Sam Altman's Return to OpenAI, Meta's Underage Users, and Guest Alan Patricof

23:55and my dad was doing well at work. And I distinctly remember this one night where my dad was winning a golf tournament at Corona Del Mar. And I never seen my dad that happy. He was just so cheery. And he said, do you want to go to the beach? And he said, let's all go to the beach. And we got in his Gran Torino. Oh my, is this going to end badly? Go ahead. And he said, do you want to drive? And I'm like, eight years old? I'm like, yeah. And he's like, well, you can sit on my lap and put your hands on the wheel. Oh my God. So I'm driving a Gran Torino, sitting on my dad's lap. He's laughing. I was so happy.

24:27And I'll bring this back. Okay. Sam Altman is sitting on Sayanadella's lap, but be clear. Sayanadella owns the car and is in charge here. Microsoft is in charge. And granted, Sam has his hands on the wheel, but Microsoft will, if not control the sport, have huge influence over it. And they are going to, you know, this will be a profit-minded board. They'll add two or three diversity hires that, you know, which they'll need. So who would you bring on the board? Give me some names. I've given you many. I haven't thought about it. There's a lot of talented people. I would want to bring, I would absolutely want to bring someone who really understands AI and disinformation.

25:15I think those are the biggest threats. Also, Kara, and you've said this, you said something that that's really resonated with me, and that is the people that design these technologies don't put in place the protections because they've never been victims themselves. And again, we're setting up another technology that's being designed by rich white guys who don't understand what it's like to be the subject of revenge porn or to have your family attacked or feel physically threatened. The thing that people, I mean, as I was thinking through, just going back to Microsoft. The concept of all of these employees going to Microsoft was never a viable, tenable solution because this is what would have happened.

26:00There were some employees, a lot of employees, because there's a war on talent at OpenAI that were making, supposedly senior engineers making$5 million a year because Sam's like, I can raise billions. This is a race. So what happens when they show up on the AI team in Microsoft and there's a senior engineer and She's making half a million. Yeah. And Bob from AI is making five million. Yeah. Yeah, it was a problem. Yeah, I think it's interesting. I think that they, you know, someone that they should have on the board, a media person. You know, like Barry Diller is too old, but the lawsuits around copyright, they just need a media.

26:32They need a media. Barry Diller would be great on the board. Yeah. I'd love to see a, you know, I'd love to see a guy like Jonathan Haidt on the board. I think he just has such a clear blue flame. They need tech people, though, too. They need people who understand the technology. They can't just have, like, I thought Lisa Su, but she's obviously competitor in terms of the chips and stuff like that. But there's a bunch of, I had a list of them. Anyway, they have to be creative here and come up with names we have not heard of. And I would say young and old, too, right? Anyway, one of the things that's very clear is the effective altruism movement, something that the former Open AA board members were vocal about.

27:09A loser here, they've been attacking me all weekend, all the effective altruists. They're not very nice people, these altruists. Really? What have they been saying? I don't know. Oh, I'm just like, you don't understand. I'm like, I am so not a techno. I am so not a techno optimist. It's like, are you literally know who you're talking to? They think, obviously, AI could destroy mankind. They favor safety over speed. Obviously, we favor safety. It doesn't mean you have to be slow, but we favor safety. As I wrote, one of the former board members, Tasha McCauley, was particularly apocalyptic about AI.

27:42I had heard that from many people. By the way, Sam Bankman-Fried was also one of the big believers and backers of effective altruism. Someone wants to call it ineffective altruism. It's really gotten a black eye. A lot of people have written about that. I mean, isn't it? Again, it goes back to it's reheated ESG, isn't it? I guess. I don't know. I think it's a little more complex. But it's another one of those things that pops out of Silicon Valley and you're like, oh, just go take psychedelics. Yeah, that we don't need to be regulated, that we have moved to a different era of philosophical grandeur where we can all still get rich and the government shouldn't get in the way?

28:17Or am I being too reductive? It's that we know what's best. It's a small group of people who knows what's best for the rest of humanity. That's when I, whenever I'm with any of them, I'm like, so you're the one that's going to decide this. I feel like I'd rather have the dirty mass do it, right? Like the mass, the mob. I prefer the mob over this group any day of the week, right? And I don't like the mob that much. Well, okay. Here's who's had the most consequential impact in the last 90 days, who has ring-fenced the war in the Middle East from becoming a regional in a World War III. And it's the most noble organization in the world.

28:50And it's us. And us is the U.S. government. And there will always be people who want to build islands offshore or believe that, you know, different movements, that they should co-opt the government after they've made their money or cosplay the government. but I'm going with the most innovative payment platform in history called the U.S. dollar and I'm going with the organization that gets at least wrong over the long term and that's the U.S. government. Yeah, I don't know. One of these things pops up in Silicon Valley all the time. I find, you know, some of the ideas are good but making it into a movement in a cult feels really weird.

29:25Anyway, we'll see what happens. We'll see. Maybe you'll get on the board of it or I'll get on the board of it. I'm likely, Cara. I would be the GOP candidate. Someone was like, Cara should be on the board. I'm like, I would be the GOP candidate before I would get on the board of OpenAI. I don't know. You check a lot of boxes, Cara. I do. I would do it. I would do it. You check a lot of boxes. I do. I'd be irritating to them. They don't know what I'm going to do. That's the issue. I'm not controllable. What do you mean to them? Yeah. That's good. Let's get on a quick break. When we come back, the new filing is shedding light on Meta's underage users.

29:56Right up Scott's alley. We'll be speaking with a friend of Pivot, Alan Patrikov, who will explain why he's making a big investment in aging tech.

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31:13Scott, we're back. Millions of underage users on Instagram were in open secret at Meta. You're kidding me. According to a newly unsealed legal complaint filed against a company by 33 states, The complaint shows that Meta received more than 1.1 million reports of Instagram users under the age of 13 since early 2019, but disabled only a fraction of those accounts. Meta was also allegedly collecting children's personal information without parental permission, violating federal children's privacy law. This is all part of a multi-state lawsuit we discussed a few weeks back, but this new complaint is unredacted, so we're learning more than ever.

31:46The complaint includes portions of internal emails, employee chats, and company presentations. Meta put out a statement saying the complaint mischaracterizes our work using selective quotes and cherry-picked documents. The statement also notes Instagram's terms of use prohibit users under age of 13 in the U.S. and has measures in place to remove those accounts when we identify them. I'm not sure it's a smoking gun, but it reveals that the profit Meta earned per 13-year-old users internally characterized as lifetime value was quantified in 2018 as roughly$270 per child. There's also an internal company chart showing how Meta tracked the percentage of 11 and 12-year-olds who used Instagram daily.

32:25I mean, I'm like, really? You're kidding. They knew? Wow. What a shocker. I think in terms of institutionalizing real harm to children, Meta may have taken the lead from the Catholic Church. Oh, wow. Okay. You're going there. Okay. Well, okay. And the problem is we've normalized the following. Mark Zuckerberg, Shell Sandberg, and the board of Meta knew their product was harming children. There has been research all over the place from different nations showing that suicidal ideation increases as correlated to usage by teenage girls, specifically on Instagram. They claimed they weren't allowing anyone under the age of 13.

33:11That was their policy. And while claiming that policy publicly, they had 1.1 million complaints of people under the age of 13. And every person at Meta knew that they were allowing 10, 11, and 12-year-olds on the platform to the extent that, per your comments, they actually took the time to put an economic lifetime value on those children that they claim were not being allowed on the platform. So this is what we have. We have individuals who knowingly harm our children and continue to harm our children while lying about harming our children. Let me ask you this. Elizabeth Holmes, Sam Bankman Freed, one lied to her investors and lost a billion dollars.

34:03There was never a medical test that gave false information. She lied to her investors. One individual lied about commingling funds and allowed funds to go to the investment arm, lost billions. Most of those investors, it looks like, are going to get all of their money back. One is in jail for 10 years. One is probably going to jail for 40 years. Who has done more harm to the world and to our youth? Who has done more harm? Sam Bankman-Fried, Elizabeth Holmes, or Mark Zuckerberg and Sheryl Sandberg? Oh, well, what's your answer, Scott? Let me guess. Well, it's a rhetorical question, but I'll just put it out there.

34:42Yeah, I think they knew. They knew. Come on. You had to know. It's like cigarette. It reminds me, I'm not going to use the Catholic Church because that was sexual abuse. Okay. So I'm going to move away from that one. I would do it more towards cigarettes. The cigarette, but they were promoting cigarette usage by young people, by the cartoons, et cetera, et cetera. And they knew people were using, young kids were using cigarettes and they did nothing to stop it. Right. That's, I think Mark Benioff, when he called them a cigarette company to me, which he got in trouble for when he did that interview, was exactly on point.

35:16It's a cigarette company and it's addictive. It's attractive to kids. It's also a place kids should not be without parental permission. I just, I think you and I both agree on this. I try to keep my kids off of these things. They get on them, right? There's a point where I don't think my kids used them. I was luckily. I don't think they used Snapchat a little too early, I think. But I wasn't as worried about that platform, so I didn't put my foot down. But they certainly, people in their class were on these platforms, and everybody knew it. And by the way, the parents have a role in this too. I'm not going to abrogate parental responsibility here.

35:54But they knew this was the case. I don't think it should come as any shock. The question is if they're going to pay for it. It's not a good look for them. What would you do if you were them? We did it. We're sorry. If I were meta? Yeah. I just can't even, I would, if the board had any concern, the board's not going to do it. Again, money and capital wins. As you say. But in this case, it matters, right? It matters a little more. The government, the FCC, the DOJ need to punish this company. And when I say punish it, either a fine that actually gives them pause before they continue to monetize kids who supposedly they're not allowing on the platform.

36:35I just think Meta has brought a new term. I think the cigarette companies are less evil, Cara. I don't think cigarette companies were trying to sell cigarettes to 11-year-olds. Well, yes, they were. Were they ads? Remember those ads? I think that was, do you think they really thought they were going as low as 11? Yes. I think they knew just who they were aiming at when they did those ads. And they also hid all kinds of studies about the dangers of these things. That's fair. I don't think, I think it's a moot point to talk about what they should do. We always digress. We always keep hoping that the better angels of these board members and these CEOs are going to show up, they don't.

37:10The profit motive is so powerful that, again, these companies should be trusted to do nothing else because they're really good at it. It's a failure of us. It's a failure of us to elect people who are smart enough to say, all right, if you're going to elevate content, if you're going to depress our teens, you have to be legally liable for this. And not only fines, but at the end of the day, and I've said this before, none of this ends until there's a perp walk. None of this ends. Who would you put in jail? I'm not, I don't have the skills or the license or the command of position to start making statements like that.

37:43Well, they will make the excuse that they had measures in place to remove these accounts. That's what they'll say. Look, we had a system. It's just people got through. People got kids lied. What do we do? Oh, well, that kind of stuff. That's what they're going to do. My kid can't get a driver's license before the age of 16. And I would argue that there's probably some that do. There's some kids who drink before the age of 21. Didn't you just tell us you drove as an eight-year-old? But go ahead, keep going. I drove on my dad's lap. But these companies, as inefficient as the government is, as stupid as those government idiots are, without the use of technology and these geniuses, they figure out a way to age gate, driver's licenses and alcohol, but they can't, but Instagram can't keep an 11-year-old off their platform?

38:21Yep, yep. I mean, we're not talking about the realm of the possible. We're talking about the realm of the profitable. And they've decided that we just can't figure, 1.1 million complaints? They knew, they knew, they knew, they knew, they knew. They knew they didn't do anything about it. They did as little as possible about it. Let's just say. We're going to put a lifetime value on the people that we don't think are getting on the platform. The government needs more to really embarrass them, but they don't seem to be easily embarrassed. Anyway, we'll see. Let's bring in our friend of Pivot.

38:56Alan Patrikov is the co-founder and chairperson of Primetime Partners, a VC fund that invests in people and companies focusing on older adults. He's also a longtime investor who's been described as the pioneering venture capitalist by the Wall Street Journal. I've known him forever. Welcome, Alan. It's great to be here. Yeah, you've had quite a career in venture capital. I'm going to ask you about that in the end, but I want to talk about what you're doing now. You started this fund in 2020 at age 85, calling it your third professional act. Why did you focus on this? Why do you think it's important to invest in the longevity economy, I guess, and age tech?

39:32I don't know what you call it, but talk about what moved you there. Actually, what happened was my wife had had Alzheimer's for probably 10 to 12 years. and I had gone through this whole process. And in the process of doing that, I found what it takes to keep someone alive and also what the challenges are as people are aging. And I started reading, and I started reading what was happening at Stanford and what was happening at Harvard. Almost every university was starting to deal with the problem of longevity and the challenges that people had. And I also was shocked to find out that the fastest growing part of the society is really people over 60.

40:15By 2030, there are going to be more people over 60 or 65 than they're going to be under 18. So we're really, it's the fast growing part of the economy. Everyone's focused on millennials and services for millennials. And I happened to find out that Abby Levy, who had been the president of Thrive Global, Arianna Huffington's company, was interested in exactly the same subject. I found out through my son, who had been our classmate. And we got together, and we were both thinking exactly the same way and saying, this is a great opportunity. There are lots of investment, there's got to be lots of investment opportunities.

40:58The market's growing. Let's start a fund and let's do something that's, you know, in a realistic size, but that has, you know, just explores the different places to put money. And we've been in business now just about three years. And we've seen, honestly, it sounds so overwhelming. We've seen over 1 ,500 possible investments, you know, some, and that doesn't include the ones, of course, that you just don't answer the phone or you just throw away. These are serious people. And we've learned that most of them are startups. There aren't very many later stage companies. They've mostly been done by younger people.

41:40They've mostly been done by people who have in some way been exposed to the problem of caregiving, that someone in their family had a hearing problem, someone had a problem breathing, someone had cancer, someone was bedridden, someone was lonely, someone was in assisted living or a senior facility. And they all, you know, they create a company. Exactly. So, so, so talk about some of the products that you, how much money do you have to put to bear? And then how, what are some of the things you've invested in? Give me like two or three examples. Sure. We've raised $50 million and we did it to be modest.

42:13We weren't trying to, you know, that's small for you. Yeah. But you want to be realistic. I'm not one who likes to sit with a lot of unused capital. We've now, been three years, we've invested, done 32 investments, and we invested about 40 million of the money we had. So, you know, we're, you know, three years in, and I always say the half-life of the investments, and remember, they're startups, because most of them started up the year before we invested, or at the time, or during our time. So, the half-life is probably a year and a half old, and we've made 32 plus investments. And to give you an idea of some of the companies, one, one of the early ones we made was a company called Carewell.

42:54There are 65 million people taking care of people today, and they don't know the first thing about what do you need, starting with diapers, starting with bed pads, starting with equipment to help them, starting with services. And so we invest in a company called Carewell, which has taken off like a rocket ship, frankly, and has been proactive in trying to help and educate people who need help in caring for people. All of us, and I know, Kara, I think you faced it at some point. Yes, I have right now. I'm in meetings, and every time I say, how many of you are caring for somebody? And almost all the audience.

43:36And if they're not doing it now, they're going to care for it. One of my favorites is a company called Cynogenics, which is basically a personalized hybrid performance, health age management solution. That's a long way of saying you go to them to extend your life cycle. It's a longevity chain of clinics. They have 20 around the country and they do all your biomarkers and they take your blood tests and they take your DEXA scan and they do your DNA and they do everything to try to determine what are the things you need, whether it's nutraceuticals or whether it's hormones or whether you need to go, obviously, an exercise program, just thinking about nutrition.

44:22And the average age they have is about 54 years old. And the average length of time people are with them, which is to me really is what impressed me, is this is a company that had been around a while before we started. It's the only company we had that had been around a little while before. The average age is probably 58. And people stick with them five or six years. So this is not going in and out. Good to see you, Alan. So if you think demographics are destiny, there's just a tidal wave of people, capital. I mean, this all makes sense. It's not, to be blunt, it's not an original idea. I remember Ken Dykewald's book back in the 90s, I think it was called Age Wave.

45:03And I remember meeting with another woman who'd started a fund. There's been quite a few funds with this strategy. You just put up the slides and it just makes a lot of sense. But my sense is these funds haven't offered the same returns as kind of the traditional venture or technology-focused venture capital funds. Why to date has this not been a great investment strategy, despite the fact that demographics are just overwhelmingly on your side here? Well, Scott, let me take exception to one case. When we started, we were virtually the first dedicated fund, as far as we knew, there may have been one or two others, one out in the West Coast and one in Chicago, that were focused in this area.

45:49Since we started, there are a whole bunch of other people. Yes, you're right. Every major fund, whether it was NEA, not necessarily Greg Kropp, Greg Kropp too, had some investment that related to this area. That's true. But we were dedicated. When we started, we said, we're going to become not only investors in this area, but we're going to become the thought leaders. It's too early. We have not seen the application of AI. It's starting. It's starting. But this is not a sort of, we have a couple of software companies, but this is an area that is, you know, dedicated to new services. And I would say we haven't yet seen the impact of how well these companies are going to do.

46:38It is not, I say it's not a new AI fund, although all these services ultimately will benefit from the, you know, all new technologies, but they are, it's a category that is, I think, open-ended category with lots of interest. And yet, yes, I don't think it's had an opportunity to prove itself. I mean, I just said the year, Our investments are, the half-life is a year and a half old. I mean, you know that for a startup fund, you can't prove too much overnight. I mean, Rome wasn't built in a day and neither was a fund. So let me ask you, there's a lot of talk about age these days. And as Scott says, it is a bigger topic than people realize, and yet it hasn't been focused on.

47:22I'd love you to talk a little bit about why you think it hasn't been focused on. And also, what do people get wrong about discussions about age in the workplace? In a column for Fortune last year, you wrote about how there had been efforts to tackle racism, sexism, and LGBTQ discrimination in the workplace, but not ageism. Talk a little bit about both those things. Well, you're asking me all the great questions. I've been a big proponent for, you know, ageism is something we just got to, we got to conquer as much as all the other isms. and it's interesting you're talking about the workplace because we've been working on a deal right now which is focused on dealing with corporations not the government specifically but with corporations who have got to think about what's going to what are they doing about their workforce that's aging out uh what are they doing to retain them what are they doing to retain that knowledge also what are they doing to prepare these people for another career and if you've read my book, no red lights.

48:23I can't, forgive me for just mentioning the day, but it's, I say I'm going to live to 114. Now, if you, you know me pretty well, but I tell you, there are not many people who don't buy my age expression. You know, if I don't make the 114 come at my funeral and laugh at me, but I really - I will not do that. I live, my mindset is to live that long. That means I'm 89. I'm going to be 90 this year. You know, I've got 25 years left. And what do people do besides, you know, if they're being put into forced retirement, what are the other things they could do in their second career? And I mean a career, you know, should they become a poet or should they start the same business all over again?

49:07Should IBM find a way for retaining the thousands of people who are going to be retiring out and in terms of either helping them retire out or finding a way to keep them and transfer that knowledge. So workforce training and retraining. I'll tell you an interesting thing. It's an issue we were working on just on Friday. I think you must be aware of the 529s. 529s are what we all use for our children, our grandchildren to prepare for college. But there is some slight provision that that 529 can be used also for retraining. So we're trying to really determine it would make a hell of a lot of sense to have someone who's set up 529s for all their children who are not using it, by the way, because compounding works if you start something at age one.

50:02And why not retrain a lot of older people with some of these 529s? So it's just an interesting idea. But we have to think about what to do besides - Because we're not going to have enough workers. Just so people understand how active you are. You ran the New York City Marathon last year, and you also attended Burning Man, neither of which I could imagine doing in one year. So you're a very unusual cat, I think. But I'm trying to inspire other people to think that way, including the two of you. Yeah, well, we're trying. Scott is turning 29 next year. Scott, next question. So asking for a friend, what advice, what behaviors as you look over the course of your life and your nutrition and your exercise or your approach to relationships, give us the hacks here.

50:53I'll tell you what I do. First of all, I'm happy to tell you I'm getting married in 10 days. Wow. And to an age-appropriate woman in her 70s who wouldn't hide it. that's the first thing. But that, but that, I can't recommend that for everybody, but you know, who knows the opportunity, that opportunity is there. And one of the things that aren't getting married is it's, it's inspired so many of our friends to say, God, you can have a second, you know, or third love in your life. You don't have to say, you know, it's all over for me, but what do I do? I walk every place, every place I can. I walk to work today.

51:31I have an office still at Greycroft. I'm chairman emeritus. I walk there. I walk back to primetime. I walk to doctor's office. I walk to the theater district. I walk home. Walking is fabulous. I walk with my partner, Future Bride, in the park every morning at 6.30 and put in three or four miles and more on the weekends. So walking is one thing. Secondly, I have an exercise therapist. I do training. I'm fortunate I can afford it two times a week. I also, I do eat relatively normal, except I have learned a very interesting trick. I weigh myself twice a day, early in the morning and at night. And if I gain by more than two pounds, I know I'm a little nuts.

52:21I skip one meal the next day, usually breakfast or lunch. I also have learned another thing, which is, I know people will laugh at it, but my future wife and I, I used to go to dinner with her and she pecked at her plate and never eat anything. And I said, this is crazy. Why am I ordering two dinners for someone who doesn't eat them? And I pay for it. Let's split dinners because when you go out to dinner, the portions are so enormous these days. And so we have been sharing meals for the last couple of years. And I assure you, none of us, neither of us have lost out by that, But that has been a very helpful discipline of, you know, eating and not overeating.

53:03And so if you take those, I do take some vitamins. And that's really, you know, I live a very active life. I'll tell you the most important thing, Scott, and you too have it. I have a very positive attitude towards life. I really believe I'm going to live longer. I really act like someone, I only know the word yes. Let me ask you a question. As a longtime investor, you mentioned Graycroft, which you ran for many years. You made some good bets and not so good bets. And sorry not to make you not positive, but I'd like to know what you - It's true. It's true. One is what you thought was one of your best bets, one of your least good bets, and how you look at venture.

53:44Oh, my, you know, if you ask, it's a tough one. My best bet, I would say, you're now pushing me to, you know, what I always try to avoid. I guess I would say when I went into the cellular communication business in the 1980s, cellular did not exist. At that time, AT &T and Motorola, who had two-way talk radios in whatever cars they were, predicted that the market for cellular or for voice would be 2 % of the population. And I backed a team of guys to make the first application for a cellular franchise, which turned out to be, obviously, today, I think cellular penetration is probably 80, 90, maybe 100%, because a lot of people have two phones.

54:35I'll throw in Audible. When I went into Audible in the 1990s, there was no iPhone. Right. So we had to come up with our own device to transmit books. I remember I had one. Books, yeah. And now, you know, I'm guessing it's well over a billion dollars a year. And there are tens of millions of people who use Audible. To bring it more currently, you know, I've been a big fan of the media my whole career. I did, well, you know, starting with New York Magazine and Huffington Post. And I was one of the people invested in the original Axios, which we've now sold to Cox Communications. All right, one bad one.

55:18Give me one that you're like, oh. Oh, God. I mean, there's so many bad ones. Let's just say the bad ones have been because I make the criteria that management, product development, marketing, and the economics should all be present when you make an investment. And it's a very helpful discipline in doing follow-on investments, even more so than initial investments. And I think that, you know, I make a mistake on the people, how long it takes to get a product into market is a big problem. The size of the market, you know, I don't think I've made too many mistakes. And I think the economics may be the biggest thing that is a setback because people don't, when they all get excited about a business, I have found almost consistently, they don't stop and say, well, how do I make money in this business?

56:18Have I realistically made the assumptions of what the gross margin is and what I'm going to have to spend to sell it? I mean, one of our biggest concerns in our area of primetime, taking it back to that, is what does it cost to attract this market that we're trying to attract? And we're very focused on cost of customer acquisition. And I think that's the biggest obstacle we face is how to reach them. You know, I had a meeting yesterday with two women who came out of NBC who want to start a streaming service for older people to, you know, entertain them. of all kinds of ideas that are really good.

56:57But I say to them, how are you going to get the audience? How do you find that audience? You don't just turn on a button. Right, good point, good point. I would imagine that the amount of capital that's flown, flowed into the asset class of venture capital since you started in this game, Alan, is somewhere between 50 and 500 fold. I mean, my guess is when you started, it wasn't a niche asset class, but it was a small group of people on one road in the Bay Area, and now it is a global institutional asset class. All those hundreds of billions of dollars that have flown in or flowed into the asset class, do you think that's been a good or a bad thing?

57:38That's a fair question. I don't know. I think that there are a lot of people who've probably gotten into this business and who've not had the discipline of investing. And I think that's the biggest problem. And that really shown itself in 2021. I don't know whether it was related to the pandemic or not, but we saw a lot of excesses. I think, you know, it goes back. The last time was like that was in 2000, which really, really set me back mentally when every single week there was a company could meet its payroll. We are not seeing that now. I have to tell you that companies are well enough funded.

58:21I don't think I've had one company that, even in my early startup group that says, I'm sorry, we're going to close down if we can't meet payroll on Friday. I think that there have been a lot of overvaluation, Scott. And it's not fair for me to criticize my compatriots. And I'm probably guilty of some of it. I tell you, with crime time, we worked so hard to discipline ourselves, but we were facing and it's many cases where you said people getting interested in this area who didn't have the discipline who were really later stage investors and just wanted to have a piece of the action and uh were pricing us out of deals or forced us into things that we just knew weren't right so we're in pretty good shape no one's in perfect shape but i would say to you that uh there's been too much undisciplined, large amounts of money, you know, whether the hedge funds or the growth funds or funds that have just been able to raise astronomical amounts of money.

59:20And if you've got the money, what are you going to do with it? You have to spend it. I don't know of anybody or not very many who say I'm sending you back your money. Yeah. Anyway, Alan, I'm hoping to laugh at your 113th birthday, not your funeral. I think that's an incredible goal. I don't know Scott and I will be around for that, but we would like to be. We really appreciate it. Alan, you're a legendary venture capitalist. It's great to meet you, Alan. We spend a lot of time on the show talking about big issues because we're committed to leaving Alan Patrykhoff a better world. Yes, we are. Anyway, thank you so much.

59:54We appreciate it. Thank you for having me. All right. Goodbye. Scott, that guy is going to outlive us, isn't he? Oh, my God. I love Alan Patrykhoff. He's one of my favorite venture capitalists. Inspiration. He's always had a good attitude. He has a good attitude. He's curious. He comes to DLD, and I remember him coming up to me and saying, he had a pen out, and he's like, what is your trick? What is your trick for remembering all that data? And I looked at him, and I said, drugs. He's like, well, I've done that. What else? Yeah, he's really sharp. I have had ups and downs with venture capitalists.

1:00:28He was very involved in a lot of media investing, and I asked him a lot of questions when I was doing some of my stuff, too. And I always felt like I got a straight answer from him compared to a lot of people. Anyway, pretty cool. He's absolutely right about this. Someone's got to unlock this market. And he's right about that in any case. One more quick break. We'll be back for wins and fails.

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1:02:43Okay, Scott, let's hear some wins and fails. Well, the win, the ceasefire is continuing. It looks like it's gonna hold even longer. They're talking about an extension of it. I think that's always, once you start doing that, it's a good thing, right? You've got, once you start stopping, it's a good thing. It doesn't mean it's going to solve everything, but it certainly is a good thing. I just don't know how else you can put it. I think President Biden's done a great job here and that he's altered with the hostages coming home. It adds to that. It means we're in the more hopeful mood of a terrible, tragic situation.

1:03:21So that would be my win. My fail? I think this Facebook thing was disappointing to see. Not a surprise. I think that would be it. Oh, the fail was these shootings that are happening all over. There's this one shooting up in Vermont at Burlington of these kids. The Palestinian kids. Yeah, Palestinian kids. I just we got it. Everyone's got to get a hold of themselves. If they can do it in Israel right now, we can do it here. That was just a real disappointment. I don't care what side you're on. You don't shoot. This is just not the American way. It's just not. It's not. It's not. So that would be my fail.

1:03:52Yeah, agreed. So I'm starting with my fail. So four-year-old hostage Abigail Edan was, I won't say free, I don't think you can actually free a hostage, was released. And she witnessed the slaughter of her parents before she was taken hostage. And it's just, okay, it's one thing. Obviously, we live in a world where that can even happen as a fail. While I'm disappointed that more people in Hollywood who were quick to hold up signs, bring home our girls when there was an awful kidnapping of girls a decade ago. It strikes me that there's a lot of virtue signaling before people finally get to what I think would be the most obvious one.

1:04:37And that is, in my opinion, you just lose all more authority when you continue to hold on to hostages. And I'm happy that these folks have been released. I'm a little bit more cynical about the ceasefire. I consider myself an amateur student of war history, and I believe Hamas needs to be destroyed. I think there's only one retirement plan befitting of Hamas. and in war you find, you fix their target, you follow and you finish them. And typically ceasefires are used to reorganize. I think the IDF will pay the price for the ceasefire. I hope that the ceasefire, it calls on people's better angels.

1:05:17I do think that the Egyptians, Qataris and the Americans and folks from both sides deserve a lot of credit for, I can't imagine the complexity of trying to negotiate something like this. But the fact that we have just a concept that a four-year-old is released as a hostage is just, I don't know, just seems unthinkable. And I, you know, show me another picture of Salma Hayek or Julia Roberts on the red carpet saying, bring our girls home from 10 years ago. And it strikes me that Hollywood has been uncomfortably quiet, except for a few people who immediately invoke the wrath of Twitter or TikTok.

1:05:59And I realize there's a lot of emotion on side. 14 ,000 Palestinians have been killed, including 40 % children. But the fact that we live in a society where we have to celebrate this, there's just something. I do believe America needs to be more involved. I think our disengagement from the Middle East has created a vacuum that has been bad for everybody. Well, we're engaged now. So, look, and my win is I think that the$4.3 billion plea deal with Binance for money laundering and up to 18 months in prison for their CEO, I think you need an algebra of deterrence. I think when individuals turn a blind eye to trafficking, to financing terrorism, to money laundering, I think the government plays a role here.

1:06:43And I think the incentives are in place, and that is an innovator who attracts capital, who's a visionary and great with technology, can aggregate so much wealth in America. I think what is missing is the incentives or the disincentives to not engage in harm. See above meta when you know you're engaging in harm, but when it's raising so much money, you believe that you can weaponize government, that you can co-opt government officials, and that you can get away with criminal activity. And so, and again, the unsung heroes of our democracy, which billionaires want to shitpost all the time, is the good men and women in our security apparatus, working for the government, working for our justice system, who spend night and day building these cases saying, these people are engaging in activity that is bad for the commonwealth.

1:07:38and that when people lose all of their money or when someone is trafficked or a terrorist organization has access to funds when they otherwise wouldn't if these people were following the law, we are going to find you and we're going to put your ass in jail. That is an important part of the system. And that half of the system has not been in full force over the last decade when it comes to tech. So I just want to, my win is our great men and women in government who work tirelessly to build these cases and send a signal to young people that regardless of how smart you are, regardless of how many quarterbacks or models want to hang out with you or former presidents because of the wealth you're aggregating, if you are breaking the law, and let's be honest, you know you are breaking the law, the government's going to come for you.

1:08:23I think that is an important part of the system. We spend too much time honoring and fellating the incentives and not recognizing the good people who put in place the disincentives. Yep. Excellent. Excellent. We love our civil service. I sound so indignant today. Indignant today. Anyway, you need to get some help from Alan Patrikoff because he's there. There you go. Don't I know it. You need to go run the New York Marathon with him. What Alan highlights, and I'm obsessed with these two doctors, Peter Atia and Andrew Humerman, is that in Alan, it speaks to that everyone's obsessed with longevity.

1:08:57And what they are not obsessed with enough is the quality of your life. And if you look at that guy, it's not about living to 110. It's about being 89 and being that fucking sharp and good looking and mentally astute. Yeah, he is. And also his wife, who had Alzheimer's, was elegant and wonderful, by the way. They had a wonderful life. As I recall, my mom ran into them in Italy once and they were living it up. That's how it's going to be for us, Scott, you and me. I hope so. Anyway, we want to hear from you. Send us your questions about business, tech, or whatever's on your mind. Go to nymag.com slash pivot to submit a question for the show.

1:09:29or call 855-51-PIVOT. Okay, Scott, that's the show. We're counting down to the end of 2023 soon. So we'll have a lot of shows coming up. And here we'll be back on Friday with more. Scott, read us out. Today's show is produced by Lara Neiman, Zoe Marcus, and Taylor Griffin. Ernie and her type engineer in this episode. Thanks also to Drew Burrows, Mia Silverio, and Gaddy McBain. Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Vox Media. We'll be back later this week for another breakdown of all things tech and business.

1:09:59care. Have a great rest of the week.

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