E61: Rabois, Bartlett, Ryan, and Weinberg on AI, Gambling, and Healthcare

25:10And it doesn't really matter. Open source can't really compete with that. Mark can put some consumer app on top of it, but no one wants to use Facebook anymore. She's got to build a whole new consumer app on top. Google can try to integrate it in by the name of the classic incumbents dilemma, blah, blah, blah, blah. So it's not so easy. I think open AI, as long as they stay on fire with people, has all the consumers and they're just going to keep addicting consumers to the next wave of technology. Maybe. It's an interesting argument, but think of existing distribution, right? Apple owns the iPhone folks, so they'll be in front just in terms of native to iOS.

25:45Obviously, Google is going to stick this. I mean, it's already, I have a Pixel, right? It's like in every app in very stupid ways, by the way, which is clearly some odd product mandate. It's one of even worse qualities, by the way, having a Pixel. Zach. Among many worst qualities, this is one that really is frustrating. The actual history is because I used to work at Google for two years. They started giving free phones. And at that point, I was like, all right, I'll take the free phone. And I stuck with it, mostly out of spite of all of my friends. But I worry about consumer distribution and the brand, if you will, being the long run thing.

26:16Because you have people with billions of eyeballs who are coming after you, both in Meta and Apple and Google, which is going to be a little tight. That's where Kevin's point is really powerful. Over 40 years, it's basically never worked. And these people with large distribution platforms, when you can teach a focused vertical app that's really resonating with tens of millions of folks, you don't lose that lead, like basically ever, or it takes decades to lose that lead. Interestingly, the people I know who use AI the most, if you will, from a consumer perspective, maybe not like in their day-to-day job, have all switched to perplexity at this point.

26:51Yes. Yes. And the interesting thing about perplexity, right, is like it sits on multiple models, right? That's kind of like the interesting layer. And so, you know, you've got this like sandwich competitions. You got perplexity and probably 19 perplexity copycats coming. And then you've got the foundational layer people here. And you're like, oh, who am I competing with if I'm open AI? I feel like a very big bear right now on open AI. I'm really not. I think it's a great business. One of the things on the perplexity point, one, I can pull up some graphs that show on screen here, but the retention curve is actually, and this is publicly available web data, is much, much better for ChatGPT than it is for perplexity.

27:30And I use perplexity as well, and I pay for it, and I like it quite a bit. But there's something going on in the difference in terms of how people use ChatGPT and how people use perplexity, if only evidenced by the retention curve. One of the things, I mean, this whole point of singular focus, I get it 100%, and it's never proven true in the course of the internet. But, you know, some of the private label brands for Walmart or Costco or whatever it is, like, you know, if we sort of go to some of the other more physical CapEx intensive, whatever you want to call it, products, I don't know. I mean, I think in the internet, maybe there's some unique qualities to this.

28:08But as you draw parallels over the history of time, banks, for example, I don't know if it totally holds. Well, if you have monopoly on distribution, which Apple has a 50 % monopoly, that is a real advantage if that makes the difference. And Walmart has access to supermarkets in a way that other people don't. To date on the internet, we haven't had that constraint, but that is one outlier there. By the way, all the points you're making, Zach, are risks, and it could go any number of ways. But when we step back, we've seen this movie many times. I mean, why was Google going to win when there were seven other search engines?

28:42It wasn't, frankly, at the time, that much better. It was a little bit better. And it was enough of a difference that over time, they just had human talent, they focused, and they had money. They had as much money as they needed. And so far, you know, OpenAI doesn't have a cash problem. We keep thinking they will. Because when Google was starting, they were competing with like shithole Yahoo and Excite and, you know, these like kind of ringy ding competitors. To be fair, though, a little later on, Yahoo was a big company and was public and was bigger and more valuable than they were. I mean, they made an offer to buy the company.

29:14So that's the innovators dilemma in all of this from Google standpoint, Zach, I've quoted, I can't believe I'm reattributing it to you here, because I could just say it as my own and own it. But Google does have an opportunity to where was it? You said, be like the Americans in World War Two that they have, eventually, they can get it right over over time. But it does start to get to the core of their business model. And I know perplexity talks a lot about this, like the the CPMs and the ability to actually change from their existing business. I mean, Zach and Kevin, you guys have lived this world far more than I, but they have a very good existing business and it's kind of this core innovator's dilemma situation that they're in.

29:55Are they really going to make the hard decisions to get to potentially where they need to go if it's uncertain, if that's actually going to land there? I mean, I assume, I hope that they wake up every day and realizing that if you're Google, that this is the first existential threat that I've seen to them in 15 years. And certainly came back, whatever, last December, I think, or the founders got more involved in it over that, right? Yeah. It's hard for them. Yeah. I think the three of us are not convinced that they're working 70 hours a week on this issue. Yeah. I mean, another way to take your World War II metaphor is I don't think Google has Eisenhower.

30:34Yeah. I mean, when you look, when you have$60 billion and you have 150 foot yacht just to trail the 300 foot yacht in case the 300 one goes wrong, like, I don't know if you're getting in the weeds of, you know, the model building here. So if anything, it might be a distraction because it's like unclear leadership. But I, yeah, it's not. Google is so bad at figuring this if they're so slow. And so like, that's definitely a bull case. By the way, the other thing I would say on the bull of OpenAI is just like the hype train is so big and so global that even if in 15 years it turns out this business can't make money, between now and then it will go public.

31:16It will have liquidity. This thing will get bid up in the same way that Tesla got bid up into the hundreds of billions of range just on the story alone. And you'll get your cash out. And I think that's probably true of anyone putting money in now. Your downside protected by the public market is my guess. And just to add to that, as we mentioned earlier, they are attracting talent. They are getting many, not all, but many of the best people. And we cannot, I mean, this is like an oil company. They are getting oil. And if you have oil, it makes the difference. A question in my head is like, do you see the other players, right?

31:54The Anthropics and I guess there's a few others, like, is there space for that? Well, I think right now, Anthropics sort of, one, they're attracting really good talent. Like there's people coming over, going over to that business that I think are just really impressive, either X OpenAI or X DeepMind or whatever. And so I think they're getting a density of talent over there. I feel like it's an interesting position for them to be in because they are able to serve as kind of the Microsoft Azure to OpenAI's Amazon AWS, like cloud service, where that was the first one that really got going. And then Anthropics been able to counter position in some ways.

32:32They got into bed with Amazon, whereas OpenAI is in bed with Microsoft. The weird thing there is they are much more beholden to the safety premise than even OpenAI is. And so my understanding is some of the incentives that exist within that company, if you think it's weird with the nonprofit structure and the commercial entity and all of that within OpenAI, it feels like that's gone by the wayside more and more. And I think we're going to see it move to more of a commercial entity. Sam has been rumored to take equity now, and it feels like they're kind of moving in a more capitalistic mandate.

33:08But when you're serving two masters as open as anthropic might be both from a from a safety standpoint as well as an agi standpoint i think it just makes it hard to make these decisioning trade-offs the safety thing is such bullshit like i mean you go back to like any technology people are like i don't know these newspapers seem unsafe like everyone's gonna have information and then the internet is like wikipedia you're like oh they're gonna put bomb recipes on wikipedia like come on i mean it's just if that's going to be the thing that anthropic you know is anchoring on it's like driving 60 miles an hour with the handbrake on like you're you're fucked like it's just never going to happen it's just like there's always these doomsday people in every technical revolution and they have literally never been right and so i don't know why we think this time's different even when you get to like some of the people that are really smart on this i think in dario from anthropic you know we'll say this and other people they do think that there's some non-trivial percentage of these things happening.

34:10And they've always been wrong because the world hasn't ended in some catastrophic fashion. And eventually, if it does happen, no one gets to say, I told you so at that point in time. And so I hear you. It can only be true once at some point. And so there is some survivorship bias that never happened before. No one's denying that there isn't potential risk. That is true. But the idea that we're going to collectively stop developing things for six months somehow was one of the dumbest ideas I've heard in a long time. Why? Because we're going to let the Chinese move forward and then we'll be protected by them?

34:47You know, I really don't think so. But yeah, no, I think it's insane. And you see people all across the political spectrum, like the node and Kevin, who are more left, me, who's more conservative, who has the insanity of turning the AI future over to the Chinese. That makes no sense. Secondly, this idea of safety, even if you believe there's some risk. When have the experts ever really been right about the risk profile of future innovation? I'm not sure, you know, ever. And then third is like risk is a relative game. Like you have to think about things we do every day. You drive a car, you take a shower.

35:22And yes, it's hard to compare asymmetric and all that stuff. But I mentioned last time on our podcast, electricity never would have been allowed in the modern world. And just think about that. Think about how much poorer we'd all be, literally and figuratively, if we didn't have electricity. I mean, the risk is ultimately, do you have bad actors, which are humans? And so the Chinese thing is such a great way of thinking about it, right? because they're not going to slow down for AI safety rules. It's just not going to happen. So we might as well control our own destiny. And I do think the good news is in America, we are going to get this right.

36:03I mean, maybe California decides to shoot itself in the foot every so often. But overall, I don't really see a material impact here. The Europeans will screw themselves over, guaranteed. They almost already have. And so it's really just the US and China at this point. And those will be the two winners. And I think it will mostly be US companies at this point. That's what it seems like. I'll try a simple, maybe I'll try a simple metaphor, Kevin, and then feel free to add some depth. I think technology is just simply a magic wand. There's a metaphor I live a long time ago. Magic wand fix things, sellability fix things, blah, blah, blah, just make things happen.

36:38And that's what engineers do is they use this magic wand and cast films. Well, just like lots of various movies and books and science fiction and others, people occasionally, bad people steal the magic wand and do things. That's possible with any technology. And AI is somewhat similar, but the goal is not to make the magic wand go away. It's like to deprive bad people of the magic wand. Yeah, and if you want to feel good about something, the world developed nuclear weapons, what, 70, 80 years ago? And for the last 60, 70 years, we haven't had a problem. Not that we're not all nervous about it, not that there isn't a risk all the time, but in general, we've done an extraordinarily good job of managing that.

37:17This is easier to manage, I think, than nuclear weapons in 30 countries. But, you know, we'll see. I mean, look, if you're worried about AI safety, you should be as pro-U.S. military as you could possibly be. Because that is the single biggest deterrent to bad actors is the size and scale of our military prowess. And so, like, if you're, you know, put your money where your mouth is. If you're scared of AI, you better be deep in investing in Nanderell and others, which actually, in an incredible way, I do think the culture, both in Silicon Valley and just like broadly in the United States, has changed.

37:52Like, these, you know, AI-driven, you know, new military companies are really in vogue. They're growing. They're getting great talent. I think it's an incredible thing for the country for us to lead in this area. And, you know, that's also another benefit of all of this, is people see the military applications of this technology. And we seem to be leading there as well, which is great. Hey, we'll continue our interview in a moment after a word from our sponsors. Hey, everyone, Eric here. In this environment, founders need to become profitable faster and do more with smaller teams, especially when it comes to engineering.

38:25That's why Sean Lenahan started Squad, a specialized global talent firm for top engineers that will seamlessly integrate with your org. Squad offers rigorously vetted top 1 % talent that will actually work hard for you every day. Their engineers work in your time zone, follow your processes, and use your tools. Squad has front-end engineers excelling in TypeScript, React, and Next.js ready to onboard to your team today. For back-end, Squad engineers are experts at Node.js, Python, Java, and a range of other languages and frameworks. While it may cost more than the freelancer on Upwork billing you for 40 hours but working only two, Squad offers premium quality at a fraction of the typical cost without the headache of assessing for skills and culture fit.

39:06Squad takes care of sourcing legal compliance and local HR for global talent. Increase your velocity without amping up burn. Visit choose squad.com and mention turpentine to skip the waitlist. This is another topic, but you know, 15 years ago, I was partial to trying to reduce the amount that we spent on the military. And over the last seven years, I've completely reversed on that. And what's what's caused that? Oh, because of the way that Russia and China are acting and will act. And I didn't see threats as visibly at the time and I underestimated them. And we have, you know, we have real players out there that I think want to do bad things.

39:47We've come a long way. I mean, Project Maven, by the way, Project Maven was only six years ago at this point. And I mean, Keith, I don't know if you were at FF at the time and the Andrewle investment or the founding was kind of getting going, but it was very controversial in the whatever, the Silicon Valley zeitgeist and I think Palmer and how all that stuff played out within Facebook was still controversial as well. And I don't know, Kevin, I agree with you that it's really shifted. I'm not sure what the linchpin or the watershed moment was that really caused it to shift from, I don't know, in the zeitgeist.

40:23Well, I wasn't at Founders Fund, but I joined after the first financing and stuff. The key thesis is a classic Founders Fund move, Peter on down, is find things other people don't believe in or afraid of or ideologically opposed to and invest in them. It's the best way to make money in venture. It works. The problem is it's not easy to do that every year. to cancel play a whole fund of a billion dollars that way. But it's the greatest thing ever. And then eventually they become consensus. And that's what's happened with Andrew and other space or defense-oriented companies. I think the sea change is just as simple as Kevin described it.

40:56The world is a dangerous place. And maybe in 2008, people believed in the end of history stuff or, you know, it would be a little political when Obama dismissed Romney's warning about Russia like we want your 1980s back. There was a lot of smart elite people that thought the world was getting safer, not more And, you know, if anything, we've learned over the last four or five years, definitely the world is a dangerous place for a lot of evil people. And if good people don't do things, evil people are going to try and come. When things are nice and easy and good, we forget why they're nice and easy and good.

41:26And it takes like a little bit of chaos to remind you like, oh, right, you know, 100 years ago, things were not that great. And it's only kind of like recent times where this stuff is true. It reminds me not to bring it to the other area, but like it reminds me of the vaccine skeptics where they're like, why do we need these polio vaccines? No one gets polio. And you're like, why the fuck do you think no one gets polio? You idiot. And like, it's just but, you know, calm and safety. And you forget the reason we have these rules. And all it's going to take is polio reemerging for the vaccines to be very in vogue.

41:59Right. It's going to totally shift the pendulum. It's not just polio. It's measles. It's, you know, it's like all these things. I mean, we are kind of seeing it in certain subcultures where it does reemerge, actually, which is incredibly scary because it can be contagious and especially with young kids. Yeah, and puts us all at risk. Yes. Which is outrageous. One of the things, I guess, one of the other topics we kind of had here, and I think I've talked to some of you about this in the past, but is just social media messaging platforms, the right to spread information, misinformation, what the different risks of these platforms actually are.

42:37Keith, I'm curious your perspective. I think you and I have talked about this a little bit in the past, but what right do people and these platforms have to, especially in this world of AI, where the deep fakes and all that stuff seem to proliferate at an ever-growing rate, what role do you think the platforms themselves should take or the government should take? Are there frameworks that you think make sense to try to? I think it's actually fairly straightforward and maybe easy. Anything you can publish in a book, you should be able to publish on a platform. And if it's illegal to publish something in a book because it's defamatory or it's a team, you shouldn't be able to post it on social media.

43:16But if you can write a book about it and publish a book and sell a book on Amazon, you should absolutely be able to post that on X or any other social platforms. There's no reason for discriminating against ideas. And so I think we've had principles that eliminate certain kinds of speech for centuries, and it's worked extremely well. And we just should take those same principles and apply them to new platforms. Does age play a different factor? There's certain things that kids can't buy in a bookstore, but they have access to online. Does that change your thinking? I can buy that. Again, taking principles that have worked for centuries and applying them to platforms.

43:56So age-gaining things makes lots of logical sense to me because we don't allow them, as you point out, to buy certain kinds of books. Yeah, we don't allow kids to buy alcohol. We don't allow them to buy cigarettes. At a certain age, we do. Seems to apply in the same route. Yeah, no, I tend to agree. It's just we have some safety rules, ironically, that we've figured out. And just because it's connected to a computer, why is it any different than a book or a newspaper? It should be the same. The interesting challenge to me is just like the rhetoric in regulating these online platforms gets very, very intense very quickly, ironically, probably because of the online platforms.

44:36And so, you know, I could easily see state by state even some very intense regulations that can do some harm. So we will see. What do you think the answer is? I mean, does it need to be a federal level thing? Do you think you let the states just figure it out? Well, the states have always regulated defamation. Like the law in New York, for example, is very different, actually, than the law in some other states around defamation or using people's identities. So we've always had state-by-state laws around defamation, even obscenity. There's a federal layer because of the First Amendment that Supreme Court has sort of insisted on.

45:12But basically, most of these things have been regulated by states very successfully. Yeah, except that you can't really do this on a state level on the internet. Well, they block gambling on a state-by-state basis, right? Yeah, because that's physical, and they can control book sales at a state-by-state level in newspapers. But here you can't. I mean, it is a nightmare. I mean, I just think the federal government has to decide because they can't have a site that can be accessed in 17 states but not in 33 states. Well, when talking about regulatory capture – The federal government thing, like, which really bothers me of, like, when we consolidate rulemaking in, like, one body is just you lose the, like, ability to learn from your mistakes or your successes when you stick it at the federal government level.

46:00I mean, one of the biggest people complain about in the US, but what they don't realize is like one of our biggest advantages as a country, a state's rights, not because, you know, any one state gets everything right, but actually you get like, you know, 50 experiments, right? And we can see we watch California do really stupid things. We go, oh, maybe we shouldn't do those. And then you watch Texas do some really interesting things in terms of like development. You go, those could look real. And you like learn as states make mistakes. And whereas if, you know, depending on which administration is in charge coming up with those rules, I really worry that like, you can't change them at the federal level very easily.

46:36And I'd almost rather let the states experiment. But wait, Zach, you're not arguing that we can have different definitions of an article that can be shown, you know, that I need 17 different article versions for 17 different states. Well, being able to block lots of financial services companies, for example, block residents of New Hampshire or Utah or Nebraska from using products. So there is, like in the gaming sites that are online, absolutely. Oh, yeah. Trust me. If you're trying to put in a college football bet and you're in California on a Saturday, let me tell you. There is some techniques that we've used in other verticals to regulate by state, even on the internet.

47:17It does make it. There's a lot of friction. There's a lot of friction it creates. But Zach, you're pro let states figure this out. We went to dinner, our wives, Zach and I did, I don't know, a couple of months ago, and he pushed the limits of letting states figure out things in health care. And it's still a topic in our household. My wife and I debate about how extreme this should go. But there's I mean, there's elements of regulatory capture or incumbent advantage that ends up playing out. And if we're going to regulate these things like utilities or whatever, financial service entities, maybe we should.

47:50But we're sort of deciding that there aren't going to be tons of innovation that comes. If we need to have this article can only exist in North Carolina and that can't exist in New York, it's going to advantage all the incumbents that actually have the resources to deal with all that stuff. Or and we become Europe where you don't have critical mass. I mean, one of the reasons the U.S. market is so powerful is that it is largely a national market. And I agree with you, Zach, that there are examples we can cite where state innovation has been fantastic. But you saw in healthcare, too, the extraordinary, you know, wastage.

48:24I mean, the fact that there's a different driver's license process for South Dakota versus North Dakota, you know, is just waste. Yeah, I'm not arguing. My take is we don't need regs beyond the kind of things Keith was talking about in terms of especially just for kids in particular. So that's the best of the ideas. Now, if we're going to introduce bad ideas about trying to regulate some speech here, at least the state level one is the least bad. I really worry about federal regs in this area because it just stifles innovation. It stifles experimentation. we don't have any clear data even on the kids thing now i am a fundamental as having two kids no chance in hell my kids will be allowed to use social media until they basically hate me but at the same time like is the data that shows it's harmful to teenagers truly convincing if we had real randomized studies like no i don't think so i mean you can like logically reason why it makes sense but that's my fear it's like we don't even really know what's harmful?

49:27I think it's I think an abstract you can say it's harmful, but it's compared to what like kids have never been the best, you know, most well behaved, given freedom to do X things. It's not like I sat home, you know, when I didn't have social media when I was growing up and just did exactly what my parents wanted me to. So, you know, when you benchmark against well, what would kids do back then, you know, I don't know if you want to keep clicking on all these things sometimes. And so I think some of these studies are done in isolation, which is like, oh, yeah, this is harmful compared to if you're reading a book, you know, going to the gym, working out, you know, et cetera.

50:00Sure. But like what do kids in practice do when they're 16? A lot of things that are like the best for that. You know, Zach, just because you have younger kids, now that my oldest is 30, I've decided to let him use, he can use social media now because I'm an open-minded father and I just, I'm flexible. Is he allowed to keep the door open when he has, you know, guests yet or no? But it does kind of come down to what the individual accountability and all this stuff like what is the harm principle in these things. And there's been new studies that have come out in the last couple of weeks around like the implications of legalizing gambling, and just the rate of domestic violence that comes out of it, the rate of suicide.

50:42And you can kind of use usury laws as examples of like we put in some regulations around, around checks and balances and not just saying, okay, well, people can do what they want. And I think the social media data, it sounds like, I don't know, I haven't gone in and studied it, but what exists at the individual accountability level versus what is societally beneficial seatbelts? I'm glad we don't have people flying out of their window every time we have a car accident anymore. But I'm sure at the time, people were arguing that you're infringing on my right to make my decision. And it's like, well, if you die, and you're the income earner in the household, and now the state has to take over, you know, and help your kids, I don't know, that feels like a good check against that.

51:29Absolutely. But I do think on the increase in suicide attempts, which is a measurable thing by girls, we've the impact on girls does appear to be quite significant. Since the introduction of the iPhone, we can't blame it completely on that. But the timing is we don't have another explanation for it. I think it's also like an ethics question. It's kind of like fundamentally, how much do you believe that people should just own their own decisions versus how much does society have a role in making sure you just like don't do the worst things? And the answer to that question will vary based on, I think, like personal beliefs.

52:08I don't know if there is a right answer. Like, should people be allowed to gamble away all of their money if they so choose? It's kind of a harm principle thing, right? I think if we totally judged on a harm principle, we would probably ban alcohol. If we just look at the societal implications as someone that drinks and enjoys, but the negative for overall society, I think you could make a very strong case that alcohol is more of a net negative to society. But it gets in this situation that we've all agreed that the benefits potentially outweigh that at an individual level. And gambling for me is certainly a net negative.

52:46And I personally wouldn't, I'm not sure it should be banned, but I wouldn't invest in anything and I don't want to encourage it. I don't think it makes the world a better place there. But I think the issue, Zach, is trickier because we pay for all the problems. So when people are obese or don't wear seatbelts and have accidents, it's not just that. If they just die right away, fine. but when they are in the hospital for for six months that that's all of us paying insurance for that 100 yeah and that's where you start to see the like the externality part of it but i it's like gambling is actually really an interesting one because do we pay for those externalities like clearly get mental health issues and maybe some safety you could argue people go a little crazy it's hard i i i struggle with this one because you know i like sports and sports gambling can be fun at the other end of it like clearly it's harmful that's like yeah no no drug uh hits that it's like watching monday night football and you're like why do i care about these oh and four teams playing with like i don't care but so you know the gambling part kind of makes it interesting but yeah clearly it is harmful i mean i think everybody has i definitely have you know individual friends of theirs where if you were truly honest you would tell them like you probably need to delete FanDuel.

54:00It's not good for you. It's also just effectively a tax on poor people. It's aggressive. As the lottery is, right? A little aggressive in all ways. When I walk through the casino or something in Las Vegas and I see people, I feel like you can't afford to lose this money and you are losing this money. Yeah. One of the reasons the impression I always have to get is terrible is I grew up in Jersey and we go down to the living city and there's no friction to get there. Vegas in some ways is friction to get there. And so adding friction, it's not quite as sad. You go to a casino in the United States growing up.

54:35It was incredibly depressing. As soon as you open the door, you're like, this is awful for society because people could just bust there. And Vegas takes a little bit more resources to get there before. And so by putting things online and making it easier, reducing the friction, I feel like we've turned everything into a Latinx city. My image of gambling when I was 12 years old came from James Bond movies. And then you go to Atlantic City and you realize it's not really quite bad. I was in Oklahoma a few weeks ago and like you stop, there's the slot casinos alongside the highway and I stopped to go to the bathroom while I was driving.

55:09And I will tell you that's like slots are about as sad as it gets of just people sitting there and you know, it's all the, I mean, there's been tons of studies on the lights and the stimuli and all that stuff that comes out of it, but it's about as bad as it gets. And again, this comes to individual accountability. Like, should we, if we know that the lights and the handle pole and the noises and all that are really rewiring our brains in some way just to keep going from an addiction standpoint, what role should the government play in that if someone's just going to lose their life savings around it?

55:43I don't think we need to encourage it. Now, people can also, by the way, the four of us can gamble amongst each other if we feel like it. And people have always done that. That generally did not ruin people. if you systematize it make it easy then it's going to be much worse i mean look we've already greenlit the world's largest casino which is crypto so you know unregulated global casino to invest in shit coins basically and with a few with a few use cases yes i know stable coin yeah yeah yeah not many my favorite i don't know if this is true so i'm just going to say something and we'll see if somebody actually like fax checks us but i was told this is my trump level like some people are talking.

56:25Many people are saying, yeah, exactly. One person I know told me that like the number one use case on Solana in terms of like that chain or whatever, like the company that generates the most revenue is basically like an auto shit coin generator. Like that's the biggest customer is like a company where you can go in like three clicks, create your own shit coin, and then like go out and market it. And that's the use. So, you know, So we do humans. I mean, we've been gambling for thousands and thousands of years. There's clearly pent up demand here. I don't even know if regulating sports betting is going to matter because we have many other outlets for this stuff.

57:04Yeah, you're right. I mean, what's the line between Robin Hood and DraftKings is it's pretty thin in some ways if you really zoom out and think about what people are actually doing with it. So I don't think that's true. the makeup and the income level of people doing sports betting or slot machines is different from the people on Robinhood. The average income is not the same. And we're also not opening up Robinhood slot machines all over. We're not encouraging the people. There's some friction to get there. I'm more comparing DraftKings to Robinhood. Do you think at that level, I mean, obviously, there's been some materiality thresholds of who can make what types of investments.

57:46Is that a good thing that we're not giving access to certain people to, I don't know, different financial products? And I guess I agree with you that I'm sure we can find the actual data on the different financial profiles of who uses what. But like, should that actually be a governor that if you're not above a certain net worth, you shouldn't be allowed to do this? To me, it just depends on how much we're actively encouraging. And again, no one is saying that Zach and I can't bet on the next football game. So that's fine. The question is, are we giving licenses, by the way, mostly because they essentially bribed politicians, and saying you can have a certain number.

58:28New York State is, I think, I can't remember having five or seven casino licenses that they are giving out. And is it going to make the state wealthier? Is it going to be better? And I'm not sure it will. I don't think it will at all. The investment regulation one is always fascinating. Like this is like the accredited investor status basically. That was the word I was looking for. Yeah, there's like qualified purchaser, which is the big one. But like accredited investor, I think is like 250K in income over the last two, three years, something like that. And if you don't have that, you're essentially like not allowed to invest in most alternative assets, which feels odd and regressive, right?

59:04By the way, I think it's kind of like an airline, like getting onto a plane. I think that that's the threshold by which they're supposed to judge you. But if they build enough confidence that you can do it, they'll let you on. And so I don't know if you guys have ever lost your wallet and tried to get on a plane. But you can kind of do it if you show your checkbook or show some other stuff and let them build the confidence. I think it's the same thing with accredited investor generally. Well, I guess I go back to why. Why does this exist? Because it feels like, oh, we've always had this thing.

59:34But if you go back, like the reason for many of these regulations in particular in the finance industry is like scams. It was just scam after scam after scam after scam, taking advantage of people who were not as well educated and maybe didn't have as much money. And, you know, this is like brokers calling you, getting you to invest in penny stocks, just like thousands and thousands of different versions of that scamming poor people essentially in mass. And that's the reason for it. And so the question is like, it goes back to that personal responsibility, like ethical issue of, you know, do you think people should allow, be allowed to get scammed?

1:00:13And at what level? Because clearly there's some harm in limiting their ability to access venture funds and startup investing and stuff like that. But there's also harm in letting them throw their money away, you know, in things that clearly aren't real. I don't know what the right answer is. I mean, you could draw a through line to this in the and it's a little bit of an extrapolation, but the lack of companies going public because of the regulatory burden that and the financial disclosures and all of that stuff that you need now to be a public company. And the reason we've done that in large part is because people were getting scammed on companies that were going public.

1:00:53And so you do this thing that in principle sounds great. Who doesn't think that like more disclosures and more accountability in the financial markets, like who's going to argue that that's a bad thing until you see the downstream implications, which is like the lack of IPOs and the fact that all this value is being created in the private markets now that used to be in the public markets. And so there are these externalities that are a little unintended, but with broad implications when you start thinking about that. And I think last time, Zach, we talked about the fact that the FDA is so protective that it costs$500 million to get a drug to market.

1:01:29And in the meantime, those people die who didn't get that drug. And maybe some more drugs should get to market. So we are overly careful in some areas. Yeah, that one is always so hard because a lot of what the FDA is really tasked with at the end of the day is safety, right? It's looking out for populations who may have like a safety issue on a drug they don't fully understand. And the challenge in safety in healthcare, maybe a longer conversation for another day, is sometimes it takes a long time to see those safety issues appear in human beings. and so when people talk about like the fda being really slow and you know these like large safety requirements you know you need x hundreds of people in a trial sometimes more depending on what you're doing and you can critique it in like being ultra conservative like sure it is ultra conservative but part of the reason for that is you don't see rare side effects in human beings for sometimes could be months or even years and so like where's the line for what we're willing to tolerate from a safety perspective, it also varies by disease, right?

1:02:39So it depends on, you know, our tolerance for side effects obviously are higher in oncology and cancer than they are in, you know, dermatitis. It's so hard to say like what's right and what's wrong in those areas because I think a lot of it comes down to like, you know, it's that question of like, would you kill one person to save a million? I would, but I don't think a lot of people would, You know, like, and so it's like, what is your ethics? And that's really tough. And don't forget, we're not killing one. We're running the risk that someone will die at some point in return for that. And yeah, we make, look, government has to make these decisions all the time.

1:03:17And we do make, and we're just trying to decide. And over time, we move that line. But right now, that line's overly conservative, I think, on the FDA side. I think we're getting overly lax on the gambling side. Yeah, but everyone has their own, you know, opinion. On the regulatory side, we just saw this in the sickle cell med that Pfizer just pulled. So Pfizer spent$5.4 billion buying this company that develops really interesting therapeutic for sickle cell. And there were these longer term studies that took a while to read out, which I'll paraphrase essentially as saying there was a higher chance of death in some patients than the control group, right?

1:03:57So there's benefits to the disease in terms of pain reduction and things like that, but also you have a higher chance of death. And so Pfizer pulled the whole thing, which was actually a Pfizer choice, not a regulatory decision. And I was talking to my co-founders of like, this doesn't make any sense because ultimately isn't this a choice that the patient and their doctor could make, which is you understand the risks. You say, look, you might die X percent chance higher, but also there's these benefits of this drug. Like you make the call. And that to me would have been the right decision from like an ethics standpoint of, you know, back to like personal responsibility.

1:04:36Now, what my co-founders told me, which I thought was really interesting is like, oh, they're pulling it because of lawsuits. And that's actually like the thing that they're worried about is even with all the disclosures and all the informed consents and everything that you would have to put in place to allow people to get on this drug, that the court system is going to kill you. and there'll be a$30 billion judgment. Yeah, I thought that stuff was all pretty preempted. I mean, there's exceptions, but I thought like for the most part, you can get preempted away litigation risk. My impression, not being an expert on the litigation side, I mean, you've got Johnson & Johnson still dealing with the baby powder lawsuits 30 years later.

1:05:17Look, the drug has its problems. I want to be very clear, right? Like this is not a perfect drug by any means. I'm only using it as an example of where even that litigation side of things plays a role in the conservative nature of some of these companies. So this is the question of harm. I mean, you can fix that by statute. How do you think about like the harm principle versus individual accountability and responsibility? I guess across, I don't know, we've talked about gambling. We've talked about stock market. We've talked about FDA. Great question, because I tend to believe in individual responsibility, period.

1:05:56I'm not a big collective action kind of person. I sort of love the Margaret Thatcher school of the world, of society's like a safe concept. So that said, I'm also pretty clearly believe that there's things that are bad for people and probably default to mostly leaving individual accountability in place. The problem is, as we subsidize healthcare and subsidize other things, you're asking other people to pay for poor decision making. And that's when you run into this challenge of if you had to bear the cost of all your poor decisions, you get less poor decisions. But we, for other reasons, decide that we're not going to force you to go bankrupt or we're not going to force you to not get access to health care because you made stupid decisions.

1:06:41But a lot of health care costs are people making stupid decisions, but we subsidize it with insurance. And as long as you're asking other people to pay, I don't think you get an unfettered right to make stupid decisions. So maybe if you wanted to waive other people paying, period, maybe you get the right to have unfettered decisions. there's probably some calibration there where you can opt in. This is one of the reasons why if celebrities are so bad for pop culture, pop culture celebrities are bad. They're usually typically wealthy and they make a lot of dumb decisions, but they have a buffer.

1:07:12They have an insurance buffer, they have money so they can deal with some of the consequences themselves. Normal people follow the behavior without that buffer economic or otherwise, jobs, etc. et cetera. They lose a paycheck, you know, they're out of work, the family's scarred. And so I think we need to think about if you're going to take social fabric insurance of any kind, you may lose some degrees of freedom on your individual responsibility. And that probably is a net economic trade. There's also a question of like, how informed can the like typical person be right? Like I would make the argument, you know, you get in a car without a seatbelt, you kind of understand the risk you're taking.

1:07:56You know, you drive a bike without a helmet, you kind of understand the risk you're taking. You know, you gamble, you probably should understand. This is not like complicated concepts. You take a drug that has a 1 % chance of a material side effect. I'm not sure people really understand what that means from a risk standpoint. We are bad at statistics. We are bad at percentages. We're bad at short-term, long-term trade-offs as human beings. And so it's also like, how possible is it for people to truly understand these individual risks? And that is hard to say. Well, that's why the do your own research argument at different times is just like, it's really opaque and hard to understand as you get into fields that are, one, I agree with you, the internalization of probabilities.

1:08:46We're just terrible at it as a species. It's just really hard to think that through. But then too, especially as you get into some of these more esoteric areas, it's hard to do your own research. But then you end up with, I mean, we don't need to go down this whole rabbit hole, but the COVID vaccine thing and how all of that's played out. And I mean, that's obviously frayed society in different ways with people trying to do their own research or pushing back. It's just, you're not capable of doing it. I mean, this is why you get a PhD or an MD and you spend years and years in school. And I'm not saying they're perfect by any means.

1:09:27I would totally disagree with that. I totally disagree with that. Like for unfortunate reasons, I've had a master cardiology for myself. And the goodness is I've accessed to six of the top 10 cardiologists in the United States, but I've had to do all the work. And none of the six agree, by the way. So these are the six of the top 10 ranked cardiologists. They don't even agree on the test I should take. So I've spent like a decade now or eight years kind of mastering cardiology because I needed to figure out what should I do or not do? Should I be concerned, not concerned, take this test, take this particular whatever.

1:10:01And the more you dig into healthcare, the more you find out this is true. So I had a colleague of mine who works for Square. He has had cancer eight times, survived, which is miraculous, just alone, at like 30 some odd years old. He was on the precipice of dying like several times. He's been told that he has no future. And he had to do his own research. And once or twice, he pulled off a miracle, like true miracle, where like one time during the middle of COVID, he was told that there is no hope. And he fortunately had made some money at Square. So he funded a prize for anybody in the globe who could tell him what to do.

1:10:34Turns out he found something. He had actually literally mailed his blood samples to 20 different labs because no one during COVID would actually do the work for. So I've just seen in cancer and cardiology, which are some of the more complicated parts of healthcare, that people doing their own research will outperform a traditional expert. Now, fortunately, my friend Kyle and I had the resources to do this. So it's true that not everybody can do this. But the outcome would have been completely different for both of us if we just took for granted what the first doctor we ran into told us to do. Well, the challenge in healthcare is like, there's many things we just simply don't understand from like a biology standpoint, right?

1:11:15Like it is naturally imprecise. I mean, we barely understand, you know, what causes cancer in the first place. like so it's not surprising to me that there are edge cases for sure where you should go figure it out now when i i think it comes down to like what does do your own research mean like yes you should seek multiple opinions yes you should go talk to lots of experts you should kind of like push the limit the other challenge by the way in health care is obviously like your doctor doesn't get paid any differently based on your outcome in general cases so there isn't a full incentive for them to get all of this right.

1:11:46So I think the idea of like, I have an issue, the system isn't solving it, I need to go figure out, you know, what I could do is totally rational and reasonable. It's the ones where it's like, well, hey, we have like, layers of published research about this specific decision or this specific drug or this specific, you know, clinical situation. And then everybody goes, I'm going to go read like Facebook comments. And that's the part You're still trusting experts in this example. My example, yes. Kyle, my cancer friend's example, not really. He didn't really have to push down below beyond what a lot of experts.

1:12:23But he did find some experts who helped navigate. I can think of some examples as well that the experts were totally wrong. Like in cancer, you want to read a great book, read Breakthrough. The experts in cancer were totally wrong. Now it's been consensus. The people pioneering that research had none of the traditional background. They've all now won Nobel Prizes. It took like a century to undermine, you know, most of the conventional wisdom about cancer. It's a fabulous book, by the way. Just pure reading for your own edification. But even in fields with experts, you know, on top of experts, on top of experts, the people who really innovated in cancer were actually people sitting in the middle of Texas with no medical degrees.

1:13:01And actually, we know much more about the heart and cancer than we do about the brain. You know, we don't have any idea. We generally know, not in your case, but generally know what's going wrong in our heart. But in the brain, we don't even know what causes depression and, you know, growing like crazy. So this problem is very acute. One of the biggest things that is just really hard for people to understand, and it's like a concept I think a lot of people inside of medicine understand, but they're just really shitty at articulating, is kind of like your level of confidence or the level of evidence, right?

1:13:32Because like not all evidence is created equal. And there are certain things where it's like, we know this is true. We've run these giant randomized studies. Here's the answer. And then it trickles down from there. We'll call that oleo vaccine, for example. Right. Or wash your hands before you do surgery. Things like this that we didn't actually know back in the day. And then there are things where there's obviously materially less level of evidence simply because, A, we don't even understand how the disease biologically works or the treatments are very unclear. And I think humans do not understand this like spectrum of evidence where you can go, there are certain medical decisions where we just, we literally have no fucking idea.

1:14:10And then there are ones where we have tons of confidence in and we're really bad, especially in the news media of articulating high confidence, mid confidence, low confidence. And that would be such a benefit to society if we could share a little bit more of that. For example, the number of articles that I get sent typically by my family members where they're like, hey, look at this new study. Look at this new drug. And I go, hey, did you check if that study was done in a mouse? Just the first check, right? And it's like 95 % of the time, it's like, yeah, it's a mouse. Like just remind you that's not a person.

1:14:42And so even little things like that, like where was the study done? What kind of animal was it done in? How many people? If there was a human study, these are complicated concepts. People just don't get them. Well, if we're afforded the luxury of doing episode three, I think healthcare is one that I would love to dive into with, I mean, Zach, given your background, Keith and Kevin, I mean, I think that could be a really fun one to talk about. Because I think we touched on it a little bit last time between outcomes and the implications of cars and guns and opioids and all that. There's a lot of data to unpack.

1:15:15So I think we can maybe put a pin in it here. And if we're fortunate enough to do episode three, circle back on healthcare. That'd be great. I would love that. Awesome. Thank you, guys. All right. Thanks, everyone. Until next time. See ya.