Feb 24, 2023 · 1h 31m · allin
E117: Did Stripe miss its window? Plus: VC market update, AI comes for SaaS, Trump's savvy move
Jason Calacanis · 24m spoken David Sacks · 23m spoken Chamath Palihapitiya · 21m spoken David Friedberg · 9m spoken Steve Jobs · 49s spoken
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In Episode 117 of The All-In Podcast, the hosts analyze Stripe's liquidity crisis and valuation reset, the post-ZIRP venture capital market, the enterprise impact of Generative AI, and major foreign policy and domestic political developments.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The hosts hold 98.4% of the talking time here. How this is scored →
The hosts as informed peer 7.1 Guest teaching 2.3 Guest disagreement 2.3 The hosts pushing back 2.3
speaking balance: gold is the hosts, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 1:01:08 Sacks vs. Jason on Kyiv Air Raid Sirens
Sacks forcefully rejects Jason's framing of Biden's Kyiv visit, calling the air raid sirens pure theater and calling Jason gullible for believing it was unscripted.
Hardest push from the hosts ▶ 45:16 Chamath Challenges Jason on AI Pricing PowerChamath directly refutes Jason's claim that customers will pay premium fees for AI apps, arguing that software tools are inherently deflationary and return value as consumer surplus.
Biggest teaching moment ▶ 7:55 Chamath Demonstrates Adyen's Leverage over StripeChamath uses granular financial data to illustrate how Stripe added 6,000 headcount in two years while Adyen maintained superior operational leverage and revenue per employee.
The host holds their own ▶ 25:18 Sacks Establishes Burn Multiple Over CACSacks reframes the startup metrics discussion by demonstrating how CAC payback numbers are easily obfuscated by accounting choices, proving why burn multiple is the superior operational metric.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The hosts as informed peer | Guest teaching | Guest disagreement | The hosts pushing back | Why |
|---|---|---|---|---|---|---|
| Pre-Show Banter and Small Talk | 2 | 1 | 1 | 1 | The segment consists of casual banter about skiing in Japan and small talk before introducing the topic of restricted stock units (RSUs) and Stripe's tax situation. Chamath briefly explains how RSU expiration dates create withholding tax liabilities. Scores reflect light small talk with minimal confrontation or expert drilling. | |
| The Strategic Risks of Delaying an IPO | 6 | 2 | 0 | 0 | Chamath draws on first-hand history from Facebook's early days, explaining Mark Zuckerberg's initial reluctance to go public and how delaying an IPO prevented floating a mobile OS to compete with iOS/Android. He provides strong contextual analysis on private market valuation risks. | |
| Stripe vs. Adyen Operational and Financial Deep Dive | 8 | 3 | 1 | 1 | Chamath presents detailed financial metrics comparing Stripe and Adyen, highlighting Stripe's 4x employee growth against Adyen's operational leverage and head vs. tail customer strategies. The presentation demonstrates high domain expertise and financial interpolation. | |
| Enterprise vs. SMB Strategy Framework | 8 | 2 | 1 | 1 | Sacks articulates a SaaS strategy framework contrasting enterprise head customers with SMB long-tail distribution, outlining sales cycles and innovator's dilemma dynamics. The conversation is collaborative with hosts expanding on each other's points. | |
| Headcount Efficiency, LTV/CAC, and Burn Multiple | 9 | 2 | 1 | 2 | Friedberg, Sacks, and Chamath conduct a deep dive into startup performance metrics including LTV/CAC ratios, return on invested capital (ROIC), and burn multiples. Sacks explains why burn multiple is superior to CAC payback due to accounting manipulation risks. | |
| VC Market Update and Post-ZIRP Realities | 8 | 2 | 2 | 2 | Chamath and Sacks analyze venture capital returns across macroeconomic cycles, assessing paper gains versus realized distributions for 2021 vintage funds versus 2023. They discuss power-law distributions and interest rate impacts with strong historical grounding. | |
| Generative AI's Impact on the SaaS Ecosystem | 8 | 3 | 4 | 4 | The hosts debate who captures value in the generative AI stack. Chamath argues that software is inherently deflationary and creates consumer surplus rather than high-margin software vendors, pushing back directly against Jason's argument that users will pay high prices for AI tools. | |
| Value Capture, the Iron Man Model, and Automation | 8 | 2 | 3 | 3 | Friedberg presents his one-third value capture rule using robot delivery as an example, while Sacks argues that AI will follow an Iron Man model of augmenting human productivity rather than eliminating jobs completely. Sacks actively reframes Jason's full-automation premise. | |
| Steve Jobs, Product Design, and Craftsmanship | 6 | 4 | 1 | 1 | The hosts react to an archived clip of Steve Jobs discussing customer-centric product strategy. Sacks cites Jobs' quote regarding the John Sculley disease to highlight the craftsmanship required between an idea and a product. | |
| Supreme Court Update on Section 230 | 7 | 2 | 5 | 5 | Sacks summarizes the Supreme Court arguments on Section 230 before launching into a contentious debate with Jason over Biden's visit to Kyiv versus Trump's visit to East Palestine. Sacks forcefully rejects Jason's framing, calling the Kyiv air raid sirens choreographed theater. | |
| Ukraine War Escalation and US Foreign Policy | 7 | 2 | 4 | 3 | Sacks delivers a critique of US foreign policy in Ukraine, drawing parallels to the movie Boyz n the Hood regarding domestic neglect versus foreign intervention. He outlines escalation risks and structural obstacles to peace negotiations. | |
| Trump's Anti-War Stance and Domestic Distractions | 8 | 3 | 5 | 5 | Chamath and Sacks discuss Trump's anti-war posture and critique of the military-industrial complex, invoking the 2014 Euromaidan background and Victoria Nuland. Jason and Sacks clash with Sacks calling out Jason's speculative geopolitical theories as nonsense. | |
| Diplomatic Missteps with China and India | 7 | 2 | 2 | 2 | Sacks critiques US diplomatic missteps regarding China, Russia, and India, recalling Cold War realpolitik under Nixon and Kissinger. Jason pivots to share updates on his fund's capital commitments and management fee strategy. |
Statements from this episode (35)
Calacanis: Foursquare allowing 2016 stock options to expire, impacting 100+ former employees
“They are going to let their previous employees stock option grants expire according to the information. They issued these options in 2016 seven year window before expiration. More than a hundred former employees will be impacted.”
Calacanis: Stripe seeking $2.3B by Q1 2023 at $55B valuation
“According to a leaked pitch deck Stripe implied they needed 2.3 billion in capital by the end of Q on 2023. They're working with Goldman Sachs to raise a few billion at a fifty five billion dollar valuation. That's down 42% from the peak of ninety five billion…”
Palihapitiya: Facebook could have disrupted iOS and Android by IPOing earlier
“When you look subsequently at how much money they've spent in AR and VR, spending half a quarters of that cash could have given them the chance to disrupt Android and iOS in 2010 and 11, which in hindsight is obviously a no brainer bet, right?”
Palihapitiya: Startups should question the trend of delaying IPOs as long as possible
“So even though I think we at Facebook were the ones to really put this in the water table about not going public, I think a lot of startups should have gone back to first principles to really question whether waiting as long as possible actually makes sense.”
Chamath: Stripe increased headcount from ~2,000 to ~8,000 in two years
“This is the number of employees that Stripe has. It went crazy from a little over 2000 to almost 8000. So a four X of employees in two years.”
Chamath: Stripe's most profitable move was going public in 2018-2019
“The most profitable thing they could have done from an enterprise value perspective would probably have been to go public in 2018, 2019.”
Sacks: Sales-focused founders lean enterprise, product-focused founders target SMBs
“I think founders who are better at sales probably skew more towards an enterprise strategy. Whereas if you're more of a product founder, you go after SMBs.”
Sacks: Enterprise SaaS companies struggle to move down-market to SMBs
“I think if you start with enterprises, it's very hard to go down market because it's a lot easier to add requirements to your product than to actually strip Complexity of a product that's actually surprisingly difficult to do.”
Chamath: Adyen charges enterprise customers roughly 1.3% to 1.4% per transaction
“Whereas if you go to the head, I think Adyen is charging like 1.3 or four percent.”
Sacks advises founders to keep 2023 burn multiples strictly below two
“I warn founders going into this year do not have a burn multiple greater than two because there's just so many headwinds right now that what happens is if you end up missing your revenue forecast, your burn multiple is going to look terrible. It could shoot up…”
Chamath: VC industry historically returns $1.60 per dollar raised
“Over many cycles where we've had high rates and low rates and medium rates, our industry typically returns a dollar 60 for every dollar it raises.”
Sacks: 2021 will likely be a poor vintage for venture capital
“I think that 2020 one's gonna be, is gonna likely be not a great vintage for VC.”
Chamath: 2023-2025 VC vintages could produce strong power-law returns
“23, 24, 25. Those can be some real power law years, I think, because we're going to have, just based on what the Fed is saying, five and a half percent interest rates for the foreseeable future, which is, it's a huge number.”
Friedberg: Many venture-backed startups are worth less than their preferred equity
“I do think that there's a significant number of these companies that if they were to be truly valued on first principles in private markets today, they'll get valued as at a value that's less than their preferred equity, which means that there's a difficult re…”
Sacks: AI will impact SaaS like mobile impacted Web 1.0
“I think that this AI revolution is going to do for SAS what mobile did for, you know, a lot of the web one point O companies. Where, like, for a lot of these Web One companies, they were either disrupted by mobile or they were turbocharged by mobile.”
Chamath: Most application performance management software can be automated by AI
“Look at some of these enterprise spaces, like take something like APM, right? Like application performance management. That's an entire ecosystem of enterprise companies. It's probably 1015, twenty billion dollars of collective market cap. And I'm just going t…”
Friedberg: Tech companies should capture one-third of value delivered
“My general rule of thumb on technology is the technology creator, the technology company should generally be capturing about one third of the value that they deliver to the customer.”
Sacks: AI will reduce team sizes rather than eliminate jobs completely
“If there's a job reduction, it would be more the case where they've got a team of five accountants, and they go to two or three because now they're just much more productive. I don't think they go to zero.”
Chamath: Breast cancer surgeries currently have a 30% error rate
“Breast cancer surgeries, the dirty secret of our healthcare industry is that has a 30% error rate.”
Sacks predicts Google and Big Tech will win Supreme Court Section 230 case
“So it looks to me like Google and big tech are going to win this one.”
Sacks: Air raid sirens during Biden's Kyiv visit were pure theater
“So these air raid sirens were basically just pure theater.”
Chamath: Josh Shapiro visited East Palestine before Pete Buttigieg
“I think the most senior Democratic person that went over there was Josh Shapiro, who's the governor of Pennsylvania. He got there before Buttigieg.”
Sacks: Ukraine war will turn out much worse than 1991 Iraq War
“But I think the truth of the matter is that this war is going to turn out much worse than the Iraq war did in 1991”
Sacks: Ukraine war would not have happened with three specific US concessions
“If we had just done those three things, there would have been no war.”
Sacks: Russian GDP took only a 3-4% hit despite Western sanctions
“I think the Russian economies had like a three to four percent hit. It is not the collapse that was predicted.”
Chamath: Trump was the only modern U.S. president avoiding new wars
“He was really the only president, I think, in modern history, right? Saxy Pooh, that hasn't gotten us embroiled in a new war?”
Chamath: Trump would have blocked NATO expansion, preventing Putin's invasion
“So I think he would have shut the door so ferociously on Ukraine and NATO, and anybody that crossed that line, he would have tarred and feathered publicly. And I think the end result would have been that Putin could have found an off ramp well before he invade…”
Sacks: A war-induced recession could be Trump's silver bullet to win
“If this war spirals out of control, either, you know, it turns into a even bigger conflict that draws us in, or it turns into a big recession, because I don't think we've seen the last of the supply shocks from this war. If we get a recession that Trump can, I…”
Sacks: Putin seized Crimea in direct retaliation for a U.S.-backed coup
“If you're wondering why Putin seized Crimea, it was in direct retaliation for the coup that we backed in Ukraine in 2014. This is the origin of the conflict.”
Sacks: U.S. policy is pushing Russia and China into an alliance
“And what we're doing right now, what we're doing right now is pushing China and Russia together into a new axis block.”
Sacks: U.S. relations with India have deteriorated since the Ukraine war
“India is the biggest democracy in the world, and our relations with them have gone south since this war because they have a friendship with Russia that goes back the wrong way.”
Calacanis secured $51M in Launch Fund 4 LP requests via online form
“Without doing a single in-person meeting, fifty one million dollars in requests came in just, you know, to a type form, basically a form online.”
Calacanis: Quora's Poe is currently the best AI chat app available
“And then I was talking to Adam D'Angelo about Poe, which is an amazing app. You should try it. I think it's the best one out there right now of all the chats.”
Calacanis: Quora will be the top player in AI going forward
“It's going to be, I think Quora is the number one player in AI going forward.”
Chamath: Quora CEO Adam D'Angelo is the smartest person he worked with
“I've worked with, I've known D'Angelo for 17 years now. He was the CTO of Facebook when I worked there. The single smartest and best, single smartest person I worked with. And then separately, one of the most absolute genuinely best human beings in the world.”