tell 1:02:39.200 --> 1:02:41.680 you us a bad idea that because yes, they are 1:02:41.880 --> 1:02:44.440 fully ingrained in the old way of doing things and 1:02:44.520 --> 1:02:47.640 they they don't have the imagination to see that things 1:02:47.640 --> 1:02:49.919 could be done in a completely different way. I mean, look, 1:02:49.960 --> 1:02:52.200 we would never have found it PayPal if we had 1:02:52.200 --> 1:02:56.760 listened to all those payment experts back in and in fact, 1:02:56.880 --> 1:02:59.280 part of the reason we created PayPal is because we 1:02:59.280 --> 1:03:01.640 didn't know that much about payments. We weren't beholden to 1:03:01.680 --> 1:03:04.480 the old way of doing things. So you're listening to 1:03:04.560 --> 1:03:08.960 experts is something that really runs against the grain of 1:03:09.000 --> 1:03:13.720 an entrepreneur. And this whole idea of listening to authority 1:03:13.760 --> 1:03:17.920 because those people in power have some sort of credentials, 1:03:18.040 --> 1:03:21.040 and that you should automatically listen to them and not 1:03:21.160 --> 1:03:24.720 consult your own faculties, your own common sense. That's an 1:03:24.720 --> 1:03:27.480 idea that I think is gonna be offensive to any entrepreneur. 1:03:27.920 --> 1:03:30.240 And I think we've seen that now with politics over 1:03:30.240 --> 1:03:32.680 the last couple of years. I mean, everything the experts 1:03:32.760 --> 1:03:36.720 told us about COVID, for example, was just completely wrong. 1:03:37.400 --> 1:03:39.560 And I mean we're told so many things and then 1:03:39.600 --> 1:03:42.240 they also not not to be right. So you know, 1:03:42.840 --> 1:03:45.800 having a healthy distrust of experts is a good idea 1:03:45.840 --> 1:03:49.480 in business or politics. I think it's also the case 1:03:49.920 --> 1:03:53.080 that everything that they told us and allowed us to 1:03:53.120 --> 1:03:56.800 discuss on social media very often ended up being wrong. 1:03:56.960 --> 1:03:59.600 And when I kind of diagnose it, I'm curious what 1:03:59.640 --> 1:04:01.640 you think about this As we come to a close here. 1:04:01.680 --> 1:04:03.920 We've been talking with David Sachs. A lot of this 1:04:04.000 --> 1:04:08.360 comes down to risk analysis. Many people are really really 1:04:08.400 --> 1:04:13.200 bad at analyzing risk, both financial and personal. And it 1:04:13.320 --> 1:04:16.040 seems to me that you talked about the American DNA, 1:04:16.120 --> 1:04:18.760 and I agree with you is based on taking risk. 1:04:18.840 --> 1:04:20.680 I mean, you don't get on a ship and decided 1:04:20.680 --> 1:04:22.440 to come to a new land and then get in 1:04:22.440 --> 1:04:24.360 a covered wagon and go all the way to the 1:04:24.360 --> 1:04:28.000 west coast because you have a high if you don't 1:04:28.040 --> 1:04:31.000 have a high risk tolerance. Right, it seems like our 1:04:31.120 --> 1:04:35.320 national risk tolerance in a social media era is being 1:04:35.440 --> 1:04:39.000 totally destroyed to the point where you saw all the 1:04:39.000 --> 1:04:40.760 time in the early days of COVID, well, if it 1:04:40.800 --> 1:04:43.160 saves just one life, well, if it saves just one life, 1:04:43.160 --> 1:04:46.120 we would have never committed airplanes. We certainly wouldn't have 1:04:46.160 --> 1:04:49.440 emitted cars. Um. How much of this is just a 1:04:49.480 --> 1:04:55.360 failure to understand basic risk in both personal business and life. Yeah, 1:04:55.400 --> 1:04:57.120 I mean I think I think you you saw this 1:04:57.200 --> 1:05:00.280 during COVID as there was a total suspension of cost 1:05:00.320 --> 1:05:04.360 benefit analysis in favor of this sort of zero COVID 1:05:04.480 --> 1:05:07.520 thinking this idea that we can completely stamp out COVID, 1:05:07.560 --> 1:05:12.120 which was just not possible, very clearly not possible, And 1:05:12.480 --> 1:05:16.400 there was a total refusal to to to apply cost 1:05:16.440 --> 1:05:20.040 benefits on any of these lockdowns. I mean, we I 1:05:20.040 --> 1:05:22.360 think it's very clear now that that whole policy of 1:05:22.480 --> 1:05:26.440 lockdowns it cratered the economy was devastating the economy, but 1:05:26.480 --> 1:05:29.240 it didn't do anything to stop COVID. And no one 1:05:29.600 --> 1:05:32.320 about the or the kids in school with the mass, 1:05:32.880 --> 1:05:35.280 you know, and and the remote learning. I mean, we 1:05:35.400 --> 1:05:39.120 lost an entire year of schooling for so many kids 1:05:39.120 --> 1:05:41.560 in this country, and no one really thought to apply 1:05:41.640 --> 1:05:46.280 cost benefit to that, you know, negligibile benefit if any, 1:05:46.360 --> 1:05:47.840 and the costs I think we're gonna be feeling for 1:05:47.880 --> 1:05:51.320 a generation. So yeah, we need to bring back benefit costs. 1:05:51.440 --> 1:05:53.280 I think we have to bring back as assumption of risk. 1:05:53.520 --> 1:05:56.760 You know that there's a tradition this country that you're 1:05:56.800 --> 1:06:00.680 allowed to do risky things. Uh, you know, if you're 1:06:00.680 --> 1:06:03.880 willing to assume the risk. And and we saw this 1:06:04.000 --> 1:06:07.560 workout I think very well in Florida, where they basically 1:06:07.560 --> 1:06:11.480 got on with their lives so much more quickly the country, Um, 1:06:11.520 --> 1:06:14.000 because they allowed people to make their own choices. And 1:06:14.040 --> 1:06:16.560 if you wanted to go out to a restaurant and 1:06:16.680 --> 1:06:19.760 risk get in COVID, that was your choice. Um. So 1:06:19.920 --> 1:06:22.479 we've got to bring back these basic ideas. And I think, 1:06:23.200 --> 1:06:24.320 you know, I don't know if it's just that the 1:06:24.360 --> 1:06:27.920 media culture doesn't really get it but but you're allowed 1:06:27.920 --> 1:06:29.400 to do whiskey things in this country. You know, if 1:06:29.400 --> 1:06:32.560 it doesn't work out for you, that's your choice, such 1:06:32.600 --> 1:06:37.200 as buying our ferrari. Alright, last question for you, uh uh, 1:06:37.840 --> 1:06:39.480 what advice would you give. There's a lot of people 1:06:39.480 --> 1:06:42.000 who are young that listen to these podcasts, this Wins 1:06:42.000 --> 1:06:46.520 and Losses podcast because they're trying to build their own culture, 1:06:46.600 --> 1:06:50.560 their own idea, their own worldview. For someone who wants 1:06:50.560 --> 1:06:53.520 to get into business today, let's say that they are 1:06:53.560 --> 1:06:55.680 out there and they're sixteen years old listening to this 1:06:55.840 --> 1:06:58.000 right now, what do you wish you had known when 1:06:58.040 --> 1:07:00.480 you were sixteen? What would you be telling young people 1:07:00.520 --> 1:07:04.000 they need to be doing today to prepare themselves to 1:07:04.080 --> 1:07:06.680 make the kinds of decisions that you had the opportunity 1:07:06.720 --> 1:07:10.040 to make in your twenties, thirties and forties. I mean, 1:07:10.080 --> 1:07:12.920 the main thing I would have done differently was just 1:07:12.960 --> 1:07:15.680 get into business faster. Like we talked about, I kind 1:07:15.680 --> 1:07:18.440 of I took some time and went to law school, 1:07:18.480 --> 1:07:20.920 and UM, I just didn't know how to get into it. 1:07:21.040 --> 1:07:25.960 And I think that what's great about UM entrepreneurialism today 1:07:26.240 --> 1:07:30.320 is there's so many opportunities. There's incubators. Now there's young 1:07:30.360 --> 1:07:32.840 startups you can join. I just would have gotten into 1:07:32.840 --> 1:07:35.760 it a lot sooner, and so I still think going 1:07:35.800 --> 1:07:38.000 to college is probably a good thing to do. I 1:07:38.000 --> 1:07:41.800 wouldn't necessarily encourage anyone to drop out, although certainly a 1:07:41.800 --> 1:07:44.960 lot of great entrepreneurs have had success dropping out, like Zuckerberg, 1:07:45.080 --> 1:07:48.280 like Bill Gates, so on. But but I would say 1:07:48.320 --> 1:07:50.400 just get into it as quickly as possible. What you 1:07:50.440 --> 1:07:54.760 really want to do is go work at a startup 1:07:54.840 --> 1:07:57.640 where you can really learn, where there's some great founders, 1:07:58.160 --> 1:08:00.920 and it almost doesn't matter what's the job is that 1:08:00.960 --> 1:08:04.520 you get. The important thing is who you're associated with. 1:08:04.760 --> 1:08:07.680 And you know, I learned so much working with people 1:08:07.720 --> 1:08:10.920 like Peter Till and Elon Musk at my first startup 1:08:10.920 --> 1:08:12.960 at PayPal, and that enabled me to go on and 1:08:12.960 --> 1:08:17.000 then found my own companies and become an investor. So 1:08:17.240 --> 1:08:19.960 you really want to just work with the smartest people 1:08:20.000 --> 1:08:23.679 you can possibly find and do that as quickly as possible. 1:08:24.360 --> 1:08:27.639 Outstanding stuff, David Sachs. This has been a phenomenal discussion 1:08:27.680 --> 1:08:30.240 wins and Losses with Clay Travis. I hope everybody enjoyed it. 1:08:30.320 --> 1:08:33.080 Thank you guys, there's now forty seven of these, I believe, 1:08:33.120 --> 1:08:34.639 so if you enjoyed this one, check out the other 1:08:34.640 --> 1:08:37.920 forty six. Thank you, thank you, quite appreciate it.