Peter Thiel

27:19Maybe you have to give us your bank account number. You never fully turn it off, but you just gradually added more conditions to it. And then of course, as more people are using it, you start noticing the use case patterns. And it turned out that the the place where it was used very heavily was on eBay, which was this network of small businesses selling stuff to other people who were often both buyers and sellers on eBay in terms. It was a naturally super networked economy. Very small businesses or individuals typically can't accept credit cards. So I think in the U .S., I don't know, there were maybe 100 million people with female.

28:00in early 2000, there were maybe two or three million people who could accept credit cards. And so if you can't accept a credit card, your next best alternative was for someone to send you a check. And that took seven to 10 days to clear. And then PayPal had the system where, you know, the money was good right away. Maybe we'd have to eventually send you a check, but you could then take the money, turn around, and use it, and so it was an extremely natural match with the extremely natural use case. And of course, you know, there were all these questions about fraud that we, you know, ignored and we then dealt with later in the world of 1999 2000.

28:39All this stuff was way less regulated. It was pre -9 -11. You could not have started a company like this after 9 -11. There were relatively few know your customer requirements. I mean, maybe she had tens of thousands of dollars, but if someone's moving $50 in the world of early 2000, nobody thought, you know, this is probably just a terrorist or something like this. And so, so the risk sort of an opening to start a business like this, for to gain traction, you could not have done it a year or two earlier, and two years later, it probably would have been completely illegal. And then how long did you continue to build PayPal?

29:18And tell me about the PayPal Mytheaters, because it's a story. So, it launched the product in late 1999. Elon had a competing company, four blocks down the street. He was at, you know, he was at 384 University Avenue in Palo Alto. We were at 165 University Avenue, and it was this crazy war. And then we sort of decided, is that how you met him? He was just competing like crazy. And then we decided to do a 50 -50 merger and early March of 2000. You know, of course we had both at exponential burn rates. It's interesting, both you had a similar vision for this digital payment system. Yeah, it was, his, come news, X .com, you know, Elon with his, with his X -word obsession.

30:01His vision was it for it to be sort of this, this multifaceted online bank, you know, checking accounts and there'd be all these different things you could do. But he had sort of by late 99, also zeroed in on payments as the initial piece to start with. Yeah, we combine the companies. We figured out ways to keep scaling it. We gradually started charging people for making payments. Like, 100%. Like, two, two and a half percent. Like, you know, roughly the same as a credit card. And then parts of them were funded by credit cards. That was from a very low margin part. Then about about half the payments ended up being funded through ACH, which is like a through someone's bank account.

30:46And that was sort of one of our big innovations. And then, yeah, we burned through a lot of money, but we quickly reduced the burn rate. And the company was profitable by worth quarter of 2001. Wow, you know, when it went public in early 2002, this was now all after the dot com bubble had burst. But it was sort of one of the, we were one of the few survivors. And then there were these natural synergies with eBay, where in some ways, you know, all these mixed things one could say about it was sort of this very boring MBA run kind of a business and you had this crazy PayPal business that was running the checkout counter and they only needed to figure out how to get their own checkout counter to work once.

31:27They weren't quite able to figure it out and so it was sad that we ended up selling PayPal to eBay but it was fortunate that, you know, they were too incompetent to run their own checkout out of counters since otherwise you would have been probably, it would have just ended more badly. So yeah, we combined the company with eBay in the fall of 2002. And in some ways, you have any feelings of remorse doing that or only good feelings. It's the first time you built a company and selling it. It must be some emotional component. It felt like clearly the right thing at the time, you know, the synergies were very big.

32:08And then at the same time, it is very sad because, you know, you lose control. And there were things, all these things about, they were, you know, crazy and charismatic. And, you know, they were sort of wild libertarian, crypto anarchist, undercurrent. We were now going to become this boring corporate culture. It was sold for one and a half billion to eBay, which seemed like a lot of money in 2002, decades and decade and a half later, when PayPal got spun out, again, it's a so -and -stam long company, it would eventually get to a market cap of north of 100 billion. Wow. And so then when you look back, it's like, wow, do we really have to sell it for one and a half billion if it's worth 100?

32:51But it felt hard to navigate through all the things, because if 70 % of the payments are on eBay, and that's the part that's growing the fastest, it was just so natural. Yeah. Did you guys continue to run it with eBay, or did you immediately take off when it was sold? It varied for different people. I was the CEO at the time. I think the CEO is always the single most redundant person in an acquisition, and so it was probably natural for me to leave. it was probably highly desired by the senior eBay management that I laid, quite a number of the other senior people left within a few months. And it was also by this point, it was just a well -running machine.

33:39And so we'd figured out all these creative product things. Maybe there were some more things one could have figured out. We didn't have that many ideas left. The mission was accomplished. There was a part of it where we're kind of out of ideas. There were new things people didn't payments years later were things to do in mobile payments. There were all sorts of somewhat different things, but not that much happened, I would say, in the payments world in the six years, let's say after we sold to eBay and before the iPhone gets started. So, the point in time, did you see yourself as a serial entrepreneur or investor, and this is what I'm doing for the rest of my life?

34:19Well, the PayPal thing felt really big. It was really insane. So it was like, you know, you couldn't think past it. You had every day, you had a near death experience and you were gonna take over the world and you move between heaven and hell five or six times a day. Very exciting. If you told someone this is gonna go on for like, it's for 26 years and it's a marathon, that would have been an incredibly exhausting thought to have at the time. And so a lot of us just, how do we survive the next, you know, month, the next three months, the next six months, things like that. And then I think things were quite unformed in 2002, 2003.

34:58And there was sort of a way, at least for myself, there were all these different things I thought of doing. You know, I scaled up a hedge fund. I started doing angel investing as a venture capitalist. I was involved in, you know, starting several different businesses. We tried a variety of things that were more old economy. me, and then the piece that worked by far the best. Were these iterations on internet ideas? And yes, it was in a way it was sad for me and for a lot of the PayPal founders to leave. But it was also, it was actually a good time because it was probably the point of maximum depression on the internet in 020304.

35:43It felt like there were no new ideas possible. Nobody was trying. And in retrospect, that was actually, it was a good time to start all sorts of things. You know, I meet Mark Zuckerberg by summer of 2004, and to be the seed investor in Facebook. You know, I started coming to call Palantir.

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37:43Tell me about first time in my Zuckerberg. You know, it was at my office in downtown San Francisco. Did Facebook already exist or no? It existed as a website. They had some kind of messed up corporate structure. Zuckerberg was 19 years old. It was just passed his sophomore year at Harvard. in move to California for the summer. I'm not sure he had actually decided to stop out of Harvard yet. They had launched it at Harvard and maybe 20 other colleges, and they basically just needed to buy some more computers to launch it at 100 more colleges in the fall. Was there already the plan to go beyond colleges or was colleges the whole plan at that point in time?

38:27Colleges was the whole plan, but I had started one of these conservative student newspapers when I was an undergraduate at Stanford. And I already had sort of a little bit of this monopoly idea and I thought, you know, actually, you have to think of Facebook. It's like the student newspaper. It's the online media equivalent of a student newspaper. And we have a chance to have a single media company that will be the new economy version of thousands of student newspapers. And if you could aggregate the thousands of student newspaper, you have great ideas. It's a great idea. Even if that's all it was, it would be a great idea.

39:06I mean, you like it. I know a billion dollar business. And then in a way, you know, you had these small but very tight networks at every at every single college. I believe at Harvard, it was something like six, seven thousand undergraduates, maybe a little bit more in the graduate school. But it was something, on the undergraduate level, I believe it was something like, within 10 days of launch, you got to 60 % market share. Sixty -per -hour. The undergraduates that signed up. And so the pro -Facebook, Pro Metta, I think that I very strongly believed at the time, and I am still quite partial to, was that people were actually pretty isolated in college.

39:47It was quite scary to go to college when you leave high school. You don't know anybody, and it was sort of a way to make some friendships before you even showed up. It was a way for people to get better connected and college life and to make it to make it a much richer experience. And things like communications always good. I don't know if I'd be quite as, you know, pan -glossy and as that today, but there probably are context where it also really deranges people. And so if we don't like each other and we just tell each other how much we hate each other and maybe peace through separateness is better than just ever more to range communications.

40:30But certainly the picture in the world of 2004 -2005 was, you know, it was more transparent, more efficient, you know, just a very different world from the sort of disconnected 20th century. You had just left behind us. How would you compare the rollercoaster ride that you witnessed with Facebook versus PayPal? How are they similar? How are they different? PayPal was in a way a much more complicated thing because you had to think about how to integrate with all these existing credit cards and bank accounts. You know, you needed a lot of customer service. If people had questions, you know, if you have $100 stuck with you, you have to have an actual human being to answer questions.

41:17You know, there were sort of more problems of a fraud nature. It was an incredibly complicated product in a way. Facebook, it was just sort of this, it just hit the zeitgeist perfectly. And maybe something like this would not have quite been possible a few years earlier where there was not enough broadband. and so you couldn't actually download all these pictures and all these images. And so Facebook sort of starts to be possible in a world of 2004, probably was not quite possible in 99 or 2000. So there was sort of a, there was a way that, you know, it was in the air, there were, you know, there were all these different approaches to social media that people had.

42:05Close rival was this company called MySpace. I often think the names of companies are incredibly important. Paypal wasn't a way like it was this easy to spell to word name. Frondley, sounds friendly. It sounds friendly. Initially, it was just to pay your pal. Yeah. But then it turned out, meaning the second important meaning was it was your pal who helped you pay. Yeah. And so it had this fantastic dual meaning. Facebook alluded to a college Facebook where you put something about yourself and then you read about other people. And my space was sort of the L .A. Facebook starts at Harvard. My space starts in L .A.

42:51They're both social media. They're both about self -expression and about learning about other people. So they involve both writing and reading. But I started at the same time. I want to say it was roughly the same time, but the emphasis is different in a subtle way, where my space, it's a little bit more this narcissistic LA self -expression. And so it's more dominated by writing and less about reading. And then Facebook, the stress is 90 % on reading about other people. And then that turned out to be the correct balance. And you know, Facebook was in a way, the stress was more on everybody else.

43:37My space with the stress was just on to create. You as a disconnected person. And I think even the name somehow anticipated the arc of the company. And then it just hit the zeitgeist in an incredibly powerful way. I don't know exactly when it got opened more broadly. I think it was about two years, maybe 2006, early, maybe 2007 that you start opening Facebook to everybody. And it was just this incredible exponential growth for years and years and years. And then it was not just the US, it was in some ways the whole world. And you were on the board of Facebook for a long time, yes. 2005 to 2022, 17 years.

44:16And why did you decide to leave? Well, 17 years is a long time to be on a board, for sure. There always are lots of different things to say on this. There's a way that public company boards are much less fun than private company boards. You know, once you're on a board of a public company, in some sense, it's a formal, more legal kind of a thing. It's a lot more process, a lot less creative brainstorming substance. And so, So, you know, Facebook went public in 2012 and I probably was talking about leaving the board since then. Then, and then at the same time, I was genuinely grateful to Mark for letting me invest and all the success I had.

45:05And so, I stayed on the board for another decade after it was public. And of course, you know, yeah, there are all these different ways that the big tech companies became bigger than anyone would have thought. And then, I don't know, you end up with all the attributes of the Judeo -Christian Godwards. It's omnipotent and omniscient. And if it's not omnipotent, it must be omnipotent and so there were endless number of crazy dynamics. But they kicked in a Facebook at a much, much later stage than at PayPal. Well, you talked about in names of companies, if we think of companies that have either mission statements or models, like Google had, don't be evil.

45:51Where does the idea of a motto or a mission statement fit in in your world? I think it's very important. I don't know whether it always has to just be this super short motto, but I think there's always some kind of a tight narrative you want on how, you know, what is this company doing that is unique, that is different? I believe it's in tall stories. I think it's in Anna Corinna where at some point he told stories says something like, all happy families are alike and all unhappy families are unhappy in their own special way. And I always have this weird cut where something like the opposite is true with companies where all unhappy companies are alike because they're somehow undifferentiated and they're, you know, hyper competitive.

46:44All happy companies are unique in their own special way and they found something that they're doing that nobody else is doing or that they're doing better. So I always think there's some kind of a narrative like that that you want. You know, on some level, you know, companies are about capitalism and success and making money, but it's a very lame company where you don't have some kind of a narrative of why it matters, why it matters the larger world, why if you weren't doing it, this wouldn't happen, things of that sort. And then of course, the place where I'm always hesitant though with the, I know, the corporate word speak is that it can get hijacked in all these ways.

47:31There's a way that you have a omission statement that can be really powerful in certain ways. And then at some point, you know, so don't be evil. I think it was a charismatic omission statement. And I don't know exactly what it meant, but what I imagined meant in the Google of the early 2000s is, you know, we're not just going to squeeze out every last dollar in every way possible. And, you know, there are all these things we can do that are questionable, but we don't need to do them. We don't have to be able to have a great company. And then at some point, it either gets hijacked where maybe it becomes a vehicle for incredible corporate political correctness, where where if the company is not politically correct, it gets redefined as evil.

48:23And so it becomes this weapon for all sorts of fights inside the company. Or there are all these ways that if you want to criticize Google, you can say it's being evil in some way. And then it becomes this all -purpose excuse for self -destructing it. So there's something about the motto that was very charismatic in the world of 2005, and that maybe a decade later, it's somehow deranged. Yeah, the idea of retiring that particular slogan seems, just seems wild. I think they retired a while ago, though. Because it's so open and poetic what it means, it can mean a lot of things. But to make that active statement, we're going to take away, don't be evil from our company.

49:11It's just a wild idea. Again, it's always easy to say these things of 2020 hindsight. But I would say with 2020 hindsight, you should have thought about that before you came up with a slogan like that. And you should have realized that it's a very, very dangerous slogan because maybe you're setting yourself up to an impossible standard. You're like a minister in a church. And that's, it's probably a good thing to be a preacher. it's probably a really, really tough standard. And again, easy to say with 2020 hindsight, probably much harder to say ex -anti.

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51:26You sold PayPal to eBay with their other suitors? It was a very strange dynamic. It was there was only one natural buyer and one natural seller because if something like 70 % of our volume was on eBay, someone else bought it, eBay could always threaten to shut us off. I see. And then at the same time, there were obviously enormous synergies with eBay because most of their users were still not using PayPal. And so they could push it to them and there would be an enormous lift for the PayPal service if eBay owned it. And then if you have a merger transaction in which there is only one seller and only one buyer.

52:14And then if you say, well, you know, you know, we end up being one and a half billion, but let's say, you know, our next best offer would be 500 million and let's say it's worth three billion to eBay up to three billion or more to eBay. Yeah, and then you know if we'd sell for 500 and they pay up to three billion, the question is how much with the price go for. And I think the theoretical answer is that it's completely arbitrary and completely up to the relative negotiation skills of the two parties. And so it's the kind of combination that's extremely valuable and extremely hard to negotiate.

52:53What do you think happened to eBay since then? Because it felt like I used eBay all the time, and somewhere along the line, me and everyone I know stopped using eBay, but I don't really know why. Yeah, it's a complicated story. So it was certainly, if you look at it as a market capitalization of the largest internet companies, I want to say initially the biggest one was Netscape and from 1997 to 2001, the biggest sort of pure internet company was Yahoo and 2001 eBay overtakes Yahoo, 2005, it gets overtaken by Google. So eBay was the largest pure internet company for four years. It probably during that time had a market cap two or three times as big as Amazon, which in some ways is the one that really replaced it on e -commerce.

53:48Yeah, there are all sorts of things one could say. The eBay site had this auction format, and then an e -commerce site is sort of a commodity product which sell a whole bunch of things. And then there were things that involved elements of both on eBay, where these small businesses that would sell things and not everything they sold was unique. And then somehow the auction format was valuable, but for only a pretty small part of e -commerce. Maybe it's good to auction stamps or rare coins or things like collectibles. But then once you shift to books or maybe The old rare used books are collectibles, but then most books are not in that category.

54:36Probably there was some way where the product should have iterated a lot and become a lot more of an e -commerce site. And I think they didn't have the vision to do that. It was working well enough. It was profitable. It just worked. But there was a limit to how much it scaled. And there was sort of a weird way that the eBay business of the early 2000s, it was a hybrid of this really valuable, let's say auction monopoly and this bigger, but more competitive commerce business and it was not as big a monopoly as it looked. It was a valuable core monopoly and then a big more competitive business and somehow they didn't think that through and navigated as well as they could have probably.

55:24Tell me the story of the books, you're at a one. How did it come to be? It was a series of lectures I gave. I'm giving various speeches about the stuff for years and various perspectives on how to start companies and various lessons I learned. And then it was in the spring of 2012, it was sort of a big Stanford class with hundreds of kids. And I'm gonna just teach everything I've learned about starting businesses in one class. How did you prepare for that? You know, in retrospect, it was actually quite uneven. You know, there were some, some lectures were really good, some were more mixed. About half of them, I just had material that I did, and you sort of put it into these, you know, pretty good PowerPoint formats.

56:07There were a bunch of other ones where I just had conversations with people in Silicon Valley, and a lot of them were sort of these high profile people. A lot of them weren't that interested in saying anything controversial. So there were parts that were fairly uneven, but there was a lot of material. One of the people in the class of sky Blake Masters, became friends with, he posted it on the internet, which was sort of a good format because if someone else takes notes and posts them, you know, there could be all sorts of mistakes in it. You don't need to double check it. But you got hundreds of thousands of readers and then that was a compelling pitch to the publishing house that's interesting.

56:47So many people had read it on the internet that even more people would buy the book. I had all these charts, and it was one of the charts that came back to over. I had a zero to one was on X axis and one to end was a Y axis. So on the X axis was extensive growth where you do more of the same. And then on the Y axis, the vertical axis was, you know, intensive growth where you do something new. And then somehow Blake came up with this idea of zero to one is the title. It's a great idea. And then, you know, it's as soon as I heard the title, it's okay. the title is good enough, we have to just do the book.

57:23Yeah, yeah. You know, it's creation from nothing. You know, it's like God creates the universe in the zero to one move. And so it's somehow, it is like the creative act. Yeah. No way. Very similar. And then it has, you know, it has this computer's zeros and ones that has a support of bits by to it. It's just two numbers that are, you know, that are the most basic. You know, we sold a crazy number of books in China's. somehow got pushed. That's interesting. I have all sort of sociological things, but you know, we published it in fall of 2014 and I did a two week book tour in China in 2015. It's somehow got pushed by the Communist Party like crazy.

58:03And you know, it's since then it's been sort of semi -deplat formed and you know, but we're selling, you know, I think we sold maybe a million and a half copies in China on which I got paid royalties. And there's, you know, there are all these interesting cultural cuts you have on different societies. So there's probably something about, I want to say maybe it's specific to China, but it's where you often, you have some of these categories of things that are numerically coded. So it's like the threefold way of the Tao or the gang of four. Yeah, the 64 exagrams of the... You have these numbers that are very important.

58:40And so somehow it was very Chinese book because we had two numbers in the title. Yeah. But it was an extremely non -Chinese book, because as far as I can tell, the number zero and one almost never get used. Because the way the numeric category thinking goes is you have categories of, it has to be at least two, in a category to have a group and to sort of abstract about the group. And it's almost like reasoning starts with the number two or three. If China continues to build itself based on imitating what happens in the States, your book would be a guide book to what happens in the States, so it would resonate.

59:23Yeah, paradoxically, of course, my book was also about how one shouldn't imitate, how you should do new things, and how you should think for yourself. I think one of the ways it resonated in China was that the sort of the question of, you know, should China just imitate or should it do something new? Was already a very acute question in 2015, 2016. And the argument that China should just imitate the West is, I'll get these numbers, somewhat garbled, but it's, you know, the nominal GDP is one fifth, one sixth per capita of the United States. And so if you just copy the US, there's so much room to catch up, you don't need to do anything creative.

1:00:08And this is sort of the boring part of the globalization story. But in some ways, the developing world to become the developed world, it just needs to copy. You don't need to come up with new things. You just need to somehow transpose Western institutions and Western knowledge and Western technology. And if you can just copy it, there should be a lot of catch -up in that. And then there's always some intuition that maybe there are limits to Western style growth, you know, maybe if everyone has a, you know, a combustion engine car, there's not enough, there's enough oil for that in the US, but there's not enough oil for 8 billion people.

1:00:45And so you need to have electric vehicles if everyone's going to have a car. So I think that was already a very acute debate behind closed doors in China somehow. Was this question, can we just copy, which is a straightforward thing, or do we need to do something new? In some ways, of course, when Japan had been the society that in important ways had just copied in the 70s and 80s, and then it worked incredibly well, and then at some point it kind of hit a wall. And so, if you do as well as Japan, that's pretty good, but you're still going to hit a wall, is China like Japan in 1970, or is it another 20 years of copying, or is it like Japan in 1995, where it's kind of hit a wall?

1:01:30Tell me the story of Japan and post World War II. I've spent a moderate amount of time there. It's obviously in some ways this society had copied the West like crazy. And then in some ways the forms also stayed very different from the West culturally. I probably always approached these things through somewhat of an economic lens. There was some kind of manufacturing, export -oriented growth model that Japan was able to perfect and to do incredibly well at. And the Wingsley Toyota? Well, it was Toyota. I think it started with all sorts of silly games and then eventually it moved up into the small cars and then more luxury cars.

1:02:23There was a big semiconductor part to this. All kinds of sort of very complicated industrial machinery. Of course, there was a free World War II history too, where you had the Meiji Restoration in the late 19th century and somehow Japan radically modernized incredibly fast in the 19th century. It was one of the very few societies that wasn't simply overwhelmed by the West in the 19th, early 20th century. It was very traditional, but somehow, they were able to turn it to radically transform. Commodore Perry shows up in Tokyo Harbor, 1850s or whatever that is. And it's been this closed society for almost 200 years.

1:03:07And then within 20, 30 years, it radically transforms. It also advances on the military side very quickly. It's a 1905 where they defeat Russia. Wow, Japan by 1905 is strong enough to defeat one of the great European powers. And then, yeah, it obviously goes haywire with the fascism and the militarism and the thirties and forties. But then, yeah, after World War II ends, there is some way the energy gets channeled in this relatively peaceful but aggressive modernization, it ends up being incredibly competitive. It violates every free trade theory one would have because it's super mercantilist.

1:03:53You have all sorts of effectively massive tariffs in Japan on any goods that get produced outside of Japan and then culturally people don't buy them. And so there's a way the consumer standards of living are relatively low. It's this unbelievably competitive machine. And in some ways, there are these processes. They do better where it becomes more efficient and smoother functioning. And then somehow, it somehow hits a wall in the 80s and 90s. Again, maybe the zero to one fris and my attempt to give on it is that There's some point where they more or less caught up with the US, but then they needed to do something new.

1:04:40And it was just not geared towards innovation at all. It was process innovation of the sort where you build a more efficient factory, but it was not inventing radically new things. And then maybe the globalization piece that worked for Japan where you had, you know, the labor was cheaper. The environmental standards were more relaxed than in the US. So you had this sort of arbitrage. Then the Asian Tigers start to apply the same to Japan where it's cheaper to have a manufacturing plant in South Korea or Taiwan or Southeast Asia. And then by the 2000s, you know, China does the Japan playbook against Japan.

1:05:25And so the sort of manufacturing, tradable goods, where built goods that you can trade globally was extremely powerful, but it had this hidden problem because there were billions of other people who were paid even less that might eventually catch up with you. And China wasn't necessarily going to just keep the cultural revolution and the mass and sanity going forever. And so the Japan thing worked extremely well when it was the only country in the world doing it, but then it had some hidden problems with it. And there's always a part of me that thinks something that went wrong in the US is that we de -stressed manufacturing a great deal.

1:06:09We have these incredible trade deficits, current account deficits, which doesn't seem like that good a way to run the economy. But the problem we don't have that Japan ran into is There's some way where the U .S. has to compete much less directly with labor in other countries. And people in the U .S. they're basically in these nontradable service sector jobs. And there's some way which the U .S. is the most immune from global competition, which is good and bad things to it. So much of today's life happens on the whip. Square space is your home base for building your dream presence in an online world.

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1:08:13How important is manufacturing for any country? Can you be a successful country without out manufacturing base? It's very important in some dimensions. And the disturbing thought I have, it's very multi -dimensional, but I'll simplify this where maybe it's less important economically than you think, and it's more important militarily than you think. And so, if you build ships and you have to compete with people in South Korea or in China or Vietnam, you're never going to make any money building ships. And so it's going to be economically not great. But then if you can't build ships in general, it probably gets very, very expensive to build ships only for your Navy.

1:09:05So yes, I don't know, the crazy intuition I have is maybe, maybe in a global world where there's sort of these massive differences, incomes and standards in different parts of the world, globally traded manufacturing can be quite a tricky economic proposition, but it's very important militarily. And then that's where there are all these extremely odd dynamics in the relationship between the US and China, we economically, it probably is really efficient to have the iPhone factory in Chen Zeng. If you try to move that to Wisconsin, it wouldn't work, and people wouldn't work for $2 an hour, and they wouldn't be as perfectionist, and there's all these ways it just wouldn't work at all.

1:09:54And then there is this question, how much are we losing this geopolitical battle with China as a result to? So how much is the markup by iPhones? It's a crazy amount. My intuition is it's something like 50%. And so Apple makes incredible profit margins. And of course, all the services that get layered on top of just the handset itself. It's probably wrong to simplify it into just two companies. But if you have Apple, which is sort of the design and marketing firm, and you have Fox which is the employees, two million plus people, and it's sort of the manufacturing assembly firm. The market capitalization of Apple in 2011 when Steve Jobs passes away is something like 200 billion.

1:10:42The Foxconn market capitalization is something like 100 billion. And you think of it as a, like a duopoly of sorts. We have the design branding firm and you have the assembly manufacturing firm. And one's worth twice as much of the other, but they're sort of roughly same ballpark. You fast forward to 2024, 13 years later. And I want to say Apple is about 3 .5 trillion and Foxconn is barely over 100 billion. Apple's captured a lot. And what's weird is how little Foxconn's is able to capture it. And then the qualifier, this is maybe there are more bespoke parts that are further up the supply chain in China.

1:11:23So maybe the people make the machines that Foxxon uses to assemble the iPhones. Maybe the machine makers really make some money, or maybe there are other parts of the supply chain where people make money. But if you simplified into just those two companies, it's simply a mystery to me why Foxxon hasn't been able to extract slightly more value. Tell me about the difference between mysteries and secrets. It's from the book.

1:11:53Well, probably these words are all like a little bit misuse, but the way the way I use it in the book, a mystery is something that is just unknowable. Maybe there's some metaphysical mysteries about the nature of the universe that are deeply unknowable. And then a secret is something that's not yet known, but that is humanly knowable that we can figure out and there's somebody who'll be a first person to figure it out. And maybe you know it's a fuzzy line with a mystery, with the secret, but from the point of view of the 16th century, you know, the map of the world. So it was still a mystery because no one knew it, but then at some point you have these explorers and they and you can be the one to figure this out.

1:12:43So geography and exploration, it was a thing to do. And then of course, at some point, the whole world's been explored, and that's not a place to even look for secrets anymore. And then the question is always, what are things in the 21st century that are analogous to Christopher Columbus discovering the new world in 1492? What are the things that nobody knows, but somebody might be able to figure out? Because those are the breakthroughs that those could be created. And that's where I think you will have fantastic breakthroughs, fantastic businesses, or at least, yeah, you're gonna change our society, change the world.

1:13:23Tell me about the first internet bubble popping.

1:13:30It's always hard to even tell these things in retrospect, 24 years later, but, The Nasdaq peak did something like 5 ,000 in March of 2000. It had probably gone up from 2000 to 5 ,000 in less than 18 months. And then it crashed something like 80 % over the next two plus years and then gradually built its way back. And then all these individual stocks you can describe. There was a pre -splitted justid amus. It was $113 a share in December of 1999. by October of 2001, it was down to five and a half bucks. Amazon had down 95%. Wow. And then if you'd held on to it, you'd get back to this December 99 level at the end of 2009.

1:14:20So it took a decade just to get back to where you started. And then if you'd held on to it for another 15 years, you would have made 30 times your money. So you would have made 30 times your money from December 99. But if you bought it at the bottom, you would have made 600 times your money. because it went down by 20, you know, to 120th, then it went up 20x and another 30x. And so, one cut I've had on the bubble of 99. And this is a little bit retrospective, but I've had this for a while, was that in some sense, 99 March 2000 was both a peak of insanity and a peak of clarity. So there was a psychosocial Romania and yeah, people had just lost their minds.

1:15:05And then at the same time, they saw with perfect clarity that the internet was going to take over the world, that the new economy was going to replace the old economy. And so there was some way in which this was an extreme peak of clarity. And then, you know, B2C was business to consumer and B2B was business to business and then the post bubble gloss in 2001 -2002 was B2C meant back to consulting and B2B meant back to banking. And in some ways you can think of the Bush 43 era which starts right after the bubble bursts and we went from, you know, we went from bricks to clicks in the 90s and then we went from clicks to bricks in the 2000s real estate or bricks BRIC Brazil, Russia, India, China, those old economy emerging market story.

1:15:58And there was some way in which it looked like we went back to sanity in the 2000s, but it was just maybe that was just a giant detour for eight years. And then it was only the last 15 years that you had this slow build and what happened really did. So did it have to happen?

1:16:18I don't think it had to happen. I think it was a very natural thing for it to happen because if you can see that the internet's going to take over the world, but not too quickly. Yeah. You're going to question it. You've got catastrophic approximations that come with that. So you can do value it like it's going to dominate the whole economy or do value it like a bunch of it will go broke first or the internet might take over, but the specific that companies might be different. So, you know, Yahoo and eBay might turn out not to be as dominant as they appeared. So, the companies might change. Facebook didn't yet exist in 99.

1:16:58Google existed, but wasn't public till 2004. But yes, I'm tempted to give it that gloss because it was such a formative period for me. Because, you know, PayPal was 98. And you lived through it. We lived the bubble and lost survived. So, it was probably overly formative. I probably think about it too much, but the 2024 cut I have is maybe AI is like the internet in 1999 where it's real, it's very big, it's going to change things, and it may still be a completely crazy bubble. Tell me about Silicon Valley bank crash. Silicon Valley is the only sector of the U .S. economy that is extremely under leveraged, where there's very, very little debt.

1:17:48debt is always this more complicated product in a way than equity. One way to think about it is that if you're a tech company early on, it's very risky. You invest as a venture capitalist in equity. Later on, if the company succeeds, it's so wildly profitable, it never needs to borrow any money. And so I believe the tech sector as a sector is one where the companies have way more cash than they owe money in bonds or debt. They're very, very under levered as companies. And almost every other sector of the US economy, you know, debt is a big part of the corporate structure. It's a big part of your structure of a bank has debt, manufacturing company has debt.

1:18:29There's sort of all these ways you have cash flows and you can borrow against the cash flows. real estate, of course, is, you know, you know, mostly dominated by debt with typically a much thinner trance of equity. And so Silicon Valley is this unusual place that's extremely light on debt as a sector. And then sort of maybe a cultural gloss on it, as you have a bank that's called Silicon Valley Bank. And it tries to be part of the Silicon Valley culture. The self image, I believe at Silicon Silicon Valley bank was that they were not bankers at all. And we don't know anything about debt. We're like these tech companies.

1:19:08We're going to copy our customers and we're going to be as clueless about debt as our customers are. Even though Silicon Valley bank, it sounds like it's a technological bank. Maybe it should roughly have the connotation, I don't know, bank of Nigeria or something like this where it is a completely clueless bank. and you know nothing about the stuff, you don't know what's going on. And so that's roughly my understanding of why it was run in this unusually risky cowboy -like way, because they were copying the tech companies, and it would be a low -status thing in a tech company to understand debt too much.

1:19:49And somehow, that should not have been true on the level of Silicon Valley bank, but I think they... They got swept up. They may want to be like Google or something like that. What do you think is likely to be the next to looking at Valley on the planet? Can there be another?

1:20:08This is like the multi -trillion dollar question. Obviously, all these countries that would like to have it or states that would like to have it, it's been very, very hard to engineer. There was a strange history of Silicon Valley where a lot of it came out of defense spending in the 50s and 60s, and then somehow it was also part of the hippie counter culture, and then at this point it's pretty divergent from both of those. I would say I have for a long time been in the camp that there should be ways to build tech companies outside of Silicon Valley, and then it has also been quite difficult. I remember a talk I gave at Stanford back I can 2005 and it was entitled, where do you find the next Google?

1:20:57So it's a search problem. We're searching for the next Google as an investor. And my answer was, you know, it's pretty hard. It's a very hard search problem. It's very valuable. I think there is a 50 % chance. You will find it within a five mile radius of this auditorium where I'm giving the talk, which I'm not getting the numbers right, but I wanna say it's like one million of the surface area of the planet. That's wild. So I'm reducing it by six zeros. Wow. But there's a 50 % chance you will find it within a five mile radius of this talk I'm giving it Stanford in 2005. And then in retrospect, I would say the next Google was Facebook and it was located 1 .7 miles by bike, 1 .8 miles by car from where I gave that talk.

1:21:39And I was already involved in it. I didn't think of it that way at the time at all. And then the updated version that I've been tempted to give over the last decade is there's less than a 50 % chance is within a 100 mile right radius. There's better than 50, 50 chances somewhere outside of Silicon Valley. I still don't know if that is true because there are these network effects. There's this know how there's this capital in Silicon Valley. There's a scale. And there's an argument that maybe it gave Silicon Valley a small but decisive advantage. So, you know, the internet was supposed to get rid of the tyranny of place, and yet it all happened to first approximation.

1:22:24I mean, you had Microsoft, Amazon, we're in Seattle, but to first approximation, so much would happen inside of, inside of Silicon Valley. There's an argument I've made that maybe at some point the network effects can shift from being positive to negative. So you have positive network effects where you have the wisdom of crowds, or you're connected with all these people, and you have these positive externalities and you communicate and you get ideas. And then maybe there's a point where network effects become negative and the wisdom of crowds becomes the madness of crowds. And it's dominated by group think or political correctness or a public human against the universities and as universities.

1:23:01Or even maybe the Silicon Valley version is that it's gotten so expensive and so competitive that you have more space to be creative in LA or Austin or somewhere very different. But then I don't know if that's just wishful thinking on my part or deep reality. There's probably a lot of it that is specific to the vectors of technology. So tell me what the next technology will be. And maybe that tells us something about the geography. So consumer internet was this thing where small differences made an enormous difference. You had to be extremely fast. And so the sort of advantage Silicon Valley had were of decisive importance.

1:23:41Maybe in 2020, 2021, it looked like crypto was going to be this next big thing. And there was something about crypto that was decentralized and also decentralized geographically. And so people could build the crypto protocols and some ways was better to do it outside the US. So if crypto would have dominated all of tech, maybe that would have been a more distributed type of technology. We fast forward to 2024. It looks like AI is the next technology. And that one seems concentrated in a way that I find disturbing inside Silicon Valley. The big AI companies are Google, Facebook, Nvidia, of course, with the chips in Silicon Valley, Open AI and Thropic, the big, large language models.

1:24:35new companies, the pure companies are all in Silicon Valley. The AI engineers are all in Silicon Valley. So the geographic mapping on AI is that it's perhaps even more concentrated in Silicon Valley than the internet was, let's say, in 1999. How has moving from Silicon Valley to Southern California impacted your life? And Southern California is such a more pleasant place to live than Northern California and the weather is better. You know, the real estate is somehow vastly better. Silicon Valley is probably the worst real estate place in the world if you sort of adjust for wealth. You know, like if someone makes X dollars, what quality of a place do they live in?

1:25:22And it is probably the absolute worst in the world. There are some pieces of it I do miss. I think, you know, I think there's a way You have a lot of really talented people in Silicon Valley. There's a part of it that felt to me like it was exhausted and it had gotten more on the madness of crowds and the wisdom of crowdside back in 2018 when I moved to Southern California. But it's complicated. Yeah, I don't think it can be fully replicated. What's the etiquette in Silicon Valley between the companies and players?

1:26:02I think the etiquette is better than it is in the entertainment industry. I think both industries people pretend to be nice to each other. I think in Silicon Valley, the niceness, the trying to find ways for people to work together are, I wouldn't say it's all fake in Southern California, but it's fairly authentic in Silicon Valley, you never know who's going to succeed. There's been a part of it that's been this massive gold rush for decades. And if you're two zero sum, if you get too difficult to reputation, that seems like a very, very suboptimal strategy in a Silicon Valley context. I do think probably there are ways it changes with the scale of the players.

1:26:53and so the Silicon Valley of the 1990s, you know, it was all small companies, but it was not dominated by really big tech companies. The one big tech company of the 90s was Microsoft, but it was far away in Seattle. And you now have these companies that are on a truly, truly enormous scale. And I think probably the social graph at a place, a little pick on Google, at a place like Google, it's a very internal world. You know, most of your friends will be other people who work at Google, maybe Apple's even more this way. And it's somehow... It's a bubble. It's somehow surprisingly less connected to the rest of Silicon Valley.

1:27:38And in that sense, maybe Southern California, maybe the entertainment industry in Southern California actually is more not worth the Silicon Valley so at this point. What is Palantir? Well, I'm always tempted to just give a JRR Tolkien literary reference where it's the surround orb originally built by the elves. It's this very powerful device that enables you to make sense of things in far away places and maybe even different times. You know, it's a very important in the Tolkien lore of the rings, which is one of my favorite books as a kid. It's a very important plot device for all sorts of reasons I could go through.

1:28:18But it ultimately gets used for good, even though it can't also get misused. Yeah, I was just talking fans and it was this company we started in 2003, 2004. It was all these contradictory motivations we had with sort of a libertarian, deep state adjacent company to help the CIA find terrorists in ways that wouldn't and violates civil liberties as much as they would if they were just relying on Luddite, Lotec, highly intrusive airport security machines and making everyone take off their shoes and stuff like that. And that was sort of the founding vision, but it was kind of the James Bond type company that...

1:29:01It's still bad. It's a decent amount of work with intelligence agencies with a military, probably about, You know, roughly half the revenues are sort of government related, which is I think always a very difficult place to work, but I also think it's sort of an important one. I'm sort of this anti -government libertarian. And so the glass half empty version is you should never work with a government because it's endlessly frustrating. And then the glass half full or glass one tenth full version is that there's so much room for improvement and there are so many ways that maybe the government is the single institution that can be most improved by technology.

1:29:43And then, you know, I always define technology as doing more with less. And so the the palantir version would be, can we have more security with less intrusion into civil liberties? And that's that's what a technological solution would look like, whereas, you know, the standard way these ideological debates are grooved is, you know, more with more, which I'll say would be the draconian, Dick Cheney, security state versus the less with less, the 20th century, Luddite ACLU approach. And my view is you had to try to find a third way. I worry that if you frame it as the Luddite's versus the totalitarian tech people, you know, the totalitarian tech people will, Cheney will always beat the ACLU after you get a terrorist attack.

1:30:37And so, yeah, part of the poundier hope is we can, you know, it was after the aftermath of 9 -11 that we started it in the hope was, we will stay a free country or relatively free country. You know, it's important to prevent these attacks from happening because after they happen, the civil liberties always go out the window. Tell me about the connections in general between the government and Silicon Valley, how deeper the ties.

1:31:04I think historically they were very deep in the 50s and 60s. I think they are quite decoupled in general in the post -cold warrior, let's say post 1989, Washington DC and Silicon Valley are very different places that feel very different. You know, DC is sort of this functioning middle class city from the middle of the 20th century that's sort of the land, the time for God or something like this. And DC is too focused on government, you know, Silicon Valley, even with all the liberal political biases, the center of energy is completely on the private sector. You know, it's fairly low on the civic side, even in extremely liberal San Francisco.

1:31:51It's just, you know, the city governance doesn't work. Nobody cares about it. Nobody thinks about it. So somehow politics, governance, getting these things to work, is something that people in Silicon Valley don't think about very much. You can almost say that this escape into virtual reality, into the internet, the world of bits, you know. The world of atoms got regulated and governed, and it got governed and over -regulated, especially in California. And so, you know, the way the natural thing for an entrepreneur or someone who wanted to make a difference in the world and do was to escape into this world of virtual reality into the world of bits or, you know, Southern California's more entertainment and all these parts of our world that interface with, you know, city zoning laws and building a house or, or the schools or all these things, I've maybe gotten more neglected in California than elsewhere.

1:32:53What sources do you trust for news? You know, I have a Bloomberg terminal, so I end up getting a lot of my news from there. I always think I should not trust them at all because it is like just this official center left establishment voice. You know, I get physical copies that still have the Wall Street Journal and the New York Times, I think there's sort of all these interesting ways to read the New York Times where it's like, there's probably some way to read Provda. And so I am probably this too competent, I trust my ability to decode the New York Times and to actually figure out things about the world from the extremely distorted way they talk about it.

1:33:39What's the most controversial idea you believe? Probably way too many, but I don't think ideas always being controversial. I certainly don't think that makes them correct. I do have this intuition that when there are things we can't talk about or that are somehow blocked, it doesn't necessarily make them right, but there's something about those things that's interesting to think about. I don't know what's controversial at this point. The COVID -19, I mean, I got vaccinated three times and I don't think I should have gotten vaccinated. I don't think it works in any way. It probably has all these bad side effects.

1:34:19And three, four years ago, that seemed too crazy and too unscientific for me to question the vaccines. And now that doesn't even seem controversial. Yeah. What have been the most interesting things you've seen in anti -aging going forward, what are you most excited about regarding anti -aging?

1:34:42What's crazy about it is I was somehow not trying enough and it's somehow, it's a very uncomfortable topic because we're probably not making progress quickly enough that the two of us will live forever And then psychologically, there are all these ways. It's so uncomfortable to think about, but it's crazy how we've almost given up on making progress. And so, yes, I think anti -aging biotech generally, it should be this area where there should be so much innovation. There's so many things, you know, we should be able to do. And when I look at it, my frustration is, you know, man, we've made some progress in cancer, really modest, almost no progress on things like dementia, 40 or 50 years.

1:35:33And I don't think these things are unsolvable mysteries. I think there should be ways really to make progress. And so I always find it shocking that we are as stuck as we are. You know, I shifted to starting to use some of the Ezebemic Mound Jaro things a year and a half ago. It seems powerfully effective. You know, the probably are all sorts of side effects that don't know what the trade -offs are, but I think there's probably some very basic stuff like, you know, getting your diet under control that we can do. It's not a panacea, but it's a big lift. And then I'm always interested in the psychological question a lot, you know, if eating healthy or not eating too much diet means both a healthy diet, but a non -accessive diet, in particular.

1:36:24If it's that straight forward, why are we so blocked from it? And then the metal level psychology theory, I often wonder, is where you know what you're supposed to do, and that almost becomes the excuse for not doing it. Yeah. Yeah, there probably are some esoteric secrets that need to be discovered,

1:36:46and that could relatively basic things that we kind of know and just, I wanna say psychologically blocked. In the book you talk about diversification in business as a bad strategy, tell me about that. Well, it was meant in the context where, it's not a perfect metaphor, but I often think a good startup is, it's kind of like a sports team. It's different from a sports team because it's not like a set game you're playing. But for a sports team to be effective, it really is this hole is greater than the sum of its parts. The people, there's sort of these deeply complimentary skills. You respect one another.

1:37:33It's not everyone's a clone, but there's a lot of complementarity. You have vigorous debates, but then you also find a way to get in sync and on the same page and move on. And so it's not an endless debating society. Yeah, if you define diversity as difference for its own sake, that's probably not quite the right metric. So I like investing also, you talk about not having a diverse portfolio, but focusing on the area that that you think is the area of growth? Yes, I always think there aren't that many great ideas. And you know, you could say here are 20 pretty good ideas and maybe there's a nihilistic reality where they're all pretty good, but you can't differentiate them and then you should invest in all 20.

1:38:28But I think that's too nihilistic. And maybe the truth is you can actually figure out here are the one or two that are the best And you should concentrate on those, and it's uncomfortable because it feels really risky, but actually the synonym, maybe diversification sounds good, but it's really synonymous with nihilism or not thinking. Paging your bets, isn't it? Yeah, it sounds like you're hedging your bets, but you're sort of being willfully ignorant or oblivious, and you actually know more than you think you do. And you just somehow bring that out. In the corporate culture, there are definitely ways that I think having vigorous internal debates are very important.

1:39:14And then there are also ways that it's good for people to be aligned on a product or some transcendent mission. You know, early on at PayPal, this is a silly example. We like to say that we were a Star Wars, not a Star Trek company. And, you know, a Star Trek is sort of communist because you have the transporter and you have no material shortage and there's no money in the world of Star Trek. So we have a new payment system and then, you know, Star Wars starts with, you know, Han Solo and he needs to get some money to pay off these debts he owes and we were a Star Wars company, not a Star Trek company.

1:39:49Maybe it's not necessary for everyone to like Star Wars more than Star Trek, but it worked. It worked and it would have been odd in the PayPal context if someone was a crazy Star Trek fan. Do you invest in anything outside of tech? I end up doing it, you know, a lot of smaller investments where I, you know, just find it interesting with the person's doing or I think it's worthwhile. But yeah, the place where I'm really anchored is tech. At times, it feels extremely overvalued, but I don't know what else moves the needle. And so I keep having this diversification thought that I, on some level, should diversify out of tech.

1:40:31In theory, that's the diversification portfolio. And then when I try to concretize it, I have no idea how to do it. And it's very likely it would be much worse. And so I end up never, in theory, I should do it in practice. You know, I don't. Can hardware be tech? I always think technology simply means a place where you're innovating and where you're doing new things. So if we sat here in 1967, the year I was born, technology would have meant computers, but it also meant the green revolution in agriculture and it would have meant supersonic aviation and rockets were tech and new medicines were tech and that sort of reflected a society where there was progress and advancement on many different fronts.

1:41:17And then an odd thing that's happened the last 30 years is that tech has sort of collapsed to becoming synonymous with IT, with software bits, internet, mobile internet, and even semiconductors. Maybe there's been a return to that with the AI chips, but for 30 years we're seeing is somehow peripheral to the software tech story. And so I would hope that the definition of technology would broaden out again because that would be indicative of our society advancing on many fronts versus this incredibly intense but incredibly narrow cone of progress we've had around the world of bits where the world Adams has been sort of inert, regulated, too hard to do things in.

1:42:07Who do you see yourself in competition with now? I'm always bad at these self -reflective questions. I don't want to ever be in competition with anybody. Is my reflection? It was a zero to one essay that I had where competition is for losers. Yeah. And if you want to compete like crazy, if you want Darwinian competition, nature -beared, red and tooth and claw, you should open a restaurant. And you know, capitalism and competition are opposites. Capitalism is about accumulating capital. A world of perfect competition is a world where all the capital gets competed away. You know, and I think from the inside, you're not always perfectly self -aware of these things.

1:42:54But to the extent I am, you know, I try to avoid it like crazy. The people I think of as extremely successful as more successful than myself, you know, are the ones I want to compete with the least. So I don't know. A person on this planet I would want to compete with less than anybody would be Elon Musk. That just sounds like a recipe for losing. Yeah. If competition leads to competing away profit, how does the luxury and fashion market fit into that idea? I don't know much about it. And I think there's this very mysterious thing called brand, which when you get a brand, you get some kind of pricing power.

1:43:44And then it is a somewhat mysterious process how brands get created or strengthened, you know, get monetized occasionally, they also get eroded. And for the most part, I think of fashion as centered on this extremely mysterious thing called branding. it obviously, on some level it works and on some level. I suspect there's a, there are some interesting secrets that people who've succeeded in that industry could say about what they did or how it worked that are very, very divergent from the official story. And then for good reason, they would not tell us those secrets because that probably would be the shortest way to erode it.

1:44:34And then there's probably a time dependent thing where there were ways to create new brands in the 70s and 80s and it's maybe very, very different today. Tell me about the age of most of the founders of successful unicorns. I think all these things are massively contested and probably are all these different ways to skew the data even on something as seemingly basic as the age of the founder. I'll do the pro -young and the anti -young person argument. So I think the consumer internet companies were founded by people who were quite young. Typically in their 20s, I was 31 years old when, I was one of the PayPal co -founders, and I think 31 was relatively old to start one of those businesses.

1:45:29the other three people I started PayPal with were 23. Maybe that was a little bit on the younger side, but let's say mid -twenties was probably a good reasonable age. Now, the anti -young person thing that I believe is that there is something where an entrepreneur, you're sort of good at a range of different things, you have people's skills, you have ideas about where the world's going, and a lot of these skills actually are ones that get developed over a long time period. And the great entrepreneurs at 45 are better than at 25. You know, I don't know how Zuckerberg is now. I think he's maybe he's 43, 44 years old.

1:46:13And I think a 44 year old Zuckerberg is way more talented than a 19 year old. And so in that sense, the 44 year old is better than the 19 year old. But he's not available. He's busy with Facebook. And so there's a selection effect where if you started a great company, most of the time it made sense to keep running it. It's the PayPal store. He's actually from an unusual one where it got short -circuited and all these people started new companies started over. And then if you compare the 19 -year -olds, Dr. Berg with, let's say, a 44 -year -old professional CEO you would bring in where there'd been four or five semi -failed companies in the past.

1:46:58That's much less clear. So I think there's, yes, I think empirically, it seems to favor people who are quite young, but maybe it's just a selection effect. Why do you think boards for public companies tend to like to remove founders and put in operators in their place. I don't know if it happens as much in Silicon Valley anymore. This was certainly the way Silicon Valley operated in the 80s and 90s, the 90s. The generational story was that it was Gen X people like myself that started the companies the 90s and we got replaced by Boomer CEOs. And so there was sort of a, you can describe it as, yeah, this professional management versus wild -eyed founder, or you can describe it in terms of some kind of generational warfare in the 90s.

1:47:51You know, at this point, it not absolutely but it has some of the balance of power in tech has shifted more to the founders. You know, they they often get voting shares where they have more voting control. there's a lot that's worked to them. Even when they don't have voting control, I think Elon owns like, I don't know, maybe 13, 14 % of the Tesla shares. And in theory, could be voted out by the other shareholders. But then, you know, there's been a lot of volatility that came with Elon, but you'd be out of your mind to get rid of them. And that's the story that has tended to dominate. You know, there obviously are still some exceptions.

1:48:34and says, at some point the board got rid of Travis Klanek at Uber. Not sure that was a good idea. Yes, there were ways he was probably a very uneven person. And still, I wonder if they would have been much better off finding a way to keep him. But public companies, you can think of as almost extensions of the government. This is the way I always describe it when your company goes public. It's private, It's like private sector. Public is like public sector. And when you go public, you have an IPO and initial public offering and you sell shares to the public. And it's not just sophisticated, wealthy, small number of sophisticated, wealthy investors.

1:49:16It is your 70 -something grandma and she has to be protected by the SEC. You have to have more disclosure and then the CFO has to have perfectly accurate numbers. and if he doesn't, or she doesn't, you go to jail. So the CFO is sort of this important quasi -government actor. The accountants are, the lawyers are super important. The HR department is important. And in some ways, the board has this quasi -governmental role. And again, the private sector is probably more geared to taking crazy risks, move fast -breaking. The public sector is more geared to risk reduction and there's some kind of balance, but the balance shifts radically.

1:50:03And so I, yeah, I, and it's a little bit of an exaggeration, but I, yeah, I often tell CEOs that when they take their company public, they should think of it as, in part, a government takeover that's happening. What, you're empowering the lawyers, you're empowering the accountants, you're empowering all these people who are quasi -acting on behalf of the government or on the rules, and they will have more power and then there's some other set of people who maybe are maybe the more creative people, the engineers, the product people, who have correspondingly less power. What do you think the government's good at?

1:50:36Let me frame it more negatively. I don't think pure capitalism is good at everything. And I don't think every problem can simply be solved in a corporate context. And then, you know, there are, I don't know, there's the example I gave with manufacturing companies, might not be great companies, but they're important if you want a military, or there are all these things that have the nature of a public good, but that wouldn't necessarily be provided by the market. And so I'm always inclined to these deep government critiques where it's really inefficient, it often ends up being political, and the people are empowered or the political actors and not the technocrats or not the people who are necessarily the best at doing these jobs.

1:51:29And then I suppose the pro -government argument is that we often don't have that great alternative to the government. If we're going to have a military, the government has to be heavily involved. It can't be probably just a pure private sector thing. And there probably are ways governance can work better and less well. There probably are states in the US that are better governed, that are worse governed. There are states where it's pretty efficient. There are states where it's very bloated. So I think there are sort of a lot of gradations that one can look at. But how did you get involved in the Hoko -Gun lawsuit?

1:52:10I have all these sort of complicated thoughts about media and the nature of media. You know, it's extremely powerful. It's important as a communication channel. It's an important vector of technology, radio, television, internet. And then I think there also are dimensions of it that are not purely good in sort of a bad act. First amendment, absolutist, sounds where speech is always good, more speech is always better. And there's sort of a part of it that has, you know, this is always where I have this sort of gerardian scapegoating intuition where it's probably a celebrity part of the media, but there's a political part where part of it is to put people on pedestals and to raise them up in order to tear them down.

1:53:05And it is kind of this deification and scapegoating cycle that the media's kind of engaged in it. And you can say that a startup founder like myself where the media helps PayPal in important ways when we were getting started. Or if you're a Hollywood celebrity in the media is essential to helping one break through. And then there's some point where we have to find some way to talk about that and also to talk about the ways in which it can come extremely resentful, destructive, and that it is sort of like this, like almost like a hate factory or a scapecoding machine. And then I think there were new media forms that this also took on.

1:53:55Gauchre media started in the early 2000s as a kind of transgressive gossipy blog. And it was very powerful because it looked like it had this sort of authoritative, objective voice, even though on the psychology of it was just these, You know, extremely angry, underpaid, deranged writers, it would be wrong to say they were all individually sociopathic, but I think on an institutional level, it was deeply sociopathic. And then there were sort of, you know, all these ways I ran into deep in the tech industry, which is not, you know, where there's a media dimension, but the idea had never been that, you know, it was mainly about the personalities, the founders, these larger than life characters, or that, you know, if you were the CEO of a tech company, you were making a different tradeoff from being an A -list celebrity.

1:54:59There was some idea that you still should have had some privacy or something like this. And, yeah, there were all these ways that, you know, we started in count, this, you know, very, this very toxic gawk or blog and it went after very, you know, probably one of my first friends it went after was Sean Parker was the Napster guy really on the Facebook board and then there was a number of other people who raised it went after, the ways they went after me and then there was always a sense there was nothing you can do, you know, it was basically if they're beating up on you, you're supposed to bury your head in the sand and hope they get tired and move on to beat up on someone else.

1:55:38And at some point, I don't know, I sort of started really thinking, isn't there something you can do? And then got pulled into financing Hulk Ogan in the litigation against Galker. And I think Aaron, my friend Aaron DeSouza, who ended up being sort of the day -to -day mastermind of the Galker litigation and the way I think he initially convinced me to do it, was something like, you know, I made some categorical argument. It felt like there was nothing one could do. And then it was some triggering thing. He said, like, Peter, do you really believe there's nothing you can do? And this sort of appeal to figuring out a way to regain some agency, just prior to being bullied, tired of being bullied, tired of implicitly co -opting in the bullying of others, because you're always hoping they move on in bully someone else.

1:56:31Yeah. Yeah. You know, and... Doesn't feel good. None of it feels good. You know, and then we somehow, you know, what sort of thing do you go after? You don't try to use libel as the main argument because you don't want gocker to be simply conflated with the most elite media where it's just sort of this first amendment protection. And then we somehow stumbled early on on the Hulk Hogan case where they had, you know, posted a video of him having sex with his best friends, girlfriend, wife, and the privacy of their bedroom. And so it was initially not about libel, but about privacy. The point I always make is, you know, if you think about in terms of constitutional law, there's a first amendment, which is the freedom of speech.

1:57:21But there's also a fourth amendment, which is where the right to privacy comes on. It is against unreasonable search and seizure. And that means not just the police officers, not supposed to rummage your whole car, your whole house without a search warrant. And it also means a private actor can't do this either. And then what does the right to privacy mean? And it means something, when you get cameras in the late 19th century, it starts to mean something different from the 18th and then. And there's a question, what does it mean in this age of the internet in the 21st century? and the case involved, this core, the place where I think the fourth amendment should trump the first amendment.

1:58:01So that's the constitutional law version. But then, yeah, I think the bigger story was that it's this very complicated trade -off between a media that's transparent and communication and one that becomes sort of a sociopathic and my judgment, Gokker was extremely unbalanced and being more towards the latter, would have been the ramification since then. What effect do you think it had? I think it was powerful and I think we do live in a very different world from 2007, Gokker out to me as gay even though this was already generally known and Hogan wins the lawsuit in Gauker gets bankrupted in 2016.

1:58:52But I think we're in a very, very different world because in the world of the 2000s, early 2010s, the media was extremely biased, but people didn't know that they were biased, and so they believed them. And today, the media is very biased, but it's known to be biased, and therefore gets discounted correspondingly. And I think is somehow, it can still be very damaging in certain contexts, but it's somehow shockingly less effective at the sort of scapegoating violence it's trying to inflict. You know the the gay version of this I always say is that you know, what's the difference between outing and bullying?

1:59:38And in 2007 when you know, I was outed, this person is gay and And they have a psychological problem because they didn't want us to talk about it. And then in 2015, they did a similar story on the CondiNASTS CFO, who's a Tim Geithner, the former New York Fed shares brother, but he got described as bullying in 2015, where bullying is a story about someone who's gay, but the psychological question gets asked, not about the subject of the story, but about the reporter writing it. And so it was, what is your problem and why do you have to make this such a big deal and why do you need to weaponize this in this way and why are you such a hateful person?

2:00:23And this was in some way, 2007, you know, outing was considered acceptable by 2015 bullying was not. And that's what I think was sort of the big cultural shift that happened where we've come to learn more about how the sausage making in the hate factory works and in all these ways it's working less well. So that's I think that's the big cultural shift that happened. I'd like to tell a story where I was a big part of this but maybe that just is sort of a way that the the internet has matured.

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