Max Chafkin on the Social Good of Tech Companies (Podcast)

That book was called Conspiracy. This book is really less focused on any single event and more of a deep dive into uh the life and times of Peter Teel. He's a fascinating character and the book is really quite quite interesting. I found the book intriguing, and I found my conversation with Max fascinating, and I think you will also so, with no further ado, my interview with Business Weeks Max Chafkin. This is Masters in Business with Very Results on Bloomberg Radio. My special guest this week is

Max Chafkin. He is a features editor and tech reporter at Bloomberg Business Week. His work has also appeared in such August magazines as Fast Company, vamany Fair, The New York Times, magazine. He is the author of a fascinating new book, The Contrarian Peter Teel and Silicon Valley's Pursuit of Power. Normally here I say, guest, welcome to Bloomberg, but since you work here, I'm gonna say Max, welcome to Masters in Business. Thanks for having me, Barry, it's

a pleasure to be here. Uh. And I have to say, this is a fascinating topic about a really interesting, eclectic person that even though there's been a decent amount written about him before this, there wasn't as much of a deep dive into his life. So so we're gonna get to that in a few minutes. Before we do, let's just start with your background. How did you get into journalism? What attracted you to this? Yeah, so my first job in journalism was at a magazine called Ink, which is

a short business magazine. You know, I, I don't know. I was interested in Uh. I was interested in getting a job in journalism. And this is going back sixteen seventeen years ago. Um, and my father had worked in business his whole career. I've sort of been interested in in business and and any idea that like the store, the sort of business stories have something to say about,

you know, the real world. Um. You know, I read Moneyball and you know, uh and the Michael Lewis book about the the the Oakland A's and and kind of the sort of business story behind the Oakland is being good at baseball. Anyway, I got this job at INC Magazine, small business magazine, and that was kind of how I got into it. And I the way I got into covering tech was, you know, back then tech was kind of this side show um and and I was like

the young reporter. Uh So they kind of just let me like do whatever I wanted in terms of of of covering the tech companies because first of all, the basic view was that it wasn't very important and that you know. So so anyway, I got to encounter a lot of these folks, you know, including um teal you know, relatively early uh and got to kind of see watch this.

You know. Obviously it's not the entire um. I didn't get to witness the entire evolution of silicon valid, but I got to see a really important part, you know, going from from that time two thousand five to today, where you know, the tech industry went from being kind of an economic side show where you know, back at my job at INC. You know, I had this more serve of senior writers telling me to you know, these companies are all stupid and um and they're all you know,

they're losing money. And I went from being this kind of important but but really a side show to being you know, i'd argue, you know, the most important you know, economic engine in the United States, maybe even the world, um, you know, really important, maybe the most important cultural center, and I think increasingly, um you know, really the important

political uh center of gravity. So it's it's amazing that people who witnessed the nineteen nineties so easily drew the wrong lesson, which is oh, a lot of these worthless the list companies have no revenue, no profits, they're worthless. But you can always pick those out. You have to look at the broader trend. And clearly in the nineties

this isn't hindsight. Technology was changing everything. You didn't have to be a genius to figure that out, although you could see how people might miss it because of so many of the negative stories. Yeah. Yeah, And it's funny that the people who kind of who who thrived in the in that early period, including Peter Thiel, but also

many others. You know, we're the we're the kind of contrarians who set who are arguing back then, actually, uh, the dot com boom was great, and we built all this infrastructure and and you heard these arguments back then

that that we're mostly um dismissed. But but yeah, I mean now in retrospect, right, it looks like, um, yeah, they basically had it right, but then a bunch of there was a bunch of like sort of dumb money that that that got dumped into the industry and and kind of the party they pick up the drinks for everybody else. Listen. I've talked about this with other technologists and vcs. Before Global crossing and Metromedia, fiber and all

that stuff that blew up. It got brought out of bankruptcy for pennies on the dollar, and that's how you ended up with the YouTube's and netflix is and uh facebooks of the world. But for that it wouldn't happen. So we're in a total agreement on technology. Let me ask you, do you recall the first time you met Peter tile tell us a little bit. So I was trying to think about this and I think it was, Uh, it's either two thousand seven or two thousand eight. So

I was writing a story about Elon Musk. You know, Elon Musk at the time was kind of famous, but not that famous. He had started a company UM during the dot com boom that had um that had been sold for like three million bucks. He had been he was like one of the early kind of like dot Colm kids, and that's when he first encountered Teal. They met one another at PayPal and and they had this

kind of very difficult kind of the relationship. They're like friend of these or something, and we can get into that, but any case, I was doing a story about musk Um who was distinguishing himself at the time because he was involved in company Tesla that you know, nobody was taking seriously because they were trying to make an electric sports car, which kind of seems like they were taking these um I'm trying to remember with the cars, right,

They're taking these Lotus Alon mules, pulling out all the engines, putting in batteries and laptop batteries, and you know, nobody thought they were a serious point. Yeah, it was a hobbyist project essentially that he was trying to turn into something much bigger. And he also had this crazy rocket thing and and and that's when I talked to Teal

I for the first time. Was just like a very quick interview about you know, what's up with this guy Elon musk uh and um and and I counted him, I guess basically a handful of times, you know, in the years that follows. The funny thing about him, So most people in Silicon Valley know who Peter Teal is. But I think most Americans and even a lot of people like who are who are involved in business like are not super aware of him because he was this

like behind the scenes player. He was not not the front man, not the guy he only ran he he was the CEO of PayPal. But it was a pretty short tenure, just a couple of years. They got booked by eBay pretty early on, and he left like the day that um, you know, the day that Meg Whitman, you know, took the keys, uh, Teal was out the door and um. And so he had this kind of behind the scenes thing where where he was sort of secretly,

you know, this really influential guy. You know, there's this sense in Silicon Valley especially you know in that period from like two thousand five to sixteen where you know kind of you know the game, you know, six Degrees of Kevin Bacon or something. But like every startup, one way or another pretty quickly comes back to Teal. And the way it came back to him was through this thing called the PayPal Mafia, which probably a lot of people have heard of, but I'll just summarize real quick.

It was basically just these this gang of folks who had been involved in the early years of PayPal. They were all sort of working together um and making investments early on, including in um Facebook, but also you know LinkedIn the Reid Hoffman was Red Hoffman, Ela mus Peter Teal, who else was in the PayPal mass So the the

YouTube founders are are members of the PayPal mafia. You also had a couple of vcs were not super well known, but a pretty important one is Keith R. Boy, who's been involved in you know, some of Jack Dorsey's Square, Jack Dorsey's company were Boy I think was was an executive there and as you know, has kind of been in the fintech world, uh in a big way over the last decade. Uh David Sacks another UM kind of well known venture capitalist. UM. You had who am I forgetting? Oh,

the founders of yelp. Uh. So it's like, uh Max Levchin who started a firm which is this, you know, another kind of fintech thing that I think they went public within the last year. She had these guys who were all UM, really successful, really smart. UM. We're very much, very similar, kind of a lot of ideological enlignment. And

there there are some exceptions. You know, Teal and Musk disagree with each other and a lot of things, but for the most part, UM, these guys are really into you know, the future and and and sort of the possibilities that are created by technology. Many of them very conservative. You know, Teal comes out of this kind of politically activist background. A lot of the early PayPal mafia guys. UM worked for this newspaper that that Peter Teel started

at Stanford, the Stanford Review. UM. So it's this kind of ideological venture capital network where they're investing each other's companies. You have UM employees who bounced from you know, one company to the next to the next. If you want to like make your career in silicon Valley. You know, one way to do it, it's not the only way is to kind of get in with this with this group of people. Tell tell us about I love this phrase, the cult of disruption. So that's kind of the cool thing.

What was attractive to me about, you know, writing about Teal and about the book, is that tel his influence. Of course, he has the money, the kind of conventional he he was an investor in the first outside investor in Facebook, co founder palanteer Co, you know, co founder

PayPal um. But then there's this ideological thing where where Teal is kind of different from a lot of these other guys, and that he had a very clear sort of idea and that ability to articulate, um, you know, a vision for technology and and for for politics, and and that idea, which is probably best you know, kind of laid out in Teal's book zero to one, but which you can find you know, on YouTube videos and things like that, is more or less that technology companies

are you know, the best hope for the future. Um. They are. There are the things they're gonna make the future happen. They're going to save the world. Um. And that the way that technology companies can thrive or are will will do best is if they try to get you know, basically as big as they can, as fast as they can, and if they are constantly trying to overturn norms and and in other words, now, in this view, right, um, it's really important to to sort of break with the herd.

And so it's not just that if you're a startup it's good to sort of break the rules. It's it's okay to break the rules. That's that's not what this says. What Teal thinks is that breaking the rules and kind of changing um norms, changing perceptions even yeah, like even getting into a little bit of trouble is a social good.

And that's kind of how progress happens. And we see that with Facebook, right the Facebook model motto was you know, move fast and break things, right like the idea of disruption. We normally, I think, conventionally have thought of disruption as being like, you know, bad thing you don't you get,

the thing you yell your kids at for um. But but but Teel kind of rebranded it as as a as a social good, as something to be proud of, and kind of folds it gets folded into this sort of imperial capitalism, which again I think we see, you know, most clearly with Facebook, where the company just is this gigantic company swallowing competitors trying to get huge, you know, getting enormous and and um, and then you know, attempting

to just sort of dominate. And so that view of technology as both rule breaking and kind of monopolistic that comes from from Peter Teel. And of course it's not a totally uh, you know, it's a controversial vision, right because like I'm not sure we want to have these giant tech monopolies or or you know, obviously, once once companies like Facebook get as big as they are, um, then that that propensity for rule breaking um becomes you know,

a potential problem. So he comes out of the PayPal mafia having sold the company, uh to eBay, which eventually gets run by Meg Whitman. I don't remember if she was CEO doing the purchase. Was it was she was, yeah, yeah, and they had a rivalry and yeah, tell us about because you would think she like Meg Whitman. Meg Whitman is not exactly the sort of person you think is prickly and gonna be getting two spats with people. How did this become some sort of uh A challenged relationship.

So with Teal, right, there's always a kind of a business dimension and an ideological dimension. Business dimension. Um. PayPal was growing quickly and in some ways is was a threat to eBay because like, if all the transactions are happening in PayPal, that that's gonna you know, could conceivably hurt eBay in the in the long run. Um. But but of course eBay has a lot of power over PayPal because at any point eBay could just try to

shut it off. eBay had a competing payment service at the time, So there's this kind of tension that you often see in in in these tech businesses where you have a platform and then a company that's kind of ascendant within that platform. So that was going on. But but but of course there's a there's another dimension, which is that Whitman was kind of a conventional business figure. Right she I can't remember if she I think she has an m b A. Her her big um success

before that was at Hasbro. She's not a technologist, right, She's somebody who's kind of like a normal business as Teal and his his peer sought, you know, kind of a square, and they saw themselves as being you know, the rebels. You know, they had been they had been involved in this conservative newspaper at Stanford was all about kind of sticking it in the eye of the establishment. And and women of course is not a politically you know, not that far away you know from Teal, she's kind

of center right or whatever. Um. But but you know they are just but they just totally different sort of personality, generational viewpoints. They want you know, Teal and and his and his crew like they're really invested in the idea of kind of overturning you know, everything about you know, Meg Whitman's world, the world of m b A's and you know kind of normal Wall Street finance and um

and you know, kind of normal business practice. They they thought they were you know, uh, you know, getting rid of all that or revolutionizing all of that. And the fact that they you know, they kind of succeeded, right they went public eventually they did sell themselves to eBay.

But but but that that success us um, you know, then becomes one of the founding myths of Silicon Valley, where you see that same attitude, you know, we are different from those guys on the East Coast that you know nowadays they talk about the paper belt, right, the East Coast establishment, the media, the finance world. That's the paper belt. We're getting like the rust belt, we're getting

rid of them. Where this new thing and that becomes kind of the one of as I said, like you know, the founding myth, the founding ideology that that kind of helps propel Facebook and Uber and many of these other companies, uh to to their amazing height. So we're gonna get to Facebook. I want to stick to this sort of rivalry he has not only with Meg Whitman, but with a fame VC Mike Moritz of Sequoia Capital. He's a California VC guy. He's not part of the rust belt.

Paper belt. Why did they butt heads? Yeah, well so more it's at the time is and was you know, one of the most famous legend legend right. You know, he had a close relationship with Steve Jobs when he was a journalist. I had written this book about Apple and then had gone on to become an investor invested in Google. Um more, it's uh so there were there actually there were so many payments companies back then. Um And that's that's a thing that we've sort of all

kind of forgot. Right. You just think PayPal, Wow, what a what a revolutionary idea, But it wasn't really a revolutionary idea. There were, you know, like dozens of these things. Every every major tech firm had a payments thing, every bank had a payments thing. And there are a bunch of independent startups, one of which was started by Elon Musk, which called x dot com, and Mike Morritz was his investor.

More it's um had and I think has a kind of a more conventional view of what a startup is and what a Silicon Valley founder is supposed to be like than than Peter Teal. And so part of what happened is that, you know, the two companies merged, Musk became CEO and Teal basically got bounced out. And six months after that, Musk goes on his honeymoon. UM and while he's away, uh Teal and some of the his friends who who had who had started the company with

him basically engineer a coup. They marched to Mike Moritz's office on Sandhill Road and they present him with letters of resignation for you know, most of the executive team and say, you know you gotta you gotta fire everybody and replace. You gotta fire sorry, you gotta fire Elon musk Um and bring in Peter or we're all gonna walk and more. It's Um agrees because basically had no choice. But of course that creates some some some I think bad blood, and then there's there's like a further h

amount of bad blood where Teal Um. You know, people think of Teal as this sort of Silicon Valley guy as being you know, you know, big visionary, but he his his involvement with PayPal originally was as an investor. He had started a hedge fund and he kind of approached the management of the company like a hedge fund guy. So he he almost the entire time he's running PayPal, he was trying to sell he he he recognized that the company was on uncertain footing, they were losing money,

it had a lot value. He wanted to sell a company. Morrits did not, because, of course, for a venture capitalist, once you have a hit, you really don't want to You don't want to sell early because your entire portfolio is kind of dependent on that hit, you know, going as big as possible So that was the second way that they butted heads, where where more it's you know, kind of comes to Seatial as this as as an operator,

not not as a real entrepreneur. And til Um sees more it's as basically a sharp elbowed guy who's just trying to get his and and and and that becomes a conflict that helps set up um teal later in his career because when Tel started a venture capital fund, his the Founders Fund, the whole idea is like, we're different from uh, the Sequoia way. You know, Mike Morritts will fire founders, he'll you know, he doesn't let founders

you know, run the company. Um. This is not an entirely fair critique, although they're especially given that he himself orchestrated the firing y Elon Musk from Elan Musk's company. But but as they saw it, you know Moretz was kind of and the kind of Sequoia way was about preserving sequoias, you know, internal rate of return. It wasn't

about you know, helping the entrepreneur. Um and and they were going to be different and the and the founders fund approach, which again they really marketed as like the opposite of Sequoia, which at the time was and still is, you know, one of the big venture capital firms, as like, we are gonna We're gonna let you do what you want.

You know, it's your company. We will never fire a founder um and and hence founders fund, hence founders fund, and hence you know, Mark Zuckerberg ending up as like, you know, the absolute dictator of this like a trillion dollar company, Facebook, with the A shares that he has a vastly disproportion of voting share, he really can't be

deposed without his own permission. And and as long as you're bringing up, um, Facebook and Zuck Teal was one of the very first investors into Facebook, wasn't yeah yeah, first outside investor. I mean he he came in at the same time as Reid Hoffman, who's another one of his buddies. Um, but you know he he made a

big the first significant investment in Facebook five dollars. If you've watched The Social network, um he there's a scene where Sean Parker, the Shawn Parker character played by Justin timber Leg and Jesse Eisenberg playing Mark Zuckerberg meet with this kind of suit VC who tells them to like, um, you know, change the company structure to fire the other

guy at Wardo Savern. And that is Peter Teal. I mean, that's that that that character who just appears for about you know, fifteen seconds is Teal because Teal was this was the outside money, and Teal helps set in motion this chain chain of events that allowed Suckerberg to restructure the company so that he would be you know, in control, not just in control then, but you know, in control today. So let's talk a little bit about Teal the investor

and tell the businessman. He's pretty obviously a fascinating and complex character, but he very much she as a contrarian from whence does this streak? I mean, there's a pretty clear path in Silicon Valley to how to succeed as an entrepreneur, how to succeed as a venture capitalist. Uh, that wasn't anything that was in need of reinventment, and yet he very much reinvent vented both of those fields. Why what motivated Yeah? So, I mean you can go

way back. I mean he so his basic idea you said contrarianism, right, but and it' and it's it's really that you know, the majority is often wrong. That's his idea that like, when when you have these things that we as a society have agreed on, um a lot of the time, we're we're we're making those assumptions, are making those decisions based on sort of faulty assumptions where we're agreeing with things because we want to make our our friends, neighbors and colleagues happy. And Heal thinks we

make mistakes that way. Um that comes you know, I think you go way back. You know, he was bullied as a child. You know, he bounced around a lot. I think I think he was always kind of him against the world as a kid. Um. But also it goes to this you know philosophy, French philosopher that he's really into Rhune Gerard Um who you know basically articulated a uh you know, a sort of philosophical version of

of contrarianism that that Teal has really brought into. And what's interesting, So I think, you know the Teal approach. You can you obviously see why it's useful um in in in the world as a technology investor, because vcs make these high risk, you know, high reward bets and so you don't really want to bet on the consensus. Right, it's a there's low upside um. Uh. But also you know, Teal thinks it's more than that, right, Teal thinks this is like a potential life philosophy, and and that that

sort of um finding areas of disagreement. He you know, in in um in job interviews, he he he asked people, you know, what is the thing that you believe that no one else believes? Right, He's like really interested in in in kind of breaking the norm and and and it's interested in this as as a life philosophy. The funny thing is right for somebody is all about you know, being different. Um. And I think this is related. A lot of what he's done is actually like sort of

sell into bubbles rather than betting. He doesn't all he you know, he sometimes has bet against bubbles, especially when he was running his hedge fund in the in the two thousand's, But but often it's more like he sees something that's hot and he figures out a way to to make a play. So that was so PayPal was certainly one of those where there's this huge boom and Teal was an outsider and he kind of you know, finds his way to this brilliant coder, Max leve Chin

and and and you know the rest of history. Same thing with Palanteer. We're Palanteers this now today, you know,

government contract or, big data mining firm. And it really grew out of um Tel's insight, you know, after not eleven that Silicon Valley has something to sell the US government because the US government was really interested in data mining doing a better job of kind of we have all this information, we have aldest surveillance, thousands and thousands of hours of audio that we've picked up from the field that's potentially dangerous. What the hell do we do

with it? Yeah, And Palanteer was more or less just yeah, you know an elevator pitch too that that was like directly aimed at that. And it took them, you know, a decade or so to kind of actually find a business. But so it's in a way Teal is good at at at at like spotting these trends and and and sort of seeing the ways that the herd is moving and then finding ways to maneuver so that he can he can profit from from that movement. And I think the the sort of Trump thing is another would be

another instance of that where Teal was really early. UM. Now, now of course we could talk about the ethics and morality or whatever of this, but but just from a sort of cold calculation, Teal was very early in in in seeing that there was movement against kind of globalization, that there was the rise of this um really you know, hardcore right wing, especially on the Internet. And and you know,

he saw Trump before many many other people. UM. Realized that that this was happening and that it was real, and and then that and that allowed him, you know, to get in early on Trump. So so let's combine the conversation of out of Facebook and the conversation about Trump with the deal you talk about the secret deal

that was cut before the election. UM. Whereas a lot of people on the writer complaining that the tech world is biased against them and there's a liberal bias in reality that wasn't what was taking place behind the scenes about that, and I think people so you know, there's on the right over the last um, you know, five to ten years, UM, there's been a realization that first of all, Silicon Valley is very powerful, UM, which is true, and that a lot of liberal people work at these

tech companies, which is also true. And so what they've done is kind of um taking the playbook that has often used against the media companies. Yeah, they're working the refs exactly right. And and so that pressure has been coming for a long time. It really it bubbled up in a big way before the election. Um. You know, there was this sort mini scandal. I talked about this

in the book. There was like a mini scandal involving Facebook trying to kind of promote stories that the New York Times and CNN and such we're publishing, um and and and Zuckerberg basically had to um have a piece summit with with all these you know, key members of the right wing media establishment. Teal was a sort of broker there where where Zuckerberg said, look, I want to hear you guys, we are going to be unbiased, um and and and over the next you know, five years.

Teal plays this role where when Facebook is under fire either from the right wing press UM or from Trump UM, Teal is there to kind of help Zuckerberg navigate navigate that world. So and and and the most important thing is, you know, anytime Zuckerberg is accused of being a you know, a liberal shill or whatever because he was because he was in favor of increased immigration. You know, he started

this pro immigration group. You know, Zuckerberg can say, look look at my look at this guy on my board member. He's the longest serving board member. He's one of you know, one of my clothes friends. He's not just a he's not a rhino. He's not just a Republican. He is a hardcore Steve Bannon, Donald Trump republican. He has real

credibility with with Trump world. And that was like the most important thing I think that that Peter Thiel gave Facebook, which is like allowing it to be somewhat insulated from attacks from Donald Trump. Now, in twenty nine, um Trump and his campaign were running these ads where they were kind of like they were really crossing the line factually right. They were claiming they were sort of making stuff up

about UM, about Hunter Biden. There were these videos of Nancy Pelosi that had clearly been doctor to make it look like she you know, had some yeah, yeah, yeah, some kind of neurological problem. UM. And there was like real energy on the left to to do something about this. You had Elizabeth Warren and AOC saying, you know, Facebook is out of control. Um And and Zuckerberg, you know, flies to Washington, d C. This is right when he was um uh promoting Libra, you know, which is another

kind of crypto crypto thing. That is, because you've you've already trusted Facebook with all your private data, you might as well trust them with your cryptocon So he gives this speech at Georgetown UM where he basically says, we're not going to regulate political speech. Politicians can lie. It's okay because you know that's that is. It is not our job as as a private company to do that. And you know the truth will out right and now that okay. So that that was the That was the

That was kind of an explanation and a defense. And I would argue a kind of signaling of of intention. Um And then he uh, you know, later on in this trip, has a meeting with um you know, Donald Trump, uh and and Melania and Jared Kushner and Ivanka Trump and um And and him and his wife Priscilla Chan and Peter teel And and Peter Chiel's husband, um And in that meeting, you know, we don't know what the

details of that meeting are UM. But but you know, after the meeting, to expressed to a friend that there was an understanding and I, as I reported in the book, there's an understanding reach that Zuckerberg would basically continue to take a hands off approach on UM, you know, on on on things that Trump said was going to give Trump a lot of leeway, which is something Trump really wanted, UM and was going to you know, basically do what he could to ensure that you know, conservative media didn't

get you know, sideline at conservative media would thrive you know, on Facebook. But they went much further than that, because when you look at the most shared stories the top ten, it's done supposedly for for technology liberals shutting down conservative voices. Facebook is dominated by people like Ben Shapiro and Dan Bongino and all these like not just right wing conservatives, far right extremist groups. Uh. The algorithm seems to have

been set up to maximize outrage. Facebook is an outrage manufacturing machine and that played right into this group's hands. Percent Now and and the phrase that was used in this conversation that I reported and was state sanctioned conservatism. The idea that Facebook would you know, basically promote these guys Ben Shapiro, Bongino and so on. Now the thing is okay, so Facebook, we have to say, first of all, um,

Facebook denies this. Um, the top ten, top twenty every day is not debatable, right, a wild, wild disparrett you would think for a country that's pretty evenly split, if anything, Republicans are a minority, Conservatives are a minority. They dominate Facebook. How do you explain that? Well, I think so, I

think it's it. It is a handful of things, like one of which is ideological and and and to the extent to which Zuckerberg I think was has been pushed to the right by Peter Teal and and you saw reporting by Bloomberg and E and others um during that time where you had folks like Shapiro, you know, running a foul of Facebook's rules, and Facebook stepping in to say, you know, yeah exactly, trying to trying to make sure that these important voices, um, you know, as Facebook saw

it didn't get silence. You know. The other thing is money. And I think like a lot of a lot of people have spent a lot of time, including me, trying to figure out, okay, like what is Mark Zuckerberg really believe It's an important question because you know, Mark Zuckerberg has you know, as much power as like arguably anybody in human history. Um. And it's like not clear what

he believes. It's kind of seems like to me like he just believes in Facebook and like in Facebook's bottom line and and these guys, you know, Shapiro Bongino, Um, they are very good for Facebook's bottom line and and and like having this you know rabid um you know outrage cycle. Of course is is is great news for Facebook. And and so I think I think that's part of

it as well. And I think a third component is probably you know, failure on the left to to to kind of come up with any any kind of answer

to this stuff. I mean probably part of the problem is and again I'm just kind of speculating, but you know, the mainstream left really embraced Facebook a lot of the stuff back in like two thousand eight, A lot of the sort of stuff that Trump was doing, um in sen in terms of like this like really specific targeting on Facebook, and you know that stuff was kind of pioneered by Barack Obama and the and the and the kind of group of tech workers who were pulled from

Google and had very specific but it wasn't on a platform like Facebook. It was broad internet based, very targeted. He was very successful in that, and the left I think they got a little cocky and ignored social media, thinking, hey, we got this whole Google se o thing well, and I think so. I think that was part of it.

But I also think that because the mainstream left like embraced Zuckerberg and embraced Facebook, I think that may have sidelined the kind of far like they're basically like the mainstream is always gonna be lamer than the than the crazy people, like in Facebook world, and so what you really had was like on Facebook, you had the kind of mainstream left are doing with the crazy right, and when that's happening, like the crazy people are always going

to be more interesting, like you know, like these these like kind of center left people, like the Obama types are just gonna be like, you know, not as fun as Dan Bongino, who is you know, you know, obviously as you say, he's an extreme character, but he is

a character, right, He's entertaining and he generates outrage. And I think that also kind of perpetuated this kind of outrage cycle that allowed you know, Republicans to um and and because not just Republicans, sorry, I mean far right you know, conservatives to to to you know, make such hay with Facebook. I mean, I think the alt right was really and and the alt right I think propelled

Trump was it was a social media phenomenon. And they saw that, and and Tile saw that, and and that's part of the reason, you know, he was supportive of that world. So let me ask you a question that's impossible to answer, but I'm gonna throw it out anyway. Would Donald Trump have gotten elected without the support of pure teal? And what I mean by Teal is him and all of the people he worked with and works with, including Facebook, Zuckerberg, etcetera. Uh, can can Trump thanked Heal

for his victories? I think if you include, if you throw in the like y network, I think the answer is a percent. Yes. I mean Trump has said like I don't think I would have gotten elected without social media. Um. But uh, but I think if we narrow it right just to Teal, Um, I think Teal had a big impact.

And I don't know if you can say, you know, I think it's it's always hard to say like one to to narrow it down to one person, but um, you know, talked to people in who had been involved at the Trump campaign and Teal was very valuable to them. And the reason he was valuable is because you know, Trump obviously had a lot of energy. There's a lot of kind of um you know, grassroots type support, a lot.

He had a lot of fans. He's a celebrity, but he hadn't attracted kind of the sort of establishment credibility like real businessman if you think back and business people, Um, if you think back to the UM, the r N C, R and C, like who else spoke. Besides, it was a surprisingly weak conference considering the winner of the election. Yeah,

I mean you had like Chachi from Happy Days. You had like a bunch of guys, a bunch of real estate guys, like a bunch of whom are now indicted or you know, I have like seriously, but that's a long laundry list, folks, But mainstream business always at least here in New York. Look, we're both sitting in a studio in New York right now. New Yorkers didn't take Trump seriously because they know him as like a third

or fourth tier. I'm not even saying anything critical. He's just not one of the giant developers, not a big guy in real estate. But that was his brand, and that was his reputation, and the rest of the country saw him very different. Yeah, and but and so I think Teal's presence helped bring around some of that, like the donor class, some of the kind of mainstream support um and and and the other thing is so at that at the convention, of course, Teal gave what I

think was like really a historic speech. You know, I think it was a speech that made him profoundly uncomfortable, but he said, um, you know, I'm proud to be gay, and I'm proud to be an American and and that was historically significant. You know, the first time at Republican convention somebody you known openly gay person had spoken and acknowledged their um sexuality. And it wasn't just that he did it, but he got around you know, a huge ovation.

It was a moment of I think legitimate um, you know, equality and a quality for a political party that has been and had been, you know, pretty hostile to the rights of gays and lesbians applauding Peter tell I think made a difference and and help help convey something about Trump that I think was valuable. And then the final thing is, you know, Tile hadn't donated to the campaign

until mid October. He donated days after the Access Hollywood tape UM had come out, the tape where Trump was um, you know, quoted, you know, seeming to endure sexual assault. Now at the time, you know, there are all the all these like Republican figures were basically trying to get as far away from Trump as they could. They were like, I didn't really you know, because a lot of like um, a lot of people running away from what they saw as a just a total disaster. Trump's gonna lose. And

and you know, two things happened. One of which was wiki leaks happened, and that I think, you know how changed the media cycle and and and helped Trump friends the Russians give props to them. And the second thing was Peter Teal, instead of running away, ran towards this and he makes a big donation one point to five million, which of course Chump changed for Peter Teal, but in

in political terms, is a significant sum. And not only that, but gives a speech where he defends Trump and he says, um, listen, I'm not going to defend the comments, but but overall, you gotta look at the big picture, and he says, we need to take Trump um uh seriously, not literally, So don't listen to the literal comments, look at the broader image. And I think that first you're gonna believe me or you're lion eyes, because that's what that speech was.

And shockingly, it was a very effective speed. I think it very much helped shape um public opinion. He actually cribbed it from an Atlantic from an Atlantic story, so I should give credit to that. But but in any case, it definitely helps shape opinion around Trump, and I think it helped not only um, you know, helped Trump kind of right the ship. But then post election, you know, we saw it actually a lot of business leaders you know,

kind of participate in the honeymoon. They said, you know what, giving let's give this a shot and um, and there was there were a handful of meetings, you know, probably most famously this meeting of tech leaders um in mid December,

that teal arrange where he had basically post election. After yeah, the CEOs of basically all of the big technology companies there, uh you know, the Microsoft, uh CEO, Google founders, and you know, it's basically the representatives from the you know, nine largest tech companies, which of course that that's like most of the big tech companies in the United States UM are all there, and they're all basically trying to

trying to work with with Trump. And I think til, I mean, he literally organized that meeting, but I think he also helped create the conditions that allowed that to happen. And I think you have to say, like Trump maybe didn't do that much with that, and you know, those relationships were short lasting, but it definitely brought a bunch of people who had had before that been very critical

of Trump to the table. Quite fascinating. Before we get to the tax stuff and the New Zealand stuff with Peter Teal and some of the other wacky things, I have to ask you how challenging was it to do this research because this is deeply reported. You know, this isn't just like very superficial. You clearly went down the rabbit hole. Yeah, it was very challenging because you know, Teal has made UM, has has carved out a lot of uh, you know, secrecy around himself. You know, didn't

cooperate much. Did he talk to you So No, he didn't cooperate, But he also didn't um you know, I he wasn't helpful. Um and at times I think he was a little bit unhelpful, but but he didn't really he also didn't try to stop me. Uh I. Um, you know early in the process. I you know, as one does you know when you're doing like a journalistic

project such this. In addition to talking to you know, former employees, friends, colleagues, you know, uh for classmates you know or whatever, I also you know, approached Teal and h and had you know, series of meetings with his you know PR people and and ultimately uh an off the record meeting in l A with with the man himself. And um, you know, to play that tape right now. How guarded was he or is he sort of Hey, this is off the record, and he felt comfortable being

a little frank He was very guarded. Um, he is very guarded. I mean he's somebody who um you know that's the PERSONA. Yeah, he he really wants to play this behind the scenes role. He really doesn't like um, scrutiny of any kind when he you know, he does

talk to the press. He actually appears, uh, he does speeches sometimes, but it's almost always um, in front of uh basically a friendly interview or somebody who's not going to to kind of push him on some of these kind of further out ideological things or push him on some of the business practices that something that his companies have been involved with, some of which are are pretty questionable. Um. And and of course I wanted to go there, and um, you had no choice, you had to go. Yeah, Yeah,

I mean I just wanted to look. I wanted to you know, there had been there. Deal is an interesting guy because there is uh, there's there's sort of two myths around him. One is the um, he's like a villainous right wing billionaire. That's kind of like the left wing view. And then the right wing view is that he is this and and the view that's kind of common in Silicon Valley is that he is basically this libertarian hero. He's like, um, you know, combination of iron

Rand and an iron Rand character. He's an intellectual and a builder John Galt for the modern New Europe. Yeah, and so and I wanted to you know, obviously both those stories have truth to them, and I think understanding where they come from is really interesting. But I wanted to do something that uh like hopefully complicated both stories and and and got actually at the at the real person and til I think is is really you know, has really invested in his own mythology and and at

times that that's really interesting. Let's let's talk about some of the mythology where things that are a little out there are kind of intriguing. And let's start with the billion dollar I RA tell us about how any of us can have a billion dollars tax free. I'm glad we moved to the service portion of the of the show. Um So teal so roth Ira H. This was created in the in the nineties. It was designed as like

a middle class uh thing for lower middle class. Uh. The idea is you put after tax dollars in and anything anything you make on your inside of your ira. Your roth ira is tax free. And they did this because they were trying without limitation. Uh. Well, so there are some really important that once it's in there, it's it's tax free, no limitation. They did try to have some limitations on how much you could put in the original contribution limit with two thousand dollars, I think it's

about six thousand now there were there. They're pretty low income caps. I think around it's a little higher now, but around a hundred thousand makes sense if it's if it's if you're using pretax dollars. But if it's after tax dollars, is it just too expensive for the government? Who knows? So? So yeah, and and so what what Teal figure it out is that you can put in um you can you can buy shares and privately held venture back companies. Early on shares are pretty much causing zero,

like a thousandth of a penny. So early on in PayPal, Teal uses a roth Ira now, which which he you know, at the time, I don't think he had much income, maybe no income at all um as as you know CEO at first as an investor in this company and

then a CEO in a startup. So but he uses the roth Ira to buy shares in PayPal for like a thousandth of a penny, and over the next couple of years acquires more PayPal shares for fractions of a penny, and and and you know, and basically those shares then we're ultimately worth millions of dollars, um, tens of millions of dollars. Then he uses some of that money inside the roth ira to buy shares and palenteer, palenteer. Again, We're going from you know, a valuation of near zero

to it's it's worth fifty billion dollars today. Um. Same thing with Facebook, right, Facebook buying buying early shares, and Facebook inside the roth ira, and then you know, those shares you know, ultimately are worth um. You know, at the end of twenty nineteen, Teel's roth ira had something like six billion dollars in it. Now. UM. Stock markets done pretty well since then, so and particularly technology companies,

particularly kinds of companies that Peter Teal investment. So it's, you know, my guess is that is his roth ira, his tax free account is in is maybe around eight billion dollars something like that. Now maybe a little more. Um and uh and again it's it's it's this amazing you know kind of it's it's not really I guess it's a loophole. I don't know what to call it.

It's just a very aggressive tax strategy. Now that thing about this is and if you depending on who you get your tax advice from, they might advise you not to do this because there is a specific rule UM that says you cannot buy shares and companies you control UM. So you can't. If you own a restaurant, you can't like put the restaurant inside the roth ir right, that's

self dealing. Um. The great thing about these venture backed tech companies is although somebody like Peter Teal has effective control UM, he does not have legal control because you know there's an independent border directors. He only own the company. So so it's it's a very very aggressive interpretation of these statutes because effectively the CEO of a venture backed tech company has a lot of influence on the stock price, you know, on the share price of these companies, but

influences in control exactly. That's that's the loophole. And we've seen so so so that you know, structure now has become very popular and silicon value like other people have. You know, this is a thing that wealth managers UM are now you have have made have made into a little cottage industry. And we even saw you know, when this first came out. So it's kind of heartbreaking to me because like this was in the book, which which was in a galley at that point, but Pro Publica

broke this story. Um and uh. And and the way that the spin that you heard from some folks was was not like, oh, what an outrage, It was like, you know, how can I do that? And um and, which which I understand because I mean, everyone wants to pay less in taxes, but it really is quite a you know, a perversion of the original intent of the law, which was again to to help basically like lower and middle income people and and and not to just deprive the US government of a huge amount of tax revenue.

So so let's look about something else that's a little bit out there, New Zealand. Why become a New Zealand citizen? What's that about? Well, so if you, if you, if you listen to what Til said, he really loves New Zealand, which I think is probably partly true. He's a big Lord of the Rings fan. I was gonna say, Peter Jackson fan, then yeah, um Lord of Rings films were were we're We're shot there and you'd still see a shire, there's the Hobbits, and let's be honest, like New Zealand

is great. I mean it's it's a you know, a very nice place to to to visit. I mean a beautiful nature, great great cuisine. UM. I think the specific appeal to Teal when he got the New Zealand citizenship, and he did this in a in a really interesting way. I mean he was in secret um and it happened when Obama was president, and and you know, as my my senses and as I say in the book, that you know he was basically looking for a backup plan. I mean he was really worried about um, about Obama

and about the Democrats. And I think you had you had all those concentration camps in Texas and they were gonna round everybody up, and right, I mean that was I'm not they were. This is legitimate what some of

the far right was playing. And and and when you're Peter Teel and you have this enormous amount of money that's tied up in a UM it's it's legal, but but but a little bit on certain structure where at any moment the I R S could say because because of the control thing, right, UM, it leaves him a little bit vulnerable because you could go back and start looking for for violations. Maybe they're not real violation, maybe they're just bogus. You could bust his jobs if you

want to. And and the way the IRA laws, the way these rules are structured, if you break one, if you do one, if you make one mistake within that IRA, they can take they can take the whole thing. They can, they can they could capture it. They can well they can. They have to collect taxes on the whole scenario is you lose your tax and even that you have the wherewithal to fight it. Eventually you'll negotiate it down. But so his worst case scenario is he might pay half

the taxes he owes exactly. But I think what he was trying to do was find a friendlier jurisdiction and and back then or as a potential backup plan, right, not necessarily where he's gonna um, not necessarily like he's gonna go run away from Obama, but um but at the time, you know, New Zealand had a right wing government, um, and it was very it was very easy for him to acquire citizenship. I mean, he only spent uh twelve days or so in the country, uh to to get

the citizenship and UM. And then I think it, you know, gives him a potential way to to at least as a negotiating point if he ends up negotiating with the U. S. Government. UM, being able to to you know, claim citizenship or whatever in a foreign country. I think UM was potentially helpful or just as a way to, hey, let me get

away from these crazy liberals. And like the one of the you know, one of the big ideas that that Teal and his followers are into is this idea of exit, that that you that billionaires should potentially be willing to threaten to leave the United States in order to push policymakers, you know, in the direction that they want them to push, that you can vote or you can leave, and that that the threat of leaving is an important part of that, which I think is really I mean, it's certainly counter

to like a normal notion of m patriotism or whatever if I want to buy into that, you know, or whatever, UM I do personally, but anyway, UM I but it's definitely like the idea is that you should be willing to kind of jurisdiction shop. And so that's what I think he was doing. After Trump was elected. My reporting says that basically hasn't been in the country since Trump took office. He's maybe he's maybe come back, you know,

there's he's now renovating one of his properties. Maybe he went back, but as far as I can tell, he hasn't been there since in New Zealand. Yeah, quite quite interesting. Let's let's talk about something else that's a little surprising. And I just had a look up the name of Ryan Holiday's book, Conspiracy Peter Til Hull Colgan, Gawker and the Anatomy of Intrigue. So, uh, it's now come out.

And and Holiday did some nice reporting a couple of years on this a couple of years ago that Teal is the one who funded the entire Hull Colgan litigation against Gawker because Gawker some years ago out of Teal as gay and then had the bad judgment to reproduce a and publishist X tape that was surreptitiously recorded of of Hulk Hogan and effectively Teal bankrupted Gowker. He apparently carries a grudge. Yeah, I'll say, yeah, this was as I as I talked about in the book, I mean,

the whole Cogan case was not really isolated. He was trying basically all sorts of things. Uh. In the period between when that blog post outing him came out, which I believe was late two thousand seven, Um uh and uh and the and and the ultimate you know verdict, which is in sixteen UM basically was you know, there's there's sort of other litigation efforts there was you know, he had had hired private investigators. He also tried to

kind of romance Hawker at one point. But but ultimately this Hogan thing was a real gift to Peter Teal because it was a very clear cut case. Gawker had published this um, this this sex tape that had been recorded without whold Cogan's knowledge or consent, which the violation and privacy and the and the great thing about that from from the sort of Peter Teel perspective is number one, it's not a free speech case, right, makes it easier, it's a little bit easier to make. And and number two,

he gets it in front of a Florida jury. Um, you know, Hulk Hogan is like is from Tampa. He's like the famous person in Tampa. And you have this, uh, this celebrity bona fide celebrity going against this like as as Teal and his allies presented it as a sociopathic New York media company, and and and the and the case was pretty clear cut. So it's like not surprising that the jury, um, you know, opted to bankrupt Gawker, um.

But what you know, what is surprising, of course, is that is that this billionaire was was the was the man behind it and a particularly the amount of time that passed and the way that he did it. He did it in secret. I mean, he didn't tell anybody. It only came out afterwards and after it happened, you know, he didn't he wasn't apologetic, right, he said, this is

my proudest philanthropic moment. This is my great contribution, um to to the world, which is you know, that's pretty out there, right, it's it's it's a it's it's definitely um different. And I think it wont him a lot of fans, of course, on the on the right, because Gawker was seen as this like liberal media outlet. He was seen as a billionaire willing to you know, take

it to the take it to the liberal media. Um. But of course it also I think critics rightly point out that like this has profound implications for freedom of the press and for for for other potentially chilling exactly. So, I want to continue discussing some of the specifics about teal because it's fascinating. But I always have been operating under the assumption that Silicon Valley is, you know, part

of the triangle of power. It's New York, d C. And Silicon Valley as engines of of economy, technology, and government. What don't we know about Silicon Valley. Isn't it a given that they're a power player? Or are they more powerful than most Americans have realized? Well, I think there's still I mean, I agree with your assessment completely. I think that I think Silkic Valley is still has more

power than than people realize. And I also think that Silicon that that certain aspects of the of the Silicon Valley ideology have really um kind of seeped into our culture in ways that we don't fully appreciate. So I mean, I mean, move fast and break things certainly one example, So this idea that disruption is a good, a social good that it needs to be embraced, um is I I'd argue that is a new thing that most that a lot of people have bought into, even people who

are degrees away. Dimma, that's been around for decades. Um. But well yeah, but I think there's I think there's something a little bit different about UM. I mean it's been a while since I've read the Innovator's dilemma. But well, you just rub something then eventually you get disrupted. Yeah, it's only you know, most of these companies only last a certain on. Apple is a rarity that disrupted itself.

But yeah, yeah, so I think that. So, but I think the idea that rule breaking in particular is something worth celebrating, is is new and different. And like the way we we're watching this attitude, um you know, Facebook, there's this whistleblower and we're we're suddenly like watching all this criticism of Facebook and sort of wondering why, like why is Mark Zuckerberg so indifferent to to use responsibilities to society. And it's like, well, that's because that's the

whole point of this company and this ideology. UM. I also, um, I think that the um I think that this idea that technology companies so so one of Teal's big ideas, right, is that that these technology companies should are basically in a ruled world that that we that we would be better off. And this is something that is i'd say widely people buy into and including a lot of liberals and stuff, that like, basically technology is going to set

us free. And I think and that it's yeah, well exactly, and I think they are you know, to assume that the people who run Facebook or Amazon or Google are

benevolent overlords is really the height of naivete. It reminds me of I realized this a somewhat controversial thing to say, but like when I was reading the book Coke Land by Christopher Leonards Cooke Brothers and and Coke Industries in particular, the way Coke Industries had sort of um, you know, had this you know, really important industrial conglomer and they had really changed the conversation around regulation, particularly deregulation, to

a point where like everyone sort of bought into that the story that they were telling. And I think the same thing, including liberals, right, And I think the same thing kind of happened has happened, and maybe it's continuing to happen with Silicon Valley, where we've sort of all bought into the idea that you know that that disruption is good, that tech companies should have more power, not less um and and you know, we're obviously we're in

a reckoning right now. But I don't know, I think those ideas are still more or less ascendant, and it's it's still really outside the mainstream if you that's interesting. I'm surprised you think those ideas is still ascendant because there's a difference between saying, hey, here's how we've always done it, but we have a way to do it faster, better, smarter, versus just look at the three biggest companies that are

kind of going through turmoil. Uber we work in there, nos, so have we seen peak disruption and now things are curling back? Maybe, although I would push back on some of that because I think so, Yeah, it's true that with Uber, we you know, the founder got bounced out and we now have little too frat boy Kinder Gendler Uber. But how much it's not making money that way? Uh it was expected to. But yeah, but how much has

Uber really changed? I mean, we we like this labor model that Uber pioneered, so like you know that that is like, you know, completely and different to the um you know, to the to the needs of workers, I would argue has become it's it's not that labor model is not on the on the retreatomy, no healthcare, no, not necessarily any qualifications. And and so I don't know, like I think they're I think it's true that that we have become more tuned to some of the failings

of the tech industry. I'm not sure that alright, So outright fraud is not allowed, disruption, no health care. Hey, maybe this guy's qualified to drive. Maybe he's not, but he's got a license. What more do you want? We're okay with that, and we work. What do we care? A bunch of you has lost a bunch of money, right, yeah, yeah, yeah, I think I mean that's pretty fair. I mean I again, and I also think, like, not just a bunch of you. Ce's mostly soft banking. People care about them much less

than they do Benchmark or Sequoia or flat Iron or whoever. Right, And I think, you know, when we look at the big companies Facebook, Google, like it doesn't feel like there's really any serious I don't know, like it's it's it's it's not clear to me how Facebook could be reined in, and I don't think it's really clear to anybody how

it could be brained in. Well, with the benefit of perfect hindsight, it's pretty clear hindsight that a lot of the is uh seminal purchases that were done, whether it's Instagram or WhatsApp, or go down the whole list of of some of their best properties. If people weren't asleep at the switch in the any trust department, that might

not have been permitted. I suspect going forward, Facebook might encounter more difficulty trying to swallow a competitor, a Nason competitor early because arguably instant Listen, when you speak to the kids and you're closer in age than I am, they're not on Facebook, They're on Insta and Facebook is now for us old people. Um and I can't stand Facebook, so I'm not one of those old people. But I use what's app pretty regularly and I use some of

their other stuff. Um. So, so what happens when the the next TikTok comes along that Facebook wants to buy, will they still be in that position? Will they be able to make that purchase? Yeah? Completely agree? I think I think you're right that there was you know, total will failure imagination there um and and yeah you would,

you would think there will be more Google. I don't know what's gonna happen with I don't see does anyone really see Amazon getting split up or Google being broken into g drive and this and that, or or Apple being broken into a max side and a phone side and a service. None of that really looks likely. If if any of the big tech is going to suffer, the one that seems to be most vulnerable seems to be Facebook. Yeah, yeah, because they have these reputational problems.

There's also a way you can imagine. I mean again, I don't think it's gonna happen, but you could imagine breaking up, like breaking Facebook into Instagram, and it's like not impossible. And clearly Till is behind the concept that bigger is better. Let these companies do what they're gonna do,

and regulated the marketplace will sort it out. Let's stick with that concept and talk about palatier Um, which, ironically for a sort of anti government libertarian, he's essentially his biggest client is the U. S. Government and all the other governments. Palanteer got into quite a bit of trouble post election tell us about what the company is and how it's sort of ran a foul and seemed to

have shaken it all. Yeah. So Palanteer was started by teal Um basically out of this, you know, this intuition that he could take some of the security technology that Paypala developed, well not even technology really an idea UM that Paypala developed, which was to use network analysis, so looking at who is connected to whom, um to figure out to how to do security any and he offered that to the U. S. Government got backing initially from the CIA, which was hugely um both hugely important for

Palanteer because it kind of opened the door um fiz Yeah exactly too and gave him some money, but also legitimacy with government contracts. And then that legitimacy not only UM got them contracts with other it's the government including the U. S. Military, It got them legitimacy with the corporate world. Because if you're like a chief security officer at a big bank or whatever, the idea that you can have c I A grade you know, data mining technology,

which is more or less what they were promising. You know, you two can have the same technology we used to get bin laden um to like you know, to to run your uh to to like come up with your trading strategy or or route out you know, bad behavior by your trader or something. Um. That was like a really compelling pitch. Now that pitch was not entirely true.

I think, as I talked about the book, like I think the idea that Palanteer like was responsible for forgetting bin laden is like a huge stretch that that kind of creation of the media. But the narrative of like c I A grade data mining for the government has been for for government and for private enterprise has been hugely successful in the long run. Now, in sixteen though Palanteer was really in bad shape. It had it had lost out a bunch of on a bunch of big contracts.

Um it was. It wasn't looking so good. A lot of the big companies that were doing business with it had had backed out and you know, gone in other directions. And then uh post Trump though, of course, things have really gone well. And Palatiner will say, hey, it has nothing to do with politics, um, just just just a

matter of beating the bushes. And you know, and you know it's sometimes like everything just falls into place, and you know, my reporting and also you know, I think just normal rationality suggests that like having a major backer of the president, especially a president like Trump, who as we know, likes to get involved in the nitty gritty and you know, it's not totally averse to rewarding his

friends and punishing his enemies. Um. You know, had had had a positive impact on the company and helped them win this eight hundred million dollar military contract and then you know, you know, dozens of other contracts worth you know, in the in the hundreds of millions, if not billions of dollars. And we've seen the company, you know, really go from being kind of substantial but not that big, you worth twenty billion dollars or so um to to

now it's worth you know, fifty billion. They have these huge military contracts, um and and and during that time the product has improved a bit, so they've you know, they've managed to land some corporate deals and of course that's been great for Peter Teal who was uh the single largest shareholder owning owning a lot of those shares through the roth Ira so so nice tax advantage there. And uh and because of the way Palentteer structured um.

The founders have this special class of share that's a that's a group that includes teal um that allows them to effectively, you know, control company. So so it's uh so he's kind of in the catbird seat. And I think I would argue that a huge reason for that is because of of his decision to support Trump early, which got him access to the White House, which got access to Palentteer, and you know, and kind of the

rest is history. So before we get to our favorite questions, I have one other thing I have to get to. Let's talk about crypto. He was pretty early into looking at bitcoin and some of the other cryptocone sees what led him there and what is he doing that space count So yeah, I mean really early, he like from like nineties early, like way ahead of why are we relying on printed government dollars? Shouldn't it be free? It's kind of a libertarian fantasy. You can go back and

I did you know reporting this book? But like that, you can go back to PayPal And the way they were talking about PayPal is really not that different from the way the not no crypto community has gotten pretty big and pretty diverse ideologically, but but it's it's the way the kind of ultra libertarian part of the cryptic narratives. Yeah, you know, so so that he was talking in like two thousand or thereabouts about giving everyone a Swiss bank

account in their pocket. This idea that once you had money inside of PayPal would be impossible for governments to track, and in particular be impossible for um repressive governments to track. So when you so like, if you're in a country with current see controls, you know, there's really nothing stopping you from putting money in PayPal account and then using it. And and that is really similar. And he talked about how this was gonna road the sovereignty of the nation state.

And this is really similar to how kind of the libertarian um part of of of the crypto world talks and and and kind of what's motivating some of the some of the crypto ideology. So I think it's it's not surprising at all that he got in, you know, on crypto early. He you know, for I don't know how much crypto he has now. I mean, he definitely had some crypto for a time. It's unclear if he if he's sold or not. Um uh, but he's also making investments in crypto companies and he's clearly, you know,

pretty interested. There was like a little mini scandal earlier this year, at least in the crypto world. You may remember where Teal described bitcoin as potentially a an arm

of the Chinese government. Where he sort of said that, um because because it hurts I. You know, it wasn't entirely clear, and all these crypto people kind of went berserk because he's on our team, he's an early believer, and and my suspicion there is what was happening is he was trying to shape regulation uh into a in a favorable, favorable way in the United States, warning essentially, if the US goes to sleep on crypto, if we don't move to kind of embrace and cultivate this industry,

we're gonna lose to other countries, which iss China ends up tossing out all their miners. And none of that ended up being no, no, completely, It was exactly that. But it is exactly the same argument that Mark Zuckerberg has made in terms of like how we should regulate Facebook. The reason we should let be hands off on Facebook is because if we don't China and TikTok is gonna you know, become supreme and then we're all gonna be you know, living in a in like you know, G's

world or something. Um. There are also also like some weird conspiracy theories and which I don't think are totally out of the remo possibility. Like Teal is a big time trader, you know, he's he's somebody who's always who very often has bets on both sides of a particular trend or a particular company, So it's possible you know, he was he was betting against Yeah, yeah, that that that that those comments were were aimed at a trade, like maybe he was trying to buy low. I don't know,

but it was. It was definitely like an interesting moment. And I think, you know, Teal is always somebody worth watching, um because he knows kind of what's next, or he has very good ideas about what's next and you know, right now for for in his world that's crypto. So I mean, I think that's it's worth watching that space obviously, but also worth watching specifically what Teal does, what he

says about it so so fascinating. All right, So while I I have you let me jump to my favorite questions that I asked all my guests, starting with tell us, what you've been streaming during uh the past eighteen months? Netflix? Amazon Prime podcast, What's keeping you? Yeah? So okay, So I mean I just finished I finished Squid Game literally two nights, surprisingly, surprisingly satisfying. I yeah, it was really good.

Although I did I found it so stressful, um that I had to watch my wife and I had to watch, like Ted Lasso, we do a palid cleansing exactly as a rule, you can only we only watch one game per not except for the last two, which were like think the ninth one. The eighth one was thirty three minutes and then the ninth one was short. But you know, anytime you watch stuff over time like that, you really

get the full flavor of it. I've been Also, I'm a huge I listened to a lot of podcasts, but um and right now I'm really into this really nerdy virology podcast. It's called This Weekend Virology, which um uh you know honestly like it's it did. The episodes are really long, um and and I think, uh, what does it cover? It's but it it covers the science behind viruses.

But of course they've been talking about COVID all the time, and I think like really paying attention to what scientists have been saying has been a great way for me, you know, to be ahead, ahead of the curve. I mean, I think like these, um, you know, we're having this this conversation about booster. You know, they've been talking about this stuff for for months and and and and you get a perspective that is um more nuanced but also maybe more interesting than kind of the media narratives which

tend to swing. So it's made me a little bit more kind of immune to like the latest freak out over. Yeah. Yeah, so so I tried to train Alexa and I couldn't get it to do it that if anybody on TV uses the phrase, I'm not an immunologist, but I want the TV muted, just just I don't care what that person has to say. What what else? Um, that's an interesting podcast? What tell me what else besides that in squid Game that's entertaining? Yeah? Yeah, so well I've been, Um,

I've been. I run a lot, so I listened to all these crazy, crazy running podcasts. I also listen, you know, pretty religiously to the to the five thirty eight podcast Nate Silver, I know is controversial and people love to rag on him, but I think he's got a pretty decent track record. Respect he's done better than most. But I think his kind of like frame on politics is

really useful. And it's another on where like, you know, when you pay super close attention to the polls, it kind of makes you a little bit more immune to the to the crazy swings in in in narrative, and especially because I'm a you know, I'm a journalist. You know, I work at Bloomberg. You know, it's good for me to like get that perspective because we as journalists are very you know, we're immersed in the narrative, right. It's

like all we think about. The line I love is the um news is equal cap weighted when reality is market cat waited. Kind of fascinating. UM. Tell us about some of your early mentors who helped shape your career. Yeah, my mentor, my big mentor was this woman Jane Brenson, who was basically the editor of inc And who came out of the Wall Street Journal And she's just a really cool she's retired now. She's a really cool journalist.

And UM. And you know, the thing I've been thinking, I was thinking about UM when I think about this question, was just you know, there was a point in my career where, UM, I had like an opportunity, like freelance opportunity. I wanted to pursue it. And I went to her she's my boss, as that can I do this? And she said, know, you can't do it, only you have to leave if you do it. Um, But but I want you to leave, and I'm gonna make it easy for you to. I'm gonna make it easy for you.

I'm gonna structure. So basically, she kind of like allowed me to you know, spread my wings like like you know, move and in a way that I think, like, well, obviously helped my career, and it's made me feel very close to her. But it makes me think like that's whatever. That's a big part of mentorship is like at a certain point that these these these yeah, and and and not not necessarily reacting in a selfish way where you

know probably would have been better. It's often better right to to to to push the mentees or whatever to stay in the in a position of support where they're helping you and and the fact that she's kind of pushed me away and helped me, Like, you know, I don't know, it's just anyway that we we've continued to have very strong relationships and since then. So, I know what it's like when you're writing a book and you don't have time to read. But this is book has

been put away for a while. What have you been reading since you finished writing contrem I just so, I just finished a book called American Prometheus, which um is about. It's a biography of Robert Oppenheimer. Came out about fifteen years ago. Oppenheimer's the guy who created the bomb for you know what, He led the Los Alamos at lab that they created the bomb. The book is, first of all,

it's really good. It has it's like kind of I hate this frame, but it honestly has interesting management lessons because like I think Oppenheimer's management style was like it is actually kind of similar to Elon Musk, Like he's sort of this you know, jack of all trades who's really good at inspiring you know, people to Anyway, I found it really interesting there. It also kind of has interesting things to say about this whole you know, conversation

around cancel culture or whatever. You know. Oppenheimer famously was um you know, kind of blacklisted as a as a communist sympathizer, which he was to some extent. So anyway, there's there's just a lot of interesting stuff. It's about technology, it's about um, you know, about management, and anyway, just

fascinating guy. And then another book, um that I've read pretty recently I really liked is the The Man Is Solved the Market the story you know, the Jim Jim Simons my saying Simon's right, Renaissance technology book and and just you know, the both like just explaining that I mean, I really love like explanatory journalism and just like explaining how renaissance technologies you know, works, and how they made money, and the and the kind of really cool, um you know,

ways in which it brought like this kind of sophisticated math and stuff into into the finance world. I just found like just mind expanding and really cool. Amazing book. Terrible title because he didn't solve the moment. He just figured out how to use the markets to make bucket loads of money. And nobody, nobody has come close to the sort of returns that he's generated with a couple of billion dollars, but that's all he could run before he started to see returns attenuate. Yeah yeah, yeah, so

so that's why they kicked out the outside investors early on. Uh, that book, it was fascinating and he just didn't amaze job. So I asked you before, we might as well talk about this here. So when Zuckerberg, Zuckerberger, Uckerman, when Zuckerman not Facebook, Ball Street Journal. When Zuckerman was writing the book, he reached out to a whole bunch of people who had worked with Simon's early on and found himself getting blocked by Simmons and said, hey, listen, this book is

coming out with your assistance or without. You can either help shape it or just be unhappy with the result is and ended up getting, you know, twenty thirty hours of interview time with him. You tried that with Ed, got a little bit of of of gift from him, but not nearly. Simon's is, you know, much older the end of his career was and is now doing philanthropy, so he was more amenable to that. You didn't get that sort of qual Yeah, I think til is a

little bit. I mean Simon's of course had been very secretive, and I read, I mean particularly like the introduction of the book describes his kind of back and forth with Simon's and all these people, you know, telling him forget it, you're totally you know, I can't talk to you. You're gonna which I really enjoyed, you know, and I found very inspiring just because of course, I you know, I ran into some of the same, um, the same things.

I mean, Teal has been very closed off and and that was to me part of the opportunity to book because any time, you know, anytime someone is is closed off like that, it's a journalistic opportunity because they you know,

there there's there's lots of stuff to say. Um. The other thing that kind of worked in my favor, um is that you know, venture capital is like a pretty it's a networking business, right, so, which which hurts me because everybody talked to somewhere down the line they may need to go to Peter Teal to ask for money.

So even people who hate him are like unwilling to They don't want to like cut off any future, um, you know, any future investment, which is is particularly important because like the way these VC deals right work is that it's really important to have great competition. So even if you don't take money from Teal, you really want to have him as a potential backer to help, you know, create a sense of you know. So, so that works

against you. But because he's all over the place, because they're you know, dozens hundreds of companies that he's an investor in. Um, all these companies have employees. There's just it's a pretty big network. So even if you're closed off, there are ways to you know, there are ways to to to sort of work your way inside because the network is so sprawling and you have people who are are who actually know a lot, but don't necessarily have

like a super close relationship with deal. So so anyway, I think that that was helpful, especially at the beginning, because you're always sort of trying to work your way into the you know, into the inside. Fascinating. Uh, what sort of advice would you give to a recent college grad who is interested in the career in journalism? Oh? Um, I would say that, um, you should and this would be my advice for like any career. I guess you

should try to read a lot of stuff. UM. I feel like people don't, Um, it's like the most obvious thing you can do. But like, but but like and this is I think you research, you want to go yeah, and and and and also just like and and read it for real, Like don't just try to like, okay, figure out what that book says, but like really actually read it, because because that's how like I think that's like pretty good advice for almost any career because but

but particularly in journalism. I mean, you know, most good story ideas and stuff come from for me anyway, come from reading things. It's it's you know, talking to people is helpful, but a lot of times, like it's just some something I read and it's like that raises an

interesting question and gets you to another question. And I just think people tend to It's also good to just be a little bit I think undirected, like again, like not just trying to figure out what something says, but like just just engage with it on an emotional level. And and like sometimes good things happen, sometimes not though

sometimes you just you know, very very interesting. And and my final question in what do you know about the world of technology, venture capital, finance investing today that you wish you knew twenty years or so? Ago fifteen years or so. Yeah, yeah, I mean it's two things like one and this is they're kind of the opposite. So

I don't know. But one is UM. Like that that that book, the Zuckerman book, was really mind expanding for me because it's all about the way the computers have had this you know, crazy impact on the world of money, and like I wish I knew and and and it's still happening, and there's still ways in which, like you know, you watch the look at this like Wall Street bet stuff where where there's interesting dynamics happening on social media and there's just like so many ways that algorithms are

like driving you know, moving money and and doing so are are are are telling the story of our lives and like that, I mean I wish I knew more. I wish I knew more about that now, I wish I had been more tuned to it, you know, fifteen years ago. Um. The other thing is UM Networks, and it's this is like the opposite, but like like in Venture Capital, UM, so much of it is still just like a is happening on an interpersonal level. It's these like the teals world is completely you know, uh it's

completely person a person, it's completely loyalty based. It's all about you know, who knows who, and and I think like understanding that or even though that's kind of the opposite of the computer thing, would have would have also helped me a great deal because really, especially in venture capital like still a very kind of old school business.

It's not like, uh, I mean they're buying they're they're buying stock and companies that do computer stuff, but the way they're doing it is very very much about um, yeah, impressions and networks and and who you know and stuff. Very interesting. Well, thanks Max for being so generous with your time. We have been speaking with Max Jafkin. He is the author of the Contrarian Peter Teal and Silicon

Valleys Pursuit of Power. If you enjoy this conversation, well be should and check out any of our previous uh nearly four hundred interviews we've done. You can find those at iTunes, Spotify, wherever you find your favorite podcast. We love your comments, feedback and suggestions right to us at m IB podcast at Bloomberg dot net. Sign up from my daily reads at rid Halts dot com. Check out my column on Bloomberg dot Com, slash Opinion. Follow me

on Twitter at rid Halts. I would be remiss if I did not thank our crack staff that helps put these conversations together each week. Mohammed is my audio engineer, Michael Batnick is my head of research. Atika val Bron is our project manager. Paris Wold is my producer. I'm Barry Ridholts. You've been listening to Masters in Business on Bloomberg Radio.