CRV's George Zachary on health scare shifting focus, COVID threat, designer babies | Angel S4 E3

I would say at different points in my life, it did. It definitely did mess with me. It messes with you. Being honest about that, yeah. Because you think, I could have placed that bet. I was there at that time. I asked myself, what would I have done differently? How would I have convinced other people in my partnership to do this? Maybe I didn't speak loudly enough about it. You were passionate, you were part of a group that was passionate about Google, you got voted down. In that case, there was one person who basically laid down on the railroad tracks and said, these guys are totally arrogant, who needs another search engine? These guys won't take coaching. There was one person in the room who basically destroyed the Google bet. He completely blocked it. He blocked it in front of the train, said over my dead body we're not doing this. The reason given is Larry and Sergey are arrogant, won't take coaching, and who needs yet another search engine? That was the period when there were a lot of search engines, and most of them didn't work out: Magellan, Lycos, Excite, AltaVista, GNN, Global Network Navigator. Yahoo was a directory. A lot of stuff going on at that time. But the lesson we all take away from that is there's always room for improvement and for a breakout success, even in a category that's crowded. If there's a market in a category, you should not dismiss what could be the ultimate player. But there's some cognitive bias that some people have. I don't know if there's a name for it, but it's almost like we've knocked on that door, nobody answered, therefore there's nothing behind the door. We've looked over that mountain, we didn't find the oil, we drilled and didn't find the oil, therefore there's no oil. It might be just that you didn't drill far enough or the drill bit wasn't sharp enough.

They thought, well, the founder CEO is not a good manager, so we should replace them. That's not really a good idea because you can actually add really good management to a leader.

I can think of two. Let me explain the other piece. If you don't have a great leader for a company, you're kind of toast, dead in the water. You need the leader for vision, drive, persistence, execution. That's the person that inspires everyone in the company. You cannot have a company without a leader. A company is a group of people. You cannot get a group of people to go somewhere without that leadership, that inspiring person who says this is where we're going and we're not giving up till we get there. A lot of times, people who are leaders are too busy to deal with management because it looks boring, and it is boring. So they need to hire management. Some people on the board will needle them about the management, and then they'll be like, oh, this person can't manage stuff. But you don't need to. You'll get comments like, Larry and Sergey, these people aren't really good managers, why won't they take coaching? Well, they're not managers. They are leaders with an incredible vision. In that case, it was a really good thing that Larry and Sergey could stay basically running the company. Eric became management. Eric Schmidt, who was adult leadership, was brought in. That's what we called it in the industry: we're going to bring in some adult leadership. They literally made him the CEO, gave him the title. But the inspiration and leadership still came from Larry and Sergey. They did the Friday meetings. They said Gmail is going to exist, this is why we're buying Android, this is why we're buying YouTube, this is why we're making these risks, this is why we're going to Google+, we're going to spend billions of dollars trying to build a social network. They had that founder authority. A very well-known example that set the tone for Silicon Valley is Steve Jobs. A notorious bad manager, great leader, somewhat Machiavellian, big swings, a lot of passion, very user-centric. He determined what he was doing, cared about that more than anybody, obsessed over it. It wasn't like, okay, I'm going to build some features and figure out what the product is, and then we'll figure out what the company is supposed to do and who we're helping. Jobs fits into that. I'm close friends with someone who ran engineering there. Fantastic management. He always put great people around him: Jony Ive heading the design group, Tim Cook running operations and the supply chain, Eddy Cue on down the line. At some point, he was smart enough to know to put great management in so he could just focus on the customer and walk around the neighborhood. He would take a lot of walk and talks in this neighborhood. We're in Palo Alto right now at CRV's office. Thanks for hosting. With Walt Mossberg on Sunday nights, talking about product and customers. I actually think it was the arrival and notice of Steve Jobs here, as well as Zuckerberg living here and Larry and Sergey living in Palo Alto, that led to the huge influx of people living in Palo Alto. They all occurred around the same time, late 90s, early 2000s. Larry and Sergey are at Stanford, they come here, they live in Palo Alto. Zuckerberg comes, he sets up shop here and lives in Palo Alto, sets up shop on University.

I know who you're going back to now. No, I haven't. The person comes from an old school guy, much older than you. He was part of that earlier generation, the era where venture investors basically totally ran the show.

I was part of the transition. I got in the business in 1995. That was still the era where sales and marketing ruled a company's success. It was all about shifting and moving atoms. There were no bits in the business. Packaged software was hardware. You're going to rack some servers, buy some licenses and boxes, rip them up and install them on floppy disks. There was no internet network to distribute, no over-the-air updates. So $400 a seat for Lotus Notes, you bought a $500 seat for Novell networks, whatever it was. The importance of a sales and marketing group was huge. Venture investors basically said, these are the most important people in the company. Of course, the product engineering people are important, but if we don't have great sales and marketing people, we're toast. So it all keyed off of that. In fact, a lot of venture investors were former sales and marketing people. You had the MBAs coming out of Stanford, Harvard, Wharton, but then you also had the sales and marketing executives who had run a sales department. They said, what makes a great venture capitalist? Somebody who could sell. When you think about it, Oracle was a sales-driven culture, still is. They just ram and jam that sales force. Also sales-driven culture, because he came from that world. Steve Ballmer, sales-driven culture at Microsoft. Intel was that way.

The merchants of consumer internet, high bandwidth, the end users. They could have a high quality user experience. So you had to focus on product, the product experience. You ended up getting product people into venture. A big shift, more product people. Because consumers could buy the software. Consumers were now driving it and making the decisions, not the salespeople ramming and jamming some product down a CTO's throat. It changed everything. The buying cycle completely changed, and who got it to the end user and presented to the end user changed.

I think the bust of 2000, which very few venture investors right now were even in business. Think about that. The average age of people in venture now is about 40, so they were about 20 in the bust. They were in school. The average venture investor being 40 has no scar tissue or experience of a bust, which is kind of scary if you're a limited partner. Back then, it started changing in Monday meetings. At our firm, MDV was primarily a networking firm that started doing some consumer internet, some of it through me. Most firms had done consumer internet, but most of the companies just went splat against the wall from the 2000 bust. Everybody got even more cynical and said, consumer internet, it's stupid. Amazon's a pet money loser. Look at all the other consumer e-commerce things, they are losing money. None of this is going to work out. Amazon will never make money. So venture investors by and large kind of ditched consumer.

Elon and Kimbal Musk and friend Greg Kouri showed up at our office in peace. I'm died at 50, 51, so tragic. They showed up at our office at MDV pitching a very controversial idea that you could put an address into an internet page and another address and it would actually tell you the directions and not view a map. A bunch of venture investors thought it was a dumb idea because everyone had a map in their glove box. Why would you do that? So it was kind of obvious to me that it was a good idea. I'd heard my parents arguing enough about where are we, let's pull over to a gas station. My favorite part of road trips was you'd have a map and you'd say, the map gets us to Albany, but we'll get a map along the way on the Thruway so we can figure out getting from Albany to Niagara Falls. There were these waypoints where your map ran out and you would refresh and get the next map at the gas station, which would have a rack of maps. When you move to LA, you get that famous big thick book with the maps. I've got the name of it, somebody will be emailing me right now. There was a giant book that you would get when you got off the plane in LA that you could look up any street name anywhere in LA. They say go to page 722 and you look. It was a giant book, but you needed it to find the most time-efficient method to get through LA, which is now called Waze, Google Maps, Apple Maps, or anything else. There was that little interim of Condom? So they pitch you this idea. They were at Stanford, I guess. This is named. Elon was working actually at one of my mentor's companies.

Rocket Science, started by Steve Blank. Steve Blank did the Lean Startup kind of stuff. Steve Blank was running something called Rocket Science. It was an interactive CD-ROM company, game culture, trying to combine games and movies. They were doing multimedia back in the day when computers got CD-ROM drives. People were like, wait a second, you could make a game, a movie, you could have a boy and text and film and a game on the same day. That didn't really work out. They were just like, what are all the ingredients we have on the shelf? Let's put it on a CD-ROM. It was never cohesive. It wasn't really fun for people who played games and it wasn't that much fun for people watching movies. It was basically bad games combined with bad webpages. A little bit of Spotify, a little bit of the web, a little bit of an app. But people bought them. You would go to CompUSA and buy a $60 CD-ROM, The Beatles' A Hard Day's Night, for a while. But the game versions were not popular. It was a bust. Elon worked at Rocket Science for a while, but I didn't meet him that way. He showed up at MDV. A seed investor introduced him to my partner John Fiber. The seed investor was a former Sun Microsystems exec. My partner John Fiber was there. There were very few seed investors back in that day. They wrote big checks, extremely wealthy people. They would write $500,000 checks in the 90s. They were very well known. Mike Markkula was one of them. Ron Conway, this is before Ron Conway. There were 90s angel investors. Somebody put $100,000 into Google before they raised. I forgot. Andy Bechtolsheim. Andy was a co-founder of Sun and another networking company. He got 1% of Google, became a billionaire from Google, but he had made so much money beforehand. He was a former Stanford University professor, in fact he still might be at Stanford. He put in a couple other companies too. He just hit home run after home run. A very successful founder in networking companies, incredibly smart person. He met them by being at Stanford. Everything should just come out of Stanford. That was the well. Be close to Stanford, which is Sand Hill Road next to Stanford. Early venture people lived in Woodside. Stanford was at Stanford and Sand Hill Road connected them. They did it in an office on Sand Hill Road so people could come from Stanford. People didn't want them coming over their houses because it didn't look professional. So 3000 Sand Hill got started with people's crappy dinky offices because there was a golf course there and a crappy place to eat lunch. Everyone had their small offices with small funds. Everyone had to collaborate together. It was hot, which was also known as collude. That was the early version of venture as it started to emerge. That's why venture investors got the bad rep of colluding on price. That was a thing back then. Everyone's fund was so small that a whole round could not get done. A round at that time would be $1 million, $2 million, $3 million. The fund sizes were $30 or $40 million. When I joined MDV in 1995, we had a $105 million fund. The median was $120 million. NEA was one of the largest funds and their fund was $220 million. We were like, whoa, that's a huge fund. Now, I'm doing my first seed fund, it's $300 million.

Somebody would come pitch everybody, and then everybody would go get lunch and say, what's a good price that we can do? How much control? It was before me because when I joined MDV, the fund sizes started to get big enough that you could do the whole thing. You didn't need like six funds. So back then, you had to get consensus of six funds to back something. So you'd have multi-party collusion. People would say, what do you think the price of this should be? Would you do it at a $20 million post? No, that's too high. What are you thinking? This is series D, it should be $15 million. That's hilarious. Series D? Back then, the founders would wind up owning less than 10% of their companies pretty regularly, except in cases where there was significant trade secret or IP in the founder. They could use that patent as a shield to get extra leverage.

There was more than that, probably 30%. You joined the board? No, my partner John Fiber joined the board because I had just joined. I was a quote-unquote partner, which basically meant I was a principal. There was title inflation going on. Back then, it became the pre-Yelp Yelp because they needed a business model. It was a directory of vendors. You're going from this direction to this direction. You're going to a restaurant. A restaurant could use an ad here. Interesting. That wound up selling to the New York Times or something? No, it ended up getting sold to, I can't remember who bought it. It was supposed to be merged with AltaVista and spun out as a public offering. It was supposed to be a share-for-share transaction. Elon was smart enough to take cash, $100 million off that. It was like a $300 million or something, less. I'll let him tell you. But that was where he got his first chunk of cash. Then he started X.com, which merged with Peter Thiel, David Sacks, and Max Levchin's Confinity. That was their idea about replacing fiat money. Various kind of funny money on old BlackBerries and Palms. When you think about it, they really had the right idea. Going back to Google, where the one search engine wins, it's like you look at PayPal and now it's Stripe and Square and cryptocurrency. That was like a version of crypto, the pre-crypto version, which was how do we replace fiat money? We're just going to have people beam it. It was like, okay, we've just limited the entire market to people who owned a $300 Palm Pilot with a green screen that looks like a Desert Storm device. Remember learning Palm Script? People listening to this are like, what are they talking about? Elon's idea for X.com, if I remember correctly, was more like just a bank. It was supposed to be an internet-only retail bank to compete with Bank of America or Chase. I thought it was too early. We didn't invest. Brutal. This is a case in venture where you can be right and wrong. You can be right conceptually but absolutely wrong in the financial outcome. You're right, it's too early for a bank, but they still won because they pivoted and iterated. They merged with Confinity. David Sacks came up with the product idea: let's just email each other money, as opposed to becoming the payment method for eBay. Then they really had something. You think about it, you have all these big brains, a lot of them from Stanford, a lot of them from South Africa or just not from America, and they just keep iterating until they figure it out. So I just bet on the founder. It's almost like the first idea, sometimes they get it right, but they're triangulating at that stage. Isn't that a lesson? Yes, in series A. If you're doing series B or C, they should have it dialed in. It should be about scaling. The mortality rate at seed and series A is pretty high, 80-90% go to zero. For the top firms, it's about 40%. For one X, it's about another 30%. One X means you got your money back, but 80 cents on the dollar is the same as zero as far as we're concerned. LPs don't pay us to do one X. It's still a zero. So you're still at 70% not accretive to the bottom line. If you're doing a 3X fund, 11% of the top quartile funds are doing that. 11% of 25% is 2.5% or so are doing 3X. Does that mean I'm good at this? I'm doing okay. I think I'm at 3X. But remember, it gets more difficult to scale. That 11% is the median fund that does that is $531 million. None of this is a solicitation for you to invest in my funds. As you get bigger, it gets harder to scale.

Almost all funds that have a 3X return have at least one company that is a fund returner. It returns the entire fund, or at least half the fund, and then they have a significant amount of companies that return a quarter of the fund. When you're doing fund construction, you're buying typically 20% of a company with your capital. Let's pick 20%. If you own 20% of a company, in order to return a $500 million fund, you need to have five times that in terms of the value of the company. Five times $500 million is $2.5 billion. So you need a company. Remember, there's dilution from roughing employees and from future rounds. You might get diluted by half. If you start off with 20%, you're going to wind up with 10% by the time there's an IPO. So 10% at IPO means a $5 billion company returns it. There aren't that many $5 billion companies. That's why this game is so hard if you do big funds. That's why there's 11% of the top quartile. A 3X fund means you have to have a $15 billion exit. How many of those are there? Dropbox, Shopify, Uber, Lyft, Slack, Zoom, certainly Airbnb. It's really hard to do. You have to get really lucky, or you just keep the fund size smaller, which is what we do. That is your strategy at Charles River? Yes, our fund size has been $400 to $600 million.

We just upped the amount of people we have to 16, up from 6 over the last four years. So everybody has, let me old guy here. What do you think the sweet spot is for a venture capitalist to do their best work? There's some combination of swinging for the fences but also having wisdom, but then it can work against you, like the Mohr Davidow partner who refused to let you invest in Google and laid on the tracks and blocked the Google. I got to find that name. I think it's 30 to 50 years old. Explain why. What is the combination of experience, wisdom, risk-taking, hunger, personal net worth that makes that the sweet spot? For consumer internet, the older you get, the less in touch you are with the needs of consumers. If you're doing really well in venture, you have so much money that you are not really paying attention to what consumers need because you can basically get whatever you need through money. You get disconnected from the reality of most people. You're in a different bubble. You have multiple homes, you have a jet. You don't know what it's like to be at Southwest in line or at Starbucks in line because nobody can cut your Starbucks. I heard this from a friend of ours who is the co-founder of eBay, but from another venture investor who passed on eBay. He told me, we didn't invest because one person in our firm blocked it, the most senior person. Their comment was, who buys stuff from flea markets? There's no margin in stuff at flea markets. By the way, 70% of people in the world are buying stuff at flea markets because they don't have enough money and they want to get a deal. From their perspective, I'm super wealthy, I don't go to flea markets. Why would you buy a used t-shirt when you could buy a new one? There's no connection to that. So for consumer internet, every venture capital firm should get a boomer. When they're doing a deal, they should just look over as a group and say, okay boomer, what do you think of this? If they fight it, they should increase the amount they invest. If they say we should totally do it, they should say, you know what, we're going to pass, but you can invest personally. Just get an okay boomer at the end of the table. Someone who's like, I don't get it, why would people take a video of themselves and share it on Snapchat? Getting okay boomer. This is the reason why you should absolutely have younger people in a partnership because they're more sensitive towards the consumer market. But you need to encourage them to speak up and not penalize them even though it seems like a stupid idea. The more senior partners who might have a track record, they say, well, younger people might think, oh my god, I've got this venture job, I could potentially have a bigger venture job. Do I want to take the risk of saying this? They don't want to lose that political capital at the table. If you fight for something in a world where 70 or 80% are basically zeros, one X equals zero, so if the default case is 80% lose, fighting for something is fighting for something with an 80% chance of zero. It goes against all logic to fight for something with the majority. It's so much easier to just be cynical and say, yeah, I think that's going to fail. Some VC was dunking on a company that failed on Twitter and they got barbecued because it was like, hey, everything fails. For you to say you passed on it and give yourself credit for a pass, that's like making a bet like, I bet you this person does not hit a grand slam right now. There was a common activity with venture people, it still occurs, which is, oh, did you pass on that? Yeah, I passed on that. There's a kind of cross-reference of, oh, I feel good because you told me you passed on this and I can say I passed on it. I feel good because another smart person said they passed on it and I passed on it. The thing you should be getting credit for is saying yes to something that most people don't understand. That's a skill. The key thing is not the thing you passed on. The key is what you did, where you placed the bet. One of my mentors in the business, the person who basically blocked the Google deal, told me it doesn't make a difference what you're passing on. He says it only takes one company to make your career. If you don't have that, you're over. That's really what it's about. People's view of me changed dramatically after the Uber investment. They were just like, here you want a book deal, here you can be on podcasts. I'm like, okay, yeah, you're a genius. It starts to become a positive feedback cycle. Better companies come to you and say, you're the guy who did Uber, and you're the guy who did Twitter. In fact, let's go to Odeo. It can be a negative feedback cycle if you have a bunch of companies that are not doing well. What happens to the usual investor? There's just a meltdown. I'm not good at this. I'm not sure. It's like, oh my god, this company is doing well, what do I do? I gotta talk to the founder.

It's a lot of people's careers. And the thing that leads to it... yeah, the thing that leads to it is a lot of young people, inexperienced people entering the business. They apply this bad rule of probability. They think, 'Oh, 1 out of 10 companies will be a huge hit.' Well, probability isn't equally distributed to everyone, right? This is what I try to explain to people. I'm like, 'Let's pick a roulette table. Tell me which one has the most reds because we're betting black.' And like, 'That one has 8 reds.' I'm like, 'It makes no difference.' There are documented instances of like 50 reds in a row. If you look up in the Guinness Book of World Records, people actually have an actual run of 50 in a row. So if you're trying to do the Martingale system or whatever and double your bets, probability can be really brutal on people. I've had that happen in my career. You get those bad beats. You got three companies dying at once. It is really not fun.

Yeah, not just in the dot-com bust, though. Other times.

Well, I've been through it. I've been doing this for 25 years, so it gets easier. It's like frontline warfare. It's like, okay, people are gonna die, my position's gonna get battered, it's gonna happen. But remember, I've done well enough that I don't worry that I'm not gonna have a house, right? I'm not worried that I don't have money for my wife and kids, right? That takes the edge off. That takes a huge edge off, right? You just have to look at it and be like, 'Listen, this is not the risk of ruin we're talking about. It's underperformance.' I can't sit here and say, 'Oh, I'm super brave, much better than all these other people.' Right, right. I'm in a position of good fortune. But I would also say that I took more risks than the average person in the business.

I don't even know the answer to that. Which one is... financially or on a personal fulfillment basis? Both are important.

I would say for me, where I'm close with the founders and they really do great, it's a huge sense of fulfillment. I love to see founders who I really like do really well. I can't tell you how important it is to me. And of course, making money in those companies is very important for my partners, for me. I'd like to make more money, right? But if I'm making money for my partners, that's great. My partners are super loyal. If I'm making money for my limited partners, I feel super happy about that. But it's the combination of both that makes me really happy. And I'd rather make less of an absolute return doing that than a slightly greater return. Now, let me tell you, if there's like a WhatsApp return and I kind of like the founders but I don't absolutely love them, right? I'll take it. I'm good with that. I'll take that situation. I got a little tiny slice of that. I was an LP in one of the funds that... congratulations. And that was some bizarre outcome. So, looking back chronologically, PillPack was a huge thing for me. Bought by Amazon for over a billion dollars.

Oh, right. But I do know that was... I was definitely eight, nine, ten figures there. There was three commas in there for sure. For Thomas, yeah. Not those. So, the founders and I are still friends. That's great. It's awesome. I am so happy for them and their families. They're just fantastic people. And I loved the team right before the acquisition. I have a friend of mine that's on the board who told me afterwards, they feel great about that. And one of the most important things that also came out of it is that drug pricing, a huge amount of it is absorbed by all these middle players, right? The difference. A lot of people don't know this, but the gross-to-net pricing of drugs is absorbed by people like... There's a drug called Humira. It's a biologic. The gross price to consumers is $600. The net price to pharma manufacturers is $150. Big spread there. Net to pharma companies actually went down the last two years, 4%. Retail prices going up 5 to 8%. And that's driven by middle players. So, a lot of people say, 'Oh, Amazon, not good.' Well, Amazon is good here. Get rid of all the middle players in pharma. Get pharma manufacturers to Amazon, reduce prices, right? It's amazing. This is one of the paradoxes of modern-day capitalism, which is what's good for consumers in a broad sense—lower prices, more choice, more efficiency, faster, cheaper, better—can sometimes be bad for some number of workers who are also consumers, whose jobs have been eliminated or there's a freelance economy that emerges.

Wrap up the Elon story. Sounds like a present.

Mistake, yes.

Yeah, 20 million followers on Twitter. That's just Elon. There's a guy. Has he changed as a human? No, he's always been bold and focused. He's the same Elon. Now he's just surrounded by everyone trying to get to him, which is bizarre. It's annoying for him. I would think so. Annoying for me. I mean, how many emails do you get asking for introductions to him every day? It's literally every day of my life. I get it. Somebody asks for it. I'm like, 'Can you solve your own goddamn problems?' Because every time you get that request, it's somebody who has a problem. I know Elon's a solution. And it used to happen with Mark Cuban. And before that, it used to happen with Travis and Uber. And now it's starting to happen with the Calm guys, where it's like, 'I have a problem. Can you ask your currently hottest, most famous friend, richest, most successful to solve my problems?' I'm like, 'Yeah, that's your problem. You need a keynote speaker, or you need an angel investor, or you need somebody to come to your benefit dinner. That's not their problem.' People are weird.

Yeah. I try to not ask anybody for any help. Maybe that's a flaw I have.

No.

What else is there to do? Just doctors for help, right? Because I'm on... well, that's why they're there. And there's an exchange where you pay them.

Yeah. So, what happened? I kind of disappeared for a little bit. You said, 'I got to take care of myself here.' All our listeners were like, 'What happened to George? Where is he? Did he go to Mars?' In 2015, I was taking a statin as a test. All the men in my family have died from heart disease, so I figured maybe I'll try to head this thing off. So I just did as a test. My doctor says, 'Hey, if your stomach starts hurting, it's a really bad sign. You need to go to the hospital right away.' Okay. My stomach started hurting really badly. I called him. He said, 'Go to the hospital right away.' I went to Stanford. They gave me a CT scan. They said, 'Your stomach looks okay, but we might give you a ring tomorrow.' I walked out of there like, 'Oh good, my stomach's okay.' Then I was thinking, 'Why did they say they might give me a ring tomorrow?' The next morning, my phone rings. I'm here at work, just about to meet a founder. The radiologist says, 'You need to have an MRI.' And I said, 'Why?' And I said, 'Well, there's a mass that's 9 centimeters by 7 centimeters by 4 centimeters that needs to be imaged right away.' 9 by 7 by 4. That feels like a grapefruit or a... well, it's about the size of three-quarters of my fist. So somewhere between the two. An apple. You got an apple in there. They don't like it. And it's heterogeneous in the imaging, and it's got arteries and veins going through it. It's not like a ball of fat, right? And that's really not good. So the radiologist's report mistakenly put that it's either a malformation of arteries and veins or it's sarcoma, aka cancer. Sarcoma is terminal. So, you see your mind at that moment. You're on the phone. I was kind of in shock. I was just about to walk into a meeting with a founder. It was like that scene from Saving Private Ryan with Tom Hanks at the beach. This huge bomb sound went off next to my head, and I was ringing and spinning. I walked into his meeting. I don't even remember who the founder was or anything of what they said. So, it was a long period of trying to figure out what's going on. It was really not clear. No one wanted to do a biopsy and pull potentially sarcoma cells through me. So I had it taken out of me. It took two or three months of going to various doctors and institutions around the country. What I noticed was that most people in cancer wards were just listening to what any doctor would tell them, as if that doctor was like the voice of God saying, 'This is what will happen to you,' or 'You need to do this.' And what I discovered was that there's no set prescription or description of what's going on that is 100% known. In fact, when I really grilled the doctors, they really weren't sure. So I thought to myself, 'Hey, I've got a lot of money. I've got a bunch of education. I've got a bunch of time. And I've got contacts. I can get in any room.' Most people don't have this. They don't have time for this. They can't take time off of work. You can pause everything. So I decided I wanted to change what I did with my investing time and money. I decided to start investing, because I'm a science and engineering geek, not a political services geek, to start investing in bioengineering. I recruited someone who's an expert in biology. Back to health. They take it out and you're good. Six months later, I went in, just thinking that it didn't really happen. So, some other things happened after that. A hurricane destroyed the house I lived in with my wife and kids while we were in it. I heard about that. I saw the pictures too. You shared them with me. So that happened. A little traumatic. Then after that, I had a really bad concussion. So, a bunch of bad beats all on the same tooth. And a really bad GI disease that is listed with the coronavirus as actually much higher mortality, at 20% worldwide. And you got through all the health stuff pretty good. Knock on wood. So it's been six months of not having anything troubling me.

I do not know how to solve the issue around how to educate. The only thing I know that I can help with is how to create more innovative solutions and products for end users. That's the only thing I know of how I can affect things. That's your skill set. Find founders to make it better. But asking multiple doctors and asking a lot of questions is probably the best technique. In terms of interfacing, someone will come up with a method of a rapid method of gaining as much information as possible of other solutions that have worked. There's nothing like this for people out there. Why isn't there something where you can say, 'I'm gonna meet with five doctors. I'm gonna give them all the data. I'm gonna ask them all their questions, and they're gonna blindly write their own synopsis and treatment plan or whatever it is, and then they all turn it over at the same time and then have a really Socratic, vibrant debate about why they answered what they did.' If they're in different institutions, a lot of it is account control. So I had a tissue block for me that was analyzed at Stanford. I disagreed with the pathologist report out of my own research, which was good. I had my tissue block transferred to UCSF. It took some work to do that because Stanford really didn't want to give up the tissue block. Literally, your body is in a lab somewhere and you're like, 'Please give what you cut out of my body to this other institution.' And they're like, 'Yeah, we don't really do that.' It takes time. No, they do do it. They have to do it by law. They have to. But there might be some process. I was like, 'I really don't want to...' Then you gotta pay us a fee. You got to go to this place to pay the fee. Run around. And wonder why. Because they don't want to have somebody come up with a different answer, and that's risk for them. I know the people at Stanford worked hard on this. I don't have any ill will. Which one do you want to live? Personally, I had urgency about this. In the case of sarcoma, you need to catch it very quickly in order to have some extension in life. This is where Steve Jobs, smart people sometimes can talk themselves into bad places. He talked himself into trying to solve his own cancer. Cancer treatment and cure: Stage four is like 10% cure, right? Stage one is like 90%. It really is. So not acting in time is a huge penalty. For patients early on in this whole horrific journey, not getting answers and not acting quickly and just listening to the one doctor God or institution God and being in semi-denial and fear is a huge risk to your life. You have to be your own advocate, or you need someone else to be your advocate. But who else is that going to be? This is part of the healthcare system that isn't there. And it's bizarre when you think about it. You could hire a real estate broker to negotiate your lease, and a real estate lawyer, and a consultant, and have five people on that project negotiating your next office lease. But where are those five people to negotiate your biopsy and getting it from one place? Does that even exist in the world? The only place it might emerge is with insurance as the payer. They are starting to talk about value-based payment, which means they're only going to pay on the solution. So if there's no improvement, they're not gonna pay as much. So it's not pay for service, it's pay for outcome. It's an incentive-based system, and that's coming. It's starting to work itself in.

I would think. Because people are like, 'Well, we're gods. You're asking the gods to be accountable.' It's like, 'Okay, we're here to bless you with our lightning bolts. How dare you?' It's like, 'Okay, be accountable.' Attorneys charge by the hour. They don't get paid by the outcome. No, those are litigators. Bill Gurley said it to me one time. He's like, 'There are no consumers in the American healthcare system. There's nobody actually buying the service.' Your employer pays for it. If you had to actually look at the menu and they said, 'Here's what your knee surgery is gonna cost you. Here's your insurance premiums. Here's what's gonna happen to them.' And you were actually making this decision, you might actually say, 'You know what? I'm gonna look on a website like Kayak.' A site like Kayak might emerge, or a price comparison search engine might come out where it's like, 'Here's what knee surgery costs across the country.' And you might say, 'You know what? I'm going to Arizona for my knee surgery because it's $10,000 in knee surgery in New York and LA's $100.' This is one of the issues. There's no price comparison. You want a flight to Tokyo? We do price comparison. So the only place where there's price comparison is in biopharma drugs. If you go to buy Lipitor in Oregon or in Florida or somewhere else, it's all the same price. PillPack. It's all the same price. I heard that PillPack idea and I was like, 'So you put the pills in a pack? I don't take any pills. I don't get it.' The average person about 50 takes three prescriptions in the US. Is that right? Yes. Because 40% of the population has diabetes or is pre-diabetic. It's amazing. We're eating too many calories, mostly too many carbs. We literally in the United States became so abundant, we won so big as a country, that I think the last three years life expectancy went down because of diabetes. We went sideways. We went from 79 to 78, 77. Literally declining with massive progress on science, cancer, healthcare. Healthcare spending is 18% of GDP. We're spending more than everybody, and now we're starting to go backwards. And the reason we're going backwards is unbelievably self-inflicted wounds. Human behavior. Eating ourselves to death. And actually suicide is going up. For young people, it used to be drunk driving and a lot of stupid behavior. Now people aren't driving drunk as much. They're killing themselves because social media anxiety is causing them. So the suicide rates are going up. What is the point of having a society that's so rich? And it's also going up in the 75 and above age group. Significantly. Wait a second. People are 75. They get to retire and enjoy. Because they're alone. So we're literally killing ourselves because people are eating sugar, because families are distributed geographically in the US, and people are alone. So we're in this phase and trend of what I call 'connected aloneness.' What does it mean? It means we're all connected digitally, but we're all alone physically. This is why I like you. And this is a bad trend. It's a terrible trend. It goes against being part of a tribe, being part of being nomadic. But it's easy to be cynical about things like Burning Man, but I think a lot of the reason young people are getting into things like Burning Man and a camp at Burning Man becomes like your tribe when you leave, and they do other stuff, is they realize the value. They get this incredible unlock when they have a tribe of people they hang out with. Our poker group has become super meaningful to all of us. We really love each other in our poker group in a way that none of us expected. It was just to generate gambling. But when Dave Goldberg died, who was a member of our core poker group, it just cemented our friendships in such a very deep way that we're on text message all day long. And when somebody gets accepted into that group, when we become friends, it becomes this otherworldly friendship. It's very strange. It's delightful. I've always believed that the digital world should be involved with the analog world. You can't exist just in the digital world. You can, but you're not going to be happy. You'll be empty. We didn't evolve as digital beings. It's empty calories. You can't feed a human through digital methods. There are some people who believe that, like Zuckerberg, this is gonna be great for him. 'We connect everybody.' It's like, you know what? Connecting everybody is not as good as you and I catching up right now. A great moment for us to be here on this podcast. Part of the reason I have the podcast, I'll be totally honest, I get to see my friends. I get to make new friendships. When's the last time you and I sat for an hour? I miss you too. The podcast for me is a way to spend an hour with somebody who I love. You're amongst a crew. What do you think are the big unlocks in healthcare? What are the things that we could unlock in our lifetime? Hopefully you and I are here for another couple decades. What are we gonna see? What are our kids gonna see? If you break it into those two groups, what could our kids see in the next 50 years? What are we gonna see in the next 20 or 30? What do you hope to see? What do you hope to bet on to make happen?

Well, when I started the bio practice, we talked about using AI, machine learning in combination with biology to develop pharma products, drugs, more quickly. Because right now it takes an average of, well, the range is roughly 12 to 15 years to develop a drug. Why is that so long? It starts with an idea in a scientist's mind of what might work. They have a theory. They have to screen tens of thousands of compounds. By the way, 50% of pharma products come from natural products. So they have to screen tens of thousands of compounds, and then they have to go through toxicity scans in mice. Why can't you use AI and machine learning and say, 'Hey, here's what we've learned from all the human tests we've done, all the mice tests we've done. Maybe when we find a new plant in the Amazon or some new compound from something at the bottom of the ocean, we could just say, 'Hey, what does the model tell us could be them?' And let's have the model come up with some theories as well as the humans. Some people are doing this. Is it working? Promising. It matters what data set you feed it. There's one company that takes 240,000 pictures a second of a cell, feeds it, and they feed different drugs to the cell to see how it responds. So they're continuously testing the cell. There's another company that's a brain organoid company. They're focused on central nervous system diseases. They're building little neural tissue groups to basically work on Alzheimer's and see what happens. You're testing different drugs on it. I'm imagining like the movie The Matrix. Everybody was in those things. We don't have to do this on humans. We'll see it on petri dishes. They take stem cells out of people who have Alzheimer's or some other monogenic disease. You're not going to take the whole brain disease like schizophrenia because it's very complex. But you take a monogenic version of autism or a very specific type of Alzheimer's. Alzheimer's covers a group of diseases. We take the stem cells from those people and we develop neurons that have Alzheimer's. Then we figure out we can see the normal firing patterns, and then we can feed them existing drugs, off-label drugs, natural products, and see if it's doing anything. Can we do it with a hundred drugs a day or a thousand drugs a day? High-speed robotics. It's literally that. A robot feeding this and taking video, and then the machine looks at the videos and tells us which one to use. You have to use pretty high-speed, high-powered microscopy to do it. It's compute intensive and expensive. But then you have to have computers analyze the pictures. You still have to have scientists in the process. Can we take those stem cells and the neurons that are firing wrong and computer model that in the same way we can make a virtual reality environment of this conference room? We make a model of how those behave, then make a model of how these drugs interact and simulate it. Or is it just too squishy? It's not definable in that way now. We can model it, but it doesn't cover a lot of cases. That's why it's better to have something like an organoid. We can build a digital model off of retroactive data. That would be interesting. If you did a thousand of these tests on those Alzheimer's neurons that are firing incorrectly that you made from the stem cells, you say, 'Okay, we put these thousand compounds into it. Here's what happened. Maybe we have an idea for the next 10,000 which ones to at least try next.' A little bit of a roadmap, a path. So that in a way is like a wind tunnel modeling. It's more efficient. So that's a CAD/CAM version of the system. But it's not the real cell. It's not the real system. You still actually have to put it out there and test it and see how it's really responding. But you do better experiments. You can do better experiments, and then you can actually see whether your digital model is matching up with the real-world model. You can further tune your digital model. This is a future that's incredible. They could figure out, 'Hey, we know this compound has some impact on Alzheimer's. We're now gonna get a bunch of Alzheimer's patients to be in a test after you test it on mice to make sure it's not toxic.' So far, there's been no successful drug. There is one drug coming to market that could help Alzheimer's from Biogen. Do you think it reverses it, stops it, alleviates it? What can we see in our lifetime? Back to that lifetime question. In our lifetime, which I'm gonna put at a couple of decades, what could we see? What could we experience? And then what would our kids experience? What would be the best-case scenario? Things you would hope to see happen. Cancer eliminated in our lifetime? Mitigated in our lifetime? Alzheimer's in our... I'm not a believer that immortality is a good thing. This is a philosophy question. We don't want to live forever. I think people being immortal is like a cancer cell. The reason I say that is then we run out of resources on the planet and the universe runs out of resources. Some people make bad decisions, as we know from the Google investment. Old people are a sense. We need a new set of humans to actually advance society with new processes, with new ideas. If people were accumulating wealth in the 200-year age range, can you imagine? We're already dealing with generational animosity, a generational gap where the old people are making decisions about social security or the planet that are terrible for young people. Now imagine we're 200 years divided. They may be holding on to philosophies and ideas that no longer apply. Racism, xenophobia. Part of society moving forward is not that the paradigm dies, it's the people who believe in the paradigm die. So you slow down the entire innovation of society. So that's a belief of mine. Coming back to cancer cells, I don't know if we'll ever stop cancer. Cancer has to do with mutation. Radiation creates mutation. There's radiation coming out of the ground. There's radiation coming out of you. There's going to be some. But the idea that you would know somebody in their 40s or 50s who died from it, that to me is what really bothers me. Kids getting cancer, dying early. Brutal. If someone has a long life that's healthy, gets to be a grandfather or grandmother if they want to, gets to be part of a full family, enjoys their life, that's what I'd love to contribute to, helping founders get there. Part of that is early detection of cancer. I'm focused on investing in that area. Early detection, catching stuff so you can do a 10% cure, right? Detection so you can cure people, not at the 90% stage where you're B-52 bombing them with chemo.

It wouldn't make a difference. For example, with MRI, if you do MRI imaging, you can see a lot of things that might look like tumors but they're not. And to payers, that becomes a very expensive proposition. So economics. The cost of MRI machines have to come down. The MRI service has to come down. MRIs need to be done outside of hospitals and major medical institutions. A major medical institution here wanted to charge me $9,500 for an MRI. Why? I went outside to a third party who did it for $900. Literally the same thing for $900. That's ridiculous. 10% of the cost.

This one in a hundred... I found this bizarre tumor inside of me that was big and I had no idea was there, coincidentally through taking a statin. The odds are that you wouldn't be here if you did the thing. It could have popped inside of me and I would have bled out. We wouldn't be here if they didn't find that. Probably not. I could have bled out and I would have died. My normal GP doctor called it a 'coincidentaloma.' That's what they call them when it gets detected that way. Coincidentaloma. That's your word of the day. Coincidentaloma. We didn't know about this but we happen to run into it. That could be the ultimate unlock. We might increase life expectancy for a year for everybody if we just found coincidentalomas. If one out of 10 people didn't die at 50, you're adding 25-29 years to the average across 30 people. If you save one out of 30 people with this, you would add one year to everybody's life. There's a whole bunch of methods with early detection. Then there's different types of therapy, like immunotherapy. It's huge and going to get bigger. What is that? Immunotherapy is teaching, training your immune system to beat cancer. A stronger immune system. But a lot of your immune system won't recognize those cancer cells. So you take the cancer cells out, you read the code on the outside of the cancer cell. You take some of your immune cells out, you program them to detect those kinds of cancer cells. You're like, 'Looking out for this.' You replicate those immune cells, put them back in your body, and then they go out and hunt those cancer cells. You basically take the army out of your body, you train them like, 'Here's Osama bin Laden. Go whack them.' You put them back in and say, 'Now you're Navy SEALs. You know what to kill.' This is called immunotherapy. It's already started. It's early. Is this the big unlock? It's already starting. There are people saved by it. When they say 'custom cancer treatments,' what they mean is this. Custom cancer treatments will also include sequencing someone's tumor. You sequence the DNA, you sequence the tumor, and then you know how to fight it better. You make a custom drug. And all this 20 years out? It's happening now. It's starting to happen now. So 10 years out, wide-scale deployment. Radiation and chemotherapy are also kind of weapons that you can use here. Very blunt, but they work. They are effective. But at what cost? Different types of chemo work for different types of cancer. Some doctors might pick the wrong chemo and kill you. Someone might pick a type of chemo that doesn't really help. This is part of the issue around patient education and doctor education. There are real problems in the healthcare system.

It's inevitable. There will be designer babies. It will start first with disease modification. Your baby's gonna be born or might not be born and will die. So we have to basically modify the DNA. We did that. Baby lives. Then it's gonna be like, 'Your baby might have a problem at age 30 because there's a long-term disease.' Okay, let's take care of that. We'll deal with that. Then, 'We can increase the performance of your baby's life so they're gonna run faster and think clearer, be taller.' That will take more time because we don't know what flipping bits in the DNA, flipping genes, is gonna happen. It's against the law in Western countries. It's against all ethical and moral standards. Let's think about that. We're back to Frankenstein. You create the helper, Frankenstein's monster.

Then Frankenstein's monster freaks out and attacks everyone in the village. Yeah, sharing inside Frankenstein's monster will get Korea, and the Frankenstein's monster might attack the village, right? So let's think about this. RNA, this technology, is extremely powerful. That's basically what we're looking at here. We could have a lot of pain and suffering and risk by playing with this technology, and there becomes now a moral ethical: should we be playing with this technology? Which is, by the way, the entire arc of the Alien series. And I don't know if you saw the movie Prometheus.

I think watch this movie this weekend, Prometheus, and let's talk about it. Like a good excuse for us to get back together. But Prometheus, I think, is a masterpiece where you're really starting to get into this concept of: should we be opening up this Pandora's box? Should we be flipping these switches? And to what ends? Because in this case, in the movie, it's a crazy billionaire who wants to live forever basically. But the movie is amazing. I'm thinking, man, science fiction for me, this was like the evolution of the Aliens series. Like, how did the Aliens get created? Well, they created engineers who created the engineers, or the engineers created humans. Okay, you know, why? And you start to figure out: has the term 'should we do this' ever stop the creation of anything? The nuclear bomb? No. Machine gun? No. Napalm? No. Biological weapons? Maybe the deployment of them, but the use of them. I mean, I would say the Russians are accused of using specific biologic weapons on specific people in the UK. Pinpoint weapons. They did them to murder people in the most horrific way possible. They haven't been widespread weapons. It's interesting. So they've all been made. Then the question is: we've contained them. We have nuclear weapons to whatever 10 people or less. We've contained and made treaties about the biological. So it's gonna be made. The questions: nuclear weapons are probably not a really good weapon to use because they kind of screw up the planet for everyone, right? Mutually assured destruction. Which I think is why the biological weapons, everybody was kind of like, 'Yeah, I think we've watched people die from these.' And we can't control them. So therefore, unless he's off the team, unless right, you program the weapon to target certain kinds of people. And now we're really getting into some... well, it's our territory, or we are getting into dark territory. But like, 23andMe and Ancestry can tell you where you come from. You could create a weapon that kills anybody who's not from left Korean, or is North Korean. Like literally, some maniac leader could say anybody from North Korea or from the Middle East gets to live. Like Osama bin Laden with this technology could say anybody of Muslim descent from these areas doesn't get the flip switch flipped, and everybody else does. My lord. Science fiction movie that has that as the premise, I don't know. But I'm just going off of what exists as facts in these specific areas. You could literally create a weapon that used a 23andMe database that says anybody of this origin dies. Oh my lord. I just never... I mean, it's nice if we know now in 23andMe what your ancestry is based off of your genes, and there's a bio weapon that can target people. Oh my god. Then why you can you tell it that it switches on and off based on this DNA pattern that exists in the person.

I absolutely do not. Does it make sense to me? No. No thanks. I believe that people's bodies and brain and mind are kind of all the same. There's something about consciousness that is... even if you could download everything, what would the point be? Would you be able to have sentient consciousness running in a computer? When I always heard that about that was weird. What about this blood transfer stuff? Transferring... by the way, there's a recent paper that came out that tries to pinpoint consciousness to brain structures, probably one that's called the thalamus, and another one in the frontal cortex. They're really trying to figure out where consciousness exists. And then just even bringing up the big C-word is really hard because how do you define what consciousness is? Is it us having this conversation? Is it us being able to interpret the world? Where does it start and end, this consciousness? And per species, what is consciousness? I mean, is this tree conscious? Plants out here conscious? And how do you define their consciousness? Consciousness is probably defined by what creates survival for that species.

So the consciousness of that tree is what makes it grow and strong and not die. Because probably if something didn't need to live, it probably wouldn't need consciousness, really. And that's the evolutionary purpose of consciousness is something that people can't seem to figure out. Like why do we need to be conscious? I mean, what consciousness? Where does the consciousness level of a shark or of a piece of bacteria, even better a virus? Coronavirus? Well, it's to replicate itself, its genetic code, wrapped with a cellular wall. And for some reason it got turned on for us. Bigger brains, more consciousness equals longer chance of survival, greater probability of survival. Right? A probability is why we from the baboons or apes or chimpanzees we came from them. Keep increasing the brain size increases chance of survival. Maybe things that didn't have consciousness just didn't reproduce, or just were food for the other ones. That's more likely scenario. You're not conscious, you're just food. You know, you're a cow and you don't have a problem with being... and people don't have an ethical problem with eating things that don't have consciousness. Carrots are fine. An egg, it's fine. What you start getting to pigs or horses or dogs, we get really squeamish on the consciousness. That is interesting when you think about it. People are really appalled at people who would eat a dog or a dolphin or a whale or anything more conscious and less conscious. Go for it. Which, you know, like Impossible Burgers are not... our laws of all, they're no longer implausible burgers. It is interesting. I've been watching some of these slurry companies that are making like fish, and I think in our lifetime we're gonna have sushi that's made in a lab that's better than any sushi from the ocean.

It's Wild Type.

They're doing cell-based fish. Salmon. So we've already developed product and had tastings.

I think we actually had a tasting here with salsa, with sauce and without. Because I think the without sauce is the test because it is the toast. I had the Beyond Meat stuff, the chicken, and all that stuff. And when you eat it without sauce, you're like, 'Mmm.' When you eat it with sauce, you're like, 'Oh, the sauce.' You know, like, 'Oh, this is just chicken, I'm fine.' That's why I think the Impossible Burger really works as opposed to just a ground beef. Could you get the lettuce, tomato, the cheese, the onions, the whole package tastes like a burger. You don't have this big of an uncanny valley to cross. Tell me about what it how it tastes. Sauce, no sauce, sauce on side. And sauce, I don't think it's ready for the vast populace yet. Nor are we shipping it yet because we need to get it to a price point that's retail.

Salmon in a fish farm is really unhealthy to eat because it's loaded with antibiotics. Because they need to get the fish to grow faster. Antibiotics make animals grow faster, right? And they're living in such close quarters, there's so much fecal material around, they literally dump antibiotics into the tank. Or they're on this side of the bay or in the side of the ocean, the fish are just swimming around in a circle. They have high mortality, right? Plus they're drinking water from the sea. And no one has any interest to clean up the sea. This is a crazy thing. They have interest to clean up the land. Countries have an interest to clean up the land to make beef and chicken actually cleaner. No one has an interest to clean up the ocean. This is just full of heavy metals, plastic, microplastics. So we have a collapsing fish sea organism based sort of source of food, which is a major problem.

Make you print them as textiles almost. Really, yeah, because they're cells, right? So you have to print them as a textile, like a pattern. So they grow the cells grow into a textile kind of basically. Well, it's very interesting because when we had the tasting, we have two people who were vegans here. Would they eat it? They had... they wouldn't eat it even though they knew it was not a fish, so it wasn't the ethical no of killing a fish. They couldn't figure out if it was a fish or not. So no man's land. It was no man's land. So it was like, 'Is this fish? Does this really have consciousness?' Going back to where we're talking about cells do not have consciousness. Now well, now we go back to where does... we go back to actually a very highly political thing from before: Roe versus Wade. So actually I can apply this joke to this. Roe versus Wade, got it. So is it... yeah, yeah, yeah. So wait, where do these things have consciousness? You don't have... come on, it's... I'm not disagreeing. So obvious is not conscious. There's no brain stem, there's no brain. Consciousness obviously resides somewhere in the brainstem in the brain. There is no brain, it's just the fleshy part of the fish. Okay, so but this will come up right. And I think it's Westworld's whole reason for being on HBO. Thank you. It's literally like, can you murder Dolores and does it count as murder? Yes, that's a different way of looking at it. No, I mean the central premise is if you're torturing or murdering in a simulated environment with printed 3D printed entities with no consciousness, did you murder somebody? Yes, well you committed the act of murder but you didn't murder somebody because they're not a somebody. So you know, this cell-based meat, Memphis Meats, is doing it on the meat side. We're not involved with Memphis Meats. So if you're listening, if you eat an Impossible Burger or even the ones that don't come from plants, I think you're in the clear. 3D printed steak, it's gonna be amazing. They're gonna make steak and fish that doesn't exist in the world right now. Like think about a week... a lot of the great cuts of meat and fish, I don't know about fish but I know for meat, came from hybridization and crossbreeding. They do all this crossbreeding to make things like Wagyu. And how they nurtured them. We're gonna be able to print something like a foie gras or a toro or a Wagyu or a Kobe beef that is cruelty free, that didn't require the murdering of an animal, the slaughter of mass slaughter of animals, and that tastes better. Wagyu will probably take a while, but I wonder it might not because it's more... sorry, yeah, it might actually be easier.

Yes, but there's a whole bunch of factors, right? It's just not mouthfeel, but there's also like the springiness is when you pull your tooth out then you bite out, how does it... you know, what's the spring load out? That is crazy. You know, what's the temperature throughout the bite? How does it retain heat? There's a huge amount of factors that the company tests for. And then as you scale up production on different sized bioreactors, you have to be testing how all these different factors work. It's amazing we can 3D print like valves for hearts now. We could 3D print a lot of interesting things. Not a brain, that's super complex. Like the heart is just like a muscle, it's really easy to 3D print. Complex fairly well, it's on the easier side. Lungs are hard because it's branching. Brain is not doable. Eyes, I don't know. But there's a guy for eyes. I saw Blade Runner where they go get the eyes. 'If you could see what I've seen with your eyes.' Looks like one of the best lines in Blade Runner ever. 'If only you could see what I've seen with your eyes.' Because it's the guy who... he's like, 'Yeah, thanks for the eyes.' All right, George, with good glasses. He had good glasses, he did.

Thanks for coughing. It's about... I was clearing my throat, not a cough. It's probably two months out from the middle of December. Got it. So we're two months out. The news started to percolate up at the end of January. So it's a 30 day incubation period? Is that right? Two to four weeks? No, it's really more like a week. But the news started percolating out about the end of January. We had 10,000 cases at the end of January. Yesterday we had 65,000. So it's six and a half times in two weeks. So this thing is 10x in three weeks or something. It's crazy. It's hard to model. My modeling was based on New England Journal of Medicine. They modeled about doubling every seven point four days. And that depends on factors like the density of the city and what precautions people are taking. Are people still shaking hands and taking flights, or are people Florentine? That's exactly right. There's a huge amount of factors like that. And by the way, authoritarian regimes are perfect for managing this. Shut the border, shut the border, take people in quarantine and isolation. Italy... I'm Kim Jong Un shot somebody on sight. I mean, this is a rumor because we don't know exact information, but supposedly somebody came back from China, he put everybody on a 30 day quarantine. Again, dictators really are effective at building roads and quarantine. Young people have an advanced police state with cameras everywhere. Perfect. See people's temperature. If you cough too much on camera, we'll send somebody out. And now they're sending drones out. Did you see that? They're sending drones out to read the heat signatures on people. So the drone's gonna follow you. And then supposedly, who knows because it's North Korea, but Kim Jong Un reportedly some high-level person came back from China and then went to a public bath like two weeks after. Like, 'I don't have burners, I can go to the public baths.' Shot him on sight. Shot on sight for doing that. This could... if this keeps scaling up, more of this could occur. And it's gonna lead to remote everything. Tele-everything is going to be the big investment area. Telemedicine, yes please. Stop shaking. Telehealth, tele-education, tele-ramen. Literally, I'm putting the ramen on your doorstep. Come out, I'll get it. Boom. So literally they were showing people getting groceries in Wuhan, the city where it started. They're showing people in Wuhan getting food. They were walking up to a store, a person was putting the bag of food on a stick and putting the stick out the window and handing to somebody. To me, this is nirvana. The world I want to live in. Please, by all means, stay ten feet away from me. I'm a germaphobe. I'm constantly using... you know why I wash my hands ten times a day. I'll shake anybody's hand for the last five years. I've had a sick kid. Everybody in the office laughs because people come in, they're like, 'Oh my god.' I'm like, 'Don't shake my hand. I said kid.' Well, this girl like, 'Do you really have a sick kid?' Because the people who work for me see me do that 365 days a year. People come into the meetings. This could lead to a new market of what I'm calling fashionable hazmat suits. Love it. Because if this becomes a huge thing, and I don't think coronavirus will go away. It's now a virus that's probably here to stay.

Who knows? You think this is... what's unique about this virus? Is there something very unique about it? It's faster, it's stronger. Well, it doesn't burn itself out faster than it's transmissible. Like Ebola, people would die faster than you can transmit it. So the ones that are super high fatality mortality, they tend not to kill people really fast before they can transmit it. Got it. So if you're close to them, you die right. But the good news is you're dead, you can't go on a plane or to a restaurant or a public bath. So you put all the people who are probably gonna die in this one area and they die. This one, you don't die. This one, you don't know. The transmission time could be... it looks like it's shorter than the symptom emergence time. So it transmits quickly but you don't know you have it till it's too late. So we could be sitting here in San Francisco and there could be a hundred people. In fact, well-known to... we could be sitting here and I have it and all three of you now have it. Or I've transmitted it to you right. And for this table has coronavirus on it, which lives for five days on a surface on average. Is that what they say now? Coronas five days? Oh, no. I mean, it's not uncommon for coronaviruses. Coronaviruses includes a class which includes the common cold. On surfaces, on surfaces. Did you see the video of people blowing some kind of spray like it was the parasite? What are they doing? They're trying to disinfect surfaces. That works well. Sure, you can kill it with alcohol and cotton. So alcohol, Clorox, whatever. You have to tear apart the external cellular wall. So alcohol and bleach will kill it. So UV light, really? You'll want to disinfect your phone for sure. That seems to be... phones are huge. Killed bones are never found. Your smartphones are big concentrators of nasty germs and viruses. I had a friend who was really obnoxious. He would lick people's phones. I was saying, 'Are you trying to kill yourself, you freaking maniac?' Like he do it as a joke. He'd look at a carrier phone and then he'd lick it and hand it back to you. Like, 'You crazy.' But I would taste like... so what? What do you think the outcome here is for coronavirus?

Well, are we doing... you know, if you look back at this, 1918 Spanish flu killed a lot of people. And on earth, this is on that level potentially. It could be. The fatality rate of Spanish flu was 2 to 3 percent, which this has. That's an extraordinary fatality rate. Correct. It's very hot, it's high. I mean, SARS was like 10 percent, but you die quick, right? And you get symptoms quick. So it was different than this one. But you know, and people thought the swine flu was gonna kill a ton of people, but its fatality rate was 0.02 percent. But a lot of people got it. A billion people got swine flu. So the number of people who died on a relative basis was high, but it was declared by WHO as a pandemic. People freaked out. This was 2009. I remember. That was like, 'Oh my god, it's when they shut their border.' Like, the pan knows what they're doing. They're just like, 'I'm sorry, something happening, nobody can come here.' And this feeds what you know, it's the new terrorism. I call it terrorism by microscopic insurgents. Right? We had this is the new terrorism. It is terrorizing. People are freaked out right now. You can't see it, you can't stop it. You can't put viruses through X-ray machines. You can't stop them at the border and say, 'Hey, are you...' I'm gonna profile you. I didn't have this thing where I remember when I went to China or Hong Kong last time, they stopped me and I just blew past it. I didn't realize they were doing this, but you had to take your hat and your sunglasses off and stand for a second at this... check your temperature. And they were shaking temperature. I just blew past because I had my ear pods in and like three guys grabbed me like physically grabbed me like, 'Whoa.' And I was like, 'What's up?' Ends always hood. We've seen what Japan or Hong Kong and they would... that's what they were testing for. I know but Japan anyway. See, there's Japan or Hong Kong where they did this and I took it off. You gotta take your side 'cause I put my hat and sunglasses on. So the other kind of issue I'm worried... so no one knows whether this is going to go from the 65,000 cases now to millions. The scary cases... let's suppose it goes to... I mean, the biggest issue is about 18 percent of the cases look like they're severe to critical. When you get coronavirus, here in the US we've got 100,000 critical care beds and 500,000 acute. And most of them are full now. So let's suppose you have 2.5 million cases in the US. That would be crazy. And if you have, let's suppose you take the 3 percent that are considered severe in the cases so far. So 3 percent of 2.5 million is going to be 75,000. So we don't have the beds. That's a necessary problem. So we're gonna have to reconfigure. And that's for severe cases, that's not just people coming in death's door. And those you don't have that. You can go to severe. And this was happening in China from those videos we see of them walking through the hospital and three people died in like five minutes in that video. The fatality rate in Wuhan is like closer to 10 percent. And they don't know if that's true or not because they don't know the denominator. Is that right? They don't know how many people have it. So that's the moving from the people being admitted it's closer to 10 percent. As we wrap up here, what's the source of all this stuff? I heard people say the wet markets are this big problem. And I typed in 'wet markets' and I started looking at and I was like, 'Oh my god.' You know, people eating bats and funky creatures that were alive and they're cutting them up in front of people because they want proof that what they're eating is what they paid for. Which is I guess understandable in a place where there's a lot of historical starvation. Well, there's that. And then I think because there's so many people doing knock-offs, you don't like... there's a lot of counterfeiting of bags or whatever. So I think amongst Chinese people, they're like, 'I don't want to get ripped off. I'm buying a bat or a toad or a shark fin that's been frozen for two years and I don't know if it's actually a shark fin. It could be something else. It could give me a dolphin fin or whatever. So I want to see you cut the fin off a live shark or I want you to cut the whatever out of the bat.' And they have these wet markets where there's just... you know, they call them wet markets. I actually don't know why they come wet markets. I'm assuming because it's not that they're in water. No, it's the blood. So when you're... what I found them, the floors are covered in blood. So people are walking through... I'm just saying, wow, people walking through blood and then walking into their homes and walking down the street and going on buses and public transportation with blood on their shoes. They gotta ban those. That's step one. Because this is now twice that this has come from the wet markets. I think it's a long term cultural issue. I don't know, we'll see how that gets dealt with. I mean, Chinese authorities are pretty severe in dealing with things that threaten the long-term stability of China. Tiananmen Square and a million Muslims behind we educated right now. Like, they basically take a severe deep dive into whatever is... they're not copacetic. I think the Chinese people would also opt out of this concept if they saw what coronavirus. They're gonna just be like, 'I don't want to ever go to wet markets.' And then wet markets won't exist because people will not go to them. So the question I ask myself is: is the cost of being wrong and not acting higher or lower than the cost of being right? So if you wait to act because you think you'll terrorize people with some false notice, oh you inconvenience them, and just terrorize people right because 'Oh my god, I might have coronavirus, I got a run to the...' The cost of being cautious is you cost an inconvenience to everybody. You cost society billions of dollars in lost travel and tickets and conference. The cost of being wrong is an exponential rise in many people die that could, overload society. And of course, there's people know us at all. SARS, avian flu that didn't really kill a lot of people because we overreacted. There's no memory now of the 1918 flu. There's no memory of the plague in China that in 1855 that killed people. There's no memory of that plague that went from China that wound up in San Francisco, the San Francisco plague of 1902-1904. And people don't even... it killed 200 people here. But the governor of California suppressed the news. The San Francisco Health Commission without notice to anyone, San Francisco quarantined all of Chinatown and all Chinese people in Chinatown, but not anyone who is non-Chinese. That's crazy. And people don't even remember this. They just think, 'Oh, we're okay now. Everything's modern. We have modern health systems.' Wrong. Flu kills 50,000 people. The flu kills 0.07 percent of people, not 2 percent. And the people it kills are sometimes people at the end of their life with a weak immune system, as we talked about earlier. And that's not gonna kill a healthy person necessarily. And people don't even remember the dot-com bust to go full circle. Take a conversation like we literally have metric apples. Remember the dot-com bust? How the hell are we can have anybody remembering the great San Francisco pandemic from 1902? I was not aware of that. It's... there was two or three hundred cases because of extreme quarantine. It emerged that a very unhealthy area of San Francisco got it. I'll let my mind wander then. You know, we have those now. Gotcha. I'm thinking bath houses, brothels, or otherwise places where people are... transmitting. I mean, it is. When you think about it, people have such short-term memories. And people weren't around. And there's denial. People don't want to... people are terrified by this. But there isn't proof yet that this will happen now. But it is inevitable that this will happen in our lifetime unless we have like vaccinations for everything, which we can't. They mutate too fast. And global... this is the thing. When you have a global society and you have open borders and you have flights going everywhere, it's great for society. We all get to know each other, get to see the world. The problem is we, the humans, were isolated and they didn't have containers that we put 300 on from all diverse backgrounds and they shipped them all over the planet after putting them in a plane for 6 to 15 hours to stew and bake in their own bacteria and viruses. This is a new phenomenon. Global aircraft transportation is going to cause these things to go supernova. And we haven't even thought it through. It's the same thing with Facebook when you think about it. We never thought what having a billion people on a platform would do. Now we've got them and it breaks the Constitution of the United States and democracy. So that, quote-unquote, viral right. So now it's the other thing. This is now going viral and we might use social media to spread viral the news about a real virus. Right? And then we have a communication issue with what is real because... manipulate to naming elections. So I think if this becomes a big deal, it could affect the election if people start freaking out. People say close the borders, I'm getting guns and bullets.

Yes, it's nonzero. It's nonzero. I mean, what about that? I literally just was talking to my wife this past week and I always keep two or three weeks of food in the house, much to the chagrin of my wife. She's like, 'Why do we have two cases of canned ravioli and soup?' I'm like, 'If there's an earthquake, you're gonna really enjoy those raviolis.' Like, dress me. And there's a reason for this. The prepper and all of us will come out. I think it's wise. I think that there's a reason why smart rich people are buying land in Montana, Wyoming, and New Zealand. I'm not that crazy, but I mean this could wreck society. If you are dying, I think it would could change it. We certainly could have our fashionable hazmat suits, which could actually be an interesting new platform. Why are we not just eliminating it? This is what leadership should be. The people who are in positions of power and communication need to look into cameras and say, 'Stop shaking everybody's hands. Fist bumps only. That's it. Step one. Stop shaking hands.' I go through conferences for the last ten years holding a cup of coffee and holding my phone in the other hand. Do you know why? Because when somebody comes, I was... I just want to shake your head. I go, 'Oh, I'm sorry. Great to meet you. Tell me about what you're working on.' And I just put two things in each hand so I don't have to be rude. But this barbaric concept of shaking hands. When you go to Japan, they bow. Shaking hands, what percentage of diseases are we transferring in that? And I tell people, shaking hands as a long-term cultural thing here in the US, we have to stop it here. It has to stop now. She can get North shaking hands started yet. Don't have a gun in your hand. It was to see if you had a weapon. I don't know when that started. Was that your up or something? Something a fact-checker sounds like you're up or something like you have a sword or a pistol on. Show me your hands. Might even be medieval. Probably it's still medieval. By the way, I'll shake hands like it and then people want to shake my hand at a party or something and I'm like, 'By the way, you know this isn't... it's a tech conference. So I've literally had a hundred people come up and shake my hand. Do you want to be the hundred first? It's a petri dish. And by all means, if you want to, we can go there, but it's not in your best interest.' So I just... and it's my advice to everybody. You could just wear a shirt that says, 'I've been coughing lately.' I call it the corona bump. I call it the corona bump. Everybody, let's just learn a lesson now. Fist bump. Very hard to transmit it, I think, in a fist bump. So a fashionable hazmat suit would be the next platform. I think the N95 with a... N95 masks or something. Those are... I've seen very fashionable ones that people make. Very fashionable ones in... I got pitch. Don't start making fashionable ones for Shanghai and Beijing because of air quality. And I think that's gonna become a thing. And I'm rethinking... you just have to put them on properly so there's no air leaks. If there's air leaks, you have to fit them properly, which is what people do in hospitals. They have them fit there. I have a suction test of some kind. And that doesn't exist in the real world. But I'm rethinking my travel schedule now. And I just... I already started to. My sis and I said, 'You know what? I'm only gonna fly private now.' I just told her I was like, 'You know, I was trying to be a just... I'm gonna use my plane more often.' I don't have a plane. I'm joking. Well, on my Southwest flight yesterday, yes, there was plenty of people with masks. Plenty. Ten three three. But it was like half... there was a half full plane. A Southwest flight that was half full from Burbank to San Jose. Not usually packed. That's usually wait-listed. I take that flight. I think that this is... I get speaking gigs. I got some speaking gigs in Asia. I was gonna do Japan, Singapore, and Manila, and it's in May or June. And I said, 'Okay, let's put it on the calendar, fine, but we have to see what's happening.' Did you see Mobile World Congress? Isn't that like a hundred thousand people or 50,000 people? It's a giant cocktail. To cancel that, that's gotta be tens of millions of dollars in impact for the sponsors and tickets alone, even if they rescheduled for next year. So this is real. Short trade shows, short airlines, short anything with physical gatherings. Long tele-everything. Somewhere Parker Lucky is like, 'I told you guys you should...' I can't make fun of Parker Lucky 'cause he's pissed off him. He won't come on the podcast because somebody was ripping him for some reason on the podcast on the news roundtable. But I want to have Parker Lucky on the podcast. He's doing those digital offenses too. Like, I think that's a good idea rather than a regular fence. If you wanted to know how many people going across the border, why would you put a wall? Why not just put towers with cameras and sensors? You need ground-penetrating radar as well because they dig underneath. Tunneling. But I mean, if you actually knew how many people growing across the board, we have a real logical discussion about this.