The following is a conversation with Jason Calacanis, who's an entrepreneur, investor,

author of Angel, How to Invest in Technology startups, and as many people may know, he's

a fun, brilliant, longtime podcast host of This Week in Startups, and cohost of the All

In podcast with Chamath Palahapatia, David Sacks, and David Friedberg, who all happen

to be poker buddies and self proclaimed besties.

The result is always a great listen due to both the love and the heated disagreements.

Quick mention of our sponsors, Brave Browser, Linode Linux Virtual Machines, FourSigmatic

Mushroom Coffee, and Rev Speech Detects Service.

Click the sponsor links to get a discount and to support this podcast.

As a side note, let me say that I've been learning a lot about real world finance in

the past few months.

To give you a bit of context, on the side, I've studied trading from an algorithmic

trading perspective as a machine learning and game theory problem off and on for a few

years in undergrad and grad school.

I found the distributed, complex system aspect of finance and economics in general fascinating.

But now, I find even more fascinating the human side of the whole thing.

Ideas of greed, power, freedom, and truth.

Wall Street Bets, Robin Hood, and the whole beautiful mess around this topic allows us

to have great conversations about human nature and the systems that underlie the rise and

fall of civilizations.

If you enjoy this thing, subscribe on YouTube, review it on Apple Podcast, follow on Spotify,

support on Patreon, or connect with me on Twitter at Lex Friedman.

And now, here's my conversation with Jason Colicanus.

I have a million things to talk to you about, but we do happen to be living through what

I would think of as a historic event in terms of its impact, in terms of almost philosophically

thinking about the role of people and how they can fight power with this whole Wall

Street Bets and GameStop situation.

I was wondering, you've covered in your amazing online podcast, you guys have been having

fascinating battles over this whole situation.

I was wondering if you could tell maybe from your perspective, as it's unrolling the

saga of Wall Street Bets and GameStop, what are some interesting insights that you have

about this whole set of events?

In full disclosure, I was an angel investor in Robin Hood before they launched.

And when I met the founder Vlad and his partner, they pitched me at a bar, not too far from

where we are right now, in Palo Alto called Antonio's Nut House.

And my friend Adeo, it's a really good story, my friend Adeo had asked me to speak at his

founder's institute, which is kind of like an accelerator for people who are thinking

about starting a company.

And so I gave a talk and then he said, hey, let's go to Antonio's Nut House and we'll

meet Elon for a drink.

And so Elon met us for a drink there.

And it's the divest of dive bars.

Like you'll take a beer.

I love the image of all of this, you hang out with Elon at a crappy bar.

Yeah, I mean, it is the worst bar in the peninsula.

Like just garbage on the floor and like cheap beer and warm beer and like you pick up your

pine glass and be lipstick on it.

It's brutal.

Classy.

Not your lipstick.

You understand?

Somebody else's lipstick.

Yes.

And so we're sitting there and Vlad walks up with his partner and he says, you're Jason

Calacanis and I said, tell me about your startup.

He said, how do you know I have a startup?

I said, you recognize me.

And I mean, that's the only way.

And he goes, is that Elon Musk?

I said, yes, Elon.

Say hi.

And he came over and said hi.

I said, tell me what you do.

He said, well, I'm a quant.

And I said, what's that?

And he said, quantitative analysis and I was like, oh, yeah, yeah, I know about that.

That's like, you guys make algorithms and then try to beat the market, right?

He's like, yeah, I was like, so you're going to pitch me on a startup and you're going

to sell your algorithm to other people.

And if it was so good, why wouldn't you just use it yourself and print money?

He's like, yeah, yeah, no, no, that's not our business.

Our business is we're going to create an app to get millennials to trade stocks.

And he said, hmm, you do realize there's no retail investors anymore, like the dot com

crash plus the 2008 financial crisis eliminated any individual's belief in participating in

the stock market.

And he said, that's the opportunity.

I said, okay, I like it.

Tell me more.

He said, well, we're going to get these millennials to trade.

I said, the same ones who live in their mom's basements and take Uber and Lyft and are on

their parents have no money, got screwed and went 250k into debt for school and now can't

get a job.

Those people?

And he's like, yeah.

I'm like, okay, they have no interest in their future, but they're going to trade stocks.

He said, yeah, that's the opportunity.

I was like, how are you going to make money?

And he said, well, that's the best part.

It's going to be free.

And I said, so your idea is to get a group of people who have no interest in saving for

their future to trade and your business model is free.

And he said, yes, I said, I'm in because in almost all cases, the crazy outlandish ideas

that nobody believes in are the ones that have the greatest returns.

I mean, Uber, I introduced to about 25 investors and three of us said yes.

So a full 12% of the community who saw that deal decided to do it.

So your sense about this idea being good had to do with the fact that this guy was just

the crazy and ambitious and bold thinking, or was it that there's something here in allowing

a much larger magnitude of people to be able to be investors?

Yeah.

The way to do really well as an angel investor or just in technology or in life is to not

say what could go wrong, but to say what could go right.

And then to just imagine for a moment, if it does work, what would the world look like?

And so when Elon was investing in Tesla and some other guys were running it and he was

trying to save the company, is this going to work?

It was almost positively not going to work.

And he knew that.

But if it does work, what does the world look like?

And so that's really what you're looking for is not the chances of success, but if it does

succeed, what would that look like?

And that's what the world needs more people doing.

And so when you looked at Robinhood, it was like, well, if he does succeed, what would

the world look like?

And now we've seen what it looks like.

You have a generation who are so financially sophisticated that they know how to do puts

and calls and shorts and research at a level that dominated the hedge fund industry.

So let's pause for a second.

These traders sitting there on a subreddit in a Discord server are able to do analysis

and research and then act in unison to say, we're going to beat, in the Robinhood sense,

this group of sophisticated insiders who have more access and more access to capital, but

we will figure out how to solve this problem.

And most things don't work.

It's like the Wikipedia.

There's no way the Wikipedia would ever work, except it did.

You're like, how is this ever going to work?

You're not paying anybody, but it's both the largest corpus of an encyclopedia ever.

So I think Robinhood actually succeeded.

And then what we saw was this system and a lot of the systems in our society, whether

it's the political system, the Constitution of the United States, education, higher education

which you're involved in, and then even the financial system, we have not stress tested

and stress tested it.

And we don't actually know all the edge cases and how it works.

So Trump was able to just really put this crazy stress test.

Is the democracy going to hold?

Are we going to break this 200, someone year old experiment?

And then we looked at the financial markets and it turns out there were more people shorting

the stock than shares were available.

I don't know how that's possible.

And then I'm trying to uncover, where can I see a list of people who've shorted the

stock and it's like, you can't, but we can tell you sort of how many every two weeks

or maybe twice a week, we can create a report.

Maybe we know.

I was surprised that nobody knows the list of people who are shorted and you guys are

trying to figure that out.

Yeah, there's no transparency on a lot of these systems.

And if you call to try to short a stock, it's almost like they'll tell you on the phone,

let me see, I think I might know a guy who has shares to loan out.

So it's like, am I calling to try to find a 73 Mustang Grande in gold?

You're going to call around.

It's like, shouldn't this be like on a ledger somewhere and be completely transparent?

So now we're seeing those things.

And I think the investigations will make it super clear.

But of course, in a vacuum without information, there are so many investors in these startups

that conflicts can start to appear.

And then you know how it is with people in conspiracy theories, the mind starts to wander.

And so in some cases, there is actually a conspiracy.

And then in other cases, people's mind will fill in like, oh my God, there's some grand

conspiracy here.

So the Robinhood's only goal is to get more people to trade stocks and to democratize it

even more.

And they apparently were on the brink of seizing as an entity if they didn't get more money

to cover all these trades.

I mean, they were on the brink and they raised $3.5 billion or something like that in a week.

Yeah.

So in some sense, Robinhood enabled this very like the magic of this distributed system

of Wall Street bets, right?

He said Wikipedia, which is probably one of my favorite websites and one of my favorite

examples of like a distributed system somehow coming together in a way, just like you said

at that crappy bar, I would have guessed it would never work.

But if it does work, it changes everything and it did.

And Robinhood, in that same way, probably enabled or was one of the major enablers of

Wall Street bets of giving power, like empowering young kids to learn about how this whole messy

financial system works and take on the big elite centralized players.

Yes.

And it's very easy when these companies get big, one thing that's changed is the footprint

of these startups and the velocity at which they grow.

So something like Airbnb is another perfect example of something that should really not

work in practice.

But it does.

I'm going to rent my couch or my extra room to somebody like a serial killer or I'm going

to stay in somebody's house like a serial killer's house and it really sounds scary,

but it actually works and it has not destroyed the hotel business, it has added.

So the best startups induce a market to exist.

If you look at Uber or Airbnb, people replace their cars and Uber was not competing ultimately

with taxis.

They were competing with car ownership, public transportation, walking, or just not going

out.

And then you look at Airbnb, a lot of people who stay in an Airbnb would not be taking

a trip to Kyoto if not for the fact that they could get a $75 beautiful room with great

reviews in Kyoto for three weeks.

It inspires people and it manifests a market because the product is so transcendent, right?

And I think that's one of the things that Robinhood did, you can't learn how to do this

options trading and puts and calls and all this sophistication stuff unless you actually

do it.

It's just too hard to learn except in practice.

Just like poker.

If you want to learn how to play poker or guitar or tennis or skiing, you could talk

about it.

You can watch YouTube videos, but at a certain point, you got to get on the mountain.

At a certain point, you got to put some chips in the pot and it's going to be painful.

Like poker is going to be painful.

You're going to lose a lot of money.

That's why you should play at the small tables first and even in trading, you look at people

who are doing this crazy trading and game stop, a company that's worth maybe a couple

of billion dollars, but certainly not tens of billions of dollars.

Of course, the people who are throwing their money and last are going to lose it.

I think everybody knew that.

And so it was a momentum play and they're betting against the hedge funds.

So I think it's good for people to learn and become financially literate and just always

understand the concept of the risk of ruin.

The good news is for a young person, the risk of ruin might be like they lose $5,000 or

something and then they have to build their stack back up.

But that's really the only thing I am concerned about is there are people who will play poker,

a blackjack or sports betting or whatever it is and lose control.

Just like there might be people who try alcohol and lose control, but we can't build a system

based upon limiting the average person's behavior based upon somebody who can't control their

ability to drink.

Two glasses of wine instead of 20.

How does this whole thing end?

Probably in tears.

For who?

Yeah.

Who's crying?

Is everybody crying?

Exactly.

Who's crying when?

So I think there were some of the hedge funds that were crying initially, that maybe some

of the Wall Street bets people who bought last would be crying.

And then eventually there's probably another set of hedge funds or even the Wall Street

bets mob and that army, some of them might have broke ranks and then shorted the stock.

So nobody knows.

So everybody has to be aware of what's happening in the game.

So if Wall Street bets said, hey, let's squeeze these hedge funds because they have too much

short interest.

Let's all buy the stock, then some of them might have said, okay, it's $200 or $300.

Maybe I'll join the short movement now that they've covered.

And they could have shorted their double agents.

So people have to understand this stuff is gnarly and it's a free for all.

I mean, it is a literal free for all.

There's a kind of morality, like a big statement that Wall Street bets made in terms of like

the elites can't just push us around, they can't bully around.

But at the same time, they're also interested in making money, right?

What's your sense?

You said that some of the people in the Wall Street bets might have broken off and shorted

the stock.

Are they more interested?

There was an emergent like morality that emerged and said like, we're not going to put up with

the centralized elites, but is that going to continue?

Are they going to fight the power structures that are bad for society or are they going

to now like, I mean, are they ultimately going to introduce more chaos that's going to damage

the economy and damage the world or are they going to continue being the good guys and

fighting the evils that manipulate the market?

What's your sense?

You know, it really feels like the Dark Knight series of films where like some people just

want to see the world burn.

I think there is a contingent of people who just literally want to see chaos.

You know that contingent on some of these forums who just want to create chaos, right?

So there's certainly that chaos contingent, but I think overall what the arc will show

is a group of people getting massively educated.

You see it in crypto as well.

There was like a three year period where all of these failed entrepreneurs who I knew

who couldn't build companies were then coming back to me after their companies has failed

or after they gave up or couldn't clear a market raising money with the venture capital

community and they were doing ICOs.

And I was like, I met you before, right?

And they're like, yeah, yeah, yeah.

No, I'm doing an ICO now.

I'm like, okay, where's your company at?

And they're like, here's a white paper.

And I was like, this white paper with spelling errors in it that says you're going to destroy

Airbnb because everybody's apartment is going to be on immutable ledger.

Like wouldn't that be better in a regular database that was private and not public?

Like why does it need to be on immutable ledgers?

It can't change.

I'm like, not changing the database as a feature?

That does not seem like a good feature.

And they couldn't explain it.

They're like, well, just people are interested in ICOs.

And there was that ICO mania.

And what it showed was there's a global appetite for risk.

People want to try new things.

This is one of the great things about the human spirit.

It is one of the great things about capitalism.

And one of the things that concerns me most about where we're at in society is the sort

of socialism, communism, entrepreneurship is bad, technology is bad, and polarization

of wealth and people getting rich is a bad thing.

When I grew up, I'm 50 now.

But when I was a Gen Xer growing up, we kind of maybe too much idolized Bill Gates and

people who were doing interesting things in the world and we thought capitalism was a

force for good.

I still believe capitalism is a force for good because when a group of people builds

a product or service that changes the world and it gets globally distributed, whether

it's Tesla or SpaceX or Google or Airbnb or Uber or Robinhood, everybody gets to benefit

from that product or service having to compete.

And if you look at the places where there's no competition like public education or less

established colleges and stuff like that, less competition for accreditation degrees,

things tend to get a little weird, don't they?

And people tend to be protected and that's not good, you need competition.

Doesn't mean that people shouldn't have global health care, it doesn't mean that we shouldn't

have a safety net, but we need to keep capitalism vibrant, especially because China has now

coopted capitalism and created their own version of capitalism, which is communism

with capitalism.

It's like this weird operating system, like we still want to keep communism so we can

take any of your gains at any time.

But we'd like you to be entrepreneurial.

And then you have somebody like the founder of Alibaba, Jack Ma, who disappears for a

couple of weeks.

Who's that?

No.

Exactly.

Who's Jack Ma?

I was like, he kind of disappears for a couple of weeks and then he comes back and he's really

sorry about the things he said and then he disappears again and like, we have to be

very careful.

If China wins capitalism, this is going to be an existential threat for humanity.

The Chinese are no joke.

I mean, they are seriously focused and they are picking the winners.

It's a very weird system because it is, in fact, I don't know what you call it.

Communism and capitalism is such overloaded terms, but they do encourage entrepreneurship,

but they, and they do a good job of it.

Oh, yes.

But then they're like the surveillance thing and they're controlling things in a way.

It's weird because it seems to work really well for them in the short term.

Yes.

It's definitely got short term benefits.

So the question is like what, how that gets distorted and becomes worse and worse and worse,

which you potentially might be.

And I think on, you know, the entrepreneurial spirit, which you have apotheos all centered

around the entrepreneurial spirit is one of the magical things that makes this country

great.

The money is deeply tied into that.

I do get bothered by people, you know, treating the word billionaires if it's a bad word.

But in general, like all the hard things, all the difficult things we're going through

in this country, it seems like the way out is going to be making the entrepreneur the

hero of society of like letting that young kid with a big dream and the guts to take

the big risks and build something totally new, giving them a chance and whatever that

involves.

I don't think it's about taxes.

I don't think it's about like regulation, all that stuff.

It's about us in just public discourse saying that that kid, that guy, that girl, they're

bad asses, like encourage them to do it.

We have to have people buy in to the fact that they have that opportunity.

And I think one of the problems in society is there's a group of people who actually

don't believe that they can succeed or they don't believe even more perniciously that

other people can.

And that's the group of people that I think are highly vocal, but a small group of people

which are generally people of incredible privilege, rich parents, white city dwellers, liberals.

They kind of look and say, poor people cannot change a lot.

And they're battling in their minds to protect poor people.

But they have this very weird patriarchal kind of approach to it, which is they think

that they're not capable of changing their lot in life.

And they're like, it's not possible.

And then once in a while, I'll tweet something where I say, you know, it's really incredible

that every piece of knowledge you could possibly want is now available for free on YouTube.

And every course from MIT and Harvard and Stanford is available on edX or Coursera and

all that information is there freely available and you can take the lectures.

This is amazing.

And people will be like, yeah, but people don't have access to it.

I'm like, they do.

It's free.

Here's the link.

And they're like, yeah, but they don't have internet.

And I'm like, here's the chart of internet penetration in America.

Like, and they're like, well, poor people don't have internet.

And I'm like, really?

Find me any downtrodden person without a smartphone with a high speed connection that capitalism

provided for $12 a month or $15 a month.

It's very hard to find that.

And we have it so well in this country and there's so much opportunity.

But people don't believe it.

And that's actually one of the problems.

See, the average American still watches four or five hours of television a day.

And often I meet people and they're like, I need a technical co founder.

And I, you know, but all I need is a million dollars.

And I'm like, okay, well, what is your skill?

And they don't have a skill.

Right.

And I'm like, well, are you a designer?

No.

Are you a product manager?

No.

Are you a developer?

No.

Are you a sales executive?

No.

So as my friend Sam Harris, I think your friend as well says like, everybody has like

a million ideas an hour.

Like you don't really get credit for those.

Even when you're asleep, your ideas spewing ideas, like zero credit for your ideas.

It's all about execution.

You have to believe that you yourself can be the core of that execution, you yourself

can build the thing.

And every, no matter what your circumstances are, I mean, we could talk about like structural

racism and all those kinds of things that push us down, but from the individual perspective,

when you just like are coaching or giving advice to an individual, you can literally

change the world.

I mean, Wall Street Bets is an indication of that in the financial space that you yourself

can have, can change the world.

That's why this country is amazing.

Build the best country in the world.

Right.

I mean, it still is amazing.

The opportunity provided to people, all this educational experience is online.

And the ability, what I tell young people who are looking for advice, I say, you know,

the skill you need to refine is the ability to learn your skills.

Like if you become good at learning a new skill, and Tim Ferriss, a friend of mine is

really pioneered this, like he can get to 60 or 70% of like the knowledge in a skill

in some incredibly short period of time.

Now I'm not saying he's going to become a virtuoso drummer or a great basketball player,

but Tim and I were on vacation together in like a group vacation in Italy and there was

a basketball court.

And I said, let's go, let's go shoot some hoops.

I never shoot shop before.

And I was like, okay, come on, I'll teach you.

I mean, Tim is fabulously uncoordinated.

People don't know this.

Yes.

Like he tried to dribble a basketball and do a layup and it looked like he had a blindfold

on.

I mean, you've never seen something less elegant than Tim Ferriss doing a layup in basketball.

And then he watched me do it three or four times.

And I watched him study me and I listen, I've been playing basketball in Brooklyn since

I was a kid.

I got a couple of moves and he was just taking notes and taking notes and taking notes and

by the end of a couple of hours of doing this, I could just watch him checking his form and

figuring it out.

That's every skill in the world now.

And what I tell people is like, I'm like, did you watch Game of Thrones?

And they're like, yeah, did you watch Breaking Bad?

Like, yeah, I'm like, okay, that's about 400 hours.

How about you don't watch the next two and you put that 400 hours into learning how to

be a graphic designer, a UX person, a developer, whatever it is and learn how to add skills.

And that's what I did my whole life.

I was a kid from Brooklyn, went to school at night, but I was very quick to get to maybe

50% of the knowledge base of graphic design or being a writer or being a sales executive,

whatever it was, a developer even.

And I was just good enough to not have people be able to bullshit me like when I hired them.

And that was a big unlock.

When you know enough that people can't snow you, that's a really good one.

And look at yourself, like you figured out how to set up an entire podcast.

People don't know this, but you don't have a team around you.

I have a team of like five, six people working on my podcast.

But if you even know enough about to set this up, you would then be able to hire a team.

Correct.

And you'll be able to call them on their bullshit if they're not doing a good job.

And that's really important.

And I don't know that much about this whole thing, but I know enough to be able to then

see who knows their stuff or not.

You're absolutely right.

And the process of learning how to learn is essential there because like I did martial

arts, jiu jitsu and so on.

And it's so funny to watch.

I did take one though, yeah.

I took one though.

It was awesome.

It's funny that there's some people that do an activity for years because just sort

of elaborate on something you were saying about hours.

It's not always the amount of hours, it's the quality that you put in.

Yes.

Deliberate practice versus just doing some behavior.

I mean, literally I've been playing chess and trying to get that going again after watching

Queens Gambit and I got Chess.com and I realized I was just playing and I'm not getting better.

And then I was like, oh wait, there's a little analysis feature here in Chess.com where we'll

show you your blunders and mistakes.

And I'm like, oh, I'm spending no time reviewing my losses in chess and I just want to play

the next game.

I should really review these losses and figure out what mistakes I made.

And when I started doing that, I was like, oh, I'm getting better, right?

So some deliberate practice really works.

And if you want to take it all the way, Magnus Carlson, shout out to the guy, he has an app

but there's a few other coaching apps where you like focus on the end game.

You focus drilling in particular, you basically don't play the game at all.

You just focus on drilling the different aspects, the opening, the end game, and there's different

kinds of puzzles.

So you can really make it into a deliberate practice.

Not to make this episode sponsored by Chess.com, but they literally have puzzles.

So I was like, oh, and it's $100 a year for this product.

And I just thought to myself, this is capitalism.

They don't need to charge you $100 an hour for a lesson.

They can charge you $100 and they've created the ability for you to play chess 24 hours

a day against opponents who are perfectly matched against you based on your rating.

And they analyze every game and they have puzzles and they have tutorials and they've

got everything else.

It's like, just think about how much value is being provided to society because of capitalism

and because competition.

If you want things to get better and you want to step up your game, just make it slightly

competitive.

It is one of these things in human existence that is so powerful.

I don't know, did you see the Michael Jordan documentary, The Last Dance?

Like half of it.

Okay.

I'm still working through it.

I mean, he's so competitive and petty.

It's so inspiring that all he cares about is just winning to the level of which he literally,

there's like this running meme, I took that personally.

And I took that personally.

I don't know if you've seen the images of him sitting, smoking a cigar, looking at like

an iPad or a video clip and it's like, I took that personally.

And you can make a super cut of every time he took something personally.

He literally takes everything personally to give himself that competitive motivation to

win.

That's capitalism.

And when people are competing, man, look at what Elon did to the space of cars.

Like every, they were literally laughing at him in the first 10 years.

Electric cars, ha ha, that company got a business.

And now every single company is like, we're going fully electric by 2035 and he kicked

their asses so brutally that they had no choice but then to step up their game.

And that's what we want, right?

And this virus and this pandemic, I think the great thing that will come out of this

horrible experience that we've all had is psychologically death, learning just so many

bad things occurred, the economy, people losing their jobs.

But we also got to see the human spirit with these mRNA vaccines and just how if we took

out some of the regulation and people were super motivated, we might actually be able

to eliminate all pandemics from ever happening again.

And before that, Bill Gates was banging his fist and Jeff Skull was doing the movie Contagion.

I mean, for two decades, people have been banging their fists.

We have to be prepared for this.

And everybody's like, yeah, whatever, YOLO, it's not going to happen.

And now it's happened and people are like, we need to be able to destroy every pandemic

and virus before it happens.

And you're, listen, you know a lot more about science than I do.

But these mRNA has been around for a while.

We've just never gotten aggressive about doing it.

And then you think about challenge trials.

I don't know if you've been following this, but they're doing challenge trials now in

the UK this month where they're introducing COVID into healthy young patients and then

giving them the vaccine.

And that is against all rules and regulations about, you know, do no harm.

But then you think about it, we kind of celebrate people jumping out of planes.

And we got that one guy, Alex Honnold, who's climbing up mountains without a rope and they

give him a North Star, you know, back page ad and an endorsement deal.

And we celebrate that.

We celebrate people surfing with sharks.

We celebrate people doing deep welding.

We pay them extra to go 200 feet underground and weld stuff.

And people do dangerous stuff all day long, astronauts.

But we won't, soldiers, firefighters, but we won't let people get paid to do a challenge

trial.

Yeah.

We're weirdly risk averse in certain areas that are completely don't make any sense.

And this is where the world needs to be.

We could have said these thousand people, young people, who we know are in all likelihood

not going to have a bad outcome, but there's a possibility.

There's a possibility.

But it's very low.

And it's certainly lower than riding a motorcycle.

It's lower than riding a motorcycle.

People ride motorcycles everywhere.

We have ads for motorcycles.

We could have just said to those thousand people, we'll give you a million dollars each

to do this.

Okay.

There's your billion dollars.

We're printing trillions of dollars of money to deal with this.

If we had just done a thousand people for a million dollars each to do a challenge trial

in March, April, May, when they had the mRNA vaccines ready, we could have deployed the

vaccines in the summer.

We would have been done with this.

We would have been over by now.

So we get to challenge all of the thinking.

I think that's what the great pause did.

It's letting everybody challenge that thinking is, why do we have that rule?

Okay.

Yeah.

We don't want to have people give up their organs for money.

We obviously understand, but there's a reasonable discussion about, well, maybe there's a level

of risk in a global pandemic.

I mean, we fought the Nazis, right?

We defeated the Nazis.

That took a lot of deaths to do that.

But we had to kill that evil.

This is another evil, which we must fight.

And it's going to result in, it's already resulting in thousands of people dying a day,

but we could have actually stopped it earlier if we just had a reasonable discussion.

This is like podcasting, is our respect what you do.

And this is why intelligent people are so drawn to podcasts, because you and I can expand

on this and not cancel each other over this very suggestion.

When I make this suggestion that are challenge trials reasonable or not, if I were to do

that on Twitter, they'd be like, oh, Callicanus wants to give poor people coronavirus in order

to save rich people.

It's like, no, I didn't say that.

But you and I could have a reasonable discussion about a challenge trial, something we should

consider in a acute situation where millions of people are going to lose their lives.

Right.

So, you know, that's an example of capitalism and competition working really well.

There's one of the, to me, sad thing to see about coronavirus is that, for example, testing

at scale should have, it seems obvious, I was a little clueless about it, but because

I thought there's no way you can have like antigen tests at hundreds of millions, like

order hundreds of millions of them and make them cheap.

But actually, I realized recently that there have been available since about like May,

you were able to...

In Korea, in Finland, all over the place.

You could have done mass manufacture.

So there, there's a little bit of a failure of capitalism to step up.

And I don't know if you agree with this, but it seems that the blame is to be placed at

the regulators and the various institutions.

Crony capitalism and all likelihood is what stopped it here in America.

I mean, I had friends who had imported them from other countries, the testing kits, and

you've probably been to parties where people had these kind of testing kits from other

countries.

They're sitting here and they're just approving them now.

Really in February, month 11 of the pandemic in America, we're going to have testing online.

Really.

I mean, even if these tests were 80% effective and they're 95% effective, mass producing them,

we should have sent them in every postal...

Anybody with a post office box should have, with a mailing address, should have had 10

of them put in their mailing address just for free from the government.

And then everybody would be testing and we would have contained it.

We don't have test and trace here in the United States.

All the countries that are on the other side of COVID did it by having testing, tracing,

and closing their borders and masks.

That's the combination that works.

The problem with the coronavirus is while there's a lot of institutions did not behave

their best, it's also the case that there's a lot of uncertainty.

So I tend to give a little bit of a pass to everybody involved for the uncertainty.

We were all...

I give them that until June.

I wonder how history will remember this whole period.

I'd love to ask you, because you were an early investor in Robinhoods, and you're in a very

nice place of being a huge supporter of the Wall Street bets, kind of distributed power

of the people, and at the same time, because of you being an investor intellectually giving

a chance to Robinhood in this kind of chaotic time of conversations to think about, well,

what did they do right?

What did they do wrong?

Yeah.

So you have a kind of a balanced view on the whole thing, which is really nice.

Is there...

We've talked about what Robinhood did right, I think.

Can you sort of steelman Chamath's argument of what Robinhood did wrong in the last few

days?

Yeah, I mean, communication is always the number one issue with these startups, right?

And if you have to get ahead of any problem, and you have to put all the bad news out immediately.

And in the case of Robinhood, it seems, based on what has been in the papers and what Robinhood

said publicly, is that they had this kind of liquidity crisis, right?

Where they were being...

Because of these exchanges telling them, you have to put up this amount of money in collateral

and them being pinned at number one in the app store.

There were so many people trying to buy five shares of this stock, five shares of this meme

stock, that it kind of broke their system.

And then the people who clear the trades for them, they said, you got to put up a billion

dollars, $2 billion, $3 billion, we can't do that overnight.

And I think that they were in an uncomfortable situation of going on TV and saying, we have

a liquidity crisis, like that could be like a run on the bank.

Everybody then logs in at the same time to Robinhood and tries to sell every share they

own because they're afraid that the whole thing's going to collapse, right?

So I think there was this kind of like black swan event and they probably didn't communicate

at all that well.

At the center of that, this is really interesting, maybe you can comment on the nature of communication.

Vlad the CEO, the guy you met at the bar, I think at the center of the communication,

right?

So Elon is an example of a guy who also is at the center of the communication for his

particular set of companies.

And that on Twitter seems to be a really powerful way to communicate.

And there was something, this is me saying it, there was something about Vlad that sounded

like he's hiding stuff.

As opposed to Elon, it doesn't sound like he's hiding stuff.

It could be the nature, the beat, the timing of the conversation.

Same thing with Mark Zuckerberg.

Mark Zuckerberg for some reason often sounds like he's hiding something.

And then there's like Jack Dorsey is much less so.

And I don't know what that is about the CEOs that makes you trust them and not.

Might be the point in time, like in terms of escape velocity.

There might be non disclosures in place that we're not aware of where they're not allowed

to talk about certain relationships.

I see.

And that results like in Vlad's case, and that results in you being like acting weird

or nervous or nervous.

Yeah, it could just be the person is nervous.

So it's really hard to be building one of these companies and you're at scale and, you

know, oh my Lord, the entire thing's coming apart and you're the most hated person for

that day.

You know how the rage cycle works and the media is just so crazy when they get their

hooks into something.

I saw it happen with Uber.

We saw it happen with Facebook and even Tesla, you know, there were times when people did

stupid things with autopilot and it's like, okay, somebody's watching a movie and sleeping

in their car or leaving the driver's seat against all the rules of autopilot and somehow

Tesla's responsible for that.

It's like, we have people who stand on top of their motorcycles and drive down the road

on a motorcycle and we don't blame Yamaha or Harley Davidson for some idiot standing

on the seat of their motorcycle on a highway going 60 miles an hour.

We just say, that person's an idiot.

But when new technology comes out, we blame the technology, not the person operating it.

And if you are going to operate, we basically vilify and indemnize and I think that that

is part of it.

Like when the person at, I remember Airbnb, we always thought, what if somebody trashes

your apartment?

And then sure enough, a bunch of methads rented this poor woman's apartment.

She left all of her stuff in it and then a bunch of methads had a drug party, destroyed

her apartment, ripped up all her photos and went crazy.

And we knew that day would happen, but nobody remembers it now, but it was the number one

story on every news channel because wow, that's an exciting story.

And I just thought to myself, I wonder if there are any parties in hotel rooms where

the hotel rooms being trashed and people are doing drugs and crazy things.

It's like, yes, that's basically every hotel in Los Angeles right now is being destroyed

by some rock band that's throwing a TV out the window.

Like we expected in a hotel, we just didn't expect it in somebody's house with Airbnb

and then Airbnb created rules around, you can't rent an Airbnb for a party and they learn.

So I think there's a learning curve with these companies and they do get to scale at a level

that is unprecedented.

It used to take decades for a company to become an international phenomenon.

Now it happens in two, three, four years.

I mean, look at clubhouse, this thing went from being a private beta six months ago to

being the number one app in Germany and in Japan and here, just like that, boom.

And it's because there's an ecosystem that has never existed, the app store.

Then there's payments online.

And then everybody has a supercomputer in their pocket.

When we, the thing people got wrong about entrepreneurship, technology and business over the last couple

of decades was just how big the market was and then how quickly you could achieve relevancy

in these markets.

We thought the market was like the 60 million homes were broadband and originally it was

like maybe 10 or 20.

Then it became 60 million.

Then it was like, okay, well, how many hours are you at your desktop computer?

Well, like probably at our computers for five hours a day, 10 hours a day at work, three

hours a day on our own.

And then I was like, yeah, nobody's on their desktop computer.

Everybody's on their mobile phone.

And oh, and by the way, they have it with them.

So the people with mobile phones are now using this high speed device with an app store,

with their credit card in it.

And the early days of the internet, people were scared to put their credit card on the

internet.

That was considered a really dumb thing to do.

If you put your credit card on the internet, you're going to lose all your money.

They're going to hack you or whatever.

And now it's just amazing to me how quickly when a company hits, how quickly it can get

to a million subscribers or 10 million or a billion users, right?

And there's all these networks, like social networks that allow the spread of the viral

spread of like a new startup, a new company, a new app to be announced.

Anything.

An idea.

Yeah.

A single meme could change the world.

Speaking of clubhouse, I just want to, we're saying so many interesting things, but there

was a magical moment with Vlad and Elon on clubhouse.

That was wild.

Yes.

Do you have thoughts about that interaction, which felt like so many aspects of this whole

situation feels like it's totally novel, surreal, like it's defining a new era, like a billionaire,

the richest human on earth is interviewing the person at the center of one of the most

interesting mass scale, like power battles in finance ever, perhaps.

And by the way, seven movies have been sold in two weeks.

Just think about how fast things are moving, Lex.

This thing happens, like people had the idea to short the stock six months ago.

They start doing their research.

They build an army, they execute the trade.

The system goes down, Robin Hood raises $3.5 billion in four days, Elon is interviewing

them on clubhouse on Sunday after the Wednesday it happened.

And now here we are, it's 10 days later.

Doesn't it feel like it's been 10 months?

It's been 10 days, Lex.

It's been 10 days.

10 days.

Plus there's like a new president, all these things that, and everyone forgot, like what?

It was an insurrection.

By the way, we also have a revolution at the Capitol where a bunch of crazy people who

have guns and body armor, and then a bunch of them who are just yoloing in cosplay took

over the Capitol.

Well, so, and the other more dramatic thing to me is that was one month ago.

That was one month and the president of the United States got banned from every major

social network, and which I think I'm still deeply troubled by is Parler being removed

from AWS.

That changed the way I, that changed a lot of things as somebody who's an aspiring entrepreneur.

That changed the way I see the world.

That little, maybe I'm being overdramatic, but no, you're not.

I think you're paranoid for a reason.

You're paranoid for a very good reason, which is as big as these companies can become, they

are beholden to the mob.

And if the mob says, Hey, this person needs to be canceled, they're going to get canceled

because you can't lose your entire audience, you can lose your whole customer base, and

you can lose all your employees.

I think what's interesting about your fear about Parler and AWS taking off is we went

from being like a social network, which is the software layer.

And then we went to like the infrastructure layer, and they'll even go after like Cloudflare,

which is a CDN provider.

They're just like a plumbing, it's like sort of like the telephone.

So we're basically holding everybody responsible on the whole chain of events here.

And what that's going to do is, I'm not a huge believer in crypto, but distributed computing,

where nobody and decentralized and distributed computing platforms and open standards, podcasting

is an open standard.

The web is an open standard, FTP was an open standard, but Twitter and Facebook are closed.

And what's going to happen is we will see a group of individuals create peer to peer

networks for social media, where nobody can control it.

And the same for cloud computing, where there's a crypto project where everybody will, and

I invested in a company that tried to do this and got sold and didn't work out, but take

your hard drive on your computer at home, you give a terabyte of your 10 terabyte drive

over to the cloud.

And then everybody else does their terabyte, and then all of a sudden you've got this virtual

cloud, and anybody can store stuff on it, and it's all encrypted, and then nobody can

stop it.

And that could be tweets, it could be videos.

And so this idea that YouTube will be able to tell people, kick people off because they're

skeptics of, I don't know, the pandemic or the vaccine, or they'll make things that are

more censorship resistant.

I think that'll be the reaction to all of this.

This is my question for you, going back to that crappy bar and people pitching you.

Is there, like with Clubhouse, do you see competitors, do you think it's possible that

another, perhaps more decentralized, or another kind of social media will emerge that will

take on Twitter and Facebook and might be able to replace them?

If you look at the whole landscape, with Clubhouse and everything else, do you think some other

company might emerge?

There'll be 10 versions of Clubhouse.

We looked at social networking, we thought Friendster was it.

Like Friendster was so good, nobody be able to compete with that, it was growing so quickly.

And then MySpace was a juggernaut, and they hit 100 million in revenue and 100 million

users.

And it was like, well, that's game over.

And then Facebook and LinkedIn and Snapchat and FriendFeed and countless others.

So there's usually 20 people who will win in a category, and 80% of the charity glory

will be owned by the top two or three players.

But will those players change, do you think?

What's your sense?

Oh yeah, for sure.

If Facebook hadn't bought Instagram, it would be a company in decline right now.

People would be shorting the stock, right?

Facebook peaked and then was sort of heading down, and Instagram saved them and WhatsApp

saved them.

So that's another kind of weird moment in history that they were able to accumulate

that much power and consolidate that much power.

Instagram should have never sold to them.

That should have gone public.

They had just raised money from Sequoia, and they had raised $50 million at a $500

million valuation, and they didn't need to sell.

And that was a big mistake to sell.

They should have kept going, and it should have took on Facebook.

And if Instagram was a standalone company right now, it'd be worth $500 million.

Do you think Facebook might buy Clubhouse?

They'll probably copy it.

Zuckerberg has no moral compass or ethics or anything.

He's a marauder.

He basically copied Snapchat seven times, like he did poke, and he just kept trying and trying

and trying.

Part of the reason why the WhatsApp founders and the Instagram founders left is they found

Zuckerberg so distasteful in terms of his ability to copy.

What do you think makes a great leader in that sense?

Because, okay, so when I look at Zuckerberg...

He's a great executor.

Is he a great executor?

I don't think he's a great leader.

I was bullish on, I was excited about Facebook in the very early days.

I thought it was an exciting opportunity to connect people, and stuff started going wrong

in certain kinds of ways.

And again, maybe it's our human nature, but I attribute a lot of that to the leadership.

Absolutely.

And...

I mean, the guy started it because he was unable to ask girls if they were single and

on a date.

I mean, that was as explicit.

That could be a good motivator.

That could be a good motivator.

Well, I mean, the motivation of 18, 19 year old men is pretty clear.

He was just trying.

He had no game.

He had no game, and he needed to know who was single so he could at least have a shot

at getting a date.

It's a little creepy.

It's a little creepy, yeah.

I think was so obsessed with engagement and winning, and he's kind of like one of those

friends you have who's just really good at playing a video game, but maybe doesn't see

the bigger picture in life.

And I mean, there's a reason why everybody who worked for him hates him and doesn't talk

to him anymore and then actively derides him.

Like, there's so many.

The people who sold WhatsApp to him then backed other projects like Telegram and said horrible

things about him on the way out.

These are the people he made billionaires, and they really don't like him.

So I think there is something that he does that does not breed loyalty, but he's very

successful in his focus, which is growth is all that matters.

He's a marauder.

And taking friction out of products and processes is the playbook of Silicon Valley for the

last decade or two.

So whatever the friction is.

That's poetry what you're saying.

And also, you're speaking so fast that I almost forget that you're dropping bombs.

But so removing the, removing friction, and you're saying Facebook is exceptionally good

at removing friction.

He was the best at it.

And at Uber, they were like, we're going to take out tipping.

We're going to take out the need for you to take out your credit card and do payment.

It's just going to be in your wallet.

You got picked up.

You leave.

That's it.

And I was like, we should have tipping.

And they're like, it adds a step and we're trying to have no steps.

You put your address in, you click the button, and you do nothing else.

And so we've been obsessed here in Silicon Valley is how many clicks can we take out

of the process?

I guess Amazon is incredible at that as well.

Absolutely.

One click was the start of it.

Then you look at Clubhouse as an example, you open Clubhouse and you see rooms.

You click on it.

You're listening.

So in one click, you're listening.

And then in one click, if you raise your hand or you get invited and you say, yes, you're

speaking.

So it's two clicks to speak, one click to listen.

Yeah.

I mean, the only way they could make that app work even faster is if you opened it up and

your microphone was turned on and you, which is kind of scary, but that is the next evolution.

And what happens when you go that fast is you get unintended consequences.

And so this is why Facebook has had more fines than any company in the history of Silicon

Valley.

It's just giant fines for doing stuff like this.

And one of them was, I don't know if you remember when they created groups or if you

have a group for your podcast, but you can just add people to a group without their permission.

And there was this famous case when they first came out with it.

Somebody created a Nambla fake group, National Man Love Boy Association or whatever, like

an affiliate association and they added Zuckerberg, Mike Arrington, myself and like 20 other famous

people in Silicon Valley.

And I was like, and then somebody takes a screenshot of it and they're like, you're

in Nambla?

And I'm like, no, Facebook, then Zuckerberg's response was, well, if your friends put you

in that Nambla group, you should get new friends and it was like, you got put in there too.

And then the sad part about it was there were a group of young men who were gay and who

were in college and there was a gay choir in their college and the person who was coordinating

their Facebook group added them.

So Zuckerberg, it wasn't enough for Zuckerberg to make it so anybody could add anybody to

any group because it will grow faster.

Let alone you have to confirm you want to be added to the group.

What it also did was posted it on their walls to increase engagement.

And what they inadvertently did was they outed a bunch of 18, 19 year olds in college to

their families because they joined the gay man's choir at some college.

And this is the kind of way, you know, this is where Silicon Valley needs to check itself

and to do better is you have to really think, well, there is my incentive to grow faster

and then there's what's right for society and for the individuals, you got to think

it through.

Think it through.

It's sometimes very difficult.

This is where vision is required to anticipate the unintended consequences.

It seems like Mark Zuckerberg is not very good at that.

We've talked to so many great leaders in this world privately and publicly.

What do you think makes a great leader of these tech companies?

Do you have an example?

Is Elon to you a great leader?

He's also a controversial one, right?

There's a love and hate, a controversial in the sense that there is, and I know a lot

of people work with him for him, that there's also a love hate relationship.

The hate comes from the fact that they get pushed extremely hard.

It's a very competitive environment, but it's a positive one because there's a vision that's

underlying.

It's similar to the Steve Jobs thing and it has to do with the, back to our Michael Jordan

discussion as well, that there seems to be the demons involved in tension and just anxiety,

all those kinds of things.

If you want to do great things, there will be some suffering and there'll be some pain

and it's not easy if you want to change the world.

Some people have this expectation that it's going to be easy.

What you'll typically find for any great leader who's trying to do something super ambitious,

if you're a rich guy and you start a restaurant and you don't care about making money and

people have made restaurants before, you could be high fives and everybody could love you

or whatever.

If you want to change the world, you want to do something hard driving, there's going

to be sacrifice involved.

The problem is people are looking at something that is an Olympic caliber sport or a Navy

Seals like effort.

In other words, an effort that requires massive sacrifice.

We would not look at somebody who wins a gold medal like Michael Phelps and say, oh my

god, he had to get up at 4 a.m. every day and he had to swim and he had to do an ice bath.

Oh my god, that poor guy, he suffered, he was tortured.

People were super mean to him, they put him in an ice bath, it was like, no, he wanted

to be the greatest swimmer of all time and he knew what the sacrifice entailed.

What happens in work, in business, is that people conflate like, oh, well, I went to

work to make a living to pay my bills versus Michael Phelps approach to getting gold medals

or Michael Jordan or pick the person, Elon or Jeff Bezos.

When you look at the reviews of a place like Amazon, there was this incredible story in

the New York Times where people were, I don't know if you remember it, this is the worst

place you could ever work, Amazon.

We talked to 200 people and they all told us, they all described for us in the New York

Times a culture of cutthroatness and brutality that has never before been seen and then you

see all these people who worked for Bezos for 24 years from when they graduated with

their MBAs until today and they've never left the company and they are ride or die forever.

What you're seeing there is there's a mismatch of people going to work in an extreme sport

or an extreme endeavor who should not do that.

There are people who should go out into the rice fields and pick rice and then there's

another group of people who are samurai and who wield a sword and who take on missions

that are dangerous.

But if you're a rice picker and that's what you do and you feel safe just getting a couple

of grains of rice, put them in a basket, cleaning it and then whatever, that's valid work, no

big deal, I'm not deriding it, I'm sort of, but that is one group and then there's people

who are samurai and you cannot conflate the two, you cannot compare the two and that's

what is happening right now in business.

Whenever you see these stories about this person at this company is a tyrant and they're

so horrible and they yelled at somebody, if you're in the field and you're taking the

beach at Normandy and it's D day or you got to take the hill or you got to whack Osama

bin Laden and you're the Navy SEALs and a rudder gets knocked off the back of the Black

Hawk, this is serious shit, don't do it if you're not serious and if you're not serious

about changing the world, why would you go work for Bezos?

Why would you go work for Elon Musk?

Don't do it, don't go work there.

This is, let me just sit back and enjoy the beauty of all that, that's music to my ears

but I'm not sure what to do with it because it's conflicting to a lot of the things I

hear from the way you're supposed to kind of act and I think in order to do great things

you have to, I always admired people that lose their shit a little bit because they're

so passionate and apologizing and all those kinds of things but there's a tension, there's

a drama to the creative process when especially in the early startup, this is not like the

work life balance idea, it doesn't even apply.

Work life balance, ridiculous, it's a ridiculous concept.

The idea that there's work life balance in a startup is ridiculous, if you're looking

for work life balance, do not go to a startup or any kind of ambitious company.

There is a series of places you can work in the world where you do not need to do anything

more than what's put in front of you and you just put the round peg in the round hole

and the square peg in the square hole and you go home and you get your little bits and

grains of rice and you go heat them up and eat them, that's it.

And there's this other thing which is the extreme pursuit of changing the world and

sacrificing and we have a generation of people, multi generations of people who are soft,

they're just soft.

I mean, what is the big struggle we've had to deal with in America in our lifetimes,

like 9 11 and we didn't have the Vietnam war and then we had this like weird Iraq wars

and Middle East wars that were kind of like a small number of people went and we sent

drones like we have not had to sacrifice.

Latin Xers, maybe the talent of boomers experienced the Vietnam war regrettably, but we've had

a couple of generations now, three I guess, that just haven't had to suffer.

And so we're soft as Americans, we're soft.

And then you look at people in China and we're like, oh my God, these poor Chinese people

are living in these tiny cramped apartments like they were living in like essentially

lean twos in northern China with no running water or like one spigot of ice cold water

for the entire village, like they're thrilled to be joining the middle class, even if it's

the bottom of the middle class, right?

They've taken hundreds of millions of people in China and moved them into the middle class.

And we're like, oh my God, these people are suffering.

It's like, you know, they're up to $4 an hour, $3 or $4 an hour in the factories there.

And they were just two decades ago at, you know, I don't know, it was probably 50 cents

an hour, something crazy like that.

And now they've improved the quality of life there so much.

It's like America did 200 years ago or 100 years ago.

They've improved it so much in China that now they're getting outpriced for factories from

Vietnam, Sri Lanka, Pakistan, India.

And people are moving and people in China are moving the factories out of China into

other countries because the Chinese are now outsourcing to Vietnam and other countries.

So this is the way of the world, you know, people move up and they get a better lot in

life for their families.

And just in America, we've gotten soft and there's a generation.

How do people die in America now?

Suicide, obesity, heart attacks, anxiety, I mean, we're suffering from things that if

you told people 100 years ago that the number, the top ways Americans would die would be

overeating and suicide, they'd be like, what?

You're literally killing yourself or eating yourself to death.

That's what's happening in America.

And when everybody, not everybody unmasked, there's a large number of people who've become

softer and softer, capitalism creates an environment where there's people that still

step up amidst that with a big dream and challenge the conventions and that human spirit just

arise above that is Elon's example, that Jeff Bezos example, and they push, you know,

the limits of those of human beings that are willing to step up.

And you know, I think about sort of how to create a company that amidst all of the softness

still creates a revolution.

It doesn't seem trivial.

It seems like how do you build a culture that's once healthy, but also unhealthy in the way

that an Olympic pursuit is?

It's all top down.

Everybody just, you asked earlier what leadership was and I never answered the question.

I think, you know, what leaders do is they set the example, they set the bar.

And if you look at someone like Elon, you know, we're personal friends for 20 years,

and he is indefatigable.

Like, I mean, the guy has a stamina that is just phenomenal, like he does not get tired,

he works relentlessly, and he sets that standard for the rest of the team.

And I think, you know, Bezos is very sharp and likes to debate stuff and is very, you

know, and Jobs was just incredible at design and figuring out how to bridge that gap.

So they just, leaders set the standard.

They set the standard.

And you know that your time is over as a leader when you can't set the standard.

And that's when you have to pass the baton, right?

And Bezos did that.

Brilliant.

And Bezos now is saying, you know what, I'm 57, I'm the richest guy on the planet, depending

on the week.

And I would like to do some other challenges, but I don't want to grind it out at Amazon

for another 25 years.

I want to do other things.

And so he passed the baton.

And that's the healthy thing to do in that regard.

I do think there is a time period in which you can run that hot.

And then at a certain point, you have to then change, just like an athlete might go to be

a coach, right, or a commentator.

And so, you know, being an entrepreneur is brutal.

It's, you know, seven days a week, 12 hours a day, anybody who says anything differently

is kidding themselves, you're going to have to sacrifice in this competition.

And America has to fight.

If America does not win capitalism, and China does, it is literally the end of the human

species.

It's over for humanity.

Right now, everything has been going really well in terms of the number of people living

in poverty is plummeting.

Life, you know, lifespans have been rising, science is booming, the economy is booming.

All these things are incredible.

The one thing that's kind of stagnant right now is the number of people living in democracy

versus under authoritarian rule.

It's flat.

So, when you look at all Steve Pinker's charts and he's really excited, there's one you're

going to see that's flat.

And I think we peaked with 53 or 54% of people on the planet Earth being in a democracy and

now it's going below 50.

And it's because some of the democratic, you know, Western countries don't have the population

growth of some of the communist and socialist countries and authoritarian countries.

And we have to make sure that we win capitalism.

We must win economically.

That is the battlefield.

The battlefield is science, technology and money and economy, finance.

That's the battlefield.

China wins, authoritarians win.

And at any time, Xi Jinping can pull Jack Ma into a room and say, it's time for you

to be reeducated or they can put three or four million people, Uyghurs, into prison camps

and say, you know what, this religious thing, that's counter to what is productive for us.

Therefore, we're going to shave your heads and we're going to have you literally pick

cotton in the fields.

They have Uyghurs with no sense of any kind of arc of history in the fields picking cotton

as slaves in what can only be described by every humanitarian organization as a concentration

camp and every Jewish person I know takes great offense when somebody uses the Holocaust

as a metaphor, except in the case of the Uyghurs right now.

And every Jewish person I've talked to has said to me, that is a Holocaust.

That is millions of people going to genocide because of their religious beliefs.

And I'm an atheist, but if people want to believe a certain religion, fine.

But you know, China's approach is we need to win capitalism so bad.

We need to win on the global stage so bad, we can't have any of this religious stuff

going on here.

That is a distraction from winning and beating America.

And then in America, the people who are going to make us win are the entrepreneurs and

the scientists and the technology and our education system and finance and we're vilifying

those things.

It's pretty dark.

It's dark, but I still believe that the vilification is just in the space of Twitter and the space

of ideas.

I think that's probably a good...

And entrepreneurs win out in the end.

They don't...

I believe...

And they'll build, we'll get the rocks...

Some of them do actually in their darkest moments, I can tell you that they turn off

their Twitter accounts and they, I've had to sit down with a number of entrepreneurs

and say, turn off Twitter.

This is not healthy for you.

This is not a healthy pursuit because don't read the comments.

If you do, it's like a full contact sport.

You should just take it as like professional wrestling or something, but stay focused on

building companies and advancing the human species through science and technology.

As you're describing, you've hosted this week in startups for how many episodes?

11 years, almost 1200 now.

1200.

Yeah.

So you've talked to some of the great leaders in business in general.

Is there a common thing that you see or...

Really messed up relationship with the parents.

Like just find me a great entrepreneur.

I will show me the trauma.

Their dad was like, you're not good enough.

In the teenage years, is that truly...

Is there something...

There is definitely something to do...

Like hardship at some point in their life kind of thing.

Yeah.

I think so.

I mean, and there's definitely something with immigrant parents that is a bit of a stereotype

about here, but I've heard from many investors, that's like their, oh, were your parents immigrants

and did they beat into you that you have to succeed and you feel the need to succeed because

they suffered to get you to this country?

There is an archetype there that I hear...

When I started investing, I heard from a lot of people was like, yeah, you want to find

those immigrant founders who are coming out of Stanford because they had to fight to get

there and their parents had to fight.

So it's like two huge fights and there's so much at stake as opposed to somebody who's

fifth generation and had everything handed to them and they were legacy and got into

schools for free.

But I think in general, the ability to get people to join you on that journey is so critical.

So you have to be charismatic and it doesn't mean like you're an extrovert.

There are introverts who are super charismatic and there are soft spoken people.

They don't have to be like super vivacious or rambunctious people.

They could be just quiet assassins, but you need to be able to get people to come on the

journey with you.

You need to be that storyteller and you have to have that passion and then you have to

transfer that enthusiasm to investors, the press, to customers, to all the stakeholders.

And if you're enthusiastic about it and you're engaged, then it's easier for people to come

on that journey.

And that's why people really start to think about, well, what is the purpose of what I'm

doing?

And it sounds corny.

And when I first heard that, I was like, it's kind of corny.

But then I read this book by, I've got his name, Rick Something.

He wrote The Purpose Driven Church and he had spoken at a TED or something and everybody

went crazy about it and he's like, a church should have one purpose, one single thing

they do.

And like his church, which was like one of these mega churches in San Diego, just wanted

to do education for this specific country and that's all they did.

And they just, they benchmarked them.

I think it's very important to have a purpose and a mission, not everything, but a specific

purpose of some kind of joy that you want to put into the world, you want to solve some

kind of big, hard problem and then everybody knows why you're coming to work every day.

And then for the founder, when you dread going to work that day and you don't feel like solving

that problem anymore, that's the, that's the tell.

And a lot of times I meet young founders and I'm like, why are you doing this?

And they're like, well, I was looking for an idea and this is the one I came up with

because I think I'll make a lot of money.

And it's like, you're going to quit.

You're going to get to month nine or 10 of this and you're going to run out of money or

like your CTO is going to quit, then your CFO is going to quit and you're going to lose

your biggest customer and you're just going to say, this is not worth it.

And if using Bezos or Elon's examples, they just needed to see the world change in very

specific ways and Steve Jobs, they needed to see a change and it doesn't matter if they

made money or they were losing or winning, they just went to work every day and they

had to change it.

It's almost like they didn't have a choice.

No choice.

Elon makes this sound like his torture, his whole journey, but he can't help it.

Having been a witness to it, just as friends for that long, I have never seen an entrepreneur

suffer more than him.

And he's been public about that, like you do not want to be me.

He has suffered for those companies.

He has suffered to get them where they are.

It has not been easy.

Can you analyze Elon in that aspect?

Is it just he can't help it?

He must see the change that he hopes for in the world?

He's just incredibly hardworking and he's very talented as well.

I don't think people understand that.

He actually is a really brilliant engineer.

At the end of the day, he actually knows what he's doing and he asks the right questions.

People were kind of aghast that he was asking Vlad such good questions and they're like,

oh my God, Elon's the best journalist on the planet.

And it was like, kind of anybody who knows Elon knows he has great questions.

I used to have dinner in LA and my book agent also was Sam Harris's agent and Sam and I

met through John Brockman and we became friends because we lived near each other and I was

friends with Elon and then I used to invite them to both dinner in Brentwood because one

lived in Bel Air, one lived in Santa Monica and I lived in Brentwood and we would go to

this place Papone and it's Italian restaurant and every Tuesday for years, we would just

the three of us, every other Tuesday or so, we'd have dinner and I'd sit there and Sam

wanted to know about AI and Elon's talking about artificial intelligence because he's

on the board of DeepMind and Elon wanted to know about atheism and meditation and all

this other stuff that Sam was an expert on.

I had to sit there and like just listen to these two guys talk.

And they have both piercing intelligences but Elon, he goes straight to the gut.

The questions that no engineer wants to hear is like just the basic stuff that like why

the hell are you doing it this way when the obvious solution is like much easier or this

or that, like why haven't you tried this?

You figure things out.

I mean, he's a problem solver.

And that's another thing, I think the great entrepreneurs can look at a problem with very

fresh eyes like almost consistently that Bezos described that as day one thinking, right?

Like just pretend this is day one every day and then other people use the term first principles.

But it basically means like when you see a problem, pause for a second and really think

through what is the best possible solution here, what are some alternative solutions

and get from everybody like how do we solve this problem and what people do sometimes

they get in a rut.

They just come to work and they just go through their email, they do whatever they did the

day before.

They don't think, why are we doing this?

And is there a better way to do it?

Now you can get so obsessive about that that you can over engineer stuff and you can never

actually ship a product.

So there have to be some pragmatism and some goals and some dates associated with that.

But it is a very cool thing to really think like, I wonder if we actually made the batteries

ourselves, what that would look like or I wonder if we could get to two day shipping,

you know, or what if we do same day shipping, like you need to have somebody who's willing

to say, you know what, fuck it, let's set a crazy audacious goal, a two day shipping

of any product anywhere in the United States.

And once you throw the gauntlet down like that, now everybody knows they're rowing in

the right direction, two day shipping, Amazon Prime, and that's what people didn't realize

about Amazon.

The business wasn't the shipping of those products, it was getting you to sign up for

Amazon Prime.

They have hundreds of millions of people doing Amazon Prime for $10 a month, I think globally

it's probably cheaper.

But that was the driver of that business was all of those people because they would, you're

an Amazon Prime subscriber, do you know how much you pay?

No.

Exactly.

It started at $50.

And I think they even had like 40, 50, $60 was like the testing in the early days and

now it's I think $149.12, $13 a month.

If you pay for the year, I think it goes down to 10 bucks a month, 120.

And you're like, wow.

And he's like, yeah, you're paying $13 a month for the privilege of shopping at Amazon.

But you say it's the greatest thing in the world because anything I need, if you forgot

a microphone or a cable goes bad or a camera goes bad, you get it here within a day or

less.

Yeah.

It's pretty amazing.

You've already been dropping bombs, incredible advice on startups in general, but let me maybe

go straight in and ask, is there advice for somebody that wants to go big to build the

big startup to help them succeed?

Yeah.

It's similar to the advice I give to investors because now I teach angel investing because

there's so many people who want to invest.

And so I wrote a book on that angel and then I do a course called Angel University that

I teach six times a year.

And then I have a syndicate called thesyndicate.com where I invest in companies.

There's 6,500 people who are members of that.

It's the largest syndicate in the world.

In fact, the first deal we ever did was com.com, the meditation app.

We put $378,000 into it when it was a $5 million product, a $5 million company.

So we bought six or 7% of the company.

It's now with $2 billion.

So you can do the math on that.

We still own 5%.

What year was it?

Six years ago.

So probably maybe 2015, 2014, and nobody else would invest in com.

But Sam Harris was the reason I did because I asked Sam, tell me about meditation and

he's explaining it to me and I said, what about this?

You have to have like a mantra.

How does it work?

Exactly.

I know positive.

I was like, well, you should just go to UCLA and talk to Diana Winston and there's this

whole project there and I'm like, UCLA does meditation?

It's like, yeah, there's a mindful institute there.

Like teaching people to teach meditation and they're doing PTSD and I'm doing brain scans

and I was like, oh, and then I talked to the UCLA people and they're like, it's real.

Yeah.

Like we taught Phil Jackson and Kobe Bryant and Shaquille O Neal did, you know, that's

how they won their championships.

They meditated.

And I was like, hmm, if UCLA is doing it, Sam says it's cool, well, fuck it, I'll put

money into that.

And that's the second biggest investment in my career after Uber and it will, well, in

all likelihood become the biggest.

I mean, it's between Uber, Robin Hood and Com.

And long story short, when I'm teaching people to angel invest, there's really two things

that you cannot fake.

One is a product that is built really well.

So if you look at Com, Robin Hood, Uber, Tesla, Amazon, these products are transcendent.

They're well constructed.

There's craftsmanship to them.

They're great products.

So you're saying not fundamentally like the idea but the execution of the actual craftsmanship

of the construction.

The actual product is amazing.

Then there's customers and that every business has ultimately a customer and that customer,

if they are in fact delighted by that product, that's the magic because you need a team to

build the product and then you need customers to use the product and really those three

vectors are undeniable.

Now, you could have great teams that build a bad product, doesn't happen too often or

you could have customers who don't like the product but generally speaking, a great team

will build a great product or a good product that iterate and then eventually delight customers.

And so most people say the team is the most important but there's a lot of smart people

out there and let's assume that you can have, you can raise money for your idea or you have

money or you can just convince people to do it for free.

If you make a great product and it connects with users, that's the magic.

You look at Clubhouse, it's actually a really well designed product and that product is

connecting with customers and if you were to talk to the customers or look at the product,

you would see a well constructed product and a delighted customer and you can tell the

delighted customer by just the amount of time they use it.

That's called engagement.

It's the fancy word for how much they use it and Snapchat, when that was going around

and they were trying to raise money, they had a fraction of the number of users.

But the top maybe third were opening the app every hour and nobody had ever seen that before.

People were using Facebook a couple of times a day, the top users, but nobody had ever

seen people using it every day for 100 days in a row every hour and I was like, what's

going on here?

I was like, oh, the ephemeral messaging and then the streaks, they had created the streaks

between people where every day and then people would be on vacation, I just have to open

my streak and keep my streak with Lex that we chatted every day going and so they had

this addictive nature to it and that's why Clubhouse was able to garner so much investment

is the number of hours people were using it every month was just unbelievably off the

charts.

Some of that is execution, but some of it is the weird magic of the product market fit.

So there's something in Clubhouse, it's still a mystery to me because I also use Discord

voice.

There's that intimacy to voice.

Oh, for sure.

Well, you have people's, yeah, tent.

Well, but like the video gets in the way actually, in a weird way, there's a privacy when you

just use voice.

People are not taking showers now, Lex.

I mean, we're in a pandemic and people just are all out of bed.

And the hair thing.

Nobody's getting haircuts.

Nobody's hair is good.

Nobody's getting haircuts.

People are wearing gym clothes.

I mean, Zoom is just horrific to be on Zoom for five hours a day.

It is exhausting.

Well, it does make me wonder what once we emerge from the pandemic, whether a product

market fit, how that evolves with Clubhouse and all those kinds of things.

Yeah, no, Clubhouse is a beneficiary of the pandemic for sure.

When do you think the, when do you think debts will be under, let's say 200 a day and we'll

have 200 million people on the other side of this?

Because that's kind of what it takes, right?

You got to get to 150, 200 million people on the other side in America.

I haven't, you know, I personally stopped deeply thinking about this because I've been

frustrated for so long that I almost checked out because it psychologically allows me to

carry on because I thought for many months now that testing needs to be done at scale.

And it still hasn't gotten done.

It has.

So we gave up basically on testing because we're, and we're all sitting there waiting

for vaccine to come along and the distribution of the vaccine is not, you know, it's struggling

from the same kind of things as the testing is going to take quite a bit of time.

So it does, if everything goes great, meaning there's not a second strand of the virus that's

going to create a second major wave, that I am cynical enough to think that it won't

be until mid summer that we start opening back up.

Yeah, I think it's going to be May, June, I'm a little bit earlier than you.

I've been tracking it.

It's like 1.5 million shots in arms a day.

I think this vaccine's been undersold.

I mean, it's a miracle.

Not one person who was in the trials died who took it and only one went to the hospital

and they weren't even put on a ventilator.

So, and the hospitalizations are plummeting and we're at 10% now in the United States.

At the pace we're going at 1.5 a day, I think when the Johnson and Johnson one comes out

next month, it'll be 3 million a day, maybe two and a half.

And we already have 100 million people who've likely had it.

So I've been doing the math.

I think we're like 60 days away, February and March.

Yeah, sometime in April, I think anybody's going to be able to get a shot and the number

of deaths is going to go below 200 a day.

And once that happens, I think people who have had enough of this, they're just going

to go yolo.

But see the crucial piece for me that I've been focusing on is the social media aspect

of how the, it's not just about the reality of deaths.

It's about the state of the collective intelligence of the human species, which is determined

by our communication on social media.

So we could, yeah, we can be collectively afraid, the fear can spread or it could be

yolo can spread or it could be like all different kinds of misinformation.

And of course, during the election year, the politics influences our perception of what

is true and not, but, you know, having real rigorous nuanced conversation about this kind

of stuff is the way, is the way out of this.

And that's where social media really comes in because social media drives division where

the people form tribes and so on.

It feels like it's honestly a technology problem.

You know, people say it's a human problem, but it just feels like I believe people are

good.

Technology can enable them to be thoughtful.

We talked earlier about, you know, the magic of Silicon Valley and then maybe going too

far with the Facebook groups example where, you know, you take out all that friction.

What happened was, we used to have something called our chron, reverse chronological order.

That's how you consume to feed.

So any kind of social feed like Twitter was in reverse chronological order.

The newest thing was up top and you would just work your way backwards.

And so it gave this like really fresh feeling.

And then a guy named Dave Moran and the team over at Facebook realized, you know, there

are some things that got a lot of attention two hours ago.

And the stuff since then has not been as important.

But if you missed that, there was a really good tweet where there was a really good update

like somebody had a baby, let's, that's kind of, can we get the baby one at the top?

And it was like, well, how would we do that?

How would we know that that's the important one?

It's like, well, let's, let's put a like button on it.

And let's see how many comments there are.

So if it gets a lot of likes or comments or retweets, let's show those first.

And then we'll kind of mix in the most recent stuff.

And so when you're on Twitter and then when Facebook did that, Facebook became so addicting

because Facebook was on, what has got the most engagement put that first?

So every time you open up Facebook, you get the dopamine hit.

And then what happens when you see the Bart Mitzvah photo or, you know, the enraging story

about some injustice in the world, you retweet it.

You write a comment.

You share it on your wall.

And thus this addiction to the outrageous, the outlandish, the inspiring occurred.

And it used to be like inspiring stuff, puppies or some heartwarming story.

And then it got dark.

And then people started to realize, if I want to show up on the top of my friend's feeds,

if I say something controversial or I'm outraged, I get to the top.

And then that's when outraged culture came in and then that's when cancel culture came

in.

And I realized, if I try to cancel that person for being a racist or a sexist or a horrible

human being or whatever they did that's wrong, I get to the top of the feed.

And we all collectively started playing a very weird video game, which is how outraged

can we all be?

And to get to the top of the list.

And then of course, with Trump, he realized it and he's like, okay, yeah, I'm just going

to make fun of a celebrity and I get more retweets.

Okay, I'm going to make fun of Rosie O'Donnell for being overweight or something.

And he just starts attacking people.

And people are like, oh my God, what did he say?

And he copied that from Howard Stern because he was in New York and he used to be on Howard

Stern and Howard Stern took over all the dialogue in the 80s and 90s because he was outrageous.

And then Trump did that.

And then social media incorporated that into the operating system.

It became the actual device of social media was the ding, ding, ding, ding, ding.

We've got something incredible for you.

Everybody salivates like Pavlog's dog, you know, oh my God, I can't be outraged.

That's what's got to be undone.

And the only way for that to be undone is these things can't be billions of people where

the most outrageous thing that happened in the world today in the last five minutes is

now in front of you.

And that's why people have anxiety.

They don't sleep and they doom scroll all night is because the human mind was not meant

to process this much suffering, pain, anger.

And that's why we have all this mental health issues.

Also, you know, young girls or even adults watching other people post their private jets

and their vacations and, you know, YOLO adventures on their Instagram to the point at which young

people are now faking being on private jets to put on their Instagram and creating like

this crazy FOMO around their Instagrams.

Like now we wonder why people are unhappy.

Like if you think everybody's on a private jet going to some Michelin star restaurant

or whatever the coolest thing in the world is today, like going to the Grammys, going

to whatever Coachella Burning Man, like you're like, oh, but I'm home.

I'm in my house and I'm not at Burning Man.

Getting inadequate.

Exactly.

So this whole system is creating the wrong set of incentives.

I didn't believe it's possible to still have extremely high engagement and create a successful

profitable business while encouraging personal growth, like encouraging people to be the

best version of themselves.

I just think we haven't, we got the first generation of social networks, I think a new generation

needs to be built.

Absolutely.

Is that your plan for a business?

Well, I have a longer term plan in terms of ambition, which is I believe in being able

to have deep connection between human and AI systems, like partners, friends.

There is a connection to there with social media.

I do think AI has a strong role to play in representing us, in guiding us in how we consume

social media.

So this algorithm that controls the feed for Facebook is a somewhat centralized algorithm,

but instead to give more power to the people, individuals, to where each one of us have

our own algorithm.

Bring your own algorithm.

Bring your own algorithm.

B Y O A.

B Y O A.

I like it.

Bring your own algorithm.

Yeah.

Well, I mean, if you thought about it, if we came and said, I want, when I look at my

Twitter feed, I would like to see the people who are the most helpful in the world, generous,

kind, intelligent, considered commenting on things that I don't already know about because

I want to open my worldview.

That could be a beautiful thing for society.

And actually, Jack was talking about potentially on Twitter, letting people bring their own

algorithms and sort their feeds themselves.

This would be a wonderful thing.

I think it's one of the reasons Clubhouse has resonated is it's such a diverse group

of people that I've been able to drop in on conversations with people who are nothing

like me and listen in and hear conversations that I wouldn't normally be privy to.

And I, my, everybody's like, oh, come join us as a speaker.

I want to do a room with you.

I get asked every day, can we do a room?

Can we do a room?

Ask an angel investor.

Talk about startups.

And I'm like, my usage of Clubhouse is going on my Peloton treadmill, putting Clubhouse

on, taking a room and just listening.

It's so delightful for me as a podcaster where my job is to talk, to sit back and just put

in a couple of miles and play chess and listen to a Clubhouse discussion.

That is about relationships or, you know, some fashion or hip hop or whatever it is

that I'm not part of.

I just sit there and I listen and you learn.

It's like such a delightful thing.

I always think about these kids who go to college and I've always been so jealous of

these Ivy League kids.

They go and they're like, oh, I got to go to class.

And I'm like, I would just love to sit there and listen to Professor Lex talk.

You know, like what a privilege to sit there and let somebody else drive and talk and listen

and learn.

Yeah.

That's the beauty of podcasting.

But of course Clubhouse creates a whole nother experience for its conversations is different.

I think it's going to be the in between.

I like it as a, you release your podcast.

Like you and I are going to release this podcast, right?

And then at some point I'll have you on my pod when you want your startup.

And then at some point, somebody's going to be like, you and I will run it.

And I ran into you.

I saw you were on Clubhouse the other night and I was busy, but I was almost going to

click on you and say, let's start a room together.

But you and I will start a room together with Eric Weinstein or somebody or Sam Harris will

jump in or Elon and we'll have a different experience, which would just shoot the shit.

And it'll act as like a fabric and a little filler between the tentpole podcast, right?

Like you and Eric, you've done three, I think with Eric.

Yeah.

We just four.

I haven't released the fourth yet.

Oh, okay.

So I'm a watched all three because I really thought your you way and him like giving you

advice is very interesting dynamic and those very interesting dynamic.

And I find him like a fascinating cat.

We know everybody in common except we've never met.

It's very weird because you think about the social graph in the real world.

This is why I think augmented reality is going to be such an amazing product.

I just have one killer feature I want for augmented reality.

We wear our glasses.

And when I look at you above your head, I see the relationships we have and the things

we've done together.

Yes.

Right?

So I see, oh, you both know Sam Harris or you had Elon on the podcast on this date or

you and I were both at Burning Man in 2016.

So the most meaningful element of our connection in the network.

And then because we would discover that through small talk, but imagine you're like at a party

and you look and it just people glow and you just see a glow around a person and like

green means you have some financial relationship, blue means you have some friendship one or

yellow means you have friendship one, blue means you know nothing about each other.

You have no connections.

You're like, wow, these blue people have no connection to.

These people, that one's glowing red.

We know seven or more people in common.

And those are the seven people.

Oh, we should go talk about how we know each other.

And that's sort of happened with Facebook, remember or MySpace where you were like, oh,

you know that person, friend of a friend?

But that's what is going to be AR is like, this is why I think if Apple figures out AR

or Snapchat and they just have those glasses, you know, forget about VR, it's just nauseating

and whatever, but AR where you put the glasses on, you see the real world, but you augment

it.

You make, just like you were saying, you make it frictionless, a very low friction to make

a deep human connection because you have all the basic elements there already.

Now think about the unintended consequences of what I just described.

It could get creepy and weird.

The privacy thing.