Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey

24:41Do you think there's gonna be a new business opportunity here? Well, it's called the RGIS Jason, it's called a mutual. And those are like a good chunk of the industry are mutuals where the shareholders are the members and they all share the risk and the ownership. But those things work because you have broad geographic coverage. If you had to go just into Malibu and self -insure the rates would literally be greater than the value of the home. Right, no one would pay into it. So actually, if you do proper underwriting, what's happened in the last couple of years is all the reinsurance companies and all the insurance companies have had to reunderwrite the rates that they charge for insurance because the frequency of a disaster has gone up.

25:20And the new price that they should be charging is so high, it doesn't matter how the capital structure is set up. It's simply, there's one big event that's going to cause a big white that for a large number. My personal belief is I think that the real estate markets in some of these places are meaningfully mispriced. And specifically what I mean is that they're massively overpriced. That's right. Because I think when you actually account for the climate damage and the long -term financial stability of the insurers and the re -insurers, I don't think that many of the markets that have seen these crazy sky -high prices, I'll name two to be specific West Palm Beach and Malibu.

26:04So both ends of the coasts, these things just don't make sense. And I think people view these things as investments, but on the west coast, when you deal with things like soil erosion and other things, I think it's a calamity waiting to happen. And I think on the east coast, when you factor in the extreme weather conditions, even Jason, your comment about rebuilding these homes in a more foolproof way doesn't solve it because you won't be able to rebuild the entire state. There's a lot of people that just can't afford it. There's a lot of folks that will not have adequate coverage. So I just think these are disasters waiting to happen, unfortunately.

26:44Yeah. It's, and Sachs, there's a movement right now. A lot of people, even of means, are renting their homes. And so in the real estate market, what are your thoughts on that? Just renting versus buying now, becoming like something that, you know, people So in the top half of homeowner, potential homeowners are now electing to not own their home and rent. Have you been doing that? I honestly hadn't heard that. I mean, the trend that I thought was happening was that you had these big funds, like BlackRock or whatever, buying up huge numbers of homes and then running them to. Lowend homes, yeah.

27:22Lowend or medium, you know, to families. I thought that's what was going on. I hadn't heard that at the high end of the range that people were running. I mean, well, if you think about it, like there's, there seems to be a cap when you have a $10 million home of what you can possibly rent it for. And it's the, the prices are now making more sense, to keep more sense, to keep your money in the market, or in other places, and then rent. I'm just here in the middle of the ocean. Are you long real estate in Florida or coastal California if you could, or do you treat them differently? I mean, they're different, but Florida is like, I mean, I don't know how you do the math on...

28:00I just don't know what you do. On a trillion dollars, a real estate value with half a trillion of mortgages, when you have real exposure on loss more frequently than one in a hundred years, they're to your point, they need to be reprised. And how do you reprised those homes in the significant level that we need to be reprised without causing massive economic and social consequence? That's what's kind of, I think, challenging me and thinking about what's the path here. So it was a good thing that I sold my Miami place. Once again, Sack takes a great tray. Pretty awesome. Well done, Sack. You top -checked it again.

28:36Well done, Sack. But just like, I really love that house. Oh, it's on the... I mean, I love that house. Where do you think I stayed when I was in town? Yeah. You're so selfish. the shot who lost the place to stay. I mean, the yacht access alone and being able to get out on the bay and get out of boat, the ski do's, all this great stuff. Ah, all right, let's keep the free bird train going here. Huge news, alpha -foil creators just want to Nobel Prize in chemistry. Two members of Google's DeepMind AI research team, Demis Hassabis and John Jumper received this year's Nobel Prize in chemistry. They both worked for Google's DeepMind, I should know.

29:19And Freeberg, again, all in getting their first, explained what Alpha Fold was back on Episode 14 in December of 2020. That was almost four years ago. Freeberg, maybe you could explain. Did we predict that they would win the Nobel Prize? I believe you did. And we'll go check the receipts using the podcast AI search engine. It became much more likely that they would win the Nobel. well, after they won the breakthrough prize. I mean, just to point this out, but yeah, yeah. Shard out your memory. Shard out your memory in Julia. Did you, yeah? Because when those guys won that award for 2023, and you heard the extent of what they've done, it was almost like obvious that they were gonna win Nobel after the fact.

30:08So I think the really interesting thing is actually, in this community, I think the breakthrough prize is actually meaningfully more relevant and a positive directional indicator to break through science and data. Well, it's kind of like winning Sundance or can, win the Palm Door, you become a favorite to win at the Oscars, right, in the Academy Awards. So that's actually interesting. The regional or more industry centric award could lead to the next one. So, Fribert, just explain to us why this is so important before we go on. I just think it's much more rigorous than the Nobel. I think the Nobel can be a little bit game, I think.

30:40Oh, interesting. What do you think, Freeberg? Explain to the audience why this is important and what's transpired since we talked about it four years ago. There's been a long challenge in biochemistry on understanding or predicting or visualizing the three -dimensional structure of proteins. Remember proteins are produced by long chains of amino acids and those amino acids are or kind of create like a bead, beaded necklace, and then the whole necklace collapses on itself in a very specific way, and that three -dimensional molecule, that big chunky protein does something structurally, physically.

31:20And so trying to understand this shape of a protein is really hard. I mean, we've used kind of x -ray imaging systems, to try and identify it, and try to build models to identify how does that quote, protein folding work. How do those amino acids collapse on each other to create that three -dimensional construct? And if I don't know if you guys remember in the early 2000s, there was a Stanford folding at home distributed computing project. Do you guys remember this? Yeah. It would use people's machines and extra CPU like the SETI at home project to... Precisely, yeah. To do this. Yeah. So it was like, it ran on the background of your computer.

31:52It used your CPU cycles when you weren't using your computer. And it tried to model protein folding. And so this has been a problem that folks have tried to tackle with compute for decades to figure out the 3D structure. This is so important because if we can identify the 3D structure of proteins and we can predict them from the amino acid sequence, we can print out a sequence of amino acids to make a protein that does a specific thing for us. And that unlocks the ability for humans to create biomolecules that can do everything from binding cancer to breaking apart pollutants and plastics to creating entirely new molecules to running in some cases like what David Baker did at University of Washington.

32:34and he shared the Nobel Prize, creating micro motors, mini motors from proteins that he designed on a computer. And so this becomes, I think, this great, like big, holy grail in biochemistry and the Alpha Fold project at DeepMind inside of Google solved this problem. And by the way, since then, they've come out with Alpha Fold 3. They've launched a drug discovery company called isomorphic labs, where they're basically predicting molecules that will do specific things for a target indication. and then they use the alpha -fold models to actually design and develop those molecules. There have been literally dozens of companies that have been started since DeepMind was published, and probably several billion dollars of capital that's gone into companies that are creating new drugs, creating new industrial biotech applications using this protein modeling capability that was unleashed with DeepMind a number of years ago.

33:25It really has transformed the industry. it'll be a couple years before we see a transplant in the world, but it's an exciting kind of thing. Yeah. Not to a virtue signal here, but those are plus -size proteins now, freeberg. They don't like being called chunky and called plus -size proteins. Plus -size proteins. Yes. One really difficult technical question for your freeberg. Is there any way for you to take this amazing breakthrough and make SACs interested in it? Is there any possible vector here for it to relate to SACs and get him off his blackberry right now. Blackberry. I think he's playing chess with Tio and JD Vance is watching them play chess.

34:04I think that's what's going on right now. It's really hard. I mean, the four audience here is watching SACs looking out. All right. Let's keep this train moving here, enough of the shenanigans. Anyway, congrats to the teams. The very things that won. I think it's a good job. Yeah. I mean, it's just great and David Baker at the Baker Lab in University of Washington, David they also break through Piersminer. What's interesting to me is like these two nobels, these guys, but also Jeffrey Hinton's, you know, you're really seeing now the convergence of the hard sciences and computer science. Totally.

34:36In a really meaningful way. And I think that that's so interesting and cool. I think in the group chat, Chimoff, you had an interesting, hey, maybe there should be a computer science award for a Nobel computer science award. And I actually think it's the opposite now, which is that it's amazing to see folks using computers to improve our understanding of the natural sciences. And I think that that's a really great place to be. So what Dennis and John and David are doing in the life sciences amazing, what Jeffrey hinted, you know, did, you know, 30 and 40 years ago and 20 years ago in terms of training deep neural nets, also really amazing.

35:16In related, all computer based. Yeah, all computer based. And in related news, Benioff just nominated himself for excellence in CRM management. So congratulations to Benioff on nominated himself for a new job. What is that called? It's just a straight. Why are you attacking Benioff? That's just a straight. You want to be a lot of needy, right? Yeah. It's just joke. It's a joke. They're just jokes. Have you not learned anything? They're homerunners. It's a people that attack you. It's not in the attack. It's a joke. And he has done so much for philanthropy. Just ask him if you do these things. I can't even do this.

35:52Oh my God. Drought with the potty. What are you doing? Exactly. Can you people have a sense of humor about yourself? No, but it's not even funny if you had said it's something else. I mean, okay, give me a give me a funnier no -bowl. go ahead. Go ahead. Anyhow, runs a 300 billion market account. He's chomping the poth to come back on the pod and explain why AI is not going to disrupt SAS. Really? Oh, we see he wants to be back on the box. He's texting me wants to come on. Well, check in. We'll check in in a hundred billion dollars. He had his chance. That chance is closed. In shot is shot and it did not land.

36:26That door was closed when he insulted our guests about not being able to afford the 20 million people, fours. Oh my God. Now you're piling on anybody coming to Dreamforce 2025. Okay, let's move on. Sorry. Anyways, leave any off alone. Jeep. It's like a leave Britney alone. The famous me leave any off alone. So how many new enemies do you want to create? I just just just just just people. Just jokes. This when you thought he was running out of feuds, you know? I'm not even kidding with anybody. I'm making stupid jokes. The reason people tune in is because you laugh and learn. Did you guys see that tweet that somebody suggested throwing a conference with all of J.

37:12Cal's haters? Jason Conn. J. Caln. J. Caln. J. Caln. Jators convention. What is it called? Jators. Jators. Yeah. Jators. Jators. I'd like to shout out my Jators. They're just jokes folks. I love you work. I'm penny off. Come on the pod, Zach. I think somebody could watch this successful summit just doing that. It's like a ready -made audience. And they're clearly passionate. They're clearly passionate. All the YC founders will be there. Keynote day one, Palmer Lucky. Keynote day two, David Sacks. I think it would rival the all in summit in terms of the passion of the fans. All three of us are chill.

37:58Jake Albezo devastated. Yeah, Keenel. He's kidding me. He's hilarious. I have to keep him. I have to keep him. Benny, I like Benny. I don't know. I'm trying to make it. We're Benny. He's just going to have a sense of humor. Oh my god. Oh, but Megan Kelly. Yes, I'm the work. Oh, yeah. I'm not. I'm Megan Kelly and Farmer Lockheed. Wait, does that Kate you too? Why does that keep? Oh my god, Jake Albezo. So I was brutal to Zach in the early days. I heard all. Yeah. Why? Well, he just anyway, we'll get to live. But you're right. Like, you know, throwing a conference for J haters would just be. J haters are ready.

38:34Jaters. That is an underserved and passionate demographic. It would be bigger than passionate demographic. Just just looking sexist replies. Community with shared values. Hey, man, if I can get 25 % of those ticket sales, I'm in. Let's go. All right. Let's keep the train moving here. where we have an update on the DOJ's antitrust suit with Google looks like they're going for the breakup as Shamaaf predicted. You remember the Bloomberg report back in August, we covered it in episode 192. Google is found liable for maintaining a monopoly in search and digital ads. Now the DOJ is working on the remedy, right?

39:15Okay. They're guilty. So now comes time for the remedy. and the DOJ is quote, is from Bloomberg, considering asking a federal judge to force Google to sell off parts of its business. And according to this filing, the DOJ is specifically considering structural remedies that would prevent Google from using products such as Chrome, Google Play. That's the app store on Android. and Android itself to advantage Google search. 32 -page document released by the DOJ lays out several options and we'll go through them and talking about them here. The obvious one, Terminating Google's exclusive agreements with hardware companies like Apple, that they default search engine there for 30 or 40 -billion years, Samsung.

39:58That's a layup, a separating chrome in Android. My God, that would be drastic ripping that out of the Google ecosystem, prohibiting certain kinds of data tracking. that's a layup as well, or other behavioral and structural changes for the company. I'm going to pause there, Friedberg, and get your thoughts on this as a former Googler. And you interviewed Sergey at the summit. But I don't think we talked to Sergey about this because obviously he would not be able to talk about it. So what are your thoughts here on a potential remedy? I think we've talked about this. I mean, look, I've shared in the past my belief that companies that are big that have excess capital that then invests that excess capital and R &D can be a net benefit for all of us.

40:41Look at Bell Labs. Bell Labs had a monopoly on through their association with AT &T with developing radar microwave, the transistor, integrated circuitry, information the internet, computing, even nuclear technology, and so on. It's because they have this extraordinary capital flow from the scale of the business, and they were able to invest in R &D. Similarly, Google acquired and invested for many, many years in DeepMind. And we just talked about how DEMAS and Team won the Nobel Prize for the work that they did. And they, by the way, published the protein structure for 200 million proteins for free out of that service.

41:26I just want to zoom out for a minute and talk about the fact that this isn't about You know whether Google has a monopoly in search that prohibits competition or in ads that prohibits competition But are do is it really worth penalizing any company that's big particularly do we lose the benefit of those big companies investing in Technology that pushes us forward Google also invested in Waymo for years and years and years which arguably spurned and drove investment from any other companies in self -driving technology. And if Google hadn't done that, would self -driving have taken off the way it did?

42:01I don't know. Same with Kitty Hawk and Larry's investment in EVTALs, and that spawned a lot of EVTAL investing. And similarly, if you think about Amazon and their investment in AWS, where they were burning cash for many years, that turned out to spawn arguably a lot of interest and investment in cloud. And so I don't think that these big companies are bad just because they're big. I think we should take apart the monopolistic antitrust actions and behaviors that they take and then identify ways to remedy those behaviors versus just saying anyone or anything that's big should be taken apart because there is a tremendous benefit to be gained from the R &D dollars that they all put into things that move the whole industry forward.

42:43And I think that leadership's important to need it. Otherwise, if you got a bunch of startups that are trying to get $10 million checks from VC is I'm not sure they're gonna build a Waymo and I'm not sure they're gonna build Amazon Cloud and I'm not sure they're gonna build a deep mind, you know, protein folding company and publish it for free. So I don't know, that's just my point of view. I mean, Chimath, what's the, likely I would be able to figure out how we should think about this stuff. Chimath, you kinda know this one. Pretty good with these predictions. Tell us, we'll be sitting here five years from now, what will have occurred?

43:14Unfortunately, not what Freeberg just said, it'll be the opposite. There'll be some form of force -crownity. I'm sympathetic to Freeberg's argument. I don't think that it's really a good thing in the end because I do think there are some incredible examples of Google's specifically reinvesting in a way that's really added value in the world. I think the problem though is that the technology innovation cycle has gotten too elongated. So you're not seeing creative destruction be the natural force that keeps all of these companies in their own swim lanes. And so they are allowed to become too amorphous and too profitable.

43:58And I think it becomes an obvious target for politicians. I think that's a really good observation there about the timeline of this because if you look at this, I have started now, and I know many people, are starting their search journey on Claude and chat GPT every day. I'm doing 30, 40, 50 queries and follow -ups per day. I force my entire team to do that as well. And so just as there's an actual viable competitor to Google, this action has reached, I don't know the halfway mark, this is going to wind up being completely meaningless acts if Chatchee PT does build a viable competitor co -existor that siphons off search.

44:43Am I wrong here? Well, it is ironic that frequently the government takes actions on these monopolies that precisely the moment they're subject to the greatest disruption. Totally. The same thing I'm with Microsoft in a way, but it was still a good thing that the government acted when it did because there was a risk of Microsoft porting over its desktop monopoly into this new era of the Internet. I think it's still a good thing to be looking at breaking up Google. I actually think that would be good. At the end of the day, it might be good for shareholders. This thing should be probably three separate companies, like we've talked about in our previous show.

45:18But it is true that Google is facing the most existential threat to its search monopoly, and it is monopoly in the form of open AI at this point in time. I have one final thought here, a piece of advice for Sergei and the team over there, and I tell Sergei directly, they have to get good at making apps. To go use chat GPT, you take out the app, and it's a wonderful, beautiful experience. When you go try to figure out how to use Gemini, it's like shoehorned into search results, and then it's like some subdomain, that's why people aren't using it. Go by thedomaininchat .com and make a dedicated app just for Gemini.

45:57You're 100 % right? You can kick ass. You're 100 % right. Go do the socket apps. We said this when you asked about the bear case of open AI, if the DOJ is gonna go after Google, and by the way, the interesting thing, Jason and I mentioned this to you, is that in the same article that floated the trial balloon about this remedy of a Google breakup, the headline in the Wall Street Journal, which I think was very purposeful said Google and Meta. So I think that they, if given their brothers, they being the powers that be at Washington will probably want to take a run at both these companies. They'll start with the one that they think they can disassemble the quickest and then they'll go to Meta afterwards.

46:42My strong advice to Meta and Google is if this is going to happen, you got to go out kicking and punching and fighting and scratching. And I think the most obvious thing is what you just said, Jason, which is you are the front door through the internet. And there is this completely new emergent technology. And where is the same response to chat GPT that you had to X or that you had to snapchat or that you had to TikTok because if it's going to happen, it's going to happen. And then you might as little just go for it. Yeah. Build the apps, make them kick ass, make the chat GPT alternative and get it to billions of people yesterday.

47:31That would be the most logical game theory thing to do to build up a pool of users that you will rely on when the DOJ tries to come with some consent decree or whatnot. So this is the time to build up the assets now as aggressively as possible. And selling YouTube would be the ultimate. I know that the ad networks you pointed out for your brother are connected. But if they distribute it in, they spot it out. I'll give you something about the ad thing. But can you imagine $500 billion going into Google's coffers in YouTube shares? They have $500 billion in cash. Chama. I had a, I talked to a company, a CEO of a public consumer facing company.

48:18And this was in the context of some 80, 90 stuff. And he said that he and two other CEOs, the three of them, you guys would all know, these are very big companies, the three of them combined are particularly large. And they said they've had multi -year roadmaps to try to build a reasonable set of tools and advertising it, it's been impossible. And partly why is that the tools that the big folks offer are so good that they just cannibalize and run over the entire market. And so what they hear from CMOs is we would love to advertise on your company, your site, but A, your tools are a standard. And B, even though your inventory is cheaper, you just don't give us the same scale and breadth that we get in these other big places.

49:07I'm not saying that that's either right or wrong, but through the lens of probably what the DOJ sees is when a lot of these folks write letters to them talking about what they're going through. This is what they're saying, and I suspect that if you could actually have a more fragmented market in some of these key markets, it's going to be a little bit easier for these smaller companies to have a business. Now, you could say, well, tough luck. You tried and you couldn't build it. I get that argument and I think that at some point that is legitimate, but the problem is if you're public and you're trying to make your company profitable, what do your engineers want to work on?

49:43They want to work on consumer -facing forward features. What always falls off the list, it's the stuff at the end. The attack, yeah. Anyways, it's this recursive negative loop that a lot of these other companies are in in the shadow of these big companies that I think is going to cause the DOJ to try to do something. This is a great set up for M &A. It's great that it for IPOs starting to look like and this is a multi Administration case that's been going right? I think the started under Trump went into Biden and is now going to continue on to Trump or Harris So what are your thoughts here? Sacks Well in terms of the political environment for M &A next year.

50:21Yeah, yeah, I mean so obviously it depends which administrations in power a lot of Democrats, you know, prominent Democrats in tech like Mark Cuban or Reed Hoffman have been making the case that if Kamala is president, she's going to be much more hospitable and friendly towards M &A and they've been saying explicitly that they want Lena Con fired. Well, in response to that, AOC just came out and said, we're going to have a throw down if you do that. So, I don't Let's go. I would not expect a substantial difference or improvement in the in the regulatory permissiveness towards MNA if if we have a democratic administration if that if you have Trump in office next year, I think that there will be an opening up of of MNA.

51:09I think the Republicans have their own issues with big tech, but those issues tend to revolve around censorship and bias and search results and LLM, things like that, as opposed to bigness per se. So I think it will be easier to get M &A done next year if you have a Republican administration. Absolutely. I am going to be printing money in a Trump administration. It is going to be obscene how many M &A deals and IPOs are going to occur. There is such a huge backlog. But I do think Democrats want to get this moving as well. and I was talking to Reed Hoffman and you and Peter Tiel in the Illuminati meeting and they voted 190 to two to replace Lina Khan in the Illuminati meeting.

51:51Tommat, why didn't you make the Illuminati meeting last week? I'm shocked that you weren't there. I'm not invited to that. People don't know that you're being facetious Jason. Oh really they don't understand that I'm joking about the Illuminati. They often don't. They often don't. Well I'm sorry to the low IQ listeners who don't know that the Luminati is not real. Oh, now you're insulting the audience. No, I mean, insulting the ones who believe there's an aluminum Nadi. He's trying to self -ticket to the jaders. I'll take it to the jaders ball with Buck Nasty. Zuck Nasty. Jane Cowell is the biggest hater in the tech industry.

52:28You ever see the haters ball? Sax. I have not. Shepalsha. Oh, no. Shema, it looks like between the time we mentioned it on the pod, it's actually happening. Here it is, because the Jators ball is happening. There it is. Lena Khan, David Sacks. Wait, why am I there? Good luck, because you're a headliner. You're organized. I think you're the host. I'm gonna be a keynote. I'm gonna say, okay, wow, I'm in the MC. There, look, there's, there's Zuck Nasty and there's Parmer Lucky. You guys don't know this bit from Shabal. The Hater's Ball from Shabal. Oh my God, it's the funniest bit on Shabal Show.

53:05It's literally. I mean, I saw a lot of ship hell shot. I'm not going to show. Just show the real picture, Nick. I'm on the ship hell show. They have all of these pimps who have a yearly convention, which is their player hate. Oh, I've seen this. I've seen it play. And all they do is sit there with like a toothpick in and they hate on each other. Yeah, yeah. They make fun of each other. I've seen this. It is the funniest bit in the history of the ship hell show. All right. Let's keep the train moving here. CRV is giving back or maybe not calling down 275 million from their LPs Charles Rev. Shoutout to my pound George Zachary and Creek brother from CRB.

53:41Historically they invest in early -stage startups. They did DoorDash air table Twitter back in the day. They had two funds that they raised back in 2022. Billion Dollar Early Stage Fund and a 500 million growth fund. Sometimes people call that an opportunity fund or a select fund. The New York Times reported CRB is going to give back about half of that to $75 million to investors or technically probably not call it down, the four partners at CRV gave an exclusive to the New York Times, so either getting ahead of this story, or maybe who knows what the motivation here is. But the reason they gave is that the market conditions for late stage have worsened dramatically and that the valuations are still too high.

54:21Yes, the rent is too high. And that there aren't any exit options as we just talked about with the administration, no IPO, no M &A. And that VC map doesn't work in the late stage. So I'll just stop there. There's a bunch of other notes here, obviously. This isn't the first time this has happened. I think Founders Fund cut the size of its eighth fund in half from 1 .8 billion to 900 million. They didn't actually give the capital back to VCs like they're saying CRV did here again. Not certain if that's what's happened or not. They put the extra 900 million into its ninth fund if they decide to raise that, which I'm assuming Founders Fund will.

54:55So, Tremapi have any thoughts on this? I guess, we had two stories here. Peter Tiel did this and he gave back quite a large piece of his fund a couple of years ago and then CRV just did it. I want to make sure I get the citation right. I think it was Thomas Lafont at Coutue who said this, it was really powerful. It made a huge impression on me, which is that the NASDAQ creates about $800 billion dollars of enterprise value a year. And he brought that up in the context of private markets have to exceed that in order for it to be a real viable alternative to just owning public indices. And so if you factor in liquidity risk and the duration, you have to probably generate, I don't know, a trillion, 1 .2 trillion dollars of enterprise value in private tech every year.

55:48That just seems like it's really hard to do. Where is all of that value getting created? So I think the adventure needs to go through a phase where it re -rationalizes. You know, this is sort of what I said at David's LP Day, which is I think that LPs have made a couple of very big mistakes. And I think the biggest mistake that they've made is by smearing too much money across too many general partners. And I think if you had to redo it, A, it's probably a lot less money in total. But B, and the example I gave there was instead of giving $50 million to craft and $10 million to somebody else, you're better off giving $60 million to craft and not even having that other GP.

56:30Because that GP makes everybody's life complicated. They overpay, they mispay, they're probably not supposed to be a GP in the first place. And so they force returns down. And then when you contrast that again to a public market that is systematically creating $800 billion of enterprise value a year. This is an incredibly tough game and it's getting much, much harder. So I think that if you just take a step back, these are the right things to do because you're much better off having a smaller pool of capital that you can concentrate into the things that matter. You're probably better off having smaller teams versus bigger teams.

57:07And you're probably better off trying to forge LP relationships where they're not doing 50 fund investments because it just makes the entire industry lag public liquid alternatives. And I think that that's just not good. Peanut butter getting spread a little bit then there are any thoughts freeberg on this trend if we can call it that. Or is this like maybe the reacting right as the market is changing and valuations are getting more reasonable? And the exit opportunities are getting more reasonable. who seems like this was the right reaction two years ago, but maybe it's the wrong reaction. Now, what do you think, Freiburg?

57:46For venture firm to return capital, they need to have at least one or two big winners. And so if that winner needs to be a 10X or a 20X or a 30X of the fund, because most of the investments in the fund are not going to work, you need to be able to enter at a reasonable price and there needs to be enough opportunity relative to the capital trying to invest in that opportunity out there for to make sense. So in a market where there is excess venture capital, where valuations are at a premium, and where you don't see the exit path, the M &A or the IPO events that make sense that you can actually realize that model, you should take less capital and make fewer, sure investments.

58:31And I think that that's what some folks have realized. They don't want to be chasing you know, highly valued inflated opportunities, and they don't want to be putting capital into tier B or tier C opportunities just for the sake of deploying capital. This is a really interesting moment where you can kind of see who are the the right folks in terms of thinking long -term in Silicon Valley, long -term in terms of building an investment practice in private venture. And maybe who are folks that are trying to build their AUM stack? And folks who have done reasonably well. Like Founders Fund has probably the most exceptional track record in Silicon Valley as a venture firm.

59:10They are very cognizant of the market conditions and I think that they're being very smart. By the way, the other thing I've heard from LPs is they're similarly trying to find more concentrated capital themselves. So they're trying to put more capital to work in fewer managers. And so there's a real weed from the chaff moment and happening in Silicon Valley venture right now. What I think a couple of years ago was, hey, everyone's going to go do a startup. A few years ago, became everyone's going to go do a venture fund. And now I think the froth that has occurred because of that is being cleared up.

59:42And to just explain this math before I get sacks is thoughts on this. If this was a $500 million fund, let's say they were putting $25 million into each, we'll take management fees out of it, $25 million into each opportunity at a billion dollar evaluation, they would own 2 .5%. Obviously of those firms, they need to get probably a $30 billion power law exit of $30 ,000 in order to just return the fund. There'll be some dilution obviously along the way. That's why it's not $20 ,000. And the number of companies that go from a billion to $30 billion per cycle is incredibly low. Uber, Coinbase, Airbnb.

1:00:26It's Yeah, I mean, look, just go back to the CRB thing. You said at the outset of the conversation that this was either a growth fund or an opportunities fund. That makes a really big difference. Explain, please. Because while an opportunities fund typically exists to back up your winners, in other words, if the venture fund is producing some big winners, the opportunities fund exists to deploy more capital into those companies. as opposed to a growth fund, which is you'd be underwriting brand new companies from scratch. A typically an opportunities fund is limited to companies that you're ready and invest in through your venture fund.

1:01:04So that makes a big difference. I mean, if CRB has a billion dollar venture fund and only a $500 million opportunities fund, it may just be the case that they don't need all of that capital to back up the winners. They can do their pro -rata out of the main fund. So I suspect that that might be what's going on. I actually think that's a pretty good time to have a growth fund. A lot of that, well because a lot of the crossover capital has left the ecosystem a few years ago. Tigers in that sort of cohort. Yeah, and you know you're supposed to see some. Yeah, well, Tiger and and soft maker still around, but there are other very large investors, hedge funds and so on, who had come into the ecosystem with billions dollars a few years ago.

1:01:46And now they've left. And some of those funds that you're talking about like Tiger used to be $10 billion funds now they're $2 billion So right they've been right size. They're not violently doing I mean the the Tiger deals my understanding was they weren't joining the board And a lot of the cases and they were outsourcing the diligence and that was a pretty violent pace. I don't know Yeah, this is the best time in probably five years have a growth fund Interesting, but to your point about the size of the venture fund the bigger the venture fund the bigger the winner that you need to make that pay off obviously.

1:02:15Yes. And so because of the power loss, it's a taking example, I don't know, let's say you've got a billion dollar venture fund. Let's say that at IPO, you own 10 % of whatever that that winner is. And because of the power law, your fund performance is really determined by your best outcome, right? Yep. So, in order to take a one billion dollar venture fund and say, deliver a three X, you know, of so three billion of returns. And your best company, you own 10 % of, that implies you have a $30 billion winner in that fund. And there are precious few outcomes where you have a $30 billion IPO, right?

1:02:55This doesn't happen very often. I count them on two hands the last cycle. Like I just did, you got Uber, you got Robin Hood, you got Coinbase, Stripe will eventually come out, you got SpaceX, well that was two cycles ago. So I mean, yeah, you're going to need to have a meaningful ownership position and a massive company in order to make a fund that big payoff The the data that I think LPs look at shows that smaller venture funds tend to perform better for this reason $500 million yeah funds So yeah, I personally wouldn't want the pressure of a billion dollar venture fund that would be really hard As a five or six hundred billion dollar venture fund you kind of need to have or want to have like a deca corn and outcome to make that a great fund, but to have to have a $30 billion plus outcome, it's even more difficult.

1:03:44Moving on, Pue just published some really interesting research on TikTok. If you don't know the Pue study, they've been doing it for decades. It's very well respected. And bipartisan or nonpartisan, four in 10 US adults aged 18 to 29 are now regularly getting their news from TikTok. Here's some charts for you to take a look at. But as you can see, the younger generation is really spending a lot of time on TikTok and getting a lot of their news there. I know this because, yeah, I've talked to a bunch of kids about this. And people that use TikTok, 52 % are regularly getting their news from the platform.

1:04:20And that number has skyrocketed compared to other social platforms. Take a look at this chart. Here's X, 59 % of people say they get their news at X. It's really a news platform. So that makes total sense. You look at Facebook, it's 48 % right now, Reddit, 33%, YouTube, 37 % in 2024, Instagram, 40%, but TikTok, 52, up from 22%. So it's no longer just dancing. And this is the reason I think many people in the government were concerned about the attack vector that the CCP would have in the United States since they still control the company for services like Snapchat, LinkedIn, and WhatsApp. And next door, it's below 30 % get their news from there.

1:05:05They're sure to treat social there, sex, 57 % of people get news there and rumble 48%. So what's your takeaway from this just sex looking at it and this impact that TikTok has is just concerning on a national security level since the algorithm's a black box. And you could tweak it if you really wanted to, to really change sentiment and young people are obviously very impressionable on this platform and their big user setting. Well, I thought there was other data in the study that should call people's fears that TikTok would somehow be used as a political weapon. So in the same survey you're talking about, 95 % of adults that use TikTok say they use it because it's entertaining.

1:05:47So that's the main reason people use it. and only 10 % of accounts followed by US adults post content related to political or social issues. Okay, that's posting and the main reason, right? Yeah, but so basically you're 90 % of the accounts that get followed aren't even posting political or social issues. They're there for entertainment as people watching dance videos as people watching. Yeah, that's definitely not the main thing I use it for is to watch wrestling highlights. So you're a wrestling guy. Yeah, I'm a wrestling fan. What yeah? You're into this kabuki theater of wrestling. This isn't the point 20.

1:06:27I get my WWE on on TikTok Yeah, you a Hulk Hogan guy you an undertaker guy Vince McMahon Jimmy super fly snooker Who you on? I know all those names, but I like I also love the road warriors. Yeah, ultimate warrior. I loved I was a huge dressing fan That was the one thing that my dad and I Bonded over we would watch wrestling every Saturday Sax, did you ever watch the the specials on Saturday night like the oh, yeah, oh That was that was the era of Hulk Hogan for sure Saturday nights main event Randy Madison sat at yeah, yeah, yeah, I mean look my my all -time favorite was Stone Cold Steve Austin Still cold as I marked out the hardest for all he was he was anti woke before anti woke became a thing totally This is crazy you guys are into wrestling and I love for us.

1:07:22I'd say for a rick No, I'm just waiting hold on have you gone to a wrestling a fact? Did you ever see like the wwf at the time or did you like the nw? Is that their moments when when Hogan turned heel and joined the uh, the, uh, was it the NWO that was like a big moment. I'm a big, uh, Andy Kaufman wrestling fan. That was my only interest is when Andy Kaufman came in there and, uh, trolled them. But I've been, yeah, in the Kaufman. Yeah, that was like in the 1970s, wasn't it? Or it was the late is 80s. Remember he was on David Letterman, which are a waller and he, he comes to a wrestling match sax in the South.

1:08:03And he gets it. where I grew up in my hometown in Memphis. Right, so he goes there and he gets in the ring and he says, all of you red necks, I wanna show you some new inventions. This is called soap and this is called a washcloth and you use it to clean yourself and he's like just mocking the southern accent and Jerry Lala, I remember Jerry Lala, smacks him and on letterman, it's the great thing. It was a huge deal, I mean, where I grew up because this was like on the local news. Yes. When I grew up in Memphis, there was no professional sports teams. Okay, all we had was the Memphis State basketball and wrestling every Monday night at the Mid -South Coliseum.

1:08:46That was it. That was like professional sports in Memphis. You also had probably like some state fairs or, you know, like best goats, best sheep or something. Lawler was so popular that he could have been elected mayor. In fact, I think there was talk at one point of him becoming mayor. Wow. Wow. I mean, the intergender champion Andy Kaufman, did you, uh, did you guys like mouth of the south? Jimmy Hart. Oh, yeah. Of course. Yeah. He was amazing. He was like the main heel manager for a while. Yeah. Okay. So for the WWE took over, I guess it's called WWF back then. But there were all these little fiefdoms and kingdoms and mid -south wrestling was like one of those kingdoms.

1:09:24And Lawler was like the king of it. And then all these guys come in and out Russell. Freeberg, you ever watch wrestling? And what do you think of this TikTok survey? I don't watch wrestling. Okay, very good. And TikTok survey, anything where you know, any thoughts? Looks like they gathered some reasonable data. Okay, there you go. There's your hard hitting. But the point my point was that is mostly an entertainment app where people go to watch dance videos, wrestling clips, style influencers, and so on. And I think that this idea that it's somehow a propaganda tool around programming or youth.

1:09:59I think that's moral panic that's been exaggerated. What do you think the odds are that TikTok is hacked to allow you to passively listen even when the app is not being used? Zero. You think it's definitely zero? No, like 5%. I mean, that's very unlikely. Yeah, because someone said that that was, that was a, there was some code that enabled that in the early version of the app. and then some other people audited it and they said they did not find evidence that there's any technology. And Apple's got a very good audit system for this. Did the same people audit what's that? And then it turned out that it was.

1:10:37It's one of the most well -known breaches. Or maybe they do. Maybe it's 100 % certain that the CCP is using it because they this people have tracked already journalists using it. So if they've already done it, it's 100%. I don't know about the passive listening. But any of the thoughts on 50 % plus of young people getting their news here, Chimath, any news on that. I mean, obviously, we don't have evidence that it's being used currently to manipulate people, but it's over 50 % of young people are now getting their news there, or say they're getting their news there. I bet I'm at more than 50 % of young people are getting their news from podcasts, and those podcasts get chopped up and clipped, and then people watch them on TikTok.

1:11:14Yeah, for sure. I bet that's how it's happening. There were a lot of people who think this show is a TikTok show and they don't know it's a big show. We'll have to prepare for a brave new world in the following way. There was an article, I think it was in the Wall Street Journal that said that Russia and Iran were paying low -level street criminals to create chaos. Okay, and I read that article and I thought, okay, well, what does this mean if you actually extrapolate this, which is that the hot wars are very complicated, not worth doing. These disruptive fissures are the better way to sow chaos.

1:11:55And it occurred to me then that tying this back to something that we saw before, it does make sense for a lot of folks to sponsor a lot of long tail content that say a lot of different things. I think that is together, it stands to reason that a lot of people will be paying influencers a lot of money to create all kinds of content that is specific to a perspective that they have. And then on top of that, if you can algorithmically amplify one over the other, you know, you're going to have issues. Is it the biggest issue in the world? Probably not. But it's probably a thing. It's probably a swing in election, but it would cost chaos.

1:12:37and we just had the Southern District of New York target that Russian... Russia today was giving $10 million to four podcasters. They didn't even know they were getting paid by the Russians. They just picked them because they liked their opinions and they gave them a hundred thousand in episode to promote pro -Russian positions. If the Russians were actually doing it, it's the stupidest use of $10 million ever because... Great. Those podcasters already had their own channels. They're already putting out lots of content. and this other content is a drop in the bucket. I think Jamal, the issue with what you're saying is just there is so much content out there already.

1:13:14People created for free, people created, because they have a career in it. There's a whole long tail of influencers. There is so much content out there already through podcasts, through websites. It's all being chopped up, that trying to do it as some sort of disinformation strategy, I think is very hard to do, because it's just when there's billions and billions these are impressions, any effort that you try to engineer ends up just being a drop in the bucket. I agree with you. Yeah, it's definitely a drop in the bucket. It makes sense in theory, but it makes sense in theory. It's very hard to do in practice.

1:13:47Yeah, the goal is not to win any specific argument. It's to create mistrust in the entire news ecosystem, in the information system, so that people give up trying to figure out what the truth is. And that's what the Russians can do. I think the mainstream media is doing that on their own. But that's what we do. You could argue that that's what's creating the distrust. As are the Russians paying off podcasters. Okay. Let's give $10 ,000 going to accomplish anything if that's story's even true. Great question. Great question. May I answer it? It's a great question. It's a very conspiracy theory.

1:14:20Not a conspiracy theory at all. These were very low level mid like, you know, TRB, CD podcasters. If you give them $100 ,000 per episode, they can spend more money buying cameras, promoting their shows, hiring people. So you're just finding people and dropping money on their head so they can do more of the same. So it's a very smart strategy, in fact, I think. I think it's a stupid thing I've ever heard. They took podcasters who were already successful and paid them to release content through a less watch channel. That's the case. Yes, it was just more about getting the money to produce more content.

1:14:53And then they in the ... These guys are already on. These guys are already live streaming like 24 -7. Oh, there's your puppy. Oh, here he goes. Freeberg trying to win more people over with this puppy love. Unbelievably, this guy is absolutely ridiculous. Unbelievable. All right. Listen, let me give Saksim Red meat here. He got his little steak tartar with my Russia Today story. He got your little amuse bouge. And now I give you your Tomahawk. You ready Saks? You want your Tomahawk? You want it rare? Here it comes. 2020 for election update the betting markets and polling indicate a really tight race, but maybe Trump is surging this week.

1:15:33Polymarket, which is a betting market has Trump 55 to 45 versus Kamala. Carl she another betting market 52 48 Trump. Lovata and points bet those are offshore booking and polymarket is also offshore. 52 48 Trump. Nate Silver, friend of the pod. His algorithm has it 5347, Kamala, real clear polling. That's an algorithm has Kamala with a two point lead. New York Times, Sienna, Kamala with a three point lead, Reuters, Ipso, pretty well trusted, three point lead for Kamala. NPR PBS, Maris Pol has Kamala with a two point lead. So sport books and betting markets are favoring Trump slightly, while the polls are slightly favoring Kamala, Now, SACS, I sliced it up nice for you.

1:16:24You got nice 10 slices of meat here, which slice you're going for? Well, I think your recitation of the polls there kind of mixes up a couple of things. There's popular vote polls, and then there's electoral college, which goes to state. If you look at pretty much now all the main pollsters, you look at Tony Fabrizio, you look at real clear politics. They're now showing that Trump is winning the electoral college right now. he is up in almost every swing state, including I think Michigan, which is pretty surprising. Clearly, there's been a huge swing towards Trump over the last week or two. And look, this still 25 days to go, so I think it can happen.

1:17:01I don't want to overstate this, but yeah, this is a good example right here showing that Trump's now actually in every season. I think he let's see. I think he let's see in every season. His 296 to 242. What is Fabrizio? He's just a Republican pollster, but his factory is pretty high. Oh, I've never heard of it. the brisio. Well another guy who I think is more neutral is Mark Halperin who is a pundit who has been very accurate this election cycle. Remember he's the one who broke the scoop that Biden would be replaced by Harris and he even said exactly when it would happen and he predicted it down to the day.

1:17:34He was exactly right about that and if you follow his account he is now saying that both with Republican and Democrat insiders that he talks to are both saying the same thing, which is their internals are now showing Trump ahead in every swing state or almost every swing state. And things seem to be breaking Trump's way right now. Again, there's 25 days left. But if you're wondering why is Harris all of a sudden doing interviews, it's because their internals started showing that she was in trouble. So they decide to get her out more. Or is it the other way, is it that her, how it's starting interviews or whatever are causing her to lose votes?

1:18:12Well, yeah, exactly. Well, so, which one is it, do you think? Because I don't know when. I don't have the dates of all these polls versus that. No, I think it's what I predicted a couple of months ago. It's the doom loop. So what I said two months ago is that if Harris gets behind, she's going to have to abandon this sort of basement strategy of not doing interviews. She's going to have to start doing interviews. The problem is she's not good at interviews. And if she does more interviews, she's going to fall further behind in the polls. and it could cause a doom loop. So that's where we appear to be right now.

1:18:39I said that on August 30th. Okay. Chimath, you know, that's... I think that Donald Trump is basically stuck to his strategy, which is he is a generational, retail politician. I just heard parts of what he did with Andrew Schultz, another great sort of, you know, podcast. I think David's right that the editing and the massaging of the Kamala Harris talking points are Galvanizing the people that have already decided and turning off the people that have already decided to vote for Trump and she's losing the folks in the middle And so this is what's causing her to have to be out there and and she's gonna have to deliver a very crisp message and I think that right now it's been a little bit lacking which is why you're seeing the polls at least the electoral college which is really what matters at this point turn Trump.

1:19:39So she's going to have a bit of an uphill fight between here in November. The other thing I'll say is that if you've seen what's happening in the appellate court, it's not clear whether the Trump case is going to get overturned before the election but But if that does, that could be very meaningful momentum for him. And then I think the third thing is that we should now buckle in because if the last two elections are any guide, there are going to be a bunch of spanners in the works between now and November. Wait, what did you say? Spanners? Spanners in the works. Yeah. What do you call it? Renge in the system?

1:20:17We mean like an October surprise. You mean like some crazy turn of events. Okay. Freeberg, any thoughts here? Would you like to rush out test this and see what you want in the numbers? Or do you have some objective thoughts here? What's your tape? You know there's a polling data? Yeah, we're at in the election. You're pretty open -ended here. You can look at the, you can make a note on overall what you see between the betting markets and the polls and that disparity. You could just talk generally about where you I think we are. You can talk about Kamala on Howard Stern and doing a bunch of interviews with friendlies where you at right now.

1:20:55I didn't see her interviews. Okay. I saw some excerpts on Twitter. Oh boy. Yeah. Let me just fall upon a point, Chimoff made. Chimoff said that she had to be crisp. If you look at any of these interviews, they're the opposite of crisp. She's asked softball questions by like Stephen Colbert saying, why are you running for president? How are you different than Joe Biden? Yeah. And she doesn't have good answers. She starts free associating. She gives these very long -witted answers that don't go anywhere. She says you can't think of a single way she's different than Joe Biden when pushed on that.

1:21:27It's very strange. These are our questions. You actually did the most favorite shows. I wish you would do some challenging shows. I think she's got to do Joe Rogan all in. And what would be another good podcast for her, Dutra Ma? If she really wanted to like do the adversarial thing or something like that. Why would you do an adversarial thing? Or if you do an adversarial, just come to all in. Come and have a conversation. come and have a normal conversation here. No, I'm just thinking like it seems like sex. If she comes in, has a conversation, you'll be respectful. Yeah. That's all the idea that I didn't treat Cuban respectfully as nonsense to swash the tape.

1:22:01I don't even keep all that. Not enough. Somebody asserted that. No, I mean, if you look back on every single presidential related one we did here, they were all respectful and they were all conversations. I think the Cuban one dipped because of both of you into a bit more of a debate and it was a lot more crossover than the other one of that Back to him is to come out. He likes to do his thing Yeah, that's exactly what I do. You look at all the other ones. I'm trying to think of a moment where it If you look at the other Dean B. Phillips Chris Christie the the VEK boring got to go love you guys This has been another amazing episode of all in podcast episode 199 Make sure you go to all in dot com slash meetups.

1:22:48Make sure if you're starting the company, you go to founder dot university. If you're an engineer, what do you do? Please go to, I'm doing over the f***. Okay, please David Sacks. Make sure you go to super guy glue AI. If you're an engineer and if you like potatoes, go to a hollow dot com and order your potatoes, pre order a subscription. I mean, if we're doing a success, let's also, let's also super go. I'm going to upload it to you in 1890, 1890. Go to the 90 and 80. I'm in control. We'll see everybody next time on the all in

1:23:43That's my dog taking a wish to drive away

1:23:49We should all just get a room and just have one big hug or two because they're all It's like this like sexual tension that we just need to release something What your that beat what your beer or beef What? We need to get merch these aren't that bad I'm going all in

1:24:12I'm doing all the...