E125: SpaceX launch, Fox News settlement, "Zombie-corn" exodus to AI, late-stage implosion

26:32I met a guy who gave me a ride in his golf cart. I was late to a meeting. The guy says, hey, are you going somewhere? And I said, yeah, because I was literally running on the street trying to get catch a flight. And the guy drives me in his golf cart. And I say, hey, he says, hey, you hear for the launch. I said, yeah, I'm here for the launch. He says, so am I. Can I ask you, do you work for SpaceX? He says, no, I'm just a fan of Elon. I'm a fan of SpaceX. And I said, can I ask you a draw from his eye? Draw the 19 hours who's somewhere in Texas, Houston or something. He drew the 19 hours to come here, to spend the week to see the launch.

27:03And the crowds here have gotten bigger and bigger. And there's hundreds of people, I think it's called San Padre Island over here with their little beach community, kind of like a Las Vegas on the beach or a Reno or a Norland's and they're just lined up there with cameras. These are Americans. Americans in RVs, in cars, setting up cameras to see history happen. It really is truly inspiring. These are just soft of the earth. Normal folk. This isn't the media. This isn't like half -loan people or necessarily the American who are inspired. And then that's I think what all entrepreneurs who hear these stories about what's going on down here, You'll overestimate what you can do in a year.

27:50You're going to underestimate what you can do in 10. And I think that's, you know, we all know Elon pretty well here and have watched this journey. They're cooking with oil. They're moving fast. And the iteration process is extraordinary. And they're making everything here. And it's Americans making everything. The tiles are, remember, being here three years ago and Elon and I, two in the morning, were walking through the factory while they were working 24 hours a day trying to figure throughout the tiles on Starship to get it back in. And they were making the tiles themselves and just trying to figure that out for me.

28:22That's the level of detail that's occurring here. And as Gavin said, there's a thousand different things changing on each iteration of this. So more great stuff to come, I believe. Yeah. Has been another episode of Phil Helmuth Menchance's Relationship with Elon. Thanks everybody for tuning in. Yeah, exactly. This is something. No, I mean, what am I supposed to do? You know, like, I'm sorry that my friend, you know, started a rocket ship company. I don't want to apologize for it. You guys doing great stuff in the world as well. So do we want to talk about AI? Do we want to go to this Tiger marking down their book?

28:57Where would you like to go, gentlemen? We can talk about the Fox settlement with Dominion. That was something you and I talked about last week's acts. I'd love to get your opinion on that. They paid $787 million in this settlement for defamation. It didn't go to trial. So you were hoping it would go to trial. How do you feel? I mean, and this is an extraordinarily large settlement. So yeah, what are your thoughts on this? You wanted to see this go to the mountain, go to the Supreme Court, and maybe see the laws in the United States change eventually. Catch us up on your reaction to this ginormous find.

29:29Yeah. Yeah. It's a big speeding ticket, yeah? Yeah. Well, it's funny you called it a speeding ticket because when I saw this, it reminded me of a scene at the beginning of a apocalypse now where Martin Sheen says that charging man with murder in this place is like handing out speeding tickets at the Indianapolis 500. I mean, the analogy here is that the media is so dishonest whether at CNN or MSNBC or the New York Times, I mean, they're constantly inaccurate or whatever. And so, it's still defending Fox. So for this one network to get a fine of like 800 million, it's like pretty incredible. I mean, they should be handing out a lot more of these in my view, not just to Fox.

30:09But yeah, look, I would like to see to that end. I would like to see the standard in New York Times versus Sullivan revised by the Supreme Court. The standard is actual malice. So you have to prove not just that the press told a lie, but that there was malice behind it. And that's what this trial would have been about. And Fox. So what should have changed to? Yeah. I think what would be a better standard in your mind? I think that if the media makes a mistake, they should have to correct it. And I would say the correction needs to be at the same level that they publicize the original story. So if they make a mistake, if it's untruthful and it damages someone's reputation, and they refuse to post a correction, then I think they should be liable.

30:57That seems fair to me. If you were to put something on page A1, if you were to give it five minutes at the start of a show on whether it's Rachel Maddo or Tucker, whoever makes the mistake, it can be anybody. If they made the mistake in the first five minutes top of the show, they don't get to buried on the website. They don't get to buried on page seven. They got to say it upfront. Hey, listen, we made a mistake. Correct. Here's the mistake. Correct. Correct. Yeah. I think it's reasonable. Corrections should get same as the original story. And by the way, if they correct it, that would be like a safe harbor.

31:26But if they refuse, and they publish a lie and it damages somebody, then they should be liable for that. I think there should also be somebody. That's what I think. Yeah, I'm going to agree with that because there is the trick in journalism to bury the correction. And there's another trick that I think needs to be looked at. It's a little more nuanced, which is somebody makes a mistake or an accusation in a publication. And then the next publication says, oh, the New York Times, Fox News, CNN said this, But they don't check it themselves. So they're using another publication as like a proxy to kind of give them some level of protection.

32:05I think they should have to on a first hand basis. Right. Now that's the game they play. You're right. So they start with a super shady source that you know, it just attributes it to some sort of anonymous source. Then the second most shady publication quotes that one and the third most shady quotes that and then it goes to the whole food chain. Yeah, so you're right. Reposting something in the echo chamber because other publications are doing it. You're right. That should not be protected. They should have to do their own sourcing, basically. Yeah, we're just from base level of fact checking.

32:37And now if you called it Fox opinion, it's slightly different than calling it Fox News. So maybe the part of this is branding. Chimath or Freeberg Germany thoughts on this. Just in general, Fox, I think has only four billion of cash. So they just spent 20 -some odd percent of it paying this off. And if I were a shareholder with the question I would ask is, did we actually make enough money to justify having to pay almost $800 million of our cash balance? The answer is probably no. And this is the first of a bunch of lawsuits that they have. The next one, which is I think is like smartomatic, which is another voting machine company.

33:13That's an even bigger lawsuit actually. That's a $2 .5 billion lawsuit. And so it's could it be the same outcome and another settlement? And so now all of a sudden you would deplete half their cash, all for a lie to do what? At some point, some smart business governance needs to kick in over at Fox and they need to realize that this stuff just doesn't make economic sense. Maybe they thought it made political and ratings sense, but you can't justify that when it costs two billion dollars. There is a concept here, I think, that is particularly interesting in Finland when you get a speeding taking, speaking of speeding tickets.

33:51Your speeding ticket is proportional to your network. And so these NHL players who like to speed a Nokia executive, it was given the equivalent, and this is a bit excessive of $100 ,000 fine for going 45 into 30 zone on its motorcycle. And an NHL player got a $39 ,000 fine two years earlier. I think that this is part of the problem is sometimes fines don't match the crime and or the they're not proportional enough for the person to feel them. And so then we kind of conjo that their speeding tickets. One very rich person said to me, you know, when they would, they had watched them parking, you know, incredibly illegally in a small town.

34:31And I said, you know, you're gonna get a pretty serious ticket. That's, it's a pretty norway spot to be parking. And they said, oh, you mean the VIP parking charge? And I was like, yeah, that's kind of sucks, but okay. There might be some concept here of a proportional fine. And I think the EU is starting to work on that as well because you know, big tech was ignoring. This is going to embolden a lot of people to take matters into their own hands and sue some of these media companies if the lie is egregious enough and it negatively impacts them enough. I think it would embolden a lot of folks.

35:06So, Sachs is right that up until now most folks haven't done anything about this, but But if you feel like the media has really wronged you in a meaningful way, there's probably also now a lot of private equity organizations that would do the lawsuit finance or hedge funds that would do the lawsuit finance. And so now you're like you're free rolling it, right? So you get one of these folks to pay it. They get 50 % of the gains. You get 25 % the lawyers get 25 % and you go and you litigate. I'm sure that you'll see more or not less because this fine is really big. And again, we don't know the end of all of these 2020 election hoax shenanigans because this is the first, not the last of these.

35:50I do think it's a really big number. I mean, I did want the case to go to all these courts so they could revise your time sources of Sullivan. But I do wonder about the size of this settlement here. It seems extraordinary. They paid it. It was an interest. It's a settlement. Yeah, they they voluntarily agreed to do it. Yeah, absolutely. So So in any event look I I hope Tremoth is right that this actually incentivizes more actions against Media companies because I think their feet need to be held to the fire and they need to do a better job publishing the truth There was an interesting thread By a Twitter poster called cana coa Do you I don't know if you guys saw this where he posted an hour of footage by Democrats and Democratic groups and more Democrat -leaning political science experts questioning whether voting machines could be hacked.

36:45Basically, this idea that voting machines could be hacked is not an allegation that is unique to Fox. So, apparently, there's evidence that Fox knew it was bogus, so they definitely should not have run with it. But I do wonder, hey, why should another people be liable for this too. Well, I mean, the question is, I think those internal text messages between the host who knowingly knew it was false and then we're doing it. I think that's why they took that settlement because 800 million or whatever. So it's a lot less than 1 .4 or 1 .5. And so there's speculation that maybe they got some bad discovery.

37:23They got some discovery problems. Yeah. But I'm just saying that. Yeah, I'm just saying that. Problems, yeah. These allegations about electronic voting machines being hackable or rigged. This seems like an allegation that's been made. That's actually interesting. Not just in 2020, but it's been made multiple times by whichever side loses. And so I would wonder why more parties aren't liable for this. By the way, I never bought into those allegations. I said so at the time. I thought they were bogus. I thought the whole Sydney pal thing, the release of the crack in or whatever was ridiculous. So I don't feel too bad for Fox or anything like that.

37:59But it seems to me, like I'm saying, they're not the only ones speeding here. There's a lot of people who need to get speeding tickets. Yeah, there is a roadmap for the press to learn from this and to get better, right? Like to maybe take to heart that maybe the public now is looking at them and assuming that the trust in media is at an all -time low. Alex Jones got $find a billion, right? It's a judgment. Judgment, yeah. Judgment, the Fox thing is a settlement, right? He got a judgment of over a billion from multiple courts. Yeah, so he set a bunch of stuff that was in court -provable to be false and then he kind of restated it and he got this massive fine.

38:38I think there's an interesting question here on how far this goes with respected, maybe it invites the lawsuit, it's like you guys say, where there's things that are more on the line. And then we really start to have kind of a tough set of conversations that maybe there are things that are factually debatable, arguable, opinionated, or they were true at a certain point, and then you didn't really have evidence to disprove it. What are you allowed to say? Are you only allowed to say things that you've proven or things that haven't been disproven? And that becomes a pretty tough set of conversations.

39:11And what I think might be interesting from here, if so much of media over time gets replaced by chat and AI aggregating lots of different information, synthesizing that and making representations back to us and that becomes our primary source of call it news or quote media in the future. What happens when those models or the synthesis of data or the source of the data leads to a statement that has a similar sort of descent around whether or not it's true or not? And that you really end up kind of ending up in a pretty cloudy environment. You know, by starting this process. I think as a very insightful and we'll get to end a minute.

39:48I just coming as a coming from a journalism background myself and then becoming a commentator, there really needs to be three or four very simple things that the media needs to do. Number one, more fact checking. Number two, less anonymous sources. They were like too much anonymous sources. And then there needs to be very clear delineation between what is a fact and what is an opinion. And the public is trying to sort this out. Is it Fox News is an opinion? And what you're saying is this an opinion or is this a fact. Did you do journalism or did you just have an opinion? Is Rachel Maddo an opinion or did she actually have a journalist check these facts?

40:24And I think this is where self -policing and maybe rebuilding their rebuilding trust is on the media. It is now the news and the media's job to rebuild trust. And if not they're going to get more fines, but let's get into, I think some of the stuff we're seeing with AI, we had talked on this show before, many times about the corpus of data under which these models are being built. Well, Reddit announced plans to start charging companies that use its data to train AI models. The co -founders, Steve Huffman, who came back after Condor Nost had bought Reddit and then sold her back to the founders.

41:00And paradoxically, I believe Sam Altman has a major investment in Reddit. He said, more than any other place on the internet, Reddit is a home for authentic conversations. There's a lot of stuff on the site that you'd only ever say in therapy AA or never at all. A lot of people use pseudonyms, obviously. And the Reddit Corpus of Data is incredibly valuable. But what we don't need to give all that value to some of the largest companies in the world for free, crawling Reddit, generating revenue, and not returning any of the value to our users is something we have a problem with. It's a good time for us to tighten things up.

41:33Your thoughts, Shamaath, on what we talked about two different episodes. Maybe we'll play a clip in here and if you want to in post. It's going to be the large data sets, Quora, Yelp, the App Store reviews, Amazon's reviews. So there are large corpses of data that you would need. Like Craigslist has famously never allowed anybody to scrape Craigslist. The amount of data inside Craigslist, as but one example of a data set, would be extraordinary to build Chatchy PT on. Chatchy PT is not allowed to because you brought up robots .txt last week. There's going to need to be an AI .txt. Are you allowed to use my data set in AI and under and how will I be compensated for it?

42:11Will the rights to the data will will Google just data Kora? Hey, we'll give you a billion dollars a year for this data set if you don't get a dandy buddy else. They should Jamal those were our previous discussions that we just played. What do you think? It's so incredible. We are witnessing such an important moment for Silicon Valley, but frankly how the world works and It's just everything is changing. That's what I'm just in awe about. We talked about this and we were basically spitballing something two or three months ago, and not but 60 or 90 days later, these things come to pass. We talk about something in one week and then 14 days later, it's completely upended.

42:56Like how impressed SACs was about plugins and then plugins were rendered useless and somewhat impotent two weeks later by auto -GPTs. It's just so profound, I think, what's going on. So, Google today announced that they're going to merge two organizations that I thought were so orthogonal to each other. Disprint. Brain and deep mind. The cultures just seem so totally different, but now they're merging those two things together. Something that I thought would never happened, they did it. So all these competitive pressures are so real. I was in L .A. for the breakthrough prize. I was flying home with somebody on Saturday.

43:37I won't say who it is, but they are right at the bleeding edge of a lot of the SAI stuff. And they let go a third of their company replaced it with an agent within six weeks of training it. So how is this not going affect everybody else, I guess is maybe the bigger question. And then I go back to what I said last week, which is that we've talked about a lot of the positive things. And I think it's important to make sure that people understand that there are a bunch of non -trivial negative things. And I think I shared one on Twitter, which was around this company that used an AI model to build a library of 40 ,000 toxic compounds that could kill all kinds of numbers of humans.

44:19So there's all kinds of really, really tough things going on right now that I think to me means it's the moment where I have the least sense of how to do my job. And so I've tried to kind of like put a pin in everything and just go back to learning mode. It's a bit humbling is what you're saying. It's incredibly humbling. The entire rulebook, even for us as capital allocators, company formation, it has you, it has you, Jamaf, wondering, as a CEO, I'm like, should I be using models to do parts of the workflow inside of my business, inside the portfolio companies that were invested in. Am I supposed to go into the board meeting now on Monday and say, hey, XYZ person just did one, two, and three and cut off X by a third.

45:06Do I demand the CEO do that? Do I force change if they don't do it? Do I say, so I don't exactly know what to do. So the carousel is spinning increasingly faster and we're all on it. I'll just say a general point, which I kind of made at this event today. It feels like the pace of change is so high that you're kind of in a dust storm. You don't really know where you're going to end up. So it's very hard to sit as an investor right now and say, I'm going to pick these things because, you know, two weeks later, you just don't know whether that path even exists just anymore because the dust storm washes it away, blows it away.

45:47And I think that as a result, there would be a lot of money lost by investors, by companies building in this space. Net, net, the index for investing in like dot com companies, the majority, a large amount of money was lost during that era. But from that era also emerged a handful of winners. And those winners ended up creating extraordinary value. I think we're at a point in time right now where we could see ten times the value generated in this phase of technology advancement than we saw during the internet and the advancement of the internet. And if that is true, I think you'll end up seeing certainly the same thing happen, which is the index will lose money.

46:33But the few winners will accrue such extraordinary gains. The problem is you can't Deterministically pick those winners today because of the dust storm problem. You just don't know the path So if you were to meet Jeff Bezos versus some CEO of some dot com selling pet stuff back in 1995 to 97 94 to 97 would you have recognized Jeff Bezos was gonna stand out? Would you have recognized Larry and Sergei were gonna stand out? Would you have recognized Bill Gates was gonna stand out or Zuck? At the end of the day, this is harder than it has ever been in terms of predicting a technology cycle. But what we still know to be true is that the capital will be allocated within a company, the operations will be run, managed, and driven and led by an individual or a set of individuals.

47:20And that's effectively what I think a lot of investing in the cycle is going to come down to. We're all going to sit here and pontificate and intellectually masturbate ourselves to some genius path that we think is going to evolve. And at the end of the day, most of it won't turn out to be true and that path won't be real. Because this is such a dynamical system right now. There are so many feedback loops. One thing makes one step change and it changes every other step. But what we still know is that great leaders can lead. You know, and especially coming out of this Elon discussion and seeing the extraordinary achievements he's delivered particularly today, I think that's maybe what a lot of early stage venture is going to shift to an AI.

47:58It's really finding great people. I'll tell you one thing for sure. I was commenting on this earlier today. I really think a lot of series C and later companies, and I know we're going to talk about this implosion discussion later. So many of those companies have a valuation that's less than their preference stack. As a result, those founders that work there and those employees that are there are getting their equity wiped out. They'll have to get me a fair free bird. Can you just explain what that means technically to the audience? So when you raise money into a startup, the investor is that give you that money, that invest that money.

48:35It's effectively alone. You owe them that money back first before your shares get paid out in the future. So if the company ends up being worth less than the money that they've invested, they get the money first. And ultimately, if the company goes public or gets sold, they can convert their what are called preferred shares into common shares and Participate so even though you only quote sold 20 % of your company for let's say 200 million dollars that 200 million dollars Actually has to get paid first so now you've raised this 200 million dollars the investors the company is now reprised Because the market has come down by 80 % and investors are saying hey your company is now worth 175 million your company is now worth less than what you owe the preferred investors.

49:22And if it's worth less than what you owe, which I think is the case for over 70 or 80 % of Siri, CNLayer companies, you know, we can cut it. Yeah, and this, but this number comes from what I shared a few months ago, which is that 70 % of publicly traded companies that went public in the last three years are trading below the cash that they've raised. So if you translate that on a one -to -one basis to the private market. And these, by the way, were the best companies. They actually got public. So in the private market, you've got to assume that something in that late stage market is on the order of 70 -80 % is worth less than their preference stack.

49:56So a lot of those employees are going to run. Those founders don't want to go work for the VCs when they get recapped and get offered a four percent way. Where are they going to go? They're going to start AI companies. And I think that's fantastic. And I think that's what's really shifting it right now. Now, that's kind of a big dynamic is a lot of these, I'm calling them zombie gorns, are gonna see this kind of mass exodus of talent. And a lot of the investors that don't know how to price stuff and don't wanna deal with recaps in the late stage are diverting their attention to seed and A and early stuff.

50:25And so there's both a rush of talent and a rush of capital to this kind of very early stage. And so we'll create this massively bubble -lific index of AI stuff, but some number of these things with some great leaders will emerge and will crew extraordinary value across many industries. I really agree with a lot of what you're saying. The thing to keep in mind is that the problem with the use of auto -GPTs as an example is that the order of magnitude of capital that you need has now just gone down. Yeah. Yeah. Instead of a $10 million series A. So we used to, you know, people in the height were doing $30 and $40 million series A's into crazy, very bubble -ish ideas and NFTs and all this other stuff.

51:09That's idiotic today because a two or three -person company can now do the work of 20 to 30 people and the amount of capital that they need is really their salaries plus the cost of renting some GPUs on your favorite pick your cloud. And so all of a sudden you can get huge amounts of progress in weeks and months with hundreds of thousands or low millions of dollars. So if you've raised all of a sudden a $5 billion fund because you were trying to do late stage deals and now all of a sudden said, well, wait, we'll just pivot to early stage. But what are you going to do? Find the next 30 -person company that's not going to work because you have to know how to write $500 ,000 to $1 ,000 checks with two or three people and really help them and really understand their technical ability to execute, right?

52:04But then it also quickly becomes a thing where maybe you're better off just doing 500 of these two and three person teams. We tried this experiment seven years ago, this thing called Capital as a Service, where we were doing this automated investing. I don't know if you guys remember this, but it was like some machine learning that we did on all of our portfolio companies. And all somebody had to do was fill out a form and send us some metrics and we would have a machined decision, right? So humans would not be allowed to make the investment decision. The problem that we ran into was there was a lot of great companies all around the world, but the administrative burden of supporting 500 companies was unbelievably large and complicated.

52:46Oh, you have a company in Indonesia. Well, there's another company in South Korea and here's a company in, you know, replacing a new round. Oh my God. They have to get board approval. They got to do this. and signatures. I mean, it's hard to scale. Yeah. So the VC, which is a software light, people heavy, artisanal business, all of a sudden becomes misfactored. Right? So you actually need to be highly automated and use software yourself in order to put 503 % teams on the field. So this is what I mean by it's really, I think, freeberg's use of the term dust storm is a really good one. It's extremely, extremely confusing what to do.

53:24and if you have large amounts of money, that may actually now, what used to be a real differentiator and a key to success may actually become an impediment because you have to first, you are forced to do business in a classical way that has changed frankly in the last 90 days. What do you think, Sacks? What's the question because we're touching a lot of different things here? Do you feel like this is a dust storm and it's murky and it's just hard to place bets as a capital allocator? Because something comes out the next day or 48 hours later the next week that takes the previous idea and wipes it out and then how do you scale?

54:06And be capital efficient. Well, we're at the early stages of a huge new wave and I think that creates a lot of opportunity. So yeah, you've got to basically separate what's really interesting from the fool's gold. There's definitely going to be a lot of that. But at least there's a reason now to believe that, say, dozens of unicorns could be created in the next couple of years. So before we were getting along in the tooth on some of these tech cycles, I mean, clouds, social, mobile, I mean, there was a reason to believe that those earlier waves had sort of played out that the big winners already been determined.

54:41And maybe there wouldn't be too many more big winners in those spaces. But now we have a whole new catalyst for founders to do all sorts of new things. And so I tend to think that's super exciting, you know, we're in the early stages. And I do think there will be dozens of new unicorns minted in various aspects of AI. It could be in AI infrastructure, you know, whether you're seeing now there's a lot of funding that's gone into vector databases or platforms or creating agents. or it could be in AI co -pilots, basically that tackle various professional categories and create a co -pilot for coders or co -pilot for doctors or lawyers or architects.

55:24I think there's going to be potentially multiple unicorns created in those categories. I think there's going to be SaaS software products that were just good before but now it will actually be great because the incorporation of APIs from AI foundation models will just turbocharge the capabilities. And so there's a whole bunch of SaaS products that I think become newly interesting and better. They go from being vitamins to painkillers. So we're looking at all those categories and I think we'll end up making some bets. But there's also going to be a lot of companies that are flashes in the pan or get undermined.

56:06you know, there'll be SaaS companies that actually become less attractive because of disruption from AI. But look, I think all of this, this Milstrom is great for an investor. I mean, if you're going to spray and pray, it's not good. You've got to be selective about where you take your shots. But I think this is the most exciting environment we've been in in a number of years. I mean, it makes me want to go to work every day and see the new stocks. that, because I literally am looking for an office space in San Mateo to start doing the incubator in person again. And on Monday, I'm having 60 companies come to San Francisco and will be at my attorney's office and we're having a Founder University with just all these new startups that we invested into just hang out for a day.

56:52The enthusiasm right now is amazing. And what's really unique is the developers who had three out of seven companies they interviewed with offer them 150 or 250 K packages RSUs, whatever. Now there's no offer from Facebook. There's no Apple, there's no Twitter, there's no Google or Microsoft offer coming in to be the backstop against starting a company. So what are they doing? They're saying, you know what? I got two friends who got laid off. I got one friend who's halfway out the door. Let's just start something. and let's just start something. Who can give me 100K? Who can give me 500K? And it's so invigorating to see the talented people, not people who've learned how to hack a pitch that together and tell a story, but people who are actually coding and making MVPs.

57:42It's truly exhilarating right now. The amount of two and three person startups I'm seeing. Yeah. And so while you have this, and it's an incredible, I've never seen this amount of destruction and creation occurring simultaneously. I love this, is on because concept. You have one half of your portfolio coming apart at the seams, layoffs, reducing their targets. While people are coming in the door with products that are absolutely awe -inspiring, just give one example. I had a company come out of our founder university, gave them $25 ,000 to incorporate a developer and his brother who's a screenplay writer.

58:17They're taking screenplay writing software and sacks, so you'll appreciate this, having and produce two amazing movies. Thank you for smoking and the Dolly film is called. Dolly land. Dolly land. Yeah, come here. We need two months. Coming out two months, congratulations to Emmy. I'm award winning Oscar winning producer. I was gonna win an Oscar this time. Please. You know the screenplay writing tools that have existed. You're like, what were processors with formatting? What they're doing is they're saying, hey, write some dialogue and then you can have dialogue and say, hey, make it a little snappier.

58:49make it a little Tarantino -ish, make it a little more, you know, sork -in -ish, and then make a storyboard with, you know, stable diffusion. And I was like, well, this is the genius idea. I mean, it's unbelievable. Of course, I'll give you $25 ,000 for your incorporation, and then they're coming to the exonerating and giving another 100K. And every single piece of software. Well, that company in success ever raised $25 or $30 million, do you think? No, I think there'll be 12 people. I think it'll be 12 people. I'll give them. But the 20 ,500, right? In that million. Our industry raises $100 billion a year on the premise that each company before they become a unicorn will absorb between $500 and a billion.

59:29Yeah. I'm going to own 20 % to 20 % of the company for low millions. And we'll see. Mid -Journey is 12 people and no, it's totally bootstrapped. Like I guess what I'm saying is because in the world of AI, so much work is done for you for free. This is why I'm asking maybe we will have to change how we do business. On the Hollywood example, there's about to be a writer's guild strike. And they may want to think twice about that because this is not the time where you want to be encouraging the industry to find alternatives to writers. You want to get back in the office and you want to say, hey, can I, is there any other work I can do this weekend boss?

1:00:07Did you see the news about BuzzFeed today? They had won a Pulitzer. They just shut down BuzzFeed news, the entire news division gone. Another 15 % gone. The layoffs, and then there was a report this week that Zuckerberg is doing his third round of layoffs, another 4 ,000 people. That puts him at 24 ,000 with a hiring freeze. So the way I describe the current funding environment is, it's a tale of two cities. It's the best of times, it's the worst of times. If you're a hot AI startup that's able to tap into the zeitgeist that's doing something that's perceived as cutting edge or relevant. There's a strong Y now and you're early stage.

1:00:47You're able to raise money for that. The Spigot has turned back on. There's a lot of funding for those types of early stage startups. But if you're a series C stage startup, you're a late stage startup with a, it's called a pre -AI model. The Spigot has just turned off completely. I mean, let's look at that chart from French base where the amount of series C funding has gone from something like 10 billion a quarter last year to like zero. I mean, this chart will partly. I thought this was an era in the chart. Look at this chart, everybody. It's a series of funding to US companies by quarter. There is just no growth stage funding.

1:01:25It's just completely dried up. I mean, look at that. I mean, it got cut in a half and then it got cut in half again. And then it just flatlined. And so we see this, is your thesis, let me to the sex. You should thesis here that people aren't trying to raise money and they're just busy cutting their companies down to a smaller team size and they'll come back out in the second half of the year or that anybody with that amount of dry powder is out of the game now. Yeah, I think that we're in this awkward stage where the companies who raise money in call it 2020 and 2021, all those valuations are obsolete and you've had a lot of late stage players leave the game or they're in the penalty box.

1:02:08They're in time out. I mean, look at Tiger, for example, the single most active funder at late stage is trying to figure out how much to mark down his portfolio. So I just think that a lot of the funding has dried up. This idea that there's tons of dry powder singing out there, I think, is a myth. Or maybe it's there, but there's no willingness to deploy it. The valuations are all out of whack. And VCs generally would rather lead around in a new startup with the fresh cap table, then in a cap table, they got a restructure because no one wants to do restructure. We talked about a year ago, as we talked about a year ago, Jamal.

1:02:42I asked you to point blank, would you, if they cut the valuation and they re -did everything and said, hey, listen, we understand this is reality, would you get involved and cut it check? And you're like, I don't want to deal with that kind of hard bucket for you. Yeah. And so now, once again, a year, six months or a year after we talk about this, it has now manifested. this is metastimes into. No, no, no. It hasn't even started. I think we are still. I think we're still being really prescient. Like, the Tiger thing was very important because they are in many ways at the front of the line in terms of the number of companies they've touched the amount of capital they've written.

1:03:21And because they're in the middle of a very large fundraise, they're need to mark the market quite accurately so that their existing LPs know what they're signing up for in this next fund. So they're the ones that have the most incentive to move the marks. But it still leaves an entire industry of folks that don't necessarily need to do that because they have, whether it's ripowder, that ripowder is real or not, the point is that there's a lot of money that hasn't been deployed. And so again, I've asked this question before, what is their incentive to really mark their book down 50 percent? They don't have an incentive.

1:03:56Why would they do that? They would rather let it decay down naturally. I'll give you an example of this or do converts that keep it alive that basically allow them to delay Yeah, anybody even the convert market freeberg that was hot for about six months and then it just yeah No, nobody's doing that stuff either, but I'll give you one example. There's a very good company That we are investors in along with Every kind of big blue chip tier one Muckity Muck organization. We did the A and they stacked on afterwards and when we We thought about what our valuation should be. We did something. We got to a number which was a third of what the mark was.

1:04:35And we're like, well, if we think the price is two thirds off, we should probably just sell it now. And we actually went and got some term sheets from some private equity firms to validate it. And what they, we was incredible, they both independently got to that same number. And so while the deal was closing, we went through the end of quarter. we moved the mark down and we pointed to that valuation and we said, look, this is what these two other very well -known firms have said. This is what we've said. So this is what our new valuation is. And, you know, we're trying to sell it and we ended up selling it.

1:05:07But every other organization didn't touch their valuation. The private equity folks, maybe you could explain to the audience why the private equity folks are such a good backstop in terms of valuation versus to save venture capitalists. Well, I think that venture capitalists, we tend to be glass half full. And we are conditioned, especially if you do your job well, to be smart buyers of deep out of the money options. What does that mean? It's like when you meet an entrepreneur and you give them three or four million bucks or $500 ,000 or whatever, at some nominal valuation, you're not trying to get your money back.

1:05:44You're trying to figure out whether he is a Zachor and Elon or Larry Page and all of a sudden you get a thousand X on your money back, right? So we are buying these deep out of the money options. Most of them don't hit, but when they do, they can just have these crazy statistical outlier outcomes. Yeah, yeah. So we're trying to buy the future and we tend to be believers of what can go right. Private equity has refined a very powerful toolkit of putting two or three orders of magnitude of the money we put into companies to work, on the premise that the glass is actually half empty and what can go wrong and how do we mitigate that risk.

1:06:24And so they tend to be much more sober, I think, in my experience dealing with them in what is the true valuation of a business? What are the upsides of a business? What are the warts on a business? They really kind of see the truth, the ground truth much better than VCs do in general. Because they're closer to public markets and they flip these things every two or three years. They're margins are much thinner. They're trying to make 1 .5, 1 .6x their money. 2x is a huge outcome for them. Yes. So they have a much more sober version of reality. Much of this tiger stuff got released and... I mean, they're funds underwater.

1:07:02Just like Masayoshi Sans fund is underwater. And it's going to be years of pain and suffering to get out from under this. And so again, I think SACs now that with tell of two cities, anybody else want to chime on this before we talk a little bit about Well for our friend of the pod Brian, I'm sure I've been I've been investing off balance sheet since 2018 And six months ago we started to explore whether we should raise a fund and I think it was like two weeks ago We brought the senior partners in me and the five other guys that run our business and We said we're not gonna raise a fund And the biggest reason is this dynamic, which is that, you know, we have $1 .00 dollars of private assets.

1:07:44I don't actually know what they're really worth, but I have a responsibility to try to get as much of that capital out. And so I thought the best thing to do is just to take our time and try to figure it out. Because I have way more questions and answers right now. And that's really the first time since I've moved to Silicon Valley where I've had that sensation. Is this sensation humility? I think it's like, I mean, I'm joking, but it is for somebody like you who has done deeply how placing bets. Deeply how? I mean, I say it's a joke, but I mean it as like a point of self -awareness for you, because listen, you place some amazing bets, whether it's the Warriors or Facebook or Bitcoin or whatever, or Slack or whatever.

1:08:27I don't know whether I should be writing $200 billion checks or $200 ,000 checks. And I don't know whether I should be doing that sort of as an incubator actually as an accelerator to what I'm doing or actually just as a series A detached investor. So I don't know, I'm trying to take the time to figure it out. And my thought was if I raise a fund right now, I could barely stand the idea of me putting money to work right now of my own capital without any answers. But then the idea of like having a bunch of sovereign wall funds and folks that were ready to work with us. I don't know. I just I just to not the right time just to tell you my fundraising story.

1:09:04I'm publicly raising launch front four. I get over $50 million in just you know, high net worth individuals, you know, and family offices who are interested, immediately close, I don't know, 26 27 28 of it. And then I'm going to go out on the road to meet with LPs and Silicon Valley bank blows up. Nobody can take a meeting that month, right? And so now, thank the Lord. I said, I'm going to have a one -year window to raise the fund. And I talked to some old school VCs, Fred Wilson, Bill Gurley. These people would take a year to raise the fund. It used to be, or I'm sorry, in the height of this, Bob will you tell me, a sax, the quick issue closed one of the craft's funds, but I was hearing people saying they're closing funds within two or three months.

1:09:46I think we're back to it's a year on the road to close the fund. What would your experience, Saxons, and you're an all -starred? So I'm curious. The shortest to the reality. I think it's just depends on your situation, to be honest. But I think the important thing for founders to know is just that the way that late -stage financing is dried up is very real. I'll give you two data points just this week. I got my first notification from a portfolio company. This is a company I invested in before Kraft. It's not a Kraft investment, but my personal investments. And they're doing a pay to play round.

1:10:21You know what that is? where that is, that means pain. Yeah. Yeah. So basically the way it works is they say they're going to raise $20 million. Well, by the way, they said they went out to raise growth funding. We're unable to get a term sheet from anybody. And so no takers and this is a good product. I mean, a lot of startups use this product. I think they're ARRs in the 20 something million, maybe 30 something million. It's not like doubling your year, it's growing like let's call it 50 % year over year. This is a company that should have been able to raise money. I don't understand why they weren't.

1:10:54Maybe because they're burning too much money. So instead of kind of cost the way they should, they're doing like a $20 million pay to play around. And what that means is that everybody is an investor in the company. You either have to do your pro -rated share of the $20 million or you get diluted 10 to 1. If you had 10 % of the company, you have to put in $2 million or your 10 % of the company is now 1%. No, it'd be more because you would look at Let's say 50 % of the companies owned by the investors and the other 50 % common. Just to take around numbers. If you own 10 % of the company, that would actually be 20%.

1:11:29Of the preferred. Yes, the employees are not buying shares in this. 20 % of the 20. So it's 4 million. So it's 4 million. Yeah, exactly. So basically you have to own 1%. Right, right. So basically it's almost like a capital call where you just have to pony up more money in order to preserve your ownership in the company. If it makes you feel better. It is imperative, but super punitive. I had one of those just happened to me as well. And I was just like, we'll put in the bare minimum because like the thing that it puts you in, it paints you in a corner where you're like, well, I've been with this thing for eight or nine years, is this the moment to basically lose all of that compounding or value or work that you put in or seen their team do?

1:12:13and it's just a really tough position. Right? So look, I'm not on the board, so I don't know what reasoning went into this, but what they should be sending out to all the shareholders is, look, here are all of our metrics. Here's our burn. Here's the steps we took to reduce our burn. I don't really like the idea of having to do, essentially a capital call from your existing investors, when you haven't reduced your own burn. I mean, why can't the company operate at break even if you're at 30 something million of an ARR, You should operate that you may not want to operate it break even but you but this is be able to but tax This is what I mean.

1:12:47I'll tell you after we stopped taping who it was that That told me this about their company But they were basically able to let go a third of their workforce By moving a bunch of work to models and let me guess the founders get to keep their shares where they get reopt in this whole Mishra gonna no, no, but wait hold on can we can I just finish yeah, please? Oh, sorry So so the point is like if you can cut off x by a third by using all of these new AI models and GPs and AutoGPTs, what are you as a board member or shareholder supposed to do? And also, as a founder, don't you have to go there first before you start to ask people for more money?

1:13:27And why aren't people doing that first? Much more aggressively. And so this is what doesn't make any sense to me. That's exactly my point is what steps were taken to cut costs before you just went to the investors to pony up more money. That's what I want to know. If they actually did that work and this is like the last money they need, okay, then you know, I'll pony up my share. By the way, we need investors. We don't know that. Yeah. No, we don't. And we need investors to be much more aggressive in holding folks accountable because these examples need to be better discussed. While the FXYZ company was able to do it, why aren't you able to do it?

1:14:01And if it's because we're not technically capable, Matt, that's maybe a plausible answer, but even that reason will go away in a few months, I suspect. But if it's that we just have such institutional rot, we're incapable of doing it. Well, then you might as well just not write the check because that company is going to get undercut by some new white sheet version of that business that doesn't have any of these impediments that just you've been. Management has told you a bunch of things. In a way, Chemaoph and Saks, management has told you they're incapable of running this business, this concern in a thoughtful way.

1:14:32I had this happen to us as well. And the question I have a use access in these situations where this pay to play happens, you basically everybody gets wiped out except those who play. But the founders and the management team always seem to get re -up and their whole because the new investor doesn't want the management team not incentivize. So in these kind of situations, it's kind of like the management team gets to reboot the cap table and they don't get peanuts. I know. I actually I don't have those details yet. Yeah. I remember I didn't lead around. I was just an angel investor in the company.

1:15:04So I checked with one of the VC firms that led around and I'm like, are you going to do this? And they said probably not. And so like the round might fail. I mean, they can make it as punitive as they want. But if the shareholders don't believe that the company has fixed this problems, they're not going to pony up the money. Let's get free, Bergen. Yeah, I think one of the problems that a lot of folks are facing is it becomes less about the fundamental value of a business in a lot of these conversations as you guys know. And it's becoming a lot more about who will fund the next round if the company is still burning money.

1:15:43And so you're making a social market bet, not a bet on the team or the business or the value. It's that there's someone else that's going to lead the next round. And this is fundamentally why he's called the greater fool. That's called the greater fool thing. Look, I mean, it's historically, we wouldn't call him a fool if it's just about progress towards profitability. But right now, there's so much trepidation. It's almost like a self -fulfilling prophecy that there's so much trepidation and doing late -stage rounds that no one wants to be the last guy in because you're not sure if the next guy's going to be there to fund the last round to get the profitability.

1:16:16And that's why half of biotechs that are public are trading below cash because historically the way biotech companies, which is a really good point and example of this, they make progress to hit milestones and then the next round of capital comes in, they make progress hit milestones, next round of capital comes in and then eventually you get phase three approvals and you go sell the company or whatever you get profitable and they almost always get acquired. And in the case of other technology companies, if the business has to do three or four things, it's got three or four milestones it has to hit.

1:16:48In your case, stocks, it might be that they got to get to 50 million ARR and they got to get the certain cost function down in the business. And if they can do those two things and the business profitable, but it's going to take us around a 20, we'll get the first chunk down and then another round of 30 to get the last chunk done. And no one knows if the next 30 is going to be there. And that's really where a lot of these market dynamics are falling apart that there's historically been a model in the market of hit milestones next round shows up, hit milestones, next round shows up. And now no one knows if the next round will show up.

1:17:17So no one wants to fund this round, particularly where there's high burn and it requires a lot of capital to make that bet. So the social, you know, the self fulfilling problem, the social market bet right now is, you know, it's self fulfills and we're, you know, we're sitting here kind of spinning our thumbs, wondering if the next guy's gonna fund it. Do you think that only 10 or 15 % of companies have now properly reset value. Like you said 70 % of these unicorns are actually zombie corns. Yeah, that's why I think the number from I don't want to I don't know Tiger's book at all. But when I hear numbers like 20 % for a fully invested mature book and invested during the peak of the cycle, it doesn't sound right that it's 20%.

1:18:00It sounds like it should be a lot lower. I think that 20 % by the way, you know, comes after like two other smaller right down. So they might be cumulatively. Yeah. So I want to talk about Tiger. I don't want to talk about Tiger. I think like sure. The statistic of 70 % of these public companies trading below their cash, the cash that they've burnt that they've raised in their lifetime. And again, just for anyone that's an analyst at home trying to figure out how we get to that number, you look at the retained earnings on the balance sheet. And so the cumulative retained earnings tells you if it's negative, tells you how much money they've burnt over their lifetime.

1:18:35And that tells you effectively how much money has been invested. So when you look at the enterprise value, which is the market cap minus the cash they have today you get their enterprise value If their enterprise value is less than their cumulative retained earnings It means that they're currently worth less than the money they've spent And that's a statistic that is a fact right now in public markets in technology gone public in the last three years And then you compare that to private markets and I don't think we've seen a 70 % right now yet Or you know 70 % of these things being worth less than the cash.

1:19:04So it's um, you know So it's still, yeah, I think you're right, Tomah. It's probably another hammer to drop multiple hammers. Multiple hammers. Before we move on to a different topic. So I think one of the interesting differences in opinion and Silicon Valley is the way that founders in VCC, the nature of the relationship. And I've been on both sides of this. I've been on the side of being a founder. And I've been on the side of being a VC. And what you'll see is that VCC is always talk about it as a partnership. but a lot of founders will talk about it as if the money is just a commodity. And frankly, when everything is up and to the right and everything is going great and you're in a bull market and you can just keep raising money and definitely because there's always someone willing to lead the next round, then the money is a commodity.

1:19:48But when you're in a down market and all of a sudden there is no market, like you can't raise your next round, all of a sudden it is a partnership because you've got to go to your investors and ask them to do something that they may not otherwise want to do. So this was purely a transactional decision as opposed to a relationship. They might not want to fund your next round and you're asked them to say no actually believe in our long -term relationship. And I think that this is a type of environment which you find out it is more of a partnership. And it should have always been. It should have always been.

1:20:23It should have been. But it wasn't. And look, I don't know what happened with that other company and all of a sudden I got a notification out of the blue. Well, I want to understand the thinking that went into that before, you know, I'm just going to basically do this kind of part. Well, this is where trust comes in, right? And like I think in a zero interest rate environment, you know, there's no need for trust. You just this cash splashing around just grab whoever the latest person in town is who wants to drop a couple of bags. You just take one of their bags. Yeah, the most important thing to me, like what I'm making a partnership is for me to know that the founders have done everything in their power to reduce costs and put the company on the right trajectory before going out and basically issuing capital calls to the investors.

1:21:02I want to know they've done that work. All right, listen, Freiberg, I know you got to go. Take care, Sultan of Science. I'll just wrap up with the other boys here with one piece of breaking news. Stack Overflow says they will join the parade of data providers like Reddit and Twitter that will require permission and payment to use their data sets. And Stack Overflow has a lot of answers to a lot of developer's questions in there. I was just curious to get your thoughts. SEC obviously sent a Wells notice. We talked about this before to Brian Armstrong of Coinbase. He said he's thinking about, or considering relocating out of the US if the regulatory clarity does not improve.

1:21:39Crypto is dead in America. It is dead in America. Crypto is dead in America. I mean, now you had Gensler. You had Gensler even blaming the banking crisis on crypto. So, the United States authorities have firmly pointed their guns at crypto. Is it scapegoat or was it a fuck around find out moment for crypto in your mind or a little bit of both? I don't know. I just think that they were probably the ones that were the most threatening to the establishment. Okay, and they were the ones that in fairness to the regulators did push the boundaries more than any other sector of the startup economy. And yeah, so now they're paying the price for that.

1:22:22The bill has come due for them. So, SACS, is it a fuck around find out moment? Is it protecting the American dollar somewhere in between? Or in competence on regularity part? The more I think about it, the more I think it's probably not a coincidence that you're seeing all these concerns about de -dollarization at the same time they're cracking down on crypto. So, look, there were a bunch of crypto companies that might have done shady things, but I think we all agree that Coinbase was not one of them. Coinbase was the gold standard in terms of doing everything right, and they've just asked over and over again for a regulatory framework.

1:22:55They're just like, tell us how to operate and we'll do it. So, I think Jamalath is right that they're effectively banning crypto in the United States. They're going to drive all these companies overseas, which is terrible for American innovation. I don't know exactly where blockchain and crypto are going to go from here, but I think that we should find that out in America. We don't want that innovation going offshore. You bring up a really good point too. It's just like Coinbase played by the rules stood in line tried to do the right things it seems that every step along the way right everything from board composition to executive composition to How they tried to interact with the regulators yet they were probably the furthest away from getting a license The one that came the closest was the one that was the most fraudulent which is up to us Hmm fascinating.

1:23:44How is that even possible? I mean, because he had skills in gaming the system. Yeah, he's flashing cashy, splashing cashy. Well, he he pronied up large amounts of money because it wasn't his money. So it was easy for him to make huge donations. But he knew how to play the game to quote SPF. He said, this is the dumb game we woke Westerners play. We say the right shibbles so everyone likes us. That's the game he was playing, which is my my whole concern about if we jump the gun on regulating AI too quickly, it'll turn into another, you know, woke game that everyone's going to play. So here's the here's how the world works.

1:24:21Regulate yourself, behave yourself, act in the interest of consumers, or get regulated or smashed. And I think we've gone over this. We talked about it in fact last week, whether in the movie industry, crypto AI, regulate yourself, behave properly, don't push the boundaries too far. You can bend the rules. But you don't want to break them. I think to regulate yourself, you use the MPAA. I don't think that's the right example. I think if you're going to regulate yourself, look at the tobacco industry. They tried to regulate themselves, but what they did was just lie to maximize profit in an area that was much less benign than movies and content.

1:25:00Maybe you could have some lascivious content in a movie or a video game or an album, but But that was a lot less harmful than smoking, which not just impacted the smokeer, but it turned out the second -hand smoker as well, or the second -hand smoke. So it touched everybody, right? You could be in a restaurant, not smoke, and yet have years of your life taken. So I think that the self -regulation for areas that impact everybody, independent of whether you participate in the system or not, is where you have to look for good examples, Jason. And I'm not sure there are many good examples of self -reliagging, those kinds of systems.

1:25:33I mean, I like your workshop being in here. I mean, some restaurants would have a smoking section and a non -smoking section before there was regulation, right? And I think if crypto had just thought had been more thoughtful about, hey, which tokens NFT projects were going to support, which ones we're not going to, that maybe they would have avoided a little bit of this? I'm not sure. You know, it's, it's hindsight's 2020 here, but a little more regulation. I don't think those smoking non -smoking sections work too well. The smoke went all over the place. It was. Can you remember coming out of a bar and you woke up the next day and you're close out like Smokers, but you have to take a shower when you went to a bar or restaurant or a club.

1:26:11You would have to come home, take a shower because you're hair and you're close. Smokers, smell of smoke goes. You couldn't sleep in the bed. Then your bed had to be able to change your sheets. Discuss. Remember when you went on a commercial flight, then a smoking section, a non smoking section. It's a two. It's a two. The smoke gets all over the place. No. You know you're on the wrong airline when they have the welded shut ash drain. They used to have an ash drain in every seat in the armrest. By the way, a friend of mine, this is like such a throwback, but a friend of mine. Well, no, God, you know, I'll say the name.

1:26:47You can bleep it out. Please, please, I love that app. Please, very important. We don't want to. It's a notorious smoker. And so I flown with him. Oh, that's the worst. And we get in there on his plane and then we these shuts the door and I'm like Smells a little odd and he smells a little

1:27:13To the pilots get hazard pay. I mean how do you compensate? I mean this is not a turbo prop. He's on He can't crack the window. No It was a global huge global. It was it was at least it has three cabins you could go to the island felt so sick. I mean, it's the worst. It's the worst, the worst smoking is the worst. All right. Well, we didn't so long to the Sultan of silence as a, so science rather there, polling update here, sacks. I don't mean to poke the bear. I know it was a rough week with the Fox news news, bring it up, bring it up. No, go for it. Quick polling update between putting we're on, I'm sorry, DeSantis and try not going to happen.

1:27:54And the Sanctus is not happening. In late March, news of Trump's indictment boasted him over to Sanctus by 26 percentage points among Republicans and Republican independence. But all of this week, the same polo show that Trump still need shrunk by 10 points in the last two weeks to just a 16 point advantage, which is still significant. But there's more a University of New Hampshire survey center poll. I don't know if any of these polls are reasonable or not. That seems like culpable on the phone. I don't know who's got a landline. Released Wednesday showed a 20 point to Santis deficit. What's going on here, Sacks?

1:28:32Did your boy peak too early? No, I don't think so. If you look at the Republican primary field, DeSantis is the only person who's got a shot other than Trump. You look at Nikki Haley, she's pulling in the 3, 4, 5 percent range. All the others are at one or two percent. there's not a candidate other than DeSantis that has over 5%. So it might be this is a Trump DeSantis race. Now what you saw is that when Alvin Bragg press charges and in Dited Trump, it created a lot of sympathy for Trump among Republicans. Effectively, what happened is Republicans registered their displeasure with Alvin Bragg by indicating support for Trump.

1:29:13Let's go. And that's what you expect to happen. And a lot of people speculated that might be the purpose of Brax prosecution is to make Trump the candidate. So we knew that was happening, but I think this new poll that you just mentioned is really interesting because it shows that that sugar high of Trump's poll ratings was a temporary bounce and it's coming down somewhat. And so what you saw actually is that this huge poll bounce that Trump got is somewhat normalizing. Now there's no question that that Dessantis is running behind Trump and he's got his work cut out for him if he's going to upset Trump as the nominee, but this thing is just getting started.

1:29:53I mean, Dessantis isn't even formally announced yet. And remember, we're still very, very early in this race. The primary battle that this most reminds me of would be Obama versus Hillary in 2007. And at this time in 2007, Hillary had a huge advantage over Obama. She was concerned the favorite. he was considered the one who couldn't lose. And it was Obama that pulled off a huge upset. And he did it by fundraising her out, hustling her, especially in building organization and some of those early primary states. And then he eventually created a narrative that it was time to turn the page. But he didn't do that until much later in the year, much closer to the primary.

1:30:37The first Republican primary is not till February. So there's plenty of time here. And I, you know, we'll see what happens. to Rothney Dots. I think Nikki Haley is going to win the Republican nomination. The more people, the more people, here's the thing. The number of people that have told being the most impressive moment with DeSantis was before they met him. The second most impressive moment was their first meeting. And then it just falls off a cliff where he becomes more and more unimpressive. The more and more time you spend with this guy. Hey, Nikki Haley, come on the pug. Nick Haley is the opposite.

1:31:13Nick Haley announced that in all of Q1, in all of Q1, she raised $5 million, extremely unimpressive. You're probably 20 % of that, Jamoth. And Nick Haley, come on the pod. We'll double it. How much of Nick Haley's $5 million was you? Listen. Zero. I can say definitively you said Q1. Zero. Yeah, Q1. Okay. Well, let me ask a question here. I am not informed on it, but you are a master strategist here. 1600 rated chess player sacks. That's not that good. Well, I mean, it's double 800 where I'm at. You're killing me in 27 moves on average. The Santhus is fighting with Disney over and over again. He's getting a little involved in the LGBTQ, everything.

1:32:01And he just seems to be getting involved in the culture wars. Is that like a primary strategy and then he moves to the center when he comes to the general or and do you agree with this general fighting with Disney and the culture work stuff? Well, strategically not your personal opinion on these issues. I know that you're a very tolerant person. Yeah, so I think this is an issue that works for him certainly in the Republican primary, but I also think it's going to work from in the general and you have to remember that that this bill that they're fighting over was a parental rights bill, that basically it gave parents the right to know what their kids were being taught in schools and it basically prohibited the teaching of this sort of gender ideology in schools.

1:32:45And I think most parents are on board with that. Now, he didn't go, yeah, he didn't go looking to pick a fight with Disney. Disney then got involved and took the side that calling this a don't say gay bill, which I think is factually is not true. The bill doesn't mention gay or homosexuality or anything like that. It was really about this trans issue. And Disney got involved and this was Bob Chepack. And Bob Chepack lost his job and Iger came in. And Iger has said that he basically lectured the Disney employees saying that we need to say out of politics and we need to respect our audience's views.

1:33:22So I think that it was Disney who kind of interfered. But I think this is overall played to distance as benefit. And look, the problem for Disney, they may win the battle over this or that tax benefit that they're fighting over, but they've lost the war over this issue because parents used to be able to trust that they could just pop their kid down in front of a Disney movie or a Disney show like Disney was like the babysitter and they just 100 % absolutely trusted all Disney content. And if you look at polling now, Disney's brand, it used to have like an NPS of like in the 50s, is now in the single digits, because let's call it half the country's parents, the more Republican ones, don't fully trust Disney's content and programming anymore.

1:34:05Really? That is a key. Yeah, that is implicitly. Well, Could they ever do that subjection? I've never seen anything objectionable. A lot of parents are questioning what content Disney might be putting in their recent programming. Obviously, we're not talking about the stuff that we grew up on. So look, whether you believe that is a problem or not, what I'm saying is this has been a brand disaster for Disney getting involved with Dessantis this way. They should really, I think, just try to patch this thing up. I don't understand the benefit of Disney. Yeah, this is a bad look for both. It's a bad look for both people.

1:34:39Yeah. Well, I think I understand the benefit for Dessantis. I don't understand the benefit for Disney. If I were them, I'd be trying to patch this up. But I think there is a really valid discussion to be had about representation in movies and all that stuff and I'm very pro that. The thing I think all parents agree is we should just at least know what's being taught to our kids and we can have a thoughtful discussion about it. There seems to be some small group of people that thinks we should hide from parents what they're actually getting what's being taught. And I find that's very strange. I think just a little bit of like transparency and what's being taught in schools is an obvious thing that nobody should be disagreeing on it.

1:35:20To Sachs's point, I think it was Pew that put out a study recently. It is the most polarizing issue amongst Americans where Democrats and Republicans are literally on opposite sides of the spectrum. It's going to be a big issue on the whole trans issue. Now, despite the polarization, in terms of the quantity of the number of people, it's actually an important issue for a small percentage of both sides. So it's a highly complicated political dynamic in America. Yeah, very. So this is where DeSantis clearly has taken the approach that not only is as important to the base to an nomination, but it's going to scale into the general.

1:35:57And it could very well be, but it's a very divisive issue. Yeah, I wish people were given a little bit more consideration and maybe they could have, I feel like maybe we're covering this issue too much. I referred some other folks in the community to say like maybe people could be given a little bit of their privacy and to handle these things. I think you're right, Jake, on this sense. I think this issue has become a lightning rod. And whenever you have a lightning rod issue, the amount of attention paid to it, it seems disproportionate to the attention on that issue. However, I would say that this is a lightning rod for a larger issue, which is the quality of education in this country, which I think is shockingly bad, and it's bad because of the decline of standards.

1:36:44They're getting rid of advanced math, they're getting rid of green, and choice. That's the thing. And the schools are run by these unions who are managing it for their own benefit, not for the benefit of the students. And look, there is a significant ideological component that's crept into these schools as well. So look, I think that overall, I think that when you get into the general, you have to up level the issue and talk about it in broader terms that every kid in our country deserves a high quality non -ideological education. I think if you can do that you will get 70 -80 % of the public on your side on this issue.

1:37:19Yeah, I feel like Yeah, I think that's right. I think we can all agree on that Democrats Republicans everybody in between if you're a parent You're not looking for an ideological battle at school you're looking for math, science, technology, history, creativity. There's a whole bunch of other things that we should be really focused on. All right, listen, this has been another amazing episode of the All -In Podcast. To people going to the episode 125 meetups, you can type in All -In meetups. Our team over there with super fans are doing it in over 50 cities. The day this comes out, so you may miss it, but you can sign up for the next one.

1:37:53I'll be phoning in and zooming into them. So for the fans, You crazy lunatics getting together have a great time have a great time and tweet it and that mentioned us on Twitter For the Sultan of science the rainman The dictator I am the world's greatest monitor and see you next time bye bye. Bye. Bye We're like your winners ride Rainman David

1:38:20We open source it to the fans and they've just gone crazy

1:38:26I'm going on a leash! What? What? What? What? What? What? What? What? What? Besties are gone! Go through the teeth! That's my dog taking a wish to drive away. Sit next to him! Oh man, my ham is the actual meat. We should all just get a room and just have one big hug. Because they're all just like this sexual tension that we just need to release that out. What? You're the bee! What? You're a bee!

1:39:09bit weird