Trey Lockerbie (03:20):
And for those who don’t know, the All-In Summit was put on by Jason Calacanis, who’s been on the show, Chamath Palihapitiya, the billionaire investor, who’s also been on the show, David Sachs from the PayPal mafia and David Friedberg, the in-house scientist, I would say is part of the group. He was an expert on all things on food and supply chain and had a really great perspective on a couple of topics that were discussed. So the main ones that stood out to me were around just general market sentiment. So there was a talk from the founder of Divvy, who spoke about the housing market.

Trey Lockerbie (03:53):
And her take seemed to be that the housing market will slow down. But that it’ll probably take well into next year for that to actually happen. I think there’s just still so much demand. And despite the fact that interest rates are rising and mortgages are getting more expensive, the demand is still there. And there is still, I think at this point, enough liquidity chasing the finite amount of homes that at least here in the US, the home appreciation will probably stay flat or continue to rise a little less aggressively than it has. But we probably are going to see a dip sometime next year. And then you had Bill Gurley and Brad Gerstner talking about the wider market sentiment. And what were your general takeaways on their approach to the market today?

Dr. Ryan Yermus (04:35):
Bill Gurley talked about it from mostly the venture point of view, investing in early stage companies. Pretty much sounding the alarm bell that the multiples that they had been investing at, have been drastically cut down. Now after COVID the economy was stimulated so heavily that multiples went out of control and they had to fight for investments and term sheets were being thrown at interesting companies. And now it’s different. Now it’s sort of a buyer’s market and funds are going to be more careful with which companies they invest in and at what valuations.

Dr. Ryan Yermus (05:09):
And then Brad’s talk, talking about public market sentiments as well. Saying that we should think about public markets coming back to say a five year average in terms of multiples and ratios, probably not prudent to say, “Oh, this stock is 75% off of its all time high,” and benchmark at the all time high. But rather try to figure out what the five year average would be for that stock and benchmark against that, is where things will get back to. I was a little bit inspired by the fact that he thought that a year from now the market would be higher than where it is today. Although, he didn’t rule out the fact that it could still go down further before it makes its way back up.

Trey Lockerbie (05:50):
There was a couple of other really interesting talks as well. Ryan Petersen, who is an expert on supply chains had a discussion. It was actually a prettier picture that I was expecting him to lay out. Basically, there’s this sentiment, I think around supply chains that it’s just going to continue to get worse. But he had a different angle. It seemed that things are actually improving and we’re still on maybe a one to two month delay on deliveries, but prices are maybe coming down. What was your main takeaway from Ryan’s talk?

Dr. Ryan Yermus (06:19):
The thing that struck me was when he talked about how the baseline average to ship a container from China to the US is traditionally in the three to $4,000 range. But that it got up as high as $20,000, took twice as long. Interestingly, the prices started to come down it seems, which is great. He also mentioned that the shipping companies themselves are investing in fleets. There will be more ships coming on board as well, which may lead to a reduction in price.

Trey Lockerbie (06:53):
One other talk that I also appreciated was Nate Silver and most people know Nate around his political predictions that he bases on statistics. He was able to apply that approach to life in general, it could be applied to investing. And it was a more general talk than I was thinking it would be. What were a couple of takeaways you took from Nate Silver?

Dr. Ryan Yermus (07:13):
I loved the way he talked about probabilistic thinking. So this idea that when you’re making decisions in gambling, in investments, in life, try to weigh the odds of a successful decision. And so you could make the right decision and still end up with the wrong outcome. So if you’ve done your calculation and you’ve got an 80% chance of winning in poker, probably a good time to make a big bet. However, one in five times that 80% is not going to hit and you end up losing, but at least you can be content with the fact that you got your money in at the right time, more often than not, you’re going to win there.

Dr. Ryan Yermus (07:49):
One thing I was thinking about though, when he was saying that is how do you manage the risk of ruin? So for example, if you’re playing in a tournament, you may do the odds in your head and have a 55% chance of winning. But is that worth going all in with all your chips? Because even though the odds are technically in your favor, it’s not by all that much. And if you do lose, you’re out of the tournament. The parallels to that, I think in life and investing, are pretty important to think about.

Trey Lockerbie (08:17):
All right, so let’s talk about the host. So Jason, Chamath, David, and David Sachs and Friedberg, they had a couple of really great moments as well. So there was a couple of ask me anything moments from the audience, and they were able to stretch out and talk about different things. The theme that kept coming up and they were really driving home, was that if you’re a founder and you’re running a business, you better have cash on hand. I mean, that kept coming up again and again and again. And it really just, I think, spoke to their sentiment and their outlook on the current market. And Elon, who we’re going to talk about here in a minute, touched on this. But the average recession period is usually about 12 to 18 months once it begins.

Trey Lockerbie (08:57):
So there is this expectation that we are probably in a recession currently, we’re waiting for the numbers to come out, but that seems to be the general sentiment. And once that proves out, not saying it’s a guarantee by any means, but once it comes out in the numbers, we might be looking at something like that, 12 to 18 months of not only volatile markets, but depressed multiples on valuations, money drying up, people are a little bit less likely to let go of their cash. As a founder, for example, it’s harder to raise money. It’s certainly harder to get the valuation you once had. So that kept coming up again and again, for me. And the basis of this thesis is basically that the Fed is a lagging indicator, if you will. They’re basically not a proactive group of people. They’re reactionary. And so they’re looking at the data, the economic data, not just the stock market, they made very clear to get that point across as well.

Trey Lockerbie (09:50):
The Fed is looking at much more data than what is just found in the stock market. So for example, they’re looking at inflation numbers that don’t seem to be quelling as rapidly as they hoped. There is, I think a higher probability, another couple of 50 basis point hikes are coming. And while we might sit here and think that that seems like the dumbest idea, because you’re raising into weakness here. They are really trying to tame inflation to get interest rates back up to where they need to be, so when there is something that breaks in the market, they can lower again and ease a little bit more. But on top of the interest rate hikes that I don’t think is being talked about enough, is the 190 billion or so of liquidity that is being taken out.

Trey Lockerbie (10:30):
So I remember Chamath talking about three trillion that they basically injected into the market once COVID started. And now the Fed has basically come out and said, “Okay, over the next three years, we’re now going to take out 190 billion a month.” And so that roughly equates to three trillion, if you do the math. So basically, they put all this money in, their plan is to take the money out. Once they do that, it actually exhausts that money and that money disappears. So hopefully that will quell inflation and if the markets will recover. I think the big question right now is how much of this is priced into today’s markets, because it remains yet to be seen how much of this is factored in. My general thesis was that it’s going to get a little bit worse before it gets better.

Dr. Ryan Yermus (11:11):
Yeah, they definitely did go out of their way to convince people not to expect a Fed put. Many investors have gotten in the habit of the Fed coming and saving the day. But it does appear this time, the Fed should be believed, or at least that was the message that we were being sent.

Trey Lockerbie (11:28):
Yeah, because 12 months ago, how much of the narrative was around the fact that the Fed can’t possibly raise rates, right? And here they are raising rates up to 75 basis points now and going higher, probably. So these things that were at once seemingly fact are being dispelled a little bit and that’s something to be very wary of. All right, so shifting gears a little bit, I want to talk about the man of the hour. It’s undeniable that this was the real headliner of the entire event.

Trey Lockerbie (11:54):
Elon Musk, who was a good friend of Jason Calacanis and the group that was on stage, came in for a fireside chat. It ended up lasting about an hour and a half. It was much longer than I even expected. And he came in much more relaxed. He was laughing, he was cracking jokes, and it wasn’t like a TED Talk, where you typically see him. And he is very serious talking about Mars and whatnot. He did touch on these points, but there was just a general relaxed nature to him. And I hadn’t quite seen that side of him before.

Dr. Ryan Yermus (12:19):
I totally agree. He was very casual. He was at ease, having a conversation with his friends. But at the same time, I think he had the whole room mesmerized. You could hear a pin drop. I loved how transparent he was about his discussions with Twitter right now.

Trey Lockerbie (12:35):
Yeah. So we’re actually going to play a clip from the event here, where Elon’s talking about the Twitter deal, because they came right off the bat talking about Twitter. Everyone’s been following along with this. But what was surprising to me is how bearish I would think his sentiment towards Twitter really was. The contention here is that he’s basically alleging that Twitter is claiming to have fewer bots than they really do. So for example, in the public filings, Twitter is saying that they have around 5% or less bots. He’s claiming that it’s four to five times that. And he said the lowest estimate was closer to 20%. So we’re going to play the clip here. If anyone’s invested in Twitter right now, I think you should definitely pay attention to this clip.

Jason Calanis (13:17):
Is this Twitter deal going to get closed, do you think? What are the chances here?

Elon Musk (13:20):
Well, I mean, it really depends on a lot of factors here. I’m still waiting for some sort of logical explanation for the number of fake or spam accounts on Twitter and Twitter is refusing to tell us. So this just seems like a strange thing.

Jason Calanis (13:38):
Wait, sorry. Are they refusing to tell you or you don’t think they really know? I mean, there’s a good chance they may just have no idea.

Elon Musk (13:44):
They claim that they do know, and they claim that they’ve got this complex methodology that only they can understand.

Jason Calanis (13:56):
But the guy who landed two rockets simultaneously can’t understand?

Elon Musk (13:56):
It’s like when you do the witch’s brew, you stir this cauldron and then you throw the [inaudible 00:14:03]. And then suddenly it comes to you in a dream, I don’t know. But there should be some objective way to this thing, because it’s a material adverse misstatement if they in fact have been vociferously claiming less than 5% of fake or spam accounts. But in fact it is four or five times that number, or perhaps 10 times that number, this is a big deal.

Elon Musk (14:27):
It’s sort of like if you said, “Okay, I agree to buy your house.” You say the house has less than 5% termites. That’s an acceptable number. But if it turns out it is 90% termites, that’s not okay. It’s not the same house. Your house will disappear. So that would obviously just not be appropriate. So in making the Twitter offer, I was obviously reliant upon the truth and accuracy of their public filings. And if those filings are not accurate, you can’t pay the same price for something that is much worse than they claimed.

Jason Calanis (15:05):
And they say, Elon, life’s in negotiation. So at a different price, it might be a totally viable deal, correct?

Elon Musk (15:14):
I mean, it’s not out of the question. The more questions I ask, the more my concerns grow. So at the end of the day, acquiring it, it has to be fixable and fixable with reasonable timeframe and without revenues collapsing along the way and all that sort of stuff. And so I really need to see how these things are being calculated. And it can’t be some deep mystery that is more complex than the human soul or something like that. I think we can apply the scientific method to this and try to figure out what’s really going on.

Elon Musk (15:48):
And Twitter’s revenue is primarily dependent, I think 70% or something of that order on brand advertising, as opposed to specific purchase advertising. This is a big deal because brand advertising, there’s not a purchase that results from that. So it’s basically how much Mindshare or basically, if you’re a big company, how often do they hear your name? As opposed to something where you can directly measure the outcome. So that means that they’re somewhat going on faith. And if that faith is undermined or reduced because of the reality of the situation coming to the fore, Twitter’s revenue will be significantly impaired. And that’s a major problem.

David Friedberg (16:28):
Elon, did you have a chance to ask these questions during your negotiation?

Elon Musk (16:34):
Like I said, I was reliant upon their public filings. So to the degree that the public, and this is normal for a public company, if you make a formal filing, that is what investors are relying on, whether they are making an acquisition offer or simply buying some shares. The accuracy of these filings is important, whether you’re buying one share or the whole company. And so if these filings are inaccurate or if they’re potentially [inaudible 00:17:04], it’s a big deal.

David Sachs (17:06):
Elon, do you have a sense of why this has been such a persistent problem for Twitter? Do they not have the technical capabilities to solve the bot problem? Or is it more of like just they’ve under prioritized the issue or been unwilling to because potentially there are implications for ad revenue?

Elon Musk (17:23):
I don’t know, it’s speculative at this point. So the worst interpretation would be that they don’t want to look too closely at the thing because they might not like the answer. That would be the worst interpretation. I’m not sure what the best interpretation is, but the least bad interpretation would be maybe they thought it was this way, but the way they were doing it was wrong. And they didn’t realize they were mistaken and simply weren’t paying enough attention. It does seem as though it should be a lot easier to get rid of the bots, and spam, and trolls, we’re not trying to split the atom here.

Trey Lockerbie (17:53):
My favorite part of this clip is the termite analogy, where he’s basically saying, if you have a home that has 5% termites, that’s reasonable. But if the home has 90% termites, that’s a different story. If I’m being honest, I was actually more convinced of this argument than I was going into it. So for example, at his TED Talk, Elon said that he basically was buying Twitter to protect free speech. And that he even said, I think, ‘the economics don’t matter’. And I found this really interesting because J.P. Morgan has quoted to put $26 billion into this deal.

Trey Lockerbie (18:25):
I mean, how do the economics not matter? And I don’t think you rally J.P. Morgan to put in 26 billion on free speech. I just found it a little too convenient that while the Twitter stock tanked, while all the rest of the market was tanking, here comes up this idea that, oh, these bots are a real issue because the revenue stream might be affected. And there was all these arguments made, but I was really skeptical going into this argument because I thought, “Well, if the economics don’t matter, then why bring it up?” But it sounds like this might be a harder problem to solve than he originally thought. And I thought he was actually very convincing. What did you think, Ryan?

Dr. Ryan Yermus (18:59):
I agree. Although firstly, I would argue that if my house was 5% termites, that would also be unacceptable. If you’re focusing on bots as the issue, as it pertains to advertisers, then that is a different narrative than thinking about free speech. And the guys were talking about how the Twitter bot situation may qualify as a material adverse change or a MAC as they were describing. That’s more in pertaining to advertisers and less so of an issue I think around free speech, unless to your point, Trey, it’s too hard of a problem to solve.

Trey Lockerbie (19:34):
Yeah. I’m glad you brought that up because MAC is a legal term, right, material adverse change. And that’s a big deal because there are billions of dollars on the line here. If what he’s saying is actually true, where the actual bot count is different than the public filings, then we’re talking about shareholder class action lawsuit level issues. I mean, this is a really big deal and a really big allegation that he’s laying out very publicly. So I just found that to be really interesting, that he was so cavalier about how he’s even thinking through this deal. I just found that to be refreshing, but also concerning in a lot of ways too, because if he’s in fact not correct on this allegation, that could really blow back on him as well.

Trey Lockerbie (20:17):
So one of the other points that I believe David Sachs highlighted, was the fact that Elon has got a billion dollars committed to this if he walks away. He’s got to lay up a billion dollars just to walk away from this deal and cut ties. But David said something interesting, which is essentially that he expects that there will be many lawsuits before Elon pays up a billion dollars, especially if there’s these types of allegations on the table. But this is a really big deal. I think for those who are holding onto Twitter stock, hoping that this deal will close where it’s supposed to, I would start to second guess that.

Trey Lockerbie (20:49):
All right. So one of the other topics that Elon touched on that I want to play a clip around is this idea of how you should break down Tesla. And this is something that gets overlooked a lot because it’s really simple to just say, Tesla is a car company. And if you compare the market cap, it’s valued over all the other car companies combined, or at least it was at one point, it’s gone down quite a bit at the time of this recording. But it’s really important to note and dissect Tesla a little bit in this way that he did, because he is basically started to frame out all the mini startups that are within Tesla and how vertically integrated they are, which over a long period of time could be a huge advantage. All right, so let’s play the clip.

Chamath Palihapitiya (21:29):
There was a Bloomberg article that said the following, so the setup is this, it said, since you went public, Tesla’s up 22,000%, 11 quarters of sequential profitability. So hitting an all cylinders, but the public analyst-

Elon Musk (21:45):
Yeah, absolutely.

Chamath Palihapitiya (21:47):
That’s a car joke. Analysts, when they put out their projections, okay, it’s one of the most enormous bands for any company in America. The price targets for Tesla, despite all of this success, some have it at 200, some have it at 1,600, it’s all over the place. You tweeted a couple months ago, Tesla’s not a company, it’s like six companies inside of a company. You’ve had to build- this-

Elon Musk (22:09):
Yeah, maybe more.

Chamath Palihapitiya (22:09):
Yeah, maybe more. Can you just explain to people, all these companies inside the super company? Just so folks have a sense of what had to be done to get here.

Elon Musk (22:16):
Okay. I mean, this question requires thought, and I’ll probably be leaving out quite a few things. But if you look at say, what does a typical car company do? What they do is they assemble vehicles and they send them to dealers and they manage the supply chain. They might make the engine, typically we’ll make the engine, but most of the parts are made by suppliers. And a lot of the actual technology development is done by suppliers. And most of the vehicle software is done by suppliers. So the actual amount of real work done by car companies, what you think of sort of like a GM or Ford is not actually that much. So they don’t do sales, they don’t do service.

Elon Musk (22:56):
So in the case of Tesla, for example, we do our own sales and service. We don’t have dealerships. Then Tesla also has, by far, the biggest network of super chargers, sort of the electric equivalent of gas stations. So we built the entire global super charger network, which is still the most advanced and by far, the best way to charge your car when traveling long distance or if you live in a city and don’t have the ability to charge your car, there’s a street parking or an apartment. We deployed it. I think we have, I don’t know, 15,000 super chargers globally. You can travel anywhere in America right now with the Tesla supercharge network. Then in terms of vertical integration, we make the battery pack, the power electronics, the drive unit. We’re more integrated in the parts.

Elon Musk (23:40):
We actually make so much of the car internally. We’re vertically integrated, not necessarily because we think that there’s some religious reason to vertically integrated, but because the pace at which we needed to move was just much faster than the supply chain could move. And to the degree that you inherit the legacy supply chain, you inherit the legacy constraints, including their speed, cost, and technology. And then Tesla is as much a software company as it is a hardware company. So the software that runs in Tesla operates the car operates the screen, does the charging, all of that stuff is developed by Tesla. And so we have sort of a car, a Tesla OS in the car. Tesla has built an autopilot AI team from scratch. That is the best real world AI team on earth. And if anyone else has got a better one, I’d like to see it demonstrated in a car.

Elon Musk (24:28):
The full self-driving beta at this point, very often take you with zero interventions across the Bay Area from San Jose to Marin, through complex traffic. It’s really quite sophisticated and I’d invite anyone to join the beta or look at the videos of those who are in the beta. We’ve got like a 100,000 people in the beta, so it’s not tiny. And we’ll be expanding that to probably a million people or a million, I don’t know, so on that order by the end of the year. We also built a chip team too, because there wasn’t hardware to that we could run the frigging AI on, we couldn’t just fill the trunk with a whole bunch of GPUs, because they would’ve created a trunk full of GPUs, that would’ve been very expensive and taken a massive amount of power and cooling, just to be able to do what the Tesla designed full self-driving computer can do.

Elon Musk (25:14):
And we started a chip team from scratch, designed it, it was the best in the world and still is the best in the world several years later. And we’re also then developed, we’re designing a Dojo supercomputer to be able to process all the video that’s coming in from billions and miles of data. Because just sort of like the way that it’s critical to compete with Google because they have so much data and they have all this people doing searches all the time and humanity is training it. The same is true of Tesla. You really need billions of miles, ultimately tens of billions of miles of training data combined with a vast training computer and then optimized inference hardware in the car and state-of-the-art AI and training and specialized software across the board to be able to achieve a full self-driving solution.

Chamath Palihapitiya (26:00):
When he opened Tesla Gigafactory, remember this six, seven years ago. I’ll just tell the audience this story quickly, Elon. He puts a slide up there and he says, “Guys, we’re not actually building a factory, we’re building a machine that makes machines.” And he puts the layout of the factory and it looks like a chip. And it was basically like how you would actually layout a microchip or you were like a layout engineer. It was the craziest thing I’d ever seen. And I was like, that was when I first got it.

Jason Calanis (26:24):
And you have an insurance company, now you’re doing insurance for Tesla owners.

Chamath Palihapitiya (26:28):
And an Uber competitor.

David Sachs (26:29):
Right. And eventually a robo taxi Uber competitor, [inaudible 00:26:31].

Elon Musk (26:31):
The car insurance thing is a bigger deal than it may seem. A lot of people are paying 30, 40% as much as their lease payment for the car in car insurance. So the car insurance industry is incredibly inefficient because first of all, you’ve got so many middle entities. You’ve got from the insurance agent all the way to the final reinsurer, there’s like a half a dozen companies each taking a cut. And then it’s all very statistical, so even if you’re a very good driver, you could be like 20 years old and a great driver, but it’s all statistical, so you can’t get insurance or it’s extremely expensive.

Elon Musk (27:10):
But Tesla allows for real time insurance based on how you actually drive the car. If you drive the car in a safer way, you actually have lower insurance. So our insurance is based on how you actually drive, not how historically, people that fit your whatever demographic drive. And then you can close the loop around your insurance rate by simply driving better and looking at your score and lowering your insurance in real time. And people do, it actually promotes safer driving.

Trey Lockerbie (27:40):
Okay. So one of the most mind boggling things he said in all of this was just how big the Tesla Gigafactory in Texas is. It’s a mile long, a quarter mile wide and 80 feet tall, three times the size of the Pentagon, found that really incredible. And this idea that it’s a machine that makes machines, I thought that was an interesting framework. And to me, it was just a snippet of how Elon runs his companies, how he lays things out for his employees to understand the mission and the bigger picture. I just thought that was an interesting takeaway because I’m always looking for ways to how this guy runs all these many companies as successfully as he has. And I felt like that was just a glimpse of how at least he approaches his employees and communicates the narrative that’s bite size and easy for everyone to digest.

Dr. Ryan Yermus (28:25):
The first thing that I’m not sure if I realized before that was that traditional auto manufacturers don’t actually build each part of the car, they assemble it more than they actually build each component. And then you parallel that with Tesla that is actually building most of the components within their cars and some of which are extremely complicated, that nobody else has even the capability to build, that to me was quite eyeopening.

Trey Lockerbie (28:54):
Okay. So lastly, I just want to play this clip from Elon, where he’s talking a little bit about the grand mission behind SpaceX. How they’re actually going to fund the mission, say to go to Mars. And really, this segment got interesting when they started talking about sustainable energy. David Friedberg brought up fusion, for example, how viable an option that is. And I thought Elon had some really good points around that. So let’s take a listen.

David Friedberg (29:13):
Elon, when you think about the importance of going to Mars versus solving critical energy and climate change problems here on earth, obviously the effort with Teslas related to sustainable energy. And I think going back to probably the 1950s, there were engineering designs around plasma fusion or fusion based systems that have evolved to these plasma systems, to these tokamak systems. And every decade, it’s like, “Hey, next decade, we’re going to have it.” What’s your point of view on where plasma fusion systems are? Are we going to have fusion energy this century, this decade? And does it create limitless energy, where the electricity production goes up by 10,000 fold and the price of electricity drops by 10,000 fold? And then what does that world on earth look like if that happens? So I guess question is, is that technology real? When does it happen? And what happens to the world here when and if that happens?

Elon Musk (30:07):
I’ll answer that question, but then let me point out what the actual issue is. If the question is like, is it possible to solve fusion energy? 100%, yes, definitely, definitely, definitely, definitely, for sure. And really just using a tokamak style, which is basically a donut ring with electromagnets that control the plasma. The way to solve that is simply scale up the tokamak. Fusion is very much a scale based thing. You want to minimize your surface to volume ratio.

Elon Musk (30:40):
So as you scale up a tokamak, you reduce your surface volume ratio, which means the volume you have relative to the surface, you now have much more, like you can basically have a hot zone in the center that’s relatively far away from the walls and more of a hot zone. So it’s not, in my mind, a question as to whether fusion can work. But there is a question as to whether it is economically viable and whether it is competitive with alternatives. I think the economic viability of fusion is a much bigger question. And I think the answer probably is that fusion is not competitive, economically. I would say it’s probably not competitive economically by an order of magnitude.

David Friedberg (31:27):
Is it a materials breakdown or where does it break down?

Elon Musk (31:31):
So you can’t just use normal hydrogen, you need to use like deuterium and tritium, unusual forms of hydrogen, helium-3. There are some other types of fusion that could be used. But there’s not a lot of this raw material, it’s quite difficult to get the raw material. So first you have to get the raw material, it’s expensive raw material. And then it’s not just about generating the energy. You’ve got to turn that energy into usable electricity. You can’t just have a hot thing, okay? So the hot thing has to translate to usable electricity.

Elon Musk (32:14):
So I think you’ve got a cost of fuel issue, which is very significant. You have a whole bunch of knockdowns from when you generate the heat to when you actually convert that into electricity. You’ve got some very difficult maintenance issues with a fusion reactor. And that should be then compared to alternatives. The sustainable energy alternatives that I think are overwhelmingly more competitive are solar energy, wind, geothermal, hydro, sum tidal, and energy, but it’s really primarily solar and wind. And you can really say like, why bother creating fusion on earth when we have a gigantic fusion reactor in the sky that just works with zero maintenance? And it shows up every day and it’s free.

David Friedberg (33:02):
Consistent, yeah. But, Elon, can we scale to a 1,000X or a 100X or electricity production here using solar and other renewable sources?

Elon Musk (33:10):
Yes. So the amount of surface area you need to power the United States is remarkably tiny. So you need like basically, roughly 100 miles by 100 miles of territory. And it obviously doesn’t need to be in one place in the United States to power the United States. It’s like a little corner of Texas or Utah. And you could probably get 10X, just with solar alone, without displacing anyone’s home, power and economy 10 times the size of the United States in the United States. If you extend that to water, because earth is 70% water. I mean, you could say, “Okay, now we could probably have a civilization that is 100 times as energy intensive as we currently have it.”

David Friedberg (33:56):
And so what does that look like? Was the last part of my question, which is a world where energy costs of say it’s 100 times cheaper than they are today and we have 100 times more energy production capacity. What changes about civilization? What do we do differently? And what do we see change most dramatically?

Elon Musk (34:12):
Well, currently because of just generally low birth rates almost worldwide, the civilization is not headed to have a population that is an order of magnitude greater than where we’re currently. We’re currently headed towards a population decline, and this is almost everywhere in the world. It basically seems as though, as soon as you have urbanization and education be on a certain level and income be on a certain level, birth rates plummet. And so as countries get wealthier, their birth rates plummet. It’s somewhat counterintuitive because people will say like, “Well, it’s too expensive to have a baby.” Nope, the wealthier you are, the fewer kids you have. The more educated you are, the fewer kids you have. So it’s the inverse. So I’m not sure who would use all that energy, unless there’s a significant change in the birth rate.

Trey Lockerbie (35:05):
All right. So overall, the whole talk was over an hour and a half. Elon gave us a lot of time. It was really fun to hear him talk to his friends, especially and have that dynamic. But as cool as Elon is, I want to talk about Ryan Yermus because you and I met at this event and we hit it off. And I just found your background so interesting. You’re a medical doctor and you’re an entrepreneur. You’ve founded or co-founded a couple of companies now that have gone public. So talk us through your background, how you became a medical doctor, and then how you found yourself co-founding all these amazing companies.

Dr. Ryan Yermus (35:37):
I’m an addictions doctor. I’ve been practicing addiction medicine for the better part of a decade now. The field of addiction is really interesting in that addiction’s not caused by just one thing. Addictions are often what we call comorbid. It also often is the result of traumas in the past or people’s upbringing, that sort of thing. I’ve been frustrated with medicine in general, though we try really hard to help people with behavioral health issues, there really aren’t many fantastic tools at our disposal to do that. The standard of care for mental health is to take a pill, or two, or three a day that, if you’re lucky, is able to alleviate symptoms or at least minimize symptoms for a time.

Dr. Ryan Yermus (36:21):
A lot of times these medicines don’t get people back to ‘feeling good’, just maybe feeling better than they felt when they were depressed, or anxious, or had symptoms of their trauma. So we were looking for better solutions. In starting Field Trip, we came across the field of psychedelics and psychedelics is really science-led. People may know of Timothy Leary back in the Harvard days, many decades ago, that ended, what at the time was the emergence of psychedelic therapy, psychedelic medicine. I would argue that we are right now in the midst of a reemergence of psychedelics, this time being led by the science. And the science is overwhelming at this point. We’ve got studies being done by non-profit called MAPS, showing that MDMA is extremely effective at treating people suffering from post traumatic stress disorder.

Dr. Ryan Yermus (37:11):
We’ve also got plenty of research coming out of NYU and Imperial College in London, and some other drug development companies, showing that psilocybin, which is the active ingredient in magic mushrooms can be used to treat depression. When we’re looking at these treatments, I think the important thing to think about is the fact that rather than needing to take a medicine every single day for weeks or months, these treatments are self-limited. This is working with a therapist for several sessions and then taking a single dose of a psychedelic in a comfortable therapeutic setting. And that can actually lead to the resolution of their symptoms and getting them back to feeling normal again, without the need to take more pills afterwards. And so what we’ve done at Field Trip is we’ve looked at this problem from a few different angles. We actually, we’re traded on the NASDAQ under the ticker FTRP and we’ve just recently announced that we’re splitting off the two arms of our business.

Dr. Ryan Yermus (38:09):
So the two arms of our business are, one is in novel psychedelic molecule development, biotech. We believe that we have a molecule in FT-104 that is a better, more user friendly version of psilocybin. The idea will be that psilocybin lasts about six hours or more and takes a full day for a person to actually have that experience. What we’re hoping to show with FT-104 is that we can deliver a psychedelic experience that’s therapeutic in a much shorter period of time. The other benefit of FT-104 is that we’ve got patent protection over the molecule itself. The other half of our business is the services business. So essentially, the delivery of psychedelic therapy. And so we have a network of 12 clinics across North America and one in Amsterdam, that’s delivering psychedelic assisted psychotherapy today. In North America, we’re using ketamine as the psychedelic medicine and combining it with comprehensive psychotherapy to treat people. And in the Netherlands, we’re actually able to use psilocybin truffles, which are permitted in the Netherlands. And so we’re able to do that now.

Trey Lockerbie (39:22):
On that point, what are you seeing as far as the benefit from ketamine versus psilocybin? They’re trying to achieve, I think, somewhat of the same thing. But there’s obviously legalities involved, as you mentioned. So are you seeing that the psilocybin data coming out of Amsterdam is more promising than the ketamine for any particular reason? Or are they just different or used for different treatments altogether?

Dr. Ryan Yermus (39:45):
Ketamine is very fast acting. The experience itself lasts just over one hour and so that’s quite beneficial. Ketamine itself though, needs to be administered if you’re treating depression several times over the course of a few weeks, whereas with psilocybin the idea is that someone could take a single dose, spend a day in our centers and hopefully emerge from it feeling much better. The centers that we’ve built out are purpose built for psychedelic assisted psychotherapy. And that’s important because one of the main principles of psychedelic assisted psychotherapy is that the setting that the person’s in actually contributes to the therapeutic effect. And the mindset that someone has when they engage in that experience actually contributes to the outcome, either positive or negative.

Trey Lockerbie (40:39):
So from what you just said, I imagine ketamine, is it similar to psychedelics or how people think about that, where say it’s the Beatles turning into cartoon characters, flying on rainbows or yellow submarines? I mean, is that the kind of psychedelic effect we’re talking about here? Or is it something more subdued than that? Talk to us about maybe the doses that are used in these types of treatments and what you’re striving for, for an ultimate outcome and how you measure that.

Dr. Ryan Yermus (41:04):
Before people start our program, we’re doing standardized questionnaires to measure their symptoms of mood, anxiety, or trauma. The goal of the treatment is to improve upon those metrics at the end of the treatment. In terms of the actual subjective experience that the person has, been reported that there are parallels to other psychedelics. The good thing about ketamine is ketamine is an approved medicine. It’s approved as an anesthetic, it’s a dissociative. And one of the reasons why it can be used in this setting is because it’s a very safe medicine to take in the acute setting, in that it does not negatively affect breathing. The doses that can be used in this setting can elicit a psychedelic experience safely. Everyone experiences ketamine differently, but people do report visions or colors or just feeling as though they’re sort of outside of their body. That’s something that we hear quite a bit.

Trey Lockerbie (42:04):
So if I’m not mistaken, you’re using psilocybin in Amsterdam. Obviously it’s illegal here in the US and it’s got this stigma around it. To my understanding it’s illegal because it goes all the way back to, I think the Nixon era, where he kind of lumped psychedelics, along with cannabis and some other drugs, into this schedule one category, which is the most severe type of drug. But when you compare it to alcohol, there is a lethal dose of alcohol, whereas with something like psychedelics, there’s not. So I’m just curious, what is giving you confidence that something like psilocybin can overcome the schedule one regulation and actually become a legal drug?

Dr. Ryan Yermus (42:42):
Yeah, it’s a good question. I mean, schedule one is reserved for substances that are deemed to have no medical use. I mean, I think you could make a strong argument that psychedelics don’t belong on that schedule. But the work in the United States is being done at the level of the FDA. So with FT-104, for example, which is a psychedelic, we’re starting our phase one trial shortly.

Dr. Ryan Yermus (43:07):
And the idea is to move on to phase two and then phase three, and then get it approved as a prescribable medicine that a doctor can prescribe to a patient. Right now, there are other companies, one is COMPASS Pathways, that is bringing psilocybin to market. I believe they’re on their phase two study or the beginning of their phase three study, to bring psilocybin to market, to treat treatment resistant, depression FT-104 is a very similar medicine to psilocybin. And so we’re confident that we should be able to get that through as well.

Trey Lockerbie (43:41):
My understanding is that a lot of funding going into this research is also coming from ex athletes, because if you think about football players, hockey players, high contact sports, there’s a lot of injuries that come from that, specifically brain injuries. And it seems like as the research is catching up, these injuries have long lasting effects. And so it’s driven a lot of people in the athletic domain to provide resources for this research, because it seems to be more of a sustainable way to overcome those types of brain injuries. So I’m curious, what exactly is going on in the brain when you’re taking a psychedelic?

Dr. Ryan Yermus (44:18):
The science is still being done in this space, but the gist of it is that when you are someone who is depressed or anxious, you get these thought patterns in your head that are really hard to shake. If think about these sort of loops of thoughts that are going around in your head and regardless of what you try to do, they tend to come back. And so that’s referred to often as the default mode network. What psychedelics can do is they can actually sort of clean the slate. People will get out of this negative thought loop, and it allows new thought pathways to form, new neural connections to form.

Dr. Ryan Yermus (44:55):
People may reemerge without this negative, depressive, or anxiety provoking thought patterns as a result of it and be able to have some distance from what was causing their depression or their anxiety. Another exciting part of psychedelic research is this idea of neuroplasticity. People are actually making new brain connections. And what that allows is people to relearn things, or to learn new things, or to get out of old assumptions, or old thoughts that they may have had. And so it’s all fascinating, fascinating stuff. Part of the reason you may get athletes or artists interested in this space is that they may have had a personal experience that impacted the way that they view life and they just want to share it with others.

Trey Lockerbie (45:47):
Do you find any resources coming from the military or even the clients coming from the military? Because I’ve heard that this can also be used as treatment towards something like PTSD. Is that correct? And are you seeing that in the research as well?

Dr. Ryan Yermus (46:02):
Yeah, absolutely. So in Canada we actually do help a lot of military veterans with their PTSD symptoms and we’ve been seeing fantastic results there. In the US, it is one area that appears to have politicians on board with. And this is the idea of using psychedelics, often MDMA assisted psychotherapy to help military veterans, who’s suffering from the effects of posttraumatic stress. It’s exciting to think that this may soon become a treatment option that’s available to more of them.

Trey Lockerbie (46:35):
I love what you said about repaving these pathways. I’ve heard this analogy with psychedelics around it being like fresh snowfall in your brain. So if you think about you go sledding, one guy goes down on the snow, it carves his path. And if you go follow him, your sled might fall into that same groove. But you get new fresh snowfall, and then you can pave new pathways. Does that idea speak to your interest in psychedelics as it relates to addiction? Because I imagine addiction comes with similar thought patterns that you’re trying to break.

Dr. Ryan Yermus (47:04):
Absolutely, you’re right in that the thought patterns in addiction are similar to other behavioral health issues. But oftentimes addiction can be even more complicated because they’re situational. If you go back to a home where everyone else is using a substance and it’s right in your face, going to be really hard to avoid it. For me, addiction is multifactorial and more complicated than many other behavioral health issues. For that reason, it’s harder to pinpoint and treat. But I do believe that there’ll be a place for psychedelics in the treatment of addiction. There is one psychedelic medicine called Ibogaine, that has traditionally been used to help people with addictions. It’s not something that we’ve started to do at Field Trip, but it’s out there and it’s interesting.

Trey Lockerbie (47:57):
The thesis around psychedelics helping depression is really interesting because yeah, while I understand that you can create these new pathways in your brain, my understanding with depression for example, is it’s almost like a chemical imbalance. So there’s actual chemicals involved or at play here that are causing those thoughts in the first place. So do the psychedelics have any impact on stabilizing the chemicals in your brain or helping in any way in that front?

Dr. Ryan Yermus (48:20):
The main treatment right now for depression is the use of medications that fall into a category called SSRI, selective serotonin reuptake inhibitors. And so that’s your medicines like Lexapro or Zoloft. Those medicines work by keeping serotonin in the brain synapses. So serotonin is a neurotransmitter, it gets released and then it gets taken back up. And so these medicines stop the taking back up of the serotonin. And the result is that, or that hopeful result is that the person feels happier. With psychedelics, they work in a different fashion. So FT-104, for example, is a 5HT2A receptor medicine, it acts on these specific serotonin receptors. And what it does in the moment, is creates a really powerful reaction. But once it resolves, sort of like the brain is back on its own, but to your point, ideally it carves a new, healthier path down the hill.

Trey Lockerbie (49:24):
So FT-104 is a molecule you guys have actually developed, designed, you’re patenting, does that mean while it’ll be used in treatments, if I’m thinking really long term for this company you’re running, does that mean it’ll ultimately manifest potentially in something like a supplement or some kind of product based thing that you could use it for, given that the regulations are relaxed on the actual molecule itself? Or would you say that’s not really in consideration for a company like Field Trip?

Dr. Ryan Yermus (49:52):
FT-104 specifically, we envision as being a prescribed medicine that a doctor would prescribe to a patient for use in a setting in which is conducive to these psychedelic experiences. So I don’t see a world in which it’s not a prescribed medicine, but I suppose anything’s possible.

Trey Lockerbie (50:12):
I guess I was thinking about the idea of microdosing, right? That’s become a trendy concept recently. Is there any benefit to microdosing in your opinion? I mean, I don’t really, exactly understand the levels, how it compares to something like the dosing you’re doing at a treatment center, but does that even have an effect in your opinion? Or is there promising research behind that at all?

Dr. Ryan Yermus (50:32):
So the idea of microdosing is that you take an amount of the substance that’s just below the amount that is perceptible. So someone, if they’re taking a micro dose of a substance, they shouldn’t actually feel the effects of that substance, or at least the immediate effects of that substance. I mean, there have been reports of people microdosing with psilocybin and reporting benefits of increased creativity, less anxiety, that sort of thing. It has not been studied, I think, to the scientific rigor that it should be to draw conclusions. But the limited evidence that I have seen hasn’t really shown too much of an effect.

Trey Lockerbie (51:15):
Let’s talk about that evidence, because I’m curious how quantitative the research gets, especially say at your clinic, your treatment centers, how exactly do you gather the data? For example, are there just surveys? What was your experience? Do you score things like depression, anxiety, PTSD, and you check back in with that person over a matter of weeks or months, and you score them again? Just walk us through the scientific method here of gathering the data.

Dr. Ryan Yermus (51:41):
That’s exactly right. So before someone starts our program, they’ll fill out standardized questionnaires, similar questionnaires that are done in research studies to measure depression, anxiety, and trauma. And then we’ll ask them to complete those same questionnaires midway throughout the treatment, after the treatment, and then one month, three months, six months after the treatment as well. And what we’ve been able to show is that we’re achieving significant reductions in these symptoms, when people fill out these surveys. And so it’s extremely exciting and we’re really proud of the amazing experiences people are getting in our centers.

Trey Lockerbie (52:19):
Now, do you have access to similar research for SSRIs as you highlighted earlier? Is that the benchmark, for example, to compare to when you’re looking at your research compared to currently prescribed medication?

Dr. Ryan Yermus (52:33):
It’s hard because it’s a bit of an apples to oranges comparison. SSRIs, in order to be approved, have to beat a placebo just by enough to be statistically significant. Though, we’ve not done a head to head comparison, so I want to be careful what I say. I believe that our treatment outcomes would be the average SSRI. Many of the people who come to us have already failed one or more courses of SSRIs, meaning that they’ve tried them, they either didn’t like how they felt or they didn’t work. And so they’re looking for a different solution.

Trey Lockerbie (53:10):
It’s my understanding, and I could be wrong, but are SSRIs an addictive medication, meaning they’re harder to get off of and therefore, this type of treatment is better in that it’s not addictive at all? What are some of the ways that you compare with the current medication, when it pertains to addiction?

Dr. Ryan Yermus (53:27):
Well, I would say that SSRIs, I don’t think they’re necessarily addictive by the sort of true way that we think about addiction. So someone may become dependent on a medicine, meaning if they don’t take it, they feel unwell. But when we think about addiction, you start to think about, okay, what are the negative implications of this person’s use of the substance? So for example, if someone is using fentanyl every day, they need to use fentanyl in order to avoid feeling sick. And if they’ve been using it long enough and they no longer have access to the fentanyl anymore, they may resort to doing bad things to get the fentanyl, or they may no longer show up to work, or it may impact their relationship with their family and their friends.

Dr. Ryan Yermus (54:13):
And so you start to see these negative constellation of outcomes as a result of that person’s addiction. And then of course it can get even worse from there. In that sense, I don’t know that SSRIs are necessarily addictive. Ketamine, the way that we use it, has a low risk of addiction. But I should say that ketamine itself can be abused on the street. So people use higher doses, perhaps more frequently can get addicted on the street. When it’s used in a clinical setting, the doses are lower, it’s observed and the outcomes, positive outcomes for patients speak for themselves there.

Trey Lockerbie (54:56):
What was the thesis around going public with this company? Is it a matter of it being hard to get funding in the private markets, given that this is a controversial approach to medicine? Or was it that this would raise more awareness around it and get the public involved and expedite the awareness? What was the reasoning around taking this company public, especially so early?

Dr. Ryan Yermus (55:16):
The founding team, there are five of us. We had experience in the Canadian public markets years back. And so we became familiar with the workings of the Canadian capital markets. When it came time to raise the second round of funding for Field Trip, my partners would go into these investors meetings, essentially, the message was, “We want you to go public.” We weighed the pros and cons of doing so, but in Canada, going public on the Canadian stock exchange was, we thought, worthwhile.

Dr. Ryan Yermus (55:49):
And so we ended up raising our round and went public on that exchange. And then eventually, actually pretty quickly, uplifted to the Toronto Stock Exchange, big board, and then cross listed over to the NASDAQ, where we are today. I think it’s a really exciting time. It’s the right time for these two halves to split off and really just focus in on their individual mandates. And for me, most of my time, I think will be on the clinics and health and wellness side.

Trey Lockerbie (56:22):
Well, Ryan, thank you for the education today. I’m fascinated by what you guys are doing at Field Trip. It was really great to meet you in Miami and get to know each other. Thanks for coming on. This was a lot of fun. I hope we can do it again soon.

Dr. Ryan Yermus (56:33):
Absolutely. It’s great meeting you as well. Thanks for having me, this is great.

Trey Lockerbie (56:38):
All right. That’s all we had for you guys today. If you’re loving the show, don’t forget to follow us on your favorite podcast app. And if you want to check out Field Trip, the stock, look no further than the TIP Finance Tool, just Google TIP Finance and it should pop right up. And lastly, we always love hearing from you, so either leave a review or reach out to me on Twitter at TreyLockerbie. And with that, we will see you again next time.

Outro (56:58):
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