May 27, 2022 · 1h 49m · allin
E83: Market slide continues, and how to address Uvalde
Chamath Palihapitiya · 29m spoken Jason Calacanis · 26m spoken David Sacks · 22m spoken Brad Gerstner · 18m spoken
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In Episode 83 of the All-In Podcast, guest host Brad Gerstner joins the panel to reflect on the inaugural All-In Summit, analyze the ongoing public market crash and startup survival strategies, and engage in a nuanced policy debate surrounding the tragic mass shooting in Uvalde, Texas.
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 80.2% of the talking time here. How this is scored →
The hosts as informed peer 6.1 Guest teaching 3.3 Guest disagreement 2.3 The hosts pushing back 2.9
speaking balance: gold is the hosts, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 1:19:08 Brad forcefully rejecting inaction on assault weapons
Brad rejects the mental health framing alone, pointing out that every country has mental health issues but only America permits unrestricted assault weapon sales.
Hardest push from the hosts ▶ 1:30:24 Sacks pushing back on mandatory training and insurance proposalsSacks refuses Jason's framing that training or insurance would deter mass shooters, arguing that shooters case targets for months and know how to use weapons.
Biggest teaching moment ▶ 41:55 Brad explaining equity compensation dynamics in down marketsBrad educates the hosts and audience on how stock dilution and falling share prices create compensation crises that tech CEOs are ill-equipped to navigate.
The host holds their own ▶ 47:44 Sacks explaining the fundamentals of money printing and outputSacks clearly articulates macroeconomic theory, explaining how 10 trillion dollars of money printing without matching goods production triggers inflation and pops asset bubbles.
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 |
|---|---|---|---|---|---|---|
| Show Opening & Host Introductions | 2 | 1 | 2 | 4 | The show opens with casual banter and Summit recaps. Sacks calls out Jason's hypocrisy regarding COVID precautions at the event compared to earlier criticisms. | |
| Palmer Luckey's Dramatic Summit Presentation | 2 | 2 | 2 | 3 | Chamath and Jason recap Palmer Luckey calling out Jason during the summit presentation. Sacks jokes that it was surprising an important figure like Palmer cared to target an unimportant host like Jason. | |
| Summit Panel Debates & Audience Diversity | 3 | 3 | 1 | 2 | Brad praises the summit's audience diversity and shares an anecdote about founders asking for advice after his panel with Bill Gurley. The hosts discuss panel debates and AMA formats. | |
| Summit Planning Lessons & Event Formatting | 3 | 1 | 2 | 3 | Jason explains the summit formatting choices and lessons learned while defending against Sacks' joke that the conference was a grift. | |
| Satirical Bestie Introductions | 5 | 3 | 2 | 2 | Jason does satirical introductions before transitioning to public market earnings for Zoom and Snowflake. Guest Brad Gerstner details how valuation normalizations led to market drawdowns. | |
| Federal Reserve Policy & Inflation Metrics | 7 | 2 | 1 | 2 | Chamath breaks down Federal Reserve rate hike trajectories, corporate credit spreads, and inflation break-even rates with strong financial domain expertise. | |
| Economic Recession, Tech Layoffs, & Rate Strategy | 7 | 4 | 3 | 4 | Sacks critiques the Fed for continuing Quantitative Easing nine months past the first elevated CPI print. Brad responds using an air traffic control metaphor to defend the Fed's current rate adjustments. | |
| Ad Tech Blowout & Corporate Earnings Valuation Risks | 7 | 2 | 1 | 2 | Chamath analyzes Snap's earnings call self-immolation and warns that inflated forecasted earnings pose down-market risks across tech stocks. | |
| Startup Contagion, Deal Terms, & Cash Flow Realities | 8 | 3 | 2 | 3 | Sacks explains deferred startup mortality risks, while Chamath emphasizes that CEOs must adopt free cash flow discipline to survive tightening funding conditions. | |
| Stock Compensation Crises, Entitlement, & Culture Resets | 7 | 6 | 3 | 3 | Brad delivers a deep breakdown of stock-based compensation mechanics and the difficult conversations leaders face as equity values decline. Sacks cites Netflix's internal memo addressing employee entitlement. | |
| Macroeconomics, Money Printing, & Federal Spending | 8 | 2 | 2 | 3 | Sacks details macroeconomic theory on money printing, inflation, and asset bubbles, citing Jeff Bezos and Elon Musk's island economics analogy. | |
| VC Discipline, Alpha vs. Beta, & Founder Expectations | 8 | 3 | 2 | 3 | Chamath criticizes venture capital firms that prioritized management fee collection over investment discipline, drawing an analogy between market beta and investment alpha. | |
| Startup Survival Frameworks & Default Investable | 7 | 5 | 2 | 3 | Brad contrasts seed-stage venture risks with late-stage growth investments. Sacks introduces the concept of default investable as an actionable framework for founders. | |
| Public vs. Private Reset Timelines & Cap Table Restructuring | 7 | 5 | 2 | 2 | Brad outlines why public-to-private market resets suffer a 6 to 12 month lag and advises founders to execute a 90-degree course correction. Chamath addresses cap table restructuring. | |
| Startup Capital Efficiency and Managing Down Cycles | 8 | 5 | 3 | 3 | Sacks presents Sequoia's capital efficiency analysis, and Brad highlights major workforce reductions at tech firms while urging venture capitalists to practice self-reflection. | |
| Tragic Events in Uvalde and Political Impasse on Gun Legislation | 6 | 3 | 2 | 2 | The hosts transition to the tragic mass shooting in Uvalde. Chamath critiques political polarization, red flag law failures, and the common demographic traits of mass shooters. | |
| Proposed Legislative Solutions and Common-Ground Controls | 7 | 4 | 5 | 4 | Brad passionately calls for bans on assault weapons and magazine limits. Sacks advocates for due-process-backed red flag laws targeting high-risk individuals. | |
| Early Warning Systems, Technology Profiling, and Policy Debates | 7 | 5 | 4 | 5 | Chamath proposes early warning systems powered by technology platforms and school-level reporting. Sacks debates Jason on whether mandated training or insurance would stop mass shooters. |
Statements from this episode (34)
Chamath: Palmer Luckey founded two multi-billion dollar unicorns by age 29
“This is a 29 year old young man who has now started two multi-billion dollar unicorns.”
Calacanis: Most in Silicon Valley oppose building weapons systems
“Most people in Silicon Valley don't believe in building weapons systems, but I kind of am with you on this.”
Gerstner: Snowflake's drop to $200 was a normal market readjustment
“Just take Snowflake as an example. The move from 400 to 200 Was probably just what I would describe as normalization in a world where rates were going back to two and a half or three percent, right?”
Gerstner: Software and growth assets trade 30-50% below 5-year average
“So now we're seeing software generally, all risk assets, growth assets, trading now 30, 40, 50% below the five-year average, right?”
Chamath: Fed will hike 50 bps in June and July before pausing
“There's going to be two 50 point hikes, one in June and one in July, and then effectively a pause because then the Fed funds rate will be at around two percent, and everything from there will probably be path and data dependent.”
Sacks: The US economy is heading into a serious recession
“So it seems to me like we're headed into a pretty serious downturn or recession here.”
Sacks: Halting QE in summer 2021 would have prevented the asset bubble
“And if they had stopped QE there, then we wouldn't have had this asset bubble in the second half of last year.”
Gerstner: Bill Ackman's call for 6-8% Fed rate hikes is misdirected
“However, the hyperventilation this week by Bill Ackman on Twitter, that the Fed needs to be doing radically more, that somehow we need to be raising rates to six, seven, eight percent in order to squash inflation, to me seems highly misdirected and totally out…”
Chamath: The stock market will hit bottom in two to three quarters
“The forecasted earnings will need to be revised over the next two or three quarters, and that's where we will probably see the low.”
Chamath: Yahoo Finance P/E ratios are deceptive during market downturns
“You cannot look at a screen on Yahoo finance or Bloomberg. Look at a price to earnings ratio and say, wow, seven times, that's so cheap. It may not be seven. You have to do your own work. It could actually be much higher than that because your earnings may be …”
Sacks: Distressed startups will face heavy structural deal terms later in 2022
“We don't like to do deals that way, but you'll start to see them happen later this year when, you know, companies get more desperate.”
Sacks: Tech talent job market will cool significantly within six months
“Well, yeah, I mean, look, but within the next six months, the talent market is not gonna be as hot.”
Chamath: Most startup CEOs and board directors are innumerate about cash flow
“Are poorly educated and innumerate. So their level of numeracy to even understand this is pretty poor. And most board directors are equally.”
Chamath: Startups that cut costs to the bone will win the market
“And if you can basically make your cash last as long as possible, even if you cut to the bone and stop growing. If you come out the other end, and you're the only company that's left, you will win and run over the market.”
Gerstner: Stock compensation requests dominate Silicon Valley boardroom discussions
“And so what's, I think the single biggest conversation going on in boardrooms in Silicon Valley today is, hey, can we have a little bit more stock this year, whether it's options or whether it's outright RSUs, to give to employees, because if we don't give it …”
Sacks: Tech companies are refusing to tolerate employee activism and boycotts
“Yeah, they're just sick of it. They're just not going to put up with it anymore. They're sick of being held hostage by their employees who think that they can kind of muscle the leaders of the company by starting a petition or boycott campaign every time they …”
Sacks: Federal Reserve rate hikes vaporized around 14% of global wealth
“It pops the asset bubble, It vaporizes something like 14% of global wealth, and then simultaneously workers feel a lot poorer because their wages haven't kept up with inflation.”
Chamath: Rapidly raised venture funds will suffer the largest negative outcomes
“If you track all of the increased frequency in fundraising, you can also probably follow those dollars and they generally will be the most poorly run. They'll be held the least accountable. And I think those will have the largest negative outcomes.”
Calacanis: Startup founders cut valuation demands by 50% in one month
“I literally have people we talked to last month who had really crazy expectations. They've come down by 50%. They wanted 50, now they're at 25.”
Sacks: Startup market valuation reset will take up to two years
“I see smart people on both sides of this. I hear Jason Lemkin's been saying, I think this is kind of short, deep, sweet, six month reset. Fred Wilson just wrote 18 months at least. I think Sequoia is saying two years. I mean, I think our instinct is 18 months …”
Gerstner: Private valuations will lag public markets by 6 to 12 months
“I think for venture, There's a six to a 12 month lag to that, so I think you gotta add it to those six months to really get to the market clearing prices for all these companies”
Gerstner: Startup founders should default to a 90-degree course correction
“The default action by every founder today should be a 90 degree course correction unless they have very good idiosyncratic reason in that business in terms of their outperformance to stay the course.”
Gerstner: Altimeter portfolio company Lacework is laying off 300 employees
“The second company on that list, Lacework, an altimeter software company that's doing terrific, growing hundreds of percent, laying off 300 people, 20%, right?”
Gerstner: At least 3,000 startups will eventually end up on Layoffs.fyi
“But I'm, you know, there's 714 startups on this list. By the time we're done, there are going to be at least 3000 startups on that list.”
Chamath: Democrats will fail on gun control due to moral virtue signaling
“I think that the Democrats will not make any progress because they try to make this, unfortunately a moral virtue signaling issue.”
Chamath: Republicans will fail on gun policy due to constitutional absolutism
“The Republicans will not make any progress because they become sort of very binary, adamant absolutists about constitutional rights and the interpretation of that right in a very specific way.”
Chamath: Mitt Romney accepted $13.6 million from the NRA
“Mitt Romney took 13.6 million dollars from the NRA.”
Gerstner: Mass public shootings are a uniquely American problem
“I would say that every fucking country on the planet has kids with mental health disorders, but not every country on the planet has kids getting shot up in schools and supermarkets and churches.”
Sacks: New York's strict background checks failed to stop the Buffalo shooter
“The Buffalo shooter was in New York. They've got the toughest gun control laws in the nation. The background check didn't stop him from getting the gun because he bought it lawfully.”
Chamath: I previously helped build an early warning account risk profiling system
“There is an explicit decision that technology companies can make to be able to review content from certain kinds of accounts and start to build a cluster and a distribution of risk. It is possible. I helped build one for one of these companies.”
Chamath: I received SSSS secondary screening designations on flights until 2008
“By the way, after 2011 I was on a no fly list, and I think I've told you guys this story before, but I would have the triple S on my boarding pass for years until about 2007 or 2008. Constantly profiled, you know put in the back room the whole nine yards.”
Chamath: Extreme primary voters make practical gun control and abortion reform impossible
“Where it will falter is we have a political system where the primaries for both sides are dictated by the looniest 10% of the left and the right. It makes practical gun control, just like abortion, an impossible task unless we completely turn our political cla…”
Calacanis: Firearm deaths and injuries now exceed motor vehicle crashes
“Firearm related deaths and injuries now exceeds motor vehicle crashes, and so does opioids.”
Sacks: San Francisco DA Chesa Boudin failed to enforce gun charges
“In San Francisco, you can't get Chesa Boudin to enforce a gun charge. He a young kid named Kelvin Chu got killed because his killer, a guy named Zion Young, he was arrested weeks before on gun charges, and Chesa Boudin just let him go.”