Dispatches from the Group Chats vol. 1

DOGE, SF, Debanking, David Sacks, Epstein, Conservative & Liberal dating

Belatedly: Happy Thanksgiving! I spent the holiday at Spirit Rock at a 7 day meditation retreat where I got ample time to reflect on how grateful I am for all the people in my life this year. As I’ve gotten older, I’ve increasingly felt the following to be true, even if achieving that state takes repeated practice:

“Gratitude will act as an elixir that will gradually dissolve the hard shell of your ego–your need to possess and control–and transform you into generous being. The sense of gratitude produces true spiritual alchemy; makes us magnanimous, large-souled.”

Housekeeping: We launched “Turpentine Lists” yesterday: an effort to spotlight breakout founders, operators, investors/funds, products, and companies that the startup ecosystem should be paying more attention to.

If you want the (anonymized) data set of recommendations of people, products, or companies, or if you just want any of them to get more recognition, fill out the form here by next Thursday. Please do submit! There are over 100 responses already by great people, I’m excited to share the aggregated data with people who submit nominations (even just a couple nominations count, no need to fill out the whole thing).

More “housekeeping”: My team won the SF Hoops championship this year. Here is a clip of me getting amped after a block and my brother laughing in the background. Sound on.

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This week I’m trying a new format: Dispatches from the Group Chats. For the last few years, the best conversations have happened in private group chats, not on public social networks, and I’m going to share some (anonymized) highlights. These chats include CEOs, investors, and political insiders.

1. Public company CEOs debate whether SF is truly back.

CEO A: “We just signed up for like 10 floors on market in a new building, I'm very bullish on SF.” [5 other similar stage CEOs express that they’re also buying more office space in SF].

CEO B: “I would very much like SF to be back - but i'm not seeing it yet. Still seems like a total war zone when you go through anything west of Van Ness, which of course you have to go through every time to get in/out of the city. It feels more dangerous than most most third world cities i've visited.

AI is doing well there - but what else are folks seeing that makes it seem back?”

CEO A: “I’m there every day, huge difference every day. Keep in mind that the tenderloinish areas were drugged out in 2019, 2018 etc too. I actually think it’s significantly better now compared to back then. The reason is that they’re having people from the city cleaning it up and moving people EVERY morning.

The tourists and activities are coming back too and getting better and better, but nowhere close to pre pandemic levels. But big difference from 2 years ago. But it’s not at all like say NYC which is 100% back.

Other areas like pac heights are MORE active than pre pandemic. Esp cafes and restaurants etc. basically, all the tech workers who work from home hang out in their neighborhood. So it’s actually the opposite over there. Just go to those places on a weekend.”

CEO B: SF is clearly on a trajectory to be back for tech. Young smart people are flowing in and energy / optimism are high. But retail is still dying, the big employers are gone, and the majority of the voters are still far left. The more “moderate” local government will help, the new federal government will help a lot. I would bet that the next four years will be quite a bit better than the last four. But nothing is guaranteed and it’ll be full of compromises.

I’m bullish on SF but I have one foot out the door.””

2. Debanking details under Biden/Warren

“So, as a [editor’s note: person working directly with related parties, redacted title to protect confidentiality], yes debanking happened and was celebrated internally at the time by some people in Biden admin.

But It’s important to separate much of the Biden team, who committed sins of omission or nonchalance about this, from the folks in the Warren aligned world at the FDIC, OCC, CFPB, and NEC that pushed for this.”

“Appreciate the candor. What was the internal talk over this like? "Those garbage people deserve it?" "It isn't really such a big deal?" Assuming it started as measures against extreme actors that gradually became normalized?

“Crypto will be gone in six months. It’s bad for people. Who cares if some rich tech founders can’t get bank accounts for once. We need more Old Testament justice. The folks [redacted] mentioned above were laughing about the SVB crisis as it unfolded and are angry SVB got rescued even now. Even the NEC wasn’t taking SVB (which in many ways arose out of Silvergate and the big debanking push in Jan-Feb) seriously the weekend the bank was teetering.

A big focus of the Warren crew is the idea that tech and finance have rotted the economy and pushed too many people out of “the real economy” that makes things, sapping our vitality. Per a ODNI staffer, to the WH “every crypto engineer is a policy failure” because it means one less person working on batteries, or semiconductors.

They want an economy where tech and finance are half or a quarter of the current size, so the economy is no longer “financialized” and warped/unequal. Matt Stoller is a great as someone to read because he spells out this view which the Warren camp doesn’t want to say.

The Biden team didn’t realize this was what was going on under them because they’re lazy and incurious.

As one Dem Senator put it ‘the problem is this WH has some staff who report not to the president but Sen. Warren’

X knows this: this was the first WH where a majority of the staff didn’t support the president during the primary that elected him.

“Is this just because there is really no constituency for Bidenism among the Dem staffer/adjacent class?”

So, I think it’s not that there isn’t but that there WASNT in 2019. 2016’s loss was shattering for a ton of people (me included) and the idea that we lost to Trump bc we didn’t go far enough to the left was like a siren song. The Pod Save guys basically bought into that too. And there was a ready made narrative for it from…Team Warren”

3. Prompt: If you were advising the department of Government Efficency (DOGE), what would you advise them?

   • Come up with a legal theory by which the executive branch can unilaterally term these employees (directly or indirectly) to move fast. Various theories exist. They will be challenged legally, so choose well.

   • Write a list of principles going forward that you want all federal employees to adhere to (ex: I will spend the governments money like it is my own and work to reduce cost dramatically to avoid bankrupting the nation, I will cease all DEI programs and be purely merit based, etc). Ask everyone to sign their name to these principles, everyone who doesn’t by Friday is fired. This drops maybe 30% or so headcount right away.

   • ⁠Stop paying all bills. Cut off 100% of outgoing funds and start to see what breaks, to help map territory of how these orgs work and what is important or not. Every outgoing request needs to be re-approved from first principles, and is denied by default unless re-justified. Extreme but very important. Triage them in what you turn back on.

   • Zero base budgeting: do a first principles analysis of what you want the government to do and how many people you’d estimate that should take. Deliver those budgets to them, and listen to the level of screaming to see where you might be off.

   • ⁠Root out snakes who are working against your interests and lied on #2 to stay in the org, set up a whistleblower hotline to find people working against the effort, and fire them

   • ⁠Also have a whistleblower form/hotline for egregious examples of waste people can report and post these online, to win hearts and minds to the cause (they are already doing this). These may be small dollar amounts but are concrete examples ordinary people can relate to. Use mockery to undermine the critics, with funny examples.

   • ⁠Once you’ve cut to health, put something in place to try and future proof it and limit the growth of government post this administration, for 100+ years. For ex: require a sunset provision in every law and agency, so they can’t keep accumulating where nothing gets deleted. Constitutional amendment capping growth in federal spending (10% of GDP max). Or align incentives to pass a balanced budget (any member of congress who votes for it is ineligible for re-election). The details here are nuanced (for example, allowing deficit spending during true emergencies like war) but some future proofing step is needed.

   • ⁠Ideally you’d find a way to get all unions out of government work also. People should be free  to organize (a basic freedom) but businesses and government should also be free to fire them if they choose for organizing (currently prohibited under law).

Some of this might need to be adapted for government vs private industry. Also you might need to go after Medicare and other major items through congress. The above is mostly executive branch focused.

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There are (at least) four kinds of DC government "dumb":

• Dumb spending - like $500 hammers, too many bases, redundant programs, cost-plus, and on and on

• Dumb organization - layers of managers, why didn't you fix that—because it isn't my job; the "DC way" is everyone gets to hire someone to do their job, so there are too many vendors/contractors, etc.

• Dumb metrics - spend all the money, save all the wrong money, vanity metrics, etc. Tightly coupled to this and essentially the same is dumb transparency.

• Dump people - people in the wrong jobs, jobs with poorly defined skillsets, and the run-of-the-mill challenges with any large organization.

Today and in all past examples, a significant focus is on dumb spending.

The Reagan administration famously compiled massive lists of these things.

Great PR. Embarrassing for a short time. But fundamentally, the system is immune from this humiliation. Each attempt at this has struggled with this because it is death by 1000 cuts-"yes we need this one thing" or "what about the children". It is why a 20% budget cut across the board can't work, as you end up managing every exception, and in isolation, nothing is all bad. It is also why every discussion starts off with "you can't touch entitlements."

There's a huge difference between paying the SS someone was promised and is modeled and the massive cost to distribute it and the inefficiency and fraud in that process.

There is also a whole culture that either piles costs on services to justify budgets or hides all costs to execute a mission to show efficiency or hides regulatory costs. Weeding through this is super tough. For example, everything in the military is designed to make things expensive to the eye.

OTOH, there are 6,000 FTEs in Medicare, but that hides who knows how many people in the state and private sector are dealing with it and the hidden cost of regulation.

No restructuring/alignment/etc can get rid of dumb people all at once without spending eternity in HR litigation and discovery. Especially with AFSCME and unions. But there is so much that can be done to improve the management of people, starting with identifying who the actual delivery people are in the system and separating that from management, focusing on metrics that count and moving away from metrics that don't. A great example is the way the FBI can relabel everything as "terrorism," and that drives crazy behaviors in the org, huge budget shifts, and a decline in law enforcement. It is a huge management churn with a negative effect because the budget is a zero sum game and no one is round long enough to deal with the implications.

The problem is a functioning government bureaucracy would have 10% of the people making twice as much with no civil service protections, and there's no bloodless way to get there from here

4. On Syria

The problem is a functioning government bureaucracy would have 10% of the people making twice as much with no civil service protections, and there's no bloodless way to get there from here

We are witnessing the disintegration of Syria before our very eyes in these last days!

Syria is the fault line where the interests of Turkey, Russia, Iran and the West collide.

The incoming Trump administration will have to decide:

* Will the US take the lead in shaping the future of Syria?

* Or will we allow others—Turkey, Russia and China—to define the region?

Historic and biblical times!

5. The Group Chats are excited about David Sacks’ appointment.

The community congratulates David on the appointment, David responds generously and says his door is open for ideas.

In chats not including David, people express amazement at how David played his cards just right (and how Peter Thiel perhaps got involved too early on the Trump train to take full advantage, though of course his bet on JD Vance certainly makes up for any loss there.)

One founder says: ““What a parlay. Podcast with Jason because you’re bored during COVID…now basically in charge of two biggest technology policy issues in a decade.

Another founder chips in: “BRB, buying more BTC….This is incredible. Let’s just keep him away from Ukraine policy. [Wide disagreement in the chat on Ukraine]

6. Epstein speculations

“Kash is gonna disclose the Epstein list and it’ll be glorious.”

“The three words “Epstein client list” are a massively popular meme. But how do we know such a thing even exists? Did he even have “clients”?”

“I know the exact location where the document is held. It’s real.” (Editor’s note: lol)

7. Execs worried about a possible increase in assassinations, beef up private security

“Had a bunch of conversations with major payor executives over the last two days, all are universally terrified, many hiring security, many. Most believe this is new norm, most companies are asking execs to pull LinkedIn down, crazy to see a shift this quick”.

8. DEI sentiment

“In my industry (talent development / coaching) I will say that all this stuff seems to have massively reduced. In 20-22, there was a ton of demand for DEI stuff and now we see ~0 of these things getting funded by companies. I'm sure the internal agitating continues but it's not translating to budgets (at least amongst our customers). Now every company wants training on how to build high performance cultures”.

9. On Conservatives and Liberals not dating

“It’s interesting to reconcile this trend with knowing I’ve never met a man markedly more liberal than his wife. Apparently, many women are against marrying a conservative but especially against marrying someone more liberal than themselves. The out group might be more tolerable than a man who’s even more of the in group.”

“I am in such a marriage. It is rare when it comes to national politics, but in more private affairs I often find wives to be more socially conservative than their husbands.…. My entirely vibe-based, tinfoil hat feeling about women refusing to date conservative men is that it is mostly due to pressure by their friends, not an innately held preference. They apply the pressure to each other as a kind of psychological intrasexual competition tact, akin to encouraging each other to cut their hair short.

“There’s also a cohort of women who might not know their partner is something short of a liberal (I know a few husbands who just keep quiet about their politics). One reason this Harris ad flopped is that it’s the inverse of who in a marriage tends to keep their political preference hidden. The implication of the ad is that the husband is an abusive piece of shit, but also that she’s too chicken to do anything but smile and lie to his face. Goes to show the depth of the problem for the party—they have no idea what Americans outside of their bubbles are really like.

I find this anecdotally to be true. I used to be told by my wife not to rabble rouse or say anything about DEI at school functions. Over time, enough of the dads started putting out feelers and finding they were not alone that the vibe shifted a bit. A ~year ago my wife stopped worrying as much about what I said as she found out I was quite normal. During this year's election season the women started joining in too. I am guessing most still voted for Kamala, but the cracks in the wall have been widening rapidly.

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If you want to see more of this format, like this post so I know to keep doing it.