Pomp Podcast #385: Michael Saylor On Buying Bitcoin With His Balance Sheet

all right guys

bang bang i have mr michael saylor here

uh you're an absolute legend my friend

uh thank you so much for uh for doing

this

happy to be here uh let's start

uh you are bitcoin famous now uh for

being the ceo of

the first publicly traded company to

convert a material amount of your

balance sheet into bitcoin and use it as

a reserve asset

we will get to all of that fun stuff in

a minute but let's just start with your

background

and kind of how you got to running micro

strategy what that business does

and kind of that background that really

led you to this

okay i grew up in an air force family

lived on military bases my entire life

i went to mit on an air force

scholarship

i i got a degree in astronautical

engineering

studied spaceship design while i was

there i got another degree in the

history of science i studied the

structure of scientific revolutions and

paradigm shifts

and became very fascinated with how new

new technologies get

introduced um learned to fly in the air

force

uh but i never went active duty because

just as i was about to graduate

the cold war ended the reagan

star wars buildup won it and uh

one day my commanding officer walked

into the room and said you know we paid

for education you're on the hook for

five years

active duty but if you want to join the

reserve you can do that

if you want to go active duty then

you're gonna wait two years before you

get called up

so you know the choice would get paid

three times as much in the civilian

world

or you know and serve in the reserve or

um wait so um

this was an easier choice for me because

i was going to be a pilot and

in my final semester i was diagnosed

mistakenly with the benign heart murmur

and it disqualified me from flying

combat jets

and so my hopes dash to being a fighter

pilot

uh i decided i did not uh want to wait

around

and so i joined the air force reserve

and uh i became a civilian

unexpectedly uh in the final month

of my undergraduate career um i thought

i wanted to be a professor

i got into into a phd program but i had

no money

and so i decided i would go work for a

year

and then i would apply for a fellowship

and then i would go back and

and uh get my phd um

i worked for the first six months the

company i worked for blew up

you know and i ended up working at

dupont and i was building computer

simulations for dupont

and uh around the 18-month point i

attended my resignation to go back to

mit

and uh i was building computer

simulations to predict uh

the return on billion dollar capital

investments in the petrochemical

industry

and the computer model is going to be

used to justify a 1.5

billion dollar investment and the

executive that wanted the money

you know i'm sure he said to his

staffers hey tell the kid we need him to

finish the job

and i was 24 and

living in an apartment with milk crates

for bookshelves spending 700 bucks a

month

and i knew i didn't want to stay and be

a corporate bureaucrat so i was like no

i'm not staying and the

the executive said well give whatever he

wants and i said well you want to raise

i was like no i don't want to race it

well what do you want to say well when i

was in high school i wanted to be a

rock and roll star and that was dash and

when i was in college i wanted to be a

fighter pilot astronaut and those hopes

were dashed and my third idea was be a

professor

and that's what i'm going to go do and

there's only one last thing on my

checklist which is i'd like to be a ceo

of my own company

and i said okay so if you want me to

stay

you're gonna have to let me start my

company i want i think i got a quarter

million dollars in cash two and a half

million dollars a contract so let me

hire ten people from dupont

give me free off the space and computer

equipment for the first two or three

years

i took the you know they said we can't

give you the money up front you're just

a 24 year old i said

you got to because this is the only time

this negotiating strategy ever works i

said

you got to give me the money because i

have no money

like i had um you know they said well

but and they went back to their boss and

they did this deal that you would never

ever ever do but i just happened to be

the one guy on the east coast that could

make their computer program work

and the guy was 12 weeks from getting a

billion dollar

check from a mega corporation and it was

all irrelevant so

they gave me the money i i thought

holy crap i have 250 000 this is enough

capital to last me for seven years

so i figured seven years good let's

start

and so age 24 i started microstrategy

with the thought that

i didn't want to work for anybody else

and when it failed

i would go back to college and uh it

never failed in the first year we did

you know

10 people and then 20 and then we were 5

million then we were 10 million then we

were 20 million then we were 40 million

and at some point we were 80 million and

then we kind of came to the market and

uh you know

96 97 time frame and the dot com

revolution revolution's going crazy

everybody's clamoring you got to go

public so we came public in 1998

and uh then there was no going back you

know i got on the roller coaster

and uh so that's how i started

microstrategy i didn't

i didn't mean to i kind of fell off the

turnip truck

and hit my head on a pot of gold and

i'll keep it

so when you decided to go public uh this

was like right in the heart

or at the start really of like kind of

this mania phase

talk a little bit about um going through

as a public company

uh leader kind of the multiple market

cycles right because

if you went public in 98 you get 99 this

big boom you have to get the crash

you kind of then see you know another

rise 0809 happens right then you kind of

get this

incredible uh decade in the equity

markets um and then you get covid

it's like how have you kind of navigated

every single one of these because i

don't think a lot of people realize like

you started coming at 24 years old

you're still running that company today

right and so it's been a journey you

know like

i i here's an irony you know i never got

that phd

i'm just like a silly mit undergraduate

i remember i was competing in my early

years with this guy

this professor from mit who had like

umpteen degrees and was so much more

educated and you know i would be running

a million dollar company he's got a

million dollar company and he said what

are you doing i said

well i'm building these computer

simulations on a macintosh he said

you know well all the experts say the

macintosh is going to die that's a bad

idea

so well eventually i you know eventually

i ported it to windows and

the next time i saw him the company's

five million dollars and we're working

on windows and he goes

what are you doing i said well i'm

building i'm building executive

information systems on windows machines

using this thing called wings this new

spreadsheet with a programming language

he said oh well experts say that wings

will never work

excel's going to dominate the

spreadsheet market and that's about idea

he was still running the million dollar

consulting company giving advice

i said okay well it turns out he was

right and in a year we flipped the

company and we rebuilt the product

on visual basic and we doubled again and

he said what are you doing i said well

now we're doing this like executive

information

decision support system and he goes well

that you know that won't work on visual

basic you're gonna use c plus plus

and and he stayed 1 million and we were

like 20 million

and then the next thing you know we uh

started building decision support

systems on relational databases and

everything

well that'll never work that's too slow

right and

and it kind of worked until we got to 40

million and then along came the web and

we flipped it again we put a web

interface on it and that got us to 80

million

and and every single two or three years

there's something new

that was simultaneously an existential

threat

like it's gonna kill us or an

opportunity

if we embrace it and we're always

inventing the next

thing so eventually we found ourselves

into the business intelligence business

and

and we created business intelligence web

intelligence relational intelligence and

uh i had three big competitors there

business objects cognos you know crystal

reports

and uh we got to like 2007 2008

and conventional wisdom-wise well they

all had to sell out so all three of them

sold one sold oracle one sold sap one

sold

ibm and we were still standing

right and then we accrued so some more

some more customers and we kept

motoring on and then along came the

iphone

you know and the iphone the first iphone

in 2007 was kind of a toy

had no cut and paste no app store 2009

the iphone actually started looking

pretty interesting and and i just i

became very enamored

with with the mobile wave this uh what

happens when software

leaps off of a pc out from under your

desk because that's what they were i

mean the computers were

rocks under your desk and they were ugly

and they had lots of cables coming out

of them i thought

what if the software is running in your

hand and what if that phone's in your

pocket

it's like software going from solid

state block of ice

it gets the liquid a laptop and then it

goes to vapor state and a vapor state

was on the phone

and i thought well man that all of a

sudden instead of going to the office to

sit down at a desk and run your software

maybe you have the software your kids

soccer game on a saturday afternoon

and then maybe rethink how the software

works

so we we started uh doing mobile stuff

and we implemented mobile intelligence

and uh

that took us to the next level now along

the way i kind of

i i took one path but i was always kind

of um

a tech inventor at heart entrepreneur

so back in uh 96 when the internet hit

you needed an email domain so we bought

microstrategy.com

but i was too lazy so i thought why do i

gonna type microstrategy.com why don't

we buy strategy.com

so we went we bought back with no one

care we bought strategy.com for like

50 grand and then i and then i thought

why don't we just start buying words so

we bought wisdom.com

and then we bought usher.com and by the

way

do you know who owns hope in the world

no

i own hope hope.com hope

emma i bought speaker i bought alert

i bought angel i bought alarm

i bought voice i mean and and here's my

thinking

you know there are all these search

engines and if you go

online and you search for voice you get

like 2 billion hits on google

okay if you want to launch a company

name voice and you own voice.com

you go to the top of the list of the

billion

and so my thinking was

if 10 billion 5 billion people go to

school and they learn how to spell

alert or emma right emma

e-m-m-h if they know how to spell that

isn't that good for a brand and so i

started thinking about branding and

and uh i launched a business alarm.com

we eventually spun it off it's a

multi-billion dollar publicly traded

company on the nasdaq today

uh and uh yeah we made some money

we didn't make the billions but we made

a lot of money off of it like 30 40

million

and then we launched another company

about an alarm was all about

integrating your home alarm system with

the internet

yeah and then we launched another

company called angel

and angel was like an early version of

siri it was an interactive voice

response from any telephone

like an angel on your shoulder talk to

it and they respond

we eventually sold that for about 100

120 million

and so you know what i learned was

it's easier to invent things and and

it's easier you know you can

invent something you can even get it to

scale um

can you can you maintain it and can you

commercialize it

right a lot of people find like you can

buy that boat

can you afford to maintain that boat

that's harder now you maintain that boat

are you really going to enjoy that boat

are you going to use that thing

that's harder the analogy in business is

just because you can buy it doesn't mean

you can

uh make it competitive

and even if it's competitive doesn't

mean you can make profit from it

so eventually i learned that you can't

keep inventing stuff and

we streamlined we sold those off but i

got i got to

2020 in 2019

where i sold voice.com i tell you that

story in a bit but i got to 2020 and we

had a portfolio domain names are sitting

there

i appreciated digital scarcity i thought

these are unique in the universe only

one person can own the work by the way

you know who owns michael.com

please tell me it's you yeah by the way

and and you know who's lazy i thought

what if someone just wants to type in

mike about that too

i'm waiting for michael jordan to call

me up

why wouldn't you own michael.com how

much money do you think you spent on

domains over the years acquiring all of

these

two million bucks million bucks okay so

so

let's call it low single-digit seven

figures right so a million two million

three million whatever it is

back in the back in the day back in the

90s and i just sat on them because i

figured

the english language is going to be

around for a while okay

and before you sold voice.com how much

do you think that you had made from

selling the domains

we made like 35 million

in the alarm transaction and more than

100 million in the angel transaction so

so but we had we had uh commercialized

businesses with them so we sold the

domain

and and the business with them as part

of it and uh

voice was the first uh the first naked

sale that we did that was material

and we did that one for 30 million and

we just sold the domain nothing else

and when you go to do this uh

when people hear wait a second the same

guy who did this bitcoin thing

sold a domain for 30 million dollars uh

he also has a business that's worth you

know over a billion dollars in the

public markets etc

uh he's spun off multiple companies that

are now worth

tens of millions hundreds of millions of

dollars like this guy just keeps

hits after hit after hit after hit uh

how does something like voice.com come

together do they approach you

do you put it up on like a broker site

and say hey there's a 30 million dollar

domain

how does that work you know at some

point i i said to my marketing people

why don't you make a list of all of our

premium domains

and my definition of a premium domain is

is a domain where if you hit the google

search you will get 500 million hits or

a billion or

five billion hits when you typed it in

the search engine

and they're all just you know ideas like

wisdom and hope

yeah and uh i said why don't you make a

list of them and send them out to every

you know everybody we know

and see if he's interested in them and

we sent out the letter

and we heard back you know nothing right

maybe i got like two

venture capitalists called me but

nothing ever went anywhere and i was

like okay

forget that go back running my own

business

and with voice you know this is how this

goes down

i'm sitting at my desk one day and uh

one of my junior

20-something business development reps

walks and he goes hey some broker

you know called us and and they offered

us like a hundred and fifty thousand

dollars

you know for uh this domain voice

and i looked at it and i'm like look

i've been waiting for 20

stinking years like 150

000 isn't going to do much for me i said

tell them no

okay so nothing nothing goes on and then

they come back

they uh they offered us 300 000 now i

said

well tell them no don't bother me so i

waited

and then the next day they come back and

they doubled at six hundred thousand

i said uh nope still not interested

um tell them tell them it's gonna have

to be

something north of you know 10 million

bucks i'm just not interested

they go well they they offered 1.2

and then it went to 3 and then it went

to 6.

and when it got to 10 or something like

that

finally that you know i'm starting i've

got all these

other people lobbying me sales people

sitting like

jackals you know like you're going to

want to

you know they're all like you have to

sell this you have to sell this

and this is where we're selling

selling intangible assets like anything

artwork

it all comes down to how much are they

worth to you

right and so if you needed the 10

million dollars

you would have taken the 10 million

dollars but

at this point you know i have 500

million dollars of cash in the bank

if i and and by i i love my things you

know like

i i love them tears right maybe you can

tell that i'm a little bit

passionate about some of this stuff you

know so

i would rather own it and not have the

10 million

then sell it you know for for that so i

said don't know

they say okay well they went up to 22

million

i said i think when they said 10 i said

the numbers

i'll sell it for 30 million so the only

price i ever put on the table

30 million bucks i didn't like nothing

else i was like

after i get to 10 i'm like i will sell

it for 30 million because that's enough

to i thought by like it's i didn't sell

for 30 million because i thought that's

what it was worth

i think that the word voice in the

english language is worth 100 million

like i've seen people drop a hundred

million dollars on an ad campaign and

you want to drop a hundred million an ad

campaign with the with the i

voice dot net type domain

it's like so i thought it was worth more

but i thought well like i

i need to market to market i need to

like create some kind of market comp for

it so we'll do 30 million so i tell them

39

they said they'll give you 22. i said

uh no but tell them i'll talk to them

and so around 22 million i agreed to get

on the phone

and you know so like i'm talking to a

broker

and a lawyer i'm like i you know all

through this we're like well who's the

buyer who's the buyer

not some some somebody you know like

and if they'd said if someone has said

yeah we're a startup and we've got like

12 million dollars in the bank and we'll

give you all of our cash and this is all

we've got

maybe they might have swayed me but

but i just had a whale on the other end

of the line that

that wouldn't identify themselves and i

thought

okay well that's the case i'm just gonna

wait until they hit my bid you know if

you had

if you had an acre in central park and

someone wanted to buy it from you

and the price is the price you would

wait and then once

it's like you don't want it i'll wait i

got another decade

i'm not going anywhere somebody's going

to eventually want to commercialize

voice

so eventually they got on the phone and

i'm talking to a broker but i hear like

a click click and there's other people

eavesdropping on the line so

i'm kind of just talking to myself they

said well we're authorized to go to 22

or 23 million i said you know i'm sorry

i said

go to the google search engine and type

in voice right now

and then why don't you what you'll

notice is that it's more popular than

like what's up

with a billion users it's a better brand

than you would get you know

if you were to um get a billion people

online it's it's a better brand than

than oracle or then sap or the hundred

billion dollar plus companies

so this is how i value it i'm

i said like this is like my daughter

i'll marry her off

but only to a man that's going to treat

her better than i will treat her

so if you guys really value this then

give me the 30 million otherwise i'm

keeping it

you know and and so at some point they

come up to 30 million

right you guys agree to 30 million

but did you know who it was before you

agreed

no i never knew who it was

really okay so you agree i sold it in

the blind

basically saying no from 150 grand up to

30 million

and then finally they did it i still

didn't know who it was until after

the transaction closed and then i hear

it's some crypto company and that's the

end of it for me

and that's my introduction to crypto i i

literally

am thinking about the broker who's like

okay just showing up to work 150 000

trying to buy a domain and next thing

they know a couple weeks later they're

brokering 30 million

deals and probably you know they're

peeing in their pants right trying just

hoping to god this goes through because

they're already thinking about what

house they're going to buy based on the

commission type situation right

it was amusing

and so you do this you say that it's

your first

uh kind of foray or experience with

crypto

but there's no experience with crypto

all right so there's this tweet

there's this tweet that everyone is

begging me to talk to you about

which is in uh i think it's 2012 or

2013.

you basically put out a tweet so you're

early because it's 2012 2013 about

bitcoin

uh you're also on twitter then which was

still pretty early for uh for twitter in

general

uh and you basically tweet out you know

kind of saying what i would consider a

pretty

uh down the fairway critique of bitcoin

which is like it's not going anywhere

yeah right fast forward seven online

gambling it's days or another

yeah seven eight years and uh now you've

got a material part of your balance

sheet

in bitcoin what happens how does that

happen okay anthony

can i tell you the truth of course i

i got an iphone back in the day

i installed twitter on it and it used to

be really fun and i used to really enjoy

reading the news and tweeting stuff

right it's like it was like you know by

the way there are certain people on

twitter

that still seem to enjoy just tweeting

out whatever the heck they want

so i was in that stage and i had a lot

of opinions

and so i'm tweeting stuff and eventually

yeah and by the way i tweeted a thousand

things i forgot all the things i tweeted

so eventually i realized that it's

probably better for

my my communication effectiveness if i

limit my

tweeting to stay on brand so

like i have a company micro strategy if

i have something intelligent to say

about microstrategy i say it

and i have a non-profit foundation the

sailor academy that gives away free

education to hundreds of thousands of

people we're just giving away a free

college degree

and if i have something that i can do to

help them i say it

and then whenever anybody else does

anything that i might have an opinion

i keep my mouth shut now because i've

realized

it's just an opinion and i've lived long

enough to be wrong on a lot of things

but now coming back to that specific

tweet

i i really am ashamed to say i didn't

know i tweeted it until

the day that i tweeted that i bought 250

million worth of bitcoin

and then i discovered the hive mind

crypto twitter consciousness where all

of a sudden

they all went through all my tweets they

found it

they reminded me of it they compared it

and i'm like oh my god i

literally forgot i ever said that

and you know but i i took it as kind of

like kind

ribbing like i didn't get all worked up

about i'm like you're right

i was wrong what an idiot i was

i wish i could go back and do it again

well the part to me that was uh so funny

about all this is one you're right that

uh the internet never forgets

right and it sounds like you were using

twitter early on how i use it which is

sometimes i literally tweet things and i

tweet them for myself to remember

what i'm thinking right like i just you

know throw something out there

uh the problem is that uh the internet

doesn't forget and even if that was a

thought in the moment right you change

your mind later it's a stamp

you know kind of uh that never goes away

and

uh so when they found it and i saw that

i was like oh my god this is amazing

like

literally in a six seven year time

period it's not just from uh

i don't believe it has value to oh maybe

it has some value right i mean you

would you consider the move uh

of taking the 250 million the first

investment

is that a bet the company type move

or do you look at that as more uh

conservative than

a bet the company type decision i i

wouldn't say

i would not say it's a bet the company

decision

um what i would say is

we looked at it and before i made that

that uh decision before the before i was

able to convince anybody on the board or

the executive team to agree that was the

right idea

we all needed to collectively be of the

opinion that we were going to be

generating cash at

infinitum right so

so uh like there's a journey that we

went through corporately

over the past year and there's a journey

that bitcoin went through over the last

seven years

so if we focus upon our journey

we had 500 600 million in cash

and we were buying our stock back a bit

and then we were thinking maybe we'll

need to buy another company we need it

for a rainy day or maybe something

really bad will happen

and we'll really need the money and you

know one of my heroes is steve jobs

and steve jobs you know you know if you

had a near bankruptcy experience and he

did

and i did too by the way by the way i i

lived uh

i lived to see my stock go from 333

dollars a share to 42 cents

okay wait wait wait wait hold on back up

yeah the stock price fell what what

time period is this you know it's not

like i like to brag about this stuff

because it's not something you want to

be proud of

but i will tell you that that two of my

bragging rights are

i am the pretty much the longest lived

public company ceo

in my industry because i've been public

company ceo for 22 years

and the second thing is is i'm pretty

sure i'm the only public company ceo

that ever presided over a 99.8

drop in the stock price and kept his job

i mean this okay so when does this

happen like what is 2003

you know okay i i look it's it's another

story i learned a lot of lessons

at the short we don't want to get off

the subject of bitcoin the subject of

whatever

the short the the short lesson there is

don't run out of money always have cash

on the ballot sheet and don't spend more

money

than you're taking in and i feel like an

idiot to give that advice to anybody

but it's still good advice right now for

sure let's come let's fast forward

back to 2020. um

so we had the money we're

we are very conservative no debt ready

for a rainy day

ready to seize the opportunity buying a

stock back

covet hits the pandemic hits everybody's

you know our equities in the tank you

know

uh we're losing momentum and the first

thing that happens in in

q1 is it's all kind of shock and awe and

in q2

the question is how does this impact my

customers our business

our product our value proposition

and uh you know and by the way everybody

gets impacted differently right if

you're running a cruise line or a

theater or

whatever and sometimes

counter-intuitively and uh

in our case we sell enterprise software

that helps you think better we sell

business intelligence

and we sell business intelligence to to

lots of governments

agencies we sell it to massive banks we

sell it to

in essence global 2000 companies

even the ones that get impacted they're

like the national airline

they can't go out of business right they

so

that's our customer base so we realized

that

our software kept working demand was

still there

everything is smooth and in fact the

great thing about software is software

you can ship

even you know over the internet all of

our services went remote

so our value proposition's intact and

the the surprise for us is our

is our productivity went through the

roof and our cost structure compressed

all of a sudden you know 20 million

dollars a year flying around in

airplanes

went away and 10 million dollars worth

of trade shows and

20 million dollars worth of marketing

things went away

but the customer in the band didn't go

away so we we actually

found that we were much more efficient

so bottom line

is yeah we got that black swan event

but that block swan event actually

kicked us into a high gear

productivity and so that was the that

was the positive

on the on the p l side we uh we realized

that we were going to generate more cash

and we and there and there was no real

no real rational business plan where i

take 200 million dollars and i spend it

to make the business better

i can burn it to make the bit but i

can't spend it to make the business

better

so simultaneously

we got a gift from the fed and the

macroeconomic side

so while we're trying to figure out what

happens on on the p

l all of a sudden we see

what do we see the long bond index goes

up 22

if you would ask me anthony like what's

the

what's the investment that you do not

want to make i would never

in a million years buy a 30-year bond

that yielded two percent interest

never ever and yet that was a winner

this year

if you bought a 30-year bond at 2

interest when the interest rates go

to 1.2 you've actually got a massive

spike so equity spiked big tech spiked

bond spiked and you know and we looked

at our cash and i had to listen to a

litany of of talking heads

ray dalio on doubt you know if ray dalio

didn't say

cash is trash every podcaster that

trolled ray dalio

said ray dalio says cash is trash cash

is trash

and you know and then i and then i went

to school at some point on you this is

probably

this is after i realized i had a problem

and and i listened to you describe the

plight of the working man i

you know i go to work i get paid

five i'm okay this is not a work man

this is a working lawyer

i get paid five hundred thousand dollars

a year i save fifty thousand dollars i

put it in my piggy bank i have five

hundred thousand in cash in the bank i

have kids and i have a future

and then all of a sudden i realize that

the cost of a college education

is going up at eight percent a year and

my cash is yielding

zero now at that point you know we've

got

the pomp podcast telling me i'm crazy

to work for dollars and save my cash

and if you take the five hundred

thousand dollars in the plight of the

lawyer with the two kids when i send

them to harvard and the 500

000 of cash in the bank yielding zero

and now you multiply everything by a

thousand

that's me i have 500 million dollar

company

we're making 50 million dollars a year i

got thousands of people working as hard

as they can possibly work

we're we're sacrificing right and left

we're squirring our pennies away we're

putting it into the bank account

there it is and uh you know in 2019 and

before

we worried about the unknowable and we

thought maybe we'll use it for something

and

i i'm a bit older than you you know i

remember when you got five percent

interest overnight on your money

and it wasn't that long ago that the

risk-free interest rate was five percent

before the great financial crisis

and i'm like i'm gonna make 25 30

million dollars a year on this

and i kept hoping and waiting for those

good times to come back

i was the guy that when the interest

rates you know when the when the 30-year

t

bill ensure you start to go to three and

a half percent like finally they're

gonna go to four

and then go to five and they're gonna go

back to normal right

normal interest rates and then of course

hope was dashed it went the other way

and um what happens next well

acid inflation goes through the roof

right and you know this entire

conversation of inflation

it's really twisted because everybody

talks about consumer prices cpi

cpi inflation that we're not getting

enough inflation

we're not getting enough inflation okay

well like

you're not getting in you're not getting

inflation on youtube

and netflix streaming videos and candy

bars manufactured by robots and

factories and domino's pizza

you're getting inflation on everything

you want

if you wanted an ivy league education if

you wanted a beachfront house in miami

if you wanted the apartment in new york

if you wanted

anything scarce everything you want

is going up seven percent and that's

asset inflation

well if if i want if i want

a bond that's going to yield fifty

thousand dollars a year

you know it used to cost a million bucks

and this year it cost 10 million dollars

the cost of the asset good went up by

two percent no i have um

i have a house in miami beach it was a

nice house built in the 1930s and i and

i have the deed

that of sale for the house a hundred

thousand dollars

for that house in 1930

it's gone up in price by a factor of a

hundred

is like you know so no inflation kind of

inflation

but it's diff it's acid inflation so i

didn't really think about it until

i got slugged in the face with the 2x4

which kind of happened around march or

april

when main street shut down the economy

shut down

and bonds went through the roof when

municipal pawns went

up while every city is bankrupt when

every

when apple stock and every other public

tech equity went

up why and the multiples blew out

and the economy went to the worst place

i've seen in 30 years

at that point you start having a thought

with yourself which is

what is what is the true inflation rate

and and

we should probably coin a different term

right if you if you looked at

asset inflation on a good year for the

last decade it's seven

percent a year normal right this year

you could make an argument it was 25

i mean if you look at the long bond

index and if you look at these equities

you can make an argument that the asset

inflation rate leaked between 25 and 30

depending and uh and now

what does that mean to me metaphorically

well here's how i feel

i felt like i had 500 million dollars of

cash

in the bank safe and it was yielding two

three percent and i'm ready for a rainy

day and then i'm starting to do stuff

with it

and then every month some banker sends

me a note saying the interest went down

it went down

now there is no interest

and then someone took my cash out of the

bank and they put it in the backyard in

pallets and then they open my back gate

and then every month someone comes along

and starts

burning two percent of the money

and then i started thinking well you

know in 12 months 25

of the money's going to be gone

and then you know then i started

thinking what is the point

of all this what am i doing wrong and of

course the answer is

you can't hold cash and so what do you

do with it

right well i mean okay so so hold on a

second here so

you realize the macro issues um

i think there was a couple of different

things that happened right so the macro

issues happen you're sitting there

you're in a very unique situation

because you have so much cash on the

company's balance sheet

um you run a business that throws off a

lot of cash right so you kind of have

that advantage

it actually improves economically like

you described in terms of your costs are

going down

that the structure of your contracts

kind of are weathering

uh very well through this storm and so

you you remain in a strong

business position where you have cash

and actually the cash is growing

not through investment it's growing from

kind of your your income

uh and you begin to get worried about

that how do you get to

crypto right and i'm leaving you a

little bit in terms of uh you've got a

friend

who basically kind of hits you over the

head a second time so let me tell that

story

as to kind of what pushes you to at

least go explore crypto

and then we can talk about kind of what

you do but just talk through that

process of like how you actually

arrive at okay crypto is a potential

solution

you know when times are good everybody's

busy

you know if you're in love with the

iphone then the answer to everything is

iphone if you're in love with your apple

watch when you're in love with twitter

the answer is

you know that you know um so when times

are good everybody focuses on that and