How Michael Saylor Bet Billions on Bitcoin

[0:00] It's not 10x better than gold. It's a
[0:02] 100x. Maybe it's a 1,000x better than
[0:04] gold. We could go on for hours. I could
[0:06] tell you why I think it's a 1,000x
[0:08] better than gold.
[0:10] Hello everyone. Today we've got a very
[0:11] special treat. I went deep into the
[0:13] archives and I found a video that I did
[0:15] with Michael Saylor back in 2020. That
[0:18] video was the very first time that
[0:20] Michael Saylor publicly talked about
[0:21] Bitcoin anywhere on the internet. The
[0:23] context here is that strategy, which was
[0:26] known as MicroStrategy back then, had
[0:27] just put about $500 million from their
[0:29] balance sheet into Bitcoin. It was the
[0:31] first public company to ever do that.
[0:33] And I spoke with Michael because I
[0:34] wanted to understand, who's Michael
[0:36] Saylor? What is MicroStrategy? Why are
[0:38] they doing this? What is his thesis on
[0:40] Bitcoin? And what is his plans for the
[0:42] future? It is fascinating to listen to
[0:44] him talk about this in late 2020 when
[0:47] Bitcoin's trading around $10,000 per
[0:48] coin. To now see what has become one of
[0:51] the largest holdings of Bitcoin in the
[0:53] world. Strategy and Michael Saylor own
[0:56] more than 800,000 Bitcoin. They've
[0:58] continued to relentlessly buy as much of
[1:00] the digital currency as they possibly
[1:01] can. And I think listening to this
[1:03] conversation will help you better
[1:05] understand what's happening there and
[1:07] why so many people over the last 6 years
[1:09] or so went from being skeptics to now
[1:11] being true believers. So here's my
[1:13] conversation from the second half of
[1:15] 2020 with Michael Saylor. It's the very
[1:17] first time he ever talked about Bitcoin
[1:19] and I hope that it's very valuable to
[1:20] you to understand where we've been so
[1:23] you can better understand where we're
[1:24] going.
[1:25] All right guys, bang bang. I have Mr.
[1:29] Michael Saylor here.
[1:31] Uh you're an absolute legend my friend.
[1:32] Uh thank you so much for uh for doing
[1:34] this. Happy to be here.
[1:37] Uh let's start. Uh you are Bitcoin
[1:40] famous now uh for being the CEO of uh
[1:43] the first publicly traded company to
[1:44] convert a material amount of your
[1:47] balance sheet into Bitcoin and use it as
[1:49] a reserve asset. Uh we will get to all
[1:51] of that fun stuff in a minute. But let's
[1:53] just start with your background um and
[1:55] kind of how you got to running
[1:58] MicroStrategy, what that business does,
[2:00] um and kind of that background that
[2:02] really led you to this.
[2:03] Okay.
[2:05] I grew up in an Air Force family, lived
[2:07] on military bases my entire life.
[2:10] I uh went to MIT on an Air Force
[2:13] scholarship.
[2:14] I I got a degree in uh aeronautical
[2:17] engineering, studied spaceship design.
[2:21] Uh while I was there I got another
[2:22] degree in the history of science and I
[2:24] studied the structure of scientific
[2:25] revolutions and paradigm shifts
[2:28] and became very fascinated with how new
[2:31] new technologies get introduced.
[2:34] Um learned to fly in the Air Force.
[2:37] Uh
[2:39] but I never went active duty because
[2:40] just as I was about to graduate, the
[2:42] Cold War ended. Uh
[2:45] the Reagan Star Wars build-up won it.
[2:48] And uh one day my commanding officer
[2:50] walked into the room and said, you know,
[2:52] we paid for education, you're on the
[2:54] hook for 5 years active duty, but if you
[2:56] want to join the reserve you can do
[2:59] that. And if you want to go active duty,
[3:00] then you're going to wait 2 years before
[3:02] you get called up. So, you know, the
[3:04] choice to get paid three times as much
[3:05] in the civilian world or
[3:08] you know, and serve in the reserve or um
[3:12] wait. So, um
[3:15] this was an easier choice for me because
[3:17] I was going to be a pilot and in my
[3:19] final semester I was diagnosed
[3:20] mistakenly with a benign heart murmur
[3:22] and it disqualified me from flying
[3:24] combat jets. And so my hopes dashed of
[3:28] being a fighter pilot uh I decided I did
[3:32] not uh want to wait around and so I
[3:35] joined the Air Force Reserve and uh I
[3:38] became uh a civilian unexpectedly
[3:42] uh in the final month of my
[3:44] undergraduate career.
[3:46] Um I thought I wanted to be a professor.
[3:49] I got into into a PhD program, but I had
[3:51] no money.
[3:52] And so I decided I would go work for a
[3:55] year and then I would apply for a
[3:57] fellowship and then I would go back and
[3:59] and uh get my PhD.
[4:02] Um
[4:03] I worked for the first 6 months, the
[4:05] company I worked for blew up.
[4:07] You know, and I ended up working at
[4:09] DuPont and I was building computer
[4:11] simulations for DuPont. And uh around
[4:14] the 18-month point I tendered my
[4:16] resignation to go back to MIT.
[4:19] And uh I was building computer
[4:20] simulations to predict uh the return on
[4:23] billion-dollar capital investments in
[4:25] the petrochemical industry.
[4:27] And the computer model was going to be
[4:28] used to justify a $1.5 billion
[4:31] investment. And the executive that
[4:34] wanted the money you know, I'm sure he
[4:36] said to his staffers, "Hey, tell the kid
[4:38] we need him to finish the job." And I
[4:40] was 24
[4:42] and living in an apartment with uh milk
[4:46] crates for bookshelves
[4:49] spending 700 bucks a month and I knew I
[4:51] didn't want to stay and be a corporate
[4:53] bureaucrat. So I was like, "No, I'm not
[4:55] staying." And the executive said, "Well,
[4:57] give him whatever he wants."
[4:59] And I said, "Well, you want a raise?" I
[5:00] was like, "No, I don't want a raise."
[5:02] "Well, what do you want?" I said, "Well,
[5:03] when I was in high school I wanted to be
[5:05] a rock and roll star and that was
[5:08] dashed. And when I was in college I
[5:10] wanted to be a fighter pilot astronaut
[5:13] and those hopes were dashed. And my
[5:15] third idea was to be a professor and
[5:17] that's what I'm going to go do. And
[5:18] there's only one last thing on my
[5:20] checklist, which is I'd like to be a CEO
[5:22] of my own company."
[5:24] And I said, "Okay, so if you want me to
[5:26] stay, you're going to have to let me
[5:28] start my company. I want I think I got a
[5:30] quarter million dollars in cash, $2.5
[5:32] million dollars of contracts, they'll
[5:34] let me hire 10 people from DuPont
[5:36] give me free office space and computer
[5:38] equipment for the first two or three
[5:40] years."
[5:42] I took the two you know, they said, "We
[5:43] can't give you the money up front.
[5:45] You're just a 24-year-old." I said,
[5:47] "You got to." Because this is the only
[5:49] time this negotiating strategy ever
[5:51] works. I said, "You got to give me the
[5:52] money because I have no money."
[5:55] Like I had um
[5:57] you know, they said, "Well, but" and
[5:59] then went back to their boss and I and
[6:01] they did this deal that you would never
[6:02] ever ever do, but I just happened to be
[6:04] the one guy on the East Coast that could
[6:05] make their computer program work. And
[6:07] the guy was 12 weeks from getting a
[6:09] billion-dollar check from a mega
[6:12] corporation and it was all irrelevant.
[6:14] So they gave me the money.
[6:17] I I thought
[6:18] "Holy crap, I have $250,000.
[6:21] This is enough capital to last me for 7
[6:23] years."
[6:26] So I figured 7 years, good. Let's start.
[6:29] And so age 24 I started MicroStrategy
[6:32] with the thought that
[6:34] I didn't want to work for anybody else
[6:36] and when it failed, I would go back to
[6:38] college.
[6:39] And uh it never failed. In the first
[6:41] year we did, you know, 10 people and
[6:43] then 20 and then we were 5 million then
[6:45] we were 10 million then we were 20
[6:47] million then we were 40 million. And at
[6:49] some point we were 80 million and then
[6:52] we kind of came to the market in you
[6:53] know, 96 97 time frame and the dot-com
[6:57] revolution's going crazy. Everybody's
[6:59] clamoring, you got to go public. So we
[7:01] came public in 1998.
[7:04] And uh
[7:05] then there was no going back, you know,
[7:07] I got on the roller coaster. And uh so
[7:10] that's how I started MicroStrategy. I
[7:12] didn't I didn't mean to. I kind of fell
[7:15] off the the turnip truck and hit my head
[7:18] on a pot of gold and I'll keep it.
[7:21] So when you decided to go public, uh
[7:24] this was like right in the heart or or
[7:26] at the start really of the kind of this
[7:27] mania phase. Uh talk a little bit about
[7:31] um going through as a public company
[7:33] uh leader kind of the multiple market
[7:35] cycles, right? Cuz if you went public in
[7:37] '98, you get to '99, there's this big
[7:39] boom, you have to get the crash, you
[7:41] kind of then see, you know, another
[7:42] rise, '08 '09 happens, right? And then
[7:44] you kind of get this incredible uh
[7:46] decade in the equity markets um and then
[7:49] you get COVID. And so like how have you
[7:51] kind of navigated every single one of
[7:53] these? Uh cuz I don't think a lot of
[7:55] people realize like you started a
[7:56] company at 24 years old, you're still
[7:57] running that company today. Right? And
[7:59] and so it's it's been a journey. You
[8:01] know, like I
[8:03] I Here's an irony.
[8:05] You know, I never got that PhD. I'm just
[8:07] like a silly MIT undergraduate. And I
[8:10] remember I was competing in my early
[8:12] years with this guy this professor from
[8:14] MIT who had like umpteen degrees and was
[8:17] so much more educated. And uh you know,
[8:21] I would be running a million-dollar
[8:23] company, he's got a million-dollar
[8:24] company. And he said, "What are you
[8:26] doing?" I said, "Well, I'm building
[8:27] these computer simulations on a
[8:28] Macintosh." He said, "You know, well,
[8:30] all the experts say the Macintosh is
[8:32] going to die. That's a bad idea." So
[8:35] well, eventually I you know, eventually
[8:37] I ported it to Windows and the and the
[8:38] next time I saw him the company's $5
[8:40] million and and we're working on
[8:42] Windows. And he goes, "What are you
[8:44] doing?" I said, "Well, I'm building I'm
[8:46] building executive information systems
[8:48] on Windows machines using this thing
[8:50] called Wings, this new spreadsheet with
[8:52] a programming language." He said, "Oh,
[8:54] well, experts say that Wings will never
[8:56] work. Excel's going to dominate the
[8:58] spreadsheet market." And that's a bad
[9:00] idea. He was still running a
[9:01] million-dollar consulting company giving
[9:03] advice.
[9:04] And I said, "Okay." Well, it turns out
[9:06] he was right and in a year we flipped
[9:09] the company and we rebuilt the product
[9:11] on Visual Basic and we doubled again.
[9:14] And he said, "What are you doing?" I
[9:14] said, "Well, now we're doing this like
[9:16] executive information decision support
[9:18] system."
[9:19] And he goes, "Well, that you know, that
[9:20] won't work on Visual Basic. You need to
[9:22] use C++." And and he stayed 1 million
[9:25] and we were like 20 million. And then
[9:26] the next thing, you know, we uh started
[9:29] building decision support systems on
[9:31] relational databases. And everybody
[9:32] said, "Well, that'll never work. That's
[9:33] too slow."
[9:35] Right? And and it kind of worked until
[9:37] we got to 40 million. And then along
[9:39] came the web and we flipped it again and
[9:41] we put a web interface on it and that
[9:42] got us to 80 million. And and every
[9:45] single two or three years there's
[9:47] something new that was simultaneously an
[9:50] existential threat like it's going to
[9:52] kill us
[9:53] or an opportunity if we embrace it.
[9:57] and we're always inventing the next
[10:00] thing. So, eventually we found ourselves
[10:02] into the business intelligence business
[10:04] and and we created business
[10:06] intelligence, web intelligence,
[10:08] relational intelligence and uh
[10:11] I had the three big competitors. There
[10:13] were business objects, Cognos, you know,
[10:16] Crystal Reports
[10:18] and uh we got to like 2007, 2008 and
[10:22] conventional wisdom was, well, they all
[10:24] had to sell out. So, all three of them
[10:26] sold. One sold to Oracle, one sold to
[10:28] SAP, one sold to IBM and we're still
[10:31] standing.
[10:32] Right? And then we accrued some some
[10:34] more some more customers and we kept
[10:37] motoring on and then along came the
[10:39] iPhone.
[10:40] You know, and and the iPhone, the first
[10:42] iPhone in 2007 was kind of a toy. Had no
[10:45] cut and paste, no app store. 2009, the
[10:49] iPhone actually started looking pretty
[10:51] interesting and and I just I became very
[10:53] enamored with with the mobile wave. This
[10:57] What happens when software leaps off of
[11:00] a PC out from under your desk? Cuz
[11:03] that's what they were. I mean, the
[11:04] computers were rocks under your desk and
[11:07] they were ugly and they had lots of
[11:09] cables coming out of them. I thought,
[11:11] what if the software's running in your
[11:12] hand? And what if that phone's in your
[11:14] pocket?
[11:16] It's like software going from solid
[11:18] state block of ice.
[11:20] It gets to liquid, a laptop, and then it
[11:23] goes to vapor state. And the vapor state
[11:24] was on the phone.
[11:26] And then I thought, well, man, all of a
[11:28] sudden, instead of going to the office
[11:30] to sit down at a desk and run your
[11:31] software, maybe you have the software at
[11:33] your kid's soccer game on a Saturday
[11:35] afternoon. And then maybe rethink how
[11:38] the software works. So, we we started uh
[11:41] doing mobile stuff
[11:42] and we implemented mobile intelligence.
[11:45] And uh that took us to the next level.
[11:48] Uh now along the way, I kind of
[11:51] I I I took one path, but I was always
[11:54] kind of um a tech inventor at heart.
[11:57] Entrepreneurial. So, back in uh '96,
[12:01] when the internet hit,
[12:03] you needed an email domain. So, we
[12:05] bought microstrategy.com.
[12:08] But I was too lazy.
[12:09] So, I thought, why do I have to type
[12:11] microstrategy.com? Why don't we buy
[12:12] strategy.com?
[12:14] So, we went we bought back when no one
[12:16] cared, we bought strategy.com for like
[12:19] 50 grand.
[12:20] And then I and then I thought,
[12:22] why don't we just start buying words?
[12:24] So, we bought wisdom.com and then we
[12:27] bought usher.com and by the way,
[12:31] do you know who owns hope in the world?
[12:34] No.
[12:34] >> I own hope. Hope.com.
[12:37] Hope, Emma, I bought speaker, I bought
[12:41] alert, I bought angel, I bought alarm,
[12:45] I bought voice.
[12:46] I mean, and and here was my thinking.
[12:49] You know, there are all these search
[12:50] engines and if you go online and you
[12:53] search for voice, you get like 2 billion
[12:55] hits on Google.
[12:57] Okay? If you want to launch a company
[12:59] named voice and you own voice.com, you
[13:02] go to the top of the list of the
[13:04] billion.
[13:06] And so, my thinking was,
[13:09] if 10 billion 5 billion people go to
[13:11] school and they learn how to spell alert
[13:15] or Emma,
[13:16] right? Emma, E M M A. If they know how
[13:19] to spell that, then isn't that a good
[13:20] for a brand?
[13:22] And so, I started thinking about
[13:23] branding and and uh I launched a
[13:26] business, alarm.com.
[13:28] We eventually spun it off. It's a
[13:29] multi-billion dollar publicly traded
[13:31] company on the NASDAQ today. Uh and uh
[13:35] you know, we made some money. We didn't
[13:37] make the billions, but we made a lot of
[13:39] money off it, like 30, 40 million.
[13:41] And then we launched another company. Uh
[13:43] by the way, alarm was all about
[13:44] integrating your home alarm system with
[13:46] the internet.
[13:47] Yeah? And then we launched another
[13:49] company called Angel.
[13:51] And Angel was like an early version of
[13:53] Siri. It was interactive voice response
[13:55] from any telephone.
[13:57] Like an angel on your shoulder, talk to
[13:59] it and they respond. We eventually sold
[14:02] that for about 100 120 million. And so,
[14:06] you know, what I learned was it's easier
[14:08] to invent things
[14:10] and and it's easier, you know, you can
[14:12] invent something, you can even get it to
[14:14] scale. Um
[14:16] can you can you maintain it and can you
[14:18] commercialize it?
[14:19] Right? A lot of people find like you can
[14:22] buy that boat.
[14:23] Can you afford to maintain that boat?
[14:25] That's harder. Now you maintain that
[14:27] boat. Are you really going to enjoy that
[14:29] boat? Are you going to use that thing?
[14:30] That's harder. The analogy in business
[14:32] is just cuz you can buy it doesn't mean
[14:34] you can
[14:35] uh
[14:36] main make it uh competitive and even if
[14:38] it's competitive, it doesn't mean you
[14:39] can make profit from it.
[14:41] So, eventually I learned that you can't
[14:43] keep inventing stuff. And uh we
[14:45] streamlined. We sold those off, but I
[14:47] got I got to
[14:49] 2020
[14:51] and 2019
[14:53] where uh I sold voice.com. I'll tell you
[14:55] that story in a bit, but I got to 2020
[14:57] and we had a portfolio domain names that
[14:59] were sitting there. I appreciated
[15:01] digital scarcity. I thought,
[15:03] these are unique in the universe. Only
[15:05] one person can own the word. By the way,
[15:08] do you know who owns michael.com?
[15:10] Please tell me it's you.
[15:12] You know, by the way, and and you know
[15:13] who's lazy? I thought, well, what if
[15:15] someone just wants to type in Mike?
[15:17] Bought that, too.
[15:19] I'm waiting for Michael Jordan to call
[15:20] me up.
[15:22] Like, why wouldn't you own michael.com?
[15:25] How much money do you think you spent on
[15:27] domains over the years acquiring all of
[15:29] these?
[15:31] 2 million bucks? Million bucks? Okay.
[15:34] So, so let's call it low single digit
[15:37] seven figures, right? So, million, 2
[15:38] million, 3 million, whatever it is. Back
[15:41] in the back in the day, back in the
[15:42] '90s, and I just sat on them cuz I
[15:44] figured the English language is going to
[15:46] be around for a while. Okay. And before
[15:49] you sold voice.com,
[15:51] how much do you think that you had made
[15:52] from selling the domains?
[15:57] We made like 35 million in the alarm
[16:01] transaction and more than 100 million in
[16:03] the Angel transaction. So, so, but we
[16:06] had we had commercialized businesses
[16:08] with them. So, we sold the domain and
[16:10] the and the business with them as part
[16:11] of it.
[16:12] And
[16:13] voice was the first uh the first naked
[16:17] domain sale
[16:18] that we did that was material. And we
[16:21] did that one for 30 million and we just
[16:22] sold the domain, nothing else. And when
[16:25] you go to do this, uh
[16:27] when people hear, wait a second, the
[16:29] same guy who did this Bitcoin thing sold
[16:32] a domain for 30 million dollars,
[16:34] uh he also has a business that's worth,
[16:36] you know, over a billion dollars in the
[16:37] in the public markets, etc.
[16:39] Uh he's spun off multiple companies that
[16:41] are now worth tens of millions, hundreds
[16:43] of millions of dollars. Like, this guy
[16:44] just keeps hit after hit after hit after
[16:47] hit. Uh how does something like
[16:49] voice.com come together? Do they
[16:51] approach you? Do you put it up on like a
[16:53] broker site and say, "Hey, there's a 30
[16:54] million dollar domain." How how does
[16:56] that work? You know,
[16:58] at some point I I said to my marketing
[17:01] people, why don't you make a list of all
[17:03] of our premium domains? And and my
[17:05] definition of a premium domain is is a
[17:08] domain where if you hit the Google
[17:10] search, you would get 500 million hits
[17:12] or a billion or 5 billion hits when you
[17:15] typed it in the search engine. And
[17:17] they're all just, you know, ideas like
[17:20] wisdom and hope. Yeah.
[17:22] And uh I said, "Why don't you make a
[17:23] list of them and send them out to every
[17:25] you know, everybody we know and see if
[17:26] anybody's interested in them." And we
[17:29] sent out the letter
[17:30] and we heard back, you know, nothing.
[17:33] Right? Maybe I got like two venture
[17:35] capitalists call me, but nothing ever
[17:36] went anywhere and I was like, "Okay,
[17:38] forget that. Go back running my own
[17:40] business."
[17:41] And with voice, you know,
[17:43] this is how this goes down. I'm sitting
[17:46] at my desk one day and uh one of my
[17:48] junior 20-something business development
[17:51] reps walks in and he goes, "Hey, some
[17:52] broker, you know, called us and and they
[17:55] offered us like 150,000 dollars,
[17:59] you know, for uh this domain, voice."
[18:03] And I looked at it and I'm like, "Look,
[18:05] I've been waiting for 20 stinking years.
[18:08] Like, uh 150,000 dollars isn't going to
[18:10] do much for me." I said, "Tell them no."
[18:13] Okay. So, nothing nothing goes on and
[18:16] then they come back and go, "They uh
[18:17] they offered us 300,000 now." I said,
[18:20] "Well, tell them no. Don't bother me."
[18:22] So, I waited and then the next day they
[18:25] come back and go, "They doubled it to
[18:26] 600,000."
[18:29] I said,
[18:30] uh no, I'm still not interested. Um tell
[18:34] them
[18:35] tell them it's going to have to be
[18:37] something north of, you know, 10 million
[18:40] bucks. I'm just not interested. They go,
[18:42] "Well, they they offered 1.2."
[18:45] And then it went to three and then it
[18:47] went to six. And when it got to 10 or
[18:50] something like that,
[18:52] finally that you know, I'm I'm starting
[18:55] I've got all these other people lobbying
[18:57] me, sales people sitting like
[19:00] jackals,
[19:01] you know, like you're going to want to
[19:03] you know, they're all you have to sell
[19:05] this. You have to sell this.
[19:07] And this is where where selling
[19:10] selling intangible assets like anything,
[19:12] art work, it all comes down to how much
[19:15] are they worth to you?
[19:17] Right? And so, if you needed the 10
[19:20] million dollars, you would have taken
[19:22] the 10 million dollars.
[19:24] But at this point,
[19:27] you know, I have 500 million dollars of
[19:28] cash in the bank. If I And and by the
[19:31] way, I I love my things, you know? Like,
[19:35] I
[19:36] I love them. Tears, right? Maybe you can
[19:38] tell that I'm a little bit passionate
[19:40] about some of this stuff.
[19:42] You know? So,
[19:44] I would rather own it and not have the
[19:46] 10 million
[19:48] than sell it. You know, I
[19:50] for for that. So, I said, "Tell them
[19:51] no."
[19:52] And I said, "Okay, well, they went to 22
[19:54] million."
[19:55] I said, I think when they said 10, I
[19:57] said, "The number's
[20:00] I'll sell it for 30 million."
[20:02] So, the only price I ever put on the
[20:04] table
[20:06] 30 million bucks. I didn't like nothing
[20:09] else. I was like, after it gets to 10,
[20:10] I'm like,
[20:12] I will sell it for 30 million because
[20:14] that's enough to I thought but like,
[20:17] it's not I didn't sell it for 30 million
[20:18] cuz I thought that's what it was worth.
[20:20] I think that the word voice in the
[20:22] English language is worth a hundred
[20:24] million.
[20:25] Like, I've seen people drop a hundred
[20:27] million dollars on an ad campaign and
[20:29] you want to drop a hundred million on an
[20:30] ad campaign with the with the iVoice.net
[20:35] type domain. It's like
[20:37] So, I thought it was worth more, but I
[20:39] thought, well, I got to I need to market
[20:41] to market. I need to like create some
[20:42] kind of market comp for it. So, we'll do
[20:46] 30 million. So, I tell them 30 million.
[20:48] They said, "They'll give you 22."
[20:50] I said,
[20:51] "No, but tell them I'll talk to them."
[20:55] And so, around 22 million, I agreed to
[20:57] get on the phone
[20:59] and
[21:00] you know, so like, I'm talking to a
[21:02] broker and a lawyer. I'm like, I I
[21:05] you know, all through this we're like,
[21:06] "Well, who's the buyer? Who's the
[21:07] buyer?" Not some some somebody, you
[21:10] know, like and if they'd said, if
[21:13] someone had said, "Yeah, we're a startup
[21:15] and we've got like 12 million dollars in
[21:17] the bank and we'll give you all of our
[21:19] cash and this is all we've got."
[21:21] Maybe they might have swayed me.
[21:23] But but I just had a whale on the other
[21:26] end of the line that that wouldn't
[21:29] identify themselves and I thought
[21:31] "Okay, well, if that's the case, I'm
[21:33] just going to wait until they hit my
[21:34] bid, you know, if you had
[21:36] if you had an acre in Central Park and
[21:39] someone wanted to buy it from you and
[21:42] the price is the price, you would wait
[21:43] and then once it's like, you don't want
[21:45] it, I'll wait. I got another decade. I'm
[21:48] not going anywhere. Somebody's going to
[21:50] eventually want to commercialize voice.
[21:53] So, eventually they got on the phone and
[21:54] I'm talking to a broker, but I hear like
[21:56] a click click and there's other people
[21:58] eavesdropping on the line. So,
[22:00] kind of just talking to myself. They
[22:01] said, "Well, we're authorized to go to
[22:03] 22 or 23 million." I said, "You know,
[22:06] sorry." I said, "Go to the Google search
[22:09] engine and type in voice right now.
[22:12] And then what don't you what you'll
[22:14] notice is that it's more popular than
[22:16] like WhatsApp
[22:18] with the billion users. It's a better
[22:20] brand than you would get, you know, if
[22:23] you were to get a billion people online.
[22:25] It's it's a better brand than than
[22:29] Oracle or than SAP or than hundred
[22:31] billion dollar plus companies. So, this
[22:34] is how I value it. I'm I said,
[22:37] "Like, this is like my daughter. I'll
[22:39] marry her off, but only to a man that's
[22:42] going to treat her better than I will
[22:43] treat her."
[22:45] So, if you guys really value this, then
[22:49] give me the 30 million.
[22:52] Otherwise, I'm keeping it.
[22:54] You know? And and so, at some point they
[22:56] come up to 30 million, right? You guys
[22:58] agree. At that point, they agreed to 30
[23:00] million. But did you know who it was
[23:03] before you agreed? No.
[23:05] You had no idea
[23:05] >> knew who it was.
[23:07] Really? who it was. Okay, so you agreed
[23:09] >> I sold it in the blind
[23:12] basically saying no from a 150 grand up
[23:16] to 30 million and then finally they did
[23:19] it. I still didn't know who it was until
[23:20] after the transaction closed and then I
[23:23] hear it's some crypto company and that's
[23:25] the end of it for me. And that's my
[23:27] introduction to crypto. I I literally am
[23:30] thinking about the broker who's like,
[23:32] okay, just you know, showed up to work
[23:33] $150,000 trying to buy a domain and next
[23:36] thing they know a couple weeks later
[23:37] they're brokering 30 million dollar
[23:38] deals and probably you know, they're
[23:40] peeing in their pants, right? Trying to
[23:42] just hoping to God this goes through cuz
[23:43] they're already thinking about what
[23:44] house they're going to buy based on the
[23:45] commission type situation, right?
[23:48] It was amusing.
[23:51] And and so,
[23:53] you do this. You say that it's your
[23:55] first
[23:56] kind of foray or or experience with
[23:58] crypto, but there's this
[24:00] >> experience with crypto. All right. So,
[24:02] there's this tweet
[24:03] >> sold the domain. That's all. There's
[24:05] this tweet that everyone is begging me
[24:07] to talk to you about, which is in I
[24:09] think it's 2012 or 2013. You basically
[24:12] put out a tweet. So, you're early
[24:14] because it's 2012 2013 about Bitcoin.
[24:17] You're also on Twitter then, which was
[24:18] still pretty early for for Twitter in
[24:20] general.
[24:21] And you basically tweet out, you know,
[24:22] kind of saying what I would consider a
[24:24] pretty down the fairway critique of
[24:27] Bitcoin, which is like, it's not going
[24:29] anywhere, right?
[24:31] Fast forward 7
[24:32] >> Online gambling, its days are numbered.
[24:35] Yeah, I 7 8 years and now you've got a
[24:38] material part of your balance sheet in
[24:40] Bitcoin. What happens? How does that
[24:41] happen?
[24:42] Okay, Anthony, can I tell you the truth?
[24:45] Of course.
[24:47] I
[24:48] got an iPhone
[24:50] back in the day. I installed Twitter on
[24:53] it and it used to be really fun and I
[24:56] used to really enjoy reading the news
[24:58] and tweeting stuff.
[25:00] Right? And it's like it was like, you
[25:02] know, by the way, there are certain
[25:03] people on Twitter that still seem to
[25:05] enjoy just tweeting out whatever the
[25:08] heck they want. So, I was in that stage
[25:11] and I had a lot of opinions and so, I'm
[25:14] tweeting stuff and eventually
[25:17] and by the way, I
[25:18] tweeted a thousand things. I forgot all
[25:20] the things I tweeted. So, eventually
[25:23] I realized that it's probably better for
[25:25] my my communication effectiveness if I
[25:29] limit my
[25:31] tweeting to stay on brand. So,
[25:34] like
[25:35] I have a company MicroStrategy. If I
[25:37] have something intelligent to say about
[25:39] MicroStrategy, I say it and I have a
[25:42] non-profit foundation, the Saylor
[25:44] Academy, that gives away free education
[25:46] to hundreds of thousands of people.
[25:48] We're just giving away a free college
[25:49] degree. And if I have something that I
[25:52] can do to help them, I say it.
[25:54] And then whenever anybody else does
[25:56] anything that I might have an opinion,
[25:59] I keep my mouth shut now because I've
[26:02] realized it's just an opinion and I've
[26:05] lived long enough to be wrong on a lot
[26:07] of things. But now, coming back to that
[26:09] specific tweet,
[26:11] I really am ashamed to say I didn't know
[26:14] I tweeted it until the day that I
[26:17] tweeted that I bought 250 million worth
[26:19] of Bitcoin and then I discovered the
[26:22] hive mind crypto Twitter consciousness
[26:26] where all of a sudden they all went
[26:28] through all my tweets.
[26:30] They found it. They reminded me of it.
[26:33] They compared it and I'm like, "Oh my
[26:35] god, I literally forgot I ever said
[26:38] that."
[26:39] And I you know, by the way, I I took it
[26:41] as kind of like kind ribbing. Like, I
[26:43] didn't get all worked up about it. I'm
[26:44] like, "You're right. I was wrong. What
[26:48] an idiot I was. I wish I could go back
[26:51] and do it again."
[26:53] Today's episode is brought to you by
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[27:40] there.
[27:41] Well, the part to me that was
[27:43] so funny about all of this is one,
[27:44] you're right that the internet never
[27:46] forgets, right? And and it sounds like
[27:48] you were using Twitter early on how I
[27:50] use it, which is
[27:51] sometimes I literally tweet things and I
[27:53] tweet them for myself to remember what
[27:54] I'm thinking. Right? Like, I just, you
[27:56] know, throw something out there. Uh the
[27:58] problem is
[28:01] that the internet doesn't forget and
[28:03] even if that was a a thought in the
[28:05] moment, right? You change your mind
[28:07] later, it's a stamp, you know, kind of
[28:10] that that never goes away. And
[28:12] so, when they found it and I saw that, I
[28:14] was like, oh my god, this is amazing.
[28:16] Like, literally in a 6 7 year time
[28:18] period, it's not just from a I don't
[28:20] believe it has value to oh, maybe it has
[28:22] some value, right? I mean, you
[28:24] would taking the 250 million, the first
[28:26] investment, is that a bet the company
[28:30] type move or do you look at that as more
[28:33] conservative than a bet the company type
[28:35] decision?
[28:37] I wouldn't say I would not say it's a
[28:39] bet the company decision.
[28:42] What I would say is
[28:45] we looked at it and you know,
[28:48] before I made that that decision, before
[28:51] the before I was able to convince
[28:53] anybody on the board or the executive
[28:55] team to agree that was the right idea,
[28:58] we all needed to collectively be of the
[29:00] opinion that we were going to be
[29:02] generating cash ad infinitum.
[29:05] Right? So,
[29:07] so uh
[29:08] like there there's a journey that we
[29:10] went through corporately
[29:12] over the past year and there's a journey
[29:14] that Bitcoin went through over the last
[29:16] 7 years. So, if we focus upon our
[29:18] journey,
[29:20] we had 500 600 million in cash and we
[29:24] were buying our stock back a bit and
[29:26] then we were thinking maybe we won't
[29:28] need to buy another company. We need it
[29:29] for a rainy day or maybe something
[29:31] really bad will happen and we'll really
[29:33] need the money. And you know, one of my
[29:35] heroes is Steve Jobs and Steve Jobs, you
[29:38] know, you know, if you had a near
[29:40] bankruptcy experience and he did
[29:42] and I did too, by the way. By the way, I
[29:45] I lived I lived to see my stock go from
[29:48] $333
[29:50] a share to $0.42.
[29:54] Okay? Wait, wait, wait, wait, hold on.
[29:56] Back up. Yeah.
[29:57] >> price fell. What what time period is
[29:59] this?
[30:00] >> I you know, it's not like I like to brag
[30:01] about this stuff cuz it's not something
[30:03] you want to be proud of, but I will tell
[30:05] you that that two of my bragging rights
[30:07] are I am the pretty much the
[30:09] longest-lived public company CEO in my
[30:13] industry
[30:14] cuz I've been public company CEO for 22
[30:17] years. And the second thing is is I'm
[30:20] pretty sure I'm the only public company
[30:22] CEO that ever presided over a 99.8%
[30:27] drop in the stock price and kept his
[30:30] job.
[30:32] I mean, this Okay, so when does this
[30:34] happen? Like what year is this?
[30:37] >> you know? And it's like
[30:38] I I Look, it's a it's another story. I
[30:40] learned a lot of lessons at the short We
[30:43] don't want to get off the subject of
[30:44] Bitcoin and the subject of whatever. The
[30:46] short the the short lesson there is
[30:49] don't run out of money. Always have cash
[30:53] on the balance sheet and don't spend
[30:56] more money than you're taking in. And I
[30:59] feel like an idiot to give that advice
[31:01] to anybody,
[31:03] but it's still good advice right now. So
[31:06] let's go let's fast forward. Back to
[31:09] 2020.
[31:10] Um so
[31:12] we had the money. We are we are very
[31:15] conservative, no debt, ready for a rainy
[31:17] day, ready to seize the opportunity,
[31:19] buying our stock back.
[31:21] COVID hits. The pandemic hits.
[31:24] Everybody's, you know, our equity's in
[31:26] the tank. You know,
[31:29] uh we're losing momentum. And the first
[31:31] thing that happens in in Q1 is it's all
[31:34] kind of shock and awe. And in Q2, the
[31:38] question is how does this impact my
[31:40] customers, our business, our product,
[31:42] our value proposition?
[31:45] And uh you know, and by the way,
[31:47] everybody gets impacted differently,
[31:48] right? If you're running a cruise line
[31:49] or a theater or whatever. And sometimes
[31:52] counterintuitively.
[31:54] And uh in our case,
[31:56] we sell enterprise software that helps
[31:58] you think better. We sell business
[31:59] intelligence. And we sell business
[32:02] intelligence to to lots of governments,
[32:05] agencies. We sell it to massive banks.
[32:08] We sell it to In in essence, Global 2000
[32:12] companies.
[32:13] Even the ones that get impacted, they're
[32:15] like the national airline. They can't go
[32:18] out of business. Right? They So that's
[32:21] our customer base. So we realized that
[32:24] our software kept working. Demand was
[32:26] still there. Everything is smooth. And
[32:29] in fact, the great thing about software
[32:30] is software you can ship even, you know,
[32:33] over the internet. All of our services
[32:36] went remote. So our value proposition's
[32:38] intact.
[32:40] And
[32:41] the the surprise for us is our is our
[32:44] productivity went through the roof.
[32:46] And our cost structure compressed.
[32:48] All of the sudden, you know, $20 million
[32:51] a year of flying around in airplanes
[32:53] went away. And $10 million worth of
[32:56] trade shows and $20 million worth of
[32:58] marketing things went away.
[33:00] But the customer demand didn't go away.
[33:02] So we we actually found that we were
[33:05] much more efficient. So bottom line is
[33:08] yeah, we got that black swan event.
[33:10] But that black swan event actually
[33:12] kicked us into a high gear productivity.
[33:15] And so that was the that was the
[33:17] positive on the on the P&L side. We we
[33:20] realized that we were going to generate
[33:21] more cash. And we And there were And
[33:24] there was no real no real rational
[33:27] business plan where I take $200 million
[33:30] and I spend it to make the business
[33:32] better.
[33:33] I can burn it to make the but I can't
[33:35] spend it to make the business better. So
[33:38] simultaneously,
[33:40] we got a gift from the Fed
[33:43] on the macroeconomic side. So while
[33:45] we're trying to figure out what happens
[33:46] on on the P&L,
[33:49] all of a sudden we see
[33:51] What do we see? The long bond index goes
[33:54] up 22%.
[33:56] If you had asked me, Anthony, like
[33:58] what's the
[33:59] what's the investment that you do not
[34:02] want to make, I would never in a million
[34:04] years buy a 30-year bond that yielded 2%
[34:08] interest. Never. Ever. And yet that was
[34:12] a winner this year. If you bought a
[34:14] 30-year bond at 2% interest, when the
[34:16] interest rates go to to 1.2, you've
[34:19] actually got a massive spike. So equity
[34:23] spiked,
[34:24] big tech spiked, bonds spiked.
[34:27] And you know, and we looked at our cash
[34:30] and I had to listen to a litany of of
[34:33] talking heads, Ray Dalio on down. You
[34:36] know, if Ray Dalio didn't say cash is
[34:39] trash, every podcaster that trolled Ray
[34:42] Dalio said Ray Dalio says cash is trash.
[34:46] Cash is trash.
[34:48] And you know, and then I'm
[34:50] And then I went to school at some point
[34:52] on you. This is probably This is after I
[34:55] realized I had a problem. And And I
[34:57] listened to you describe the plight of
[34:59] the working man. I You know, I go to
[35:00] work. I get paid
[35:03] five Okay, this is not a working man.
[35:05] This is a working lawyer. I get paid
[35:07] $500,000 a year. I save $50,000.
[35:11] I put it in my piggy bank. I have
[35:13] $500,000 in cash in the bank. I have
[35:15] kids and I have a future. And then all
[35:17] of a sudden I realize that the cost of a
[35:20] college education is going up at 8% a
[35:23] year and my cash is yielding zero.
[35:27] Now at that point, you know, we've got
[35:29] the the pump podcast telling me I'm
[35:31] crazy to work for dollars and save my
[35:35] cash.
[35:37] And if you take the $500,000 and the
[35:39] plight of the lawyer with the two kids,
[35:41] one is sending to Harvard, and the
[35:42] $500,000 of cash in the bank yielding
[35:44] zero.
[35:46] And now you multiply everything by a
[35:47] thousand.
[35:49] That's me.
[35:51] I have $500 million company.
[35:53] We're making $50 million a year.
[35:56] I got thousands of people working as
[35:58] hard as they can possibly work.
[36:00] We're we're sacrificing right and left.
[36:03] We're squirreling our pennies away.
[36:05] We're putting it into the bank account.
[36:08] There it is.
[36:09] And you know, in 2019 and before, we
[36:13] worried about the unknowable and we
[36:15] thought maybe we'll use it for something
[36:18] in the And by the way, I I'm a bit older
[36:20] than you. You know, I remember when you
[36:21] got 5% interest overnight on your money.
[36:26] And it wasn't that long ago that the
[36:28] risk-free interest rate was 5% before
[36:31] the great financial crisis. And I'm
[36:33] like, well, I'm going to make 25, 30
[36:35] million dollars a year on this. And I
[36:36] kept hoping and waiting for those good
[36:39] times come back. I was the guy that when
[36:42] the interest rates, you know, when the
[36:43] when the 30-year T-bill interest rate
[36:45] started to go to 3 and 1/2%. I'm like,
[36:47] finally they're going to go to four. And
[36:49] then they're going to five. And they're
[36:51] going to go back to normal, right?
[36:53] Normal interest rates. And then of
[36:55] course, hope was dashed. It went the
[36:57] other way.
[36:59] And um
[37:01] what happens next? Well,
[37:04] asset inflation goes through the roof.
[37:07] Right? And you know,
[37:08] this entire conversation of inflation,
[37:11] it's really twisted because everybody
[37:12] talks about consumer prices, CPI, CPI
[37:15] inflation. That We're not getting enough
[37:17] inflation. We're not getting enough
[37:18] inflation. Okay? Well, like you're not
[37:21] getting any You're not getting inflation
[37:23] on YouTube and Netflix streaming videos
[37:27] and and candy bars manufactured by
[37:28] robots in factories and Domino's Pizza.
[37:31] You're getting inflation on everything
[37:33] you want.
[37:35] If you wanted an Ivy League education,
[37:37] if you wanted a beachfront house in
[37:39] Miami, if you wanted the apartment in
[37:41] New York, if you wanted anything scarce,
[37:45] everything you want is going up 7% and
[37:48] that's asset inflation. Well,
[37:51] if I want if I want a bond that's going
[37:54] to yield $50,000 a year,
[37:57] you know, it used to cost a million
[37:59] bucks. And this year, it cost $10
[38:03] million.
[38:04] The cost of the asset going to went up
[38:06] by
[38:08] 2%? No.
[38:10] I have a
[38:11] I have a house in Miami Beach.
[38:14] It was a a nice house built in the
[38:15] 1930s. And I And I have the deed that of
[38:19] sale for the house.
[38:21] $100,000
[38:23] for that house in 1930.
[38:26] It's gone up in price by a factor of a
[38:28] hundred.
[38:30] It's like if you know, so no inflation?
[38:33] Kind of inflation. But it's diff it's
[38:35] asset inflation. So I didn't really
[38:37] think about it until
[38:39] I got slugged in the face with a two by
[38:41] four, which kind of happened around
[38:43] March or April
[38:45] when Main Street shut down, the economy
[38:47] shut down, and bonds went through the
[38:51] roof, when municipal bonds went up while
[38:54] every city is bankrupt, when every when
[38:57] Apple stock and every other public tech
[39:00] equity went up
[39:02] while and the multiples blew out
[39:05] and the economy went to the worst place
[39:07] I've seen in 30 years.
[39:09] At that point, you start having a
[39:11] thought with yourself, which is
[39:13] what is what is the true inflation rate?
[39:16] And And we should probably coin a
[39:18] different term, right? If you if you
[39:20] looked at asset inflation on a good year
[39:22] for the last decade, it's 7% a year
[39:25] normal, right? This year,
[39:27] you can make an argument it was 25%.
[39:31] Right? I mean, if you look at the long
[39:32] bond index and if you look at these
[39:34] equities, you can make an argument that
[39:36] the asset inflation rate leaped to 25
[39:38] and 30% depending.
[39:41] And uh And now,
[39:43] what does that mean to me
[39:44] metaphorically? Well, here's how I feel.
[39:47] I felt like I had $500 million of cash
[39:51] in the bank, safe,
[39:53] and it was yielding 2-3% and I'm ready
[39:56] for a rainy day and then I'm starting to
[39:58] do stuff with it. And then every month
[40:00] some banker sends me a note saying the
[40:02] interest went down, it went down. Now
[40:04] there is no interest.
[40:07] And then someone took my cash out of the
[40:09] bank and they put it in the backyard in
[40:11] pallets
[40:12] and then they opened my back gate and
[40:15] then every month someone comes along and
[40:17] starts burning 2% of the money.
[40:22] And then I started thinking, well, you
[40:24] know, in 12 months 25% of the money's
[40:26] going to be gone.
[40:28] And then you know, then I started
[40:30] thinking
[40:31] what is the point of all this? What what
[40:35] am I doing wrong? And of course the
[40:36] answer is
[40:38] you can't hold cash. And so
[40:41] what do you do with it, right? Well, I
[40:43] mean the answer is but you So so hold on
[40:45] a second here. So you realize the macro
[40:47] issues. Um
[40:49] I think there was a couple of different
[40:50] things that happened, right? So the
[40:51] macro issues happened, you're sitting
[40:53] there, you're in a very unique situation
[40:54] because you have so much cash on the on
[40:56] the company's balance sheet. Um you run
[40:58] a business that throws off a lot of
[41:00] cash, right? So you kind of have that
[41:01] advantage. It actually improves
[41:04] economically like you described in terms
[41:05] of your costs are going down.
[41:07] Um that the structure of your contracts
[41:10] kind of are are weathering uh very well
[41:12] through this storm. Um and so you you
[41:14] remain in a strong business position
[41:17] where you have cash. And actually the
[41:18] cash is growing, not through investment,
[41:21] it's growing from kind of your your
[41:22] income. Uh and you begin to get worried
[41:24] about that.
[41:25] How do you get to crypto, right? And and
[41:28] I'm leaving you a little bit in terms of
[41:30] uh you've got a friend who basically
[41:33] kind of hit you over the head a second
[41:34] time. So maybe tell that story of as to
[41:36] kind of what pushes you to at least go
[41:38] explore crypto and then we can talk
[41:40] about kind of what you do. But but just
[41:42] talk through that process of like how
[41:43] you actually arrive at okay, crypto is a
[41:45] potential solution.
[41:47] You know, I
[41:48] when times are good everybody's busy.
[41:52] You know, if you're in love with the
[41:53] iPhone then the answer to everything is
[41:55] iPhone. If you're in love with your
[41:56] Apple Watch, when you're in love with
[41:58] Twitter the answer is, you know, that.
[42:00] You know, um
[42:02] so when times are good everybody focuses
[42:04] on that and there's only limited time.
[42:05] So
[42:07] I I think I was closed to the
[42:10] possibility is just there's so many
[42:12] other things going on and um when uh the
[42:16] COVID crisis hit
[42:18] everybody got sent home and we all had
[42:21] to had to contemplate ideas that we had
[42:24] previously rejected and we had to
[42:26] embrace ideas that that just were very
[42:29] foreign to us. So how do I discover
[42:32] crypto?
[42:34] Well first I have a mega mega mega
[42:36] problem. And the mega problem is I have
[42:40] a lot of cash and I'm watching it melt
[42:43] away.
[42:44] And I and and I'm I'm helped to realize
[42:48] I have a mega problem by this insane V
[42:51] recovery in the bond market and the
[42:54] equity market and you know, all of the
[42:57] talking heads.
[42:59] So after after that then I have an
[43:01] opportunity
[43:03] which is I've got a cash generating
[43:05] business
[43:08] and then I've got one more problem which
[43:10] is the investors, the the outside
[43:12] investment community. If you go to them
[43:14] and say, "Hey, we're a great enterprise
[43:16] software company and we've got all this
[43:18] cash."
[43:19] Their answer is, "Well
[43:21] we don't really value the cash." What I
[43:23] mean because they're smarter than I am,
[43:26] right? No, I'm not being I'm not joking,
[43:28] I'm being serious. They are smarter than
[43:29] I am. They knew before I knew that cash
[43:32] is trash and you're a fool to sit on the
[43:35] cash. You're just
[43:37] if the natural asset inflation rate is
[43:39] 10% it means that every time I generate
[43:42] 50 million in operating income I burn 50
[43:46] million in purchasing power on the cash
[43:48] and we're just running as hard as we can
[43:51] to stand still.
[43:52] So we weren't getting any credit for the
[43:55] cash.
[43:56] We didn't need the cash.
[43:58] Ergo, we need to do something. And so
[44:02] what is the thing you're going to do?
[44:03] And we started working through it. Like
[44:05] what do you do if you have $500 million
[44:07] of cash you don't need? Well, you can
[44:08] buy your own stock back.
[44:11] Right? There's a limit to how fast you
[44:13] can do it. If you go into a market in a
[44:14] thinly traded stock and you're buying
[44:16] 20% of
[44:18] the float every day, you know, and
[44:21] that's going to take about four years.
[44:24] Right? It's like
[44:25] you know, if if your cat if your ice
[44:27] cube is melting 15 or 20% a year you
[44:30] don't got four years or at least
[44:33] you know, inflation's going to do a
[44:35] better job. So that didn't really make
[44:37] sense. So we had we got kicked into high
[44:39] gear. Like everybody got kicked into
[44:42] high gear this year, right? If you
[44:43] didn't know how to use Zoom,
[44:45] you know?
[44:46] Like we started we started
[44:48] on a Monday morning with one video
[44:50] conferencing technology. We discarded
[44:52] it. I'm not going to say which one. We
[44:54] discarded it for another one by 11:00
[44:57] a.m. By 2:00 p.m. we're using Zoom. By
[45:00] 4:00 p.m. the CEO sends out an edict,
[45:03] Zoom is now the corporate standard.
[45:04] Everyone will switch over to Zoom
[45:06] starting tomorrow.
[45:08] Right? That's how And by the way, the
[45:10] same CEO that said, "I don't believe in
[45:13] remote work. You got to show up to the
[45:15] office or else you're not working for
[45:16] me." And I would have sworn up and down
[45:19] I hated remote work until COVID crisis
[45:21] hit.
[45:22] Flip. And so that that same idea
[45:25] happened with the balance sheet.
[45:27] There are all these strongly held views,
[45:28] you got to be conservative, you got to
[45:30] invest in cash and short-term T-bills
[45:32] and you don't contemplate anything else.
[45:35] And then all of the sudden you
[45:36] contemplate other things. So I mean,
[45:39] you're an expert. You tell me if you had
[45:41] $500 million of cash right now
[45:44] where would you invest it?
[45:47] Uh I'm cheating because you and I see
[45:49] eye to eye now is I'd go buy a lot of
[45:50] Bitcoin.
[45:51] Okay. And so if you didn't know what you
[45:54] know, but you were an intelligent person
[45:57] and you watched YouTube and you watched
[46:01] everything else. What would be your
[46:03] laundry list of assets to consider
[46:05] investing in? Yeah, it it basically be
[46:07] all the inflation hedge assets, right?
[46:09] You'd look at everything from real
[46:10] estate, precious metals,
[46:12] uh Bitcoin. You kind of just go down the
[46:13] line, hard assets that have some sort of
[46:15] inflation hedge uh type qualities uh
[46:18] that really are more kind of wealth
[46:20] preservation than anything would be the
[46:22] the the general bucket to at least go
[46:23] start exploring with, right?
[46:25] >> Okay, so let's take through them.
[46:26] Commercial real estate. How do you go
[46:29] buy $500 million
[46:31] worth of commercial real estate at a
[46:32] fair price that's not an impaired asset
[46:36] by something happening in the economy
[46:38] right now? How how many people want to
[46:40] sell you commercial real estate at a
[46:42] fair price right now that is not
[46:43] impaired? They all think it's still
[46:45] worth what it was worth in January.
[46:47] Okay. So that you know, that's kind of
[46:49] difficult. So what's my next thing? Go
[46:52] buy
[46:53] I'm not so silly as to go buy like uh
[46:56] 20th century stock. Go buy Apple,
[46:59] Amazon, Facebook
[47:01] you know, Twitter?
[47:02] Oh, by the way, back in 2012 I wrote The
[47:05] Mobile Wave. You know what I said in The
[47:07] Mobile Wave? I said go buy Facebook,
[47:10] Amazon, Apple, Twitter. It was a good
[47:12] idea in 2012.
[47:15] If you had done it then you would have
[47:16] made 10 times your money. Very good
[47:19] idea. Not the same idea this week.
[47:24] Right? I mean, at this point you know,
[47:27] is is Apple computer going to go up by a
[47:29] factor of 10 from here?
[47:32] Right? Maybe it might double, it might
[47:34] be cut in half, but you know, you're
[47:36] with the best equity in the world you've
[47:38] got a you've got equal upside downside.
[47:40] You're really just Yeah, there's no
[47:42] asymmetric payoff. Exactly. And so when
[47:44] you started to look at this, um did you
[47:47] look at real estate, precious metals and
[47:50] Bitcoin or kind of what was what was the
[47:52] on the menu if you will for evaluation?
[47:54] I went Okay, and this is where I got to
[47:57] I got to give a plug to my friend Eric
[47:58] Weiss. Eric Weiss
[48:00] running his own Bit
[48:02] Bit Bitcoin investment, you know,
[48:05] advisory service, you know, and he's
[48:07] saying this is what I'm doing and I'm
[48:08] just dismissing him like,
[48:10] "Whatever, this Bitcoin thing. I don't
[48:12] know what it is, but it's crazy crypto
[48:14] and it's like shell game." So
[48:17] he just he keeps mentioning it and I
[48:19] keep thinking about it. And then then it
[48:22] one day we're sitting around my pool in
[48:25] Miami and he starts explaining it and
[48:28] something clicks in my head that maybe
[48:31] this is a pretty good idea, you know,
[48:33] like I I I have been beaten over the
[48:36] head with a 2x4. And so I'm a bit more
[48:40] open-minded, but I started thinking
[48:42] about it. And then I realized
[48:45] I really got to look at precious metal.
[48:47] You know, you got Now you go to the
[48:49] Robert Kiyosaki, silver, gold or
[48:52] Bitcoin, you know, choose one.
[48:55] And so we get down to choosing. Are we
[48:57] going to invest in precious metals or
[48:59] Bitcoin? I Am I going to I I already
[49:02] dismissed commercial real estate. I
[49:03] dismissed a market basket of equities,
[49:06] the spider. You know, Nasdaq 100. That
[49:09] stuff's just not compelling. I you know,
[49:12] I tell you what I want, right? What I
[49:14] want is something that that might be cut
[49:16] in half, that can go up by a factor of
[49:18] 10.
[49:19] Asymmetric payoff. By the way, that's
[49:22] what any intelligent investor wants.
[49:24] That's what you want when you bought
[49:26] Amazon in 2011. That's what you were
[49:28] getting when you bought Apple computer
[49:30] when the iPhone came out. That's what
[49:32] every every rational winner is getting.
[49:34] You want a 10x upside and then you want
[49:38] Yeah, like I can even live with losing
[49:40] all the money. Although, here's the
[49:42] catch.
[49:44] You know, like every good investment, in
[49:45] my opinion, if if you're going to put a
[49:47] lot of money at work, the
[49:49] the winning formula for the past 10
[49:51] years or 15 years has been
[49:53] find a digital dominant network that's
[49:57] dematerialized some some fundamental
[50:00] thing. The mobile network is Apple, the
[50:03] information network is Google, the video
[50:05] network YouTube, you know, the social
[50:08] network Facebook, uh even Twitter is
[50:11] speech network, dematerialized, and
[50:14] Amazon, the retail network.
[50:17] You buy them when they're a $100 billion
[50:19] market cap.
[50:21] When something hits a $100 billion And
[50:23] by when they're 10 times bigger than the
[50:26] next biggest thing,
[50:28] and they're $100 billion, they're
[50:29] probably going to crush
[50:31] They're probably going to crush
[50:32] everything. And at that point,
[50:35] like, you know, I remember lecturing
[50:37] Wall Street guys in 2011, 2012 about
[50:41] Apple. You know, and here's what they
[50:43] said. They said, "Well, we know you love
[50:45] Apple, and and you think it's going to
[50:47] beat the world. But, you know, our idea
[50:49] is if Apple goes up too high, we're
[50:51] going to sell the stock, and we're going
[50:52] to buy HP so we can and Dell so we can
[50:55] diversify your computer portfolio. And
[50:58] then if And if all your tech names, if
[51:00] Apple and Amazon and Facebook go up too
[51:02] much, we're going to sell those so you
[51:03] don't get too much in technology."
[51:06] Okay, and and my answer was
[51:09] what you know, if you think about it
[51:11] broadly, there's no example of a
[51:13] successful company in the history of the
[51:14] world that wasn't a technology company.
[51:16] Standard Oil was a technology company.
[51:19] If you go and go to Hershey's factory,
[51:21] you'll find they figured out a
[51:23] manufacture 50,000 candy bars in a clean
[51:26] room, and it's the most sophisticated
[51:27] piece of technology you will ever see in
[51:30] your life. You think they're not
[51:31] technology companies, you're just
[51:33] ignorant.
[51:34] There is no There is no winning
[51:35] investment in a company that's not a
[51:37] technology company at their time.
[51:40] General Electric? There was a time when
[51:42] electricity was interesting technology.
[51:46] Boeing? Same thing, before we could fly.
[51:49] So So, the idea you sell too much tech
[51:52] is a foolish idea, in my opinion. The
[51:55] idea that you sell Apple
[51:57] when it gets too big is another foolish
[51:59] idea. Like, "Well, there's never been a
[52:01] company that was 500 billion in market
[52:03] cap." What?
[52:05] Or or trillion, right? The people say
[52:06] that. "There's never been a company as
[52:08] valuable as Apple, because there's never
[52:11] been a company as valuable as Apple."
[52:14] And another way to say that is, "There's
[52:15] never been a company that could create a
[52:18] software camera, change the way it
[52:20] works, and ship it to a billion people
[52:22] overnight for a nickel."
[52:25] And if you could actually ship a product
[52:27] to a billion people overnight for a
[52:28] nickel, you could create a lot of value
[52:31] with no cost. So, obviously, these
[52:33] digital networks
[52:36] Facebook, Apple, Amazon, you know, you
[52:38] you could see them. They're all around
[52:40] us.
[52:41] They're They They're insanely
[52:44] um
[52:45] value generating. But they're But
[52:46] there's another dynamic here, which is
[52:47] the network effect, right? Metcalfe's
[52:49] law.
[52:50] It's like as soon as
[52:51] as soon as everybody uses Facebook,
[52:56] you know, you can't How do I get
[52:59] 257 of my closest friends to switch to
[53:02] the next thing? It's really hard. Like
[53:05] Twitter.
[53:07] You know, how do you get all of your
[53:09] followers on Twitter to switch to the
[53:11] next speech network?
[53:13] You think you know, even if
[53:15] you know, even if a guy has a massive
[53:17] following on Twitter, you think he's
[53:19] going to switch, you know, to another
[53:22] thing? Probably not.
[53:24] >> to be the last person to leave.
[53:25] So, you you know, you're buried in
[53:28] concrete there. So, now we come back to
[53:31] Bitcoin.
[53:33] Okay.
[53:34] The The number one knock on Bitcoin uh
[53:37] for the outsider is, "Well, it's just
[53:39] software. Someone else can copy it." And
[53:42] I think Bitcoin is They don't do
[53:44] themselves justice here. I mean,
[53:46] sometimes I think the exchanges
[53:49] and and some of the others, they
[53:50] over-promote the fact that there's 237
[53:54] different crypto pairs you can trade.
[53:56] Right? And And it it I've done that.
[53:59] It's like that It's that long tail where
[54:02] all of a sudden there's one thing, and I
[54:05] want to have a list of 47 things.
[54:08] But But you know what's an epiphany?
[54:10] You know, the epiphany is when you're a
[54:12] young CEO, and you're like, "I'm going
[54:14] to put a salesperson in every single
[54:15] state in America. There's 50 states, 50
[54:17] salespersons."
[54:19] There's an epiphany when you go to New
[54:20] York City, and you realize that half of
[54:22] all the money in the country is in one
[54:24] city.
[54:26] And then you realize that maybe you're
[54:28] being captured by orthodoxy. So,
[54:31] in this entire crypto area, it's it it's
[54:34] great to have all the innovation, and
[54:36] it's good to experiment with this and
[54:38] that and DeFi, and maybe that'll work,
[54:40] and maybe that'll work, and maybe
[54:41] that'll work. But to the outsider,
[54:44] the outsider, you look at it, and you're
[54:46] like, "Well, what if everybody moves
[54:47] their money off of Bitcoin to the
[54:50] to ether or to whatever or or to yo-yo
[54:52] coin?"
[54:53] And, you know, and they stop. And And
[54:57] then someone puts this language, eight
[55:00] pages of language, in front of you. What
[55:02] happens if there's a hard fork or a soft
[55:03] fork? You know how debilitating and
[55:06] anxiety-inducing that would be to get to
[55:09] deliver eight pages of legal disclaimers
[55:12] on hard fork, soft fork risk. Like, "You
[55:14] mean like my crypto can float away?" And
[55:17] they get all anxiety-ridden. So, you got
[55:19] to get beyond that.
[55:21] Okay. And by It's easy to get beyond
[55:23] that. The easy way to get beyond it is
[55:25] to say,
[55:26] "Look, this is a proof-of-work crypto
[55:30] network designed to be a store of value,
[55:32] and the only thing we're going to do is
[55:35] maintain a constant store of value as a
[55:37] digital gold,
[55:39] and we're going to expend huge amounts
[55:41] of energy to protect that network and
[55:44] upgrade that network. And you can take
[55:47] your $500 million
[55:49] out of the bank and put it on our
[55:51] network, and everybody in the community
[55:54] is going to spend every
[55:56] iota of their energy to make sure no one
[55:58] F's with that network. Okay?"
[56:00] >> Okay. All right. So, hold on. So, when
[56:02] you when you start to understand this,
[56:05] uh
[56:06] it sounds like you pretty astutely
[56:09] Bitcoin, everything else. There was a
[56:11] separation in your mind in terms of
[56:13] understanding that.
[56:15] Uh and as you were learning about that,
[56:18] were you going into this um
[56:21] with an open mind as uh I don't even
[56:24] remember that I tweeted this thing, you
[56:25] know, in the past. I know I've got this
[56:27] problem. This is The promise of this
[56:29] thing is a store of value. Like, let me
[56:30] go explore it. Or do you basically have
[56:33] people who are kind of guiding you and
[56:35] and pushing you and saying, "Hey, this
[56:37] is the solution. This is your solution."
[56:38] Like, is this a self-guided tour, or is
[56:40] this a externally guided tour?
[56:42] >> Completely. But I am completely
[56:44] oblivious to any previous opinion I had
[56:46] had. Then the before But
[56:49] I I didn't follow Bitcoin all through
[56:51] the 2017
[56:53] Bitcoin cash for any of the fireworks
[56:56] that were very colorful. I missed it
[56:58] all, right?
[56:59] >> Okay. So, I you know, I show up with a
[57:01] clean slate in 2020,
[57:04] and I'm reading about this as history,
[57:05] and I'm looking at, you know, Andreas's,
[57:09] you know, videos and your videos and Dan
[57:11] Held's videos, and I'm reading The
[57:13] Bitcoin Standard by Saifedean, and I'm
[57:16] reading Parker Lewis's essays, and You
[57:20] got You got indoctrinated by the Bitcoin
[57:22] community. You got hit with all the
[57:24] content. Uh yeah. And
[57:27] And the all the maximalists, and I'm
[57:29] seeing Max Keiser, and I'm You know, and
[57:31] and I'm saying I'm like, I'm starting to
[57:33] figure out there seems to be some
[57:34] interesting drama here, but it's more
[57:37] entertaining for me, right?
[57:39] And here's the thing that really just
[57:41] that just kicks you over the edge,
[57:42] though. It's just when you go to real
[57:46] Bitcoin dominance,
[57:48] and you look at Bitcoin, and then
[57:50] Bitcoin cash, and then the next one, the
[57:52] next one, you realize,
[57:53] "Okay, Bitcoin is 92% of everything.
[57:57] And the next competitor is 2%.
[58:00] And then the next competitor is 1.5%.
[58:03] Okay? The number one knock on Bitcoin
[58:06] is, "Well, maybe it's the MySpace to
[58:07] Facebook." It's like,
[58:09] absolutely not. If you know anything
[58:12] about MySpace, you realize that MySpace
[58:14] was never worth more than a billion
[58:15] dollars. Okay? MySpace was one was 200
[58:20] times smaller than Bitcoin is right now.
[58:24] It was never that case, right? There's
[58:27] never an example of a $100 billion
[58:29] monster digital network that was
[58:33] vanquished once it got to that dominant
[58:35] position. So, all you got to do is see
[58:37] that chart, and then you think about the
[58:40] think about the dynamic and the network
[58:42] effect, and you're like, "This is
[58:44] already won."
[58:45] Right? It's won. It's been tested. And,
[58:48] you know, and by the way, the hard forks
[58:49] I think are a big advantage. The fact
[58:52] that the fact that Bitcoin went through
[58:54] it, and we saw what happened, and we saw
[58:57] that the community would defend Bitcoin,
[59:00] that's what gives a person like me
[59:03] confidence
[59:05] to invest hundreds of millions of
[59:07] dollars in Bitcoin. I I I don't want to
[59:09] hear that you've got a new idea, and
[59:12] you're upset over transaction fees, and
[59:14] you would like to implement smart
[59:15] contracts, so you got to change
[59:17] everything. I don't want to hear that. I
[59:19] want to hear that you're going to defend
[59:21] the network to the death against someone
[59:24] that's going to break it or compromise
[59:27] it in any way, shape, or form.
[59:30] When you decide, personally,
[59:32] this is a good idea.
[59:34] Uh I'm going to take a material amount
[59:36] of the $500 million and I'm going to go
[59:38] buy Bitcoin with it."
[59:40] You've got a board, you've got
[59:42] shareholders, you've got regulators,
[59:44] there's there's a number of kind of
[59:46] stakeholders, right? That people who
[59:47] either have financial interest in what
[59:48] you're doing
[59:50] uh or really care about what you're
[59:51] doing uh from a regulatory standpoint.
[59:53] What are those conversations like? Do
[59:55] you just go to the board and say, "Hey,
[59:57] there's this thing called Bitcoin. I'm
[59:58] going to take $250 million. I'm going to
[59:59] go buy it." Do you kind of warm them up
[60:01] with some information first? Like like
[60:03] what is that conversation at the board
[60:05] level like?
[60:06] I started assigning them homework.
[60:10] And
[60:11] they all know you.
[60:13] So they you know, they've all watched a
[60:15] variety of your podcast. Uh they all
[60:18] know Andreas.
[60:20] They all they're all required to watch
[60:23] the debate between Eric Voorhees and
[60:26] Peter Schiff on gold on on on fiat
[60:29] versus Bitcoin, what is better money.
[60:31] Right? And then a non-stop stream of
[60:35] essays,
[60:36] you know, on macroeconomics and Bitcoin
[60:39] theory and you know, you know, the the
[60:42] who's who let me and people you've
[60:44] interviewed. When Lyn Alden publishes
[60:46] her piece, it goes to my board, you
[60:48] know, the the bullish case for Bitcoin
[60:51] goes to the board.
[60:52] All of those things and and it's and
[60:56] between them and the general counsel and
[60:58] the CFO and myself, we're all basically
[61:00] just going down the rabbit hole.
[61:03] And following that is a you know, is a
[61:06] series of discussions.
[61:09] One-on-ones with everybody. Everybody
[61:11] goes off, does their own homework. We
[61:13] all come together. Lots of group
[61:16] discussion. We all split.
[61:18] The CFO goes off to
[61:21] to to to organize and start to consult
[61:24] with arrays of accountants.
[61:26] The general counsel goes off to consult
[61:28] with arrays of attorneys.
[61:30] You know? Then we go off and consult
[61:33] with arrays of financial advisors. Then
[61:35] we consult with arrays of bankers. Then
[61:37] we come back together again and then we
[61:39] share. Then we have deliberations.
[61:42] Then we deliberate some more. And then
[61:44] we think very carefully about what is
[61:47] the appropriate and prudent way
[61:50] in order to begin
[61:52] to move forward with or affect this
[61:54] strategy. Now,
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[64:32] All right. So the first purchase
[64:35] uh is $250 million.
[64:37] Um
[64:37] you announced today that you did uh
[64:39] another $175 million. So you're now at
[64:42] $425 million, which is uh almost all of
[64:46] that $500 million of cash or a good
[64:48] portion of it. Walk us through uh I got
[64:51] a ton of questions around what I'll call
[64:53] operationally investing hundreds of
[64:55] millions of dollars. So how do you think
[64:57] about entering the market and trying not
[64:59] to move price? How do you think about uh
[65:02] OTC, right? Uh desks. Um obviously, for
[65:06] those who are listening who might be
[65:08] confused, Michael and the team is not
[65:10] going on Coinbase and letting a $400
[65:12] million, you know,
[65:13] market order rip. So so there's some
[65:16] very thoughtful things that go into
[65:17] this. Let's talk first just about how do
[65:19] you actually acquire this much Bitcoin
[65:22] uh without kind of moving price? And
[65:24] And before I get there, I'll make one
[65:25] more point. We had $500 million in cash.
[65:29] We wanted to buy our own stock back with
[65:32] it or put it into some some asset like
[65:35] Bitcoin. Our first step is to announce
[65:38] that we're
[65:39] thinking that through. Our second step
[65:41] is announce a tender offer for our
[65:43] stock, $250 million. That took place the
[65:46] same day we announced we bought the $250
[65:48] million in Bitcoin. Then we have a
[65:50] 20-day period
[65:52] where we wait for our shareholders to
[65:53] decide if they're going to tender and
[65:55] how much. So we had to move through
[65:58] that. When we got done, we actually
[65:59] bought $60 million
[66:02] worth of our stock that hit the wire in
[66:04] the last few days, too. So what we've
[66:06] our real goal was to invest it all.
[66:09] Got it. So So that was the is going to
[66:11] be. So it was 250 in Bitcoin, the tender
[66:13] ended up being 60 million or so, so
[66:15] you're at like 310. And then that hat
[66:17] you had kind of another $175 million
[66:20] that you could play with and still keep
[66:21] some cash in in the bank.
[66:22] >> Yeah. And it's the shareholders'
[66:24] decision as to how much of that will be
[66:26] tendered, right? So we we wait for them.
[66:29] And then after the tender offer, we had
[66:31] excess cash in our treasury. So the next
[66:34] step is for us to is to invest our
[66:36] treasury cash. So that's what we
[66:38] announced today. In fact, we we wrapped
[66:41] it all up. So substantially, 95% of that
[66:44] money is either invested in our stock or
[66:47] in Bitcoin and we've accomplished that
[66:49] in short order, right? Like over the
[66:50] course of 6 weeks or 4 weeks. Now,
[66:53] uh regarding acquiring that much
[66:56] Bitcoin. First of all,
[66:59] I can't give you like exact blow-by-blow
[67:02] details because I've got security issues
[67:04] and the world is watching and I
[67:09] I can't. But what I can do is is is I
[67:14] can describe to you, if you were running
[67:17] a company,
[67:18] how you should think about this.
[67:21] You know, if you were in my position,
[67:22] which is
[67:23] you're going to go and you're on you're
[67:25] going to audition a bunch of uh a bunch
[67:28] of institutional-grade
[67:30] exchanges.
[67:32] You're going to work through and look
[67:34] for institutional-grade custodians.
[67:38] You're you're going to look at
[67:40] you know, all of the security issues,
[67:42] all the technology issues, etc. You're
[67:45] going to You're going to think about the
[67:47] team. You're going to build a
[67:49] relationship with them.
[67:51] And then you're going to buy if you're
[67:53] going to buy that much,
[67:55] you're going to buy it
[67:57] in thousands or tens of thousands or a
[68:01] hundred thousand plus small transactions
[68:04] day and night, minute by minute over the
[68:09] like over the course of many many many
[68:11] days. So
[68:12] So um it's not like we're going in
[68:16] I'll sit and I'll watch this happening
[68:18] and I've got a great team, you know, a
[68:20] great team that I've worked with and
[68:22] some excellent professionals. They are
[68:23] brilliant geniuses at what they do. But
[68:25] let me tell you, they've got great
[68:27] technology, too.
[68:28] Right? It's like And and you got to have
[68:31] the right technology, you got to have
[68:32] the right team, and then you have to be
[68:34] very patient. Like very very patient.
[68:39] You know, like a
[68:40] I'll I'll watch people walk in on Monday
[68:42] morning and you know, it's like, "Okay,
[68:44] some dude just got up at 9:00 a.m. and
[68:46] decided to buy some Bitcoin." And the
[68:48] price spikes. You know, whenever I see
[68:51] that, I'm like, "Well, that guy won't be
[68:53] in the market very long." Because no one
[68:56] that really wanted to buy a lot of
[68:58] Bitcoin would be so silly as to spike
[69:02] the price so hard, you know? I I can
[69:05] tell you this, which is we bought $425
[69:08] million worth of it and we never ran the
[69:11] price.
[69:12] Not a dollar.
[69:14] Like you don't know I'm trading
[69:16] >> Yeah, it's pretty impressive.
[69:17] >> I'm in the market, you wouldn't know
[69:19] that I'm trading against you ever
[69:21] because
[69:22] that's just
[69:24] that's not how you get stuff done,
[69:25] right? Let the market come to you. So,
[69:28] the good news is
[69:30] if you want to buy hundreds of millions
[69:33] or sell hundreds of millions, you can do
[69:35] it
[69:36] and not be seen and and you can do it
[69:39] without moving the market materially or
[69:41] panicking anybody. But, you have to have
[69:42] the right team, the right tools, and the
[69:44] right discipline and you can't be in a
[69:46] hurry.
[69:47] Got it. That makes sense.
[69:49] How has the reaction been from other
[69:52] CEOs or people who kind of are outside
[69:54] the company? Uh I'm assuming that you've
[69:56] gotten um people coming inbound that are
[69:59] peers. Are they laughing at you? Are
[70:02] they excited? Are they asking, "How did
[70:04] you do this? Why did you do this?" Like,
[70:06] what are those conversations like?
[70:09] Well, first of all, I think this is a
[70:11] year where every CEO is busy
[70:14] like minding his own business.
[70:17] Right? Like
[70:19] that they've either got a business that
[70:21] that that
[70:23] has serious serious solvency issues or
[70:26] or struggle, or they've got a business
[70:29] that's being digitally disrupted or
[70:30] twisted one way or the other and and or
[70:34] they've got all sorts of of
[70:37] employee care and feeding issues. So, so
[70:40] this is not the year where a lot of CEOs
[70:43] are necessarily sitting around shooting
[70:45] the whatever about, you know, what's
[70:47] happening this year, right? Everybody's
[70:49] kind of
[70:50] all hands on deck, working hard. Uh the
[70:54] people I do speak to, though,
[70:56] and I speak to some, I would say
[70:59] everybody
[71:01] has uh
[71:03] has had a lot of their assumptions
[71:05] shaken this year. Assumptions about, you
[71:08] know, how the market will behave,
[71:10] assumptions about regulations, right? I
[71:12] mean, assumptions about international
[71:15] business, assumptions about their
[71:16] balance sheet, and things that were
[71:19] inconceivable last year.
[71:22] Right? Oracle, TikTok,
[71:25] you know, all sorts of interesting
[71:27] things that you you will see on the
[71:29] paper and people are just like not and
[71:31] they're like not even a second thought,
[71:32] like, "Oh, yeah, that's happening.
[71:34] That's happening." All those things are
[71:37] are are being considered this year to a
[71:39] much greater degree. So, I I do have
[71:42] people coming to me and and they and
[71:44] they want to know how do we think about
[71:47] it and why do we do it? And
[71:49] you know, and and they're all starting
[71:51] to to think what's their angle on this
[71:53] now. And so, I I think it's catalyzing
[71:56] people to be much more open-minded.
[72:00] Yeah, I think that makes a lot of sense.
[72:02] Do you feel like uh
[72:03] you've kind of broken the dam open and
[72:06] now a bunch of people will follow, or do
[72:08] you think that this is kind of a slowly
[72:09] but surely it will take a lot of time
[72:11] for more to to to kind of follow in your
[72:13] footsteps? I
[72:14] I think it's like the four-minute mile.
[72:16] I think that people told themselves they
[72:17] couldn't do it and then someone does it
[72:20] and then and the next year dozens and
[72:22] dozens of people do it. Right? Uh
[72:25] this particular case,
[72:27] uh
[72:28] there's a lot of stuff that I've done in
[72:31] my career that was a lot harder than
[72:33] this.
[72:34] And I and I will say any entrepreneur
[72:37] that ever successfully launches a
[72:39] business and you know, and gets to
[72:41] profitability will have accomplished
[72:43] something much harder than what we did.
[72:45] So,
[72:46] it's a it's a uh it's a challenging
[72:49] project, but it's not beyond um beyond
[72:52] the capability of any any uh management
[72:54] team. I think that a lot of people just
[72:56] kind of had a mental block.
[72:58] Uh you know, or they it's just in this
[73:00] block of I just dismiss it, I don't even
[73:02] consider it, and then they get focused
[73:05] on something else. Uh my own experience
[73:08] is
[73:09] you know, on the day from the day that I
[73:12] decided
[73:13] that I wanted to buy Bitcoin, if if I
[73:16] decided on that day as an individual,
[73:19] you go to these, you know, high-end
[73:21] exchanges, it's going to be 6 weeks to
[73:23] get through the KYC for an individual.
[73:26] If you want to do it. If you're a
[73:27] company, a private company, and if you
[73:31] had your team all around you, from the
[73:33] point that that you thought it was
[73:35] interesting, you're 12 weeks to 18 weeks
[73:40] to get through the hoops. If you're
[73:43] a nimble publicly traded company, I
[73:45] think you're looking at 6 months.
[73:47] And if you're a good company, like just
[73:49] a good rational publicly traded company
[73:51] to put on the docket, you would do it in
[73:53] 9 to 12 months. And so,
[73:56] I I think that um
[73:58] people were kind of oblivious to the to
[74:01] the the need {slash} the role of Bitcoin
[74:06] and the Bitcoin narrative of digital
[74:08] gold, right? This is the ultimate
[74:11] inflation hedge. This is This is if it's
[74:14] it's not 10x better than gold, it's
[74:16] 100x. Maybe it's 1,000x better than
[74:19] gold. We could go on for hours. I could
[74:21] tell you why I think it's 1,000x better
[74:23] than gold, but let's just assume, since
[74:26] we're preaching to the choir, that it's
[74:28] 1,000x better than gold. Once you
[74:31] realize that it's 1,000x better than
[74:33] gold,
[74:34] from that point, it's
[74:37] minimum
[74:39] 12 weeks if you went like a bat out of
[74:42] hell, and probably 6 months. And I kind
[74:45] of feel that if people were waiting to
[74:47] see if this was possible, well, they
[74:50] kind of saw our announcement August. So,
[74:52] the 6-month clock starts in August. If
[74:56] if they were uh super
[74:59] if they were just perfectly configured,
[75:01] if they had all the same characteristics
[75:03] as us,
[75:04] then they start focusing on this in May
[75:08] or June. Nobody's thinking about this in
[75:10] March or April. Everybody's just so busy
[75:12] trying to keep the doors open and and
[75:15] their bells getting rung. So, take
[75:18] August and say August, September,
[75:20] October,
[75:21] I you know, December, January, February.
[75:24] I think that what you're going to see is
[75:26] over the next two, three, four months,
[75:29] something interesting.
[75:31] And um
[75:33] you know, the
[75:34] the the other point, right, that's not
[75:37] not lost upon me is
[75:39] there's 3,500 publicly traded companies,
[75:41] there's $5 trillion
[75:42] in their treasuries, and it's all
[75:44] melting.
[75:45] And
[75:46] and yeah, at some point you have a
[75:48] fiduciary obligation to not lose the
[75:50] money.
[75:51] Okay?
[75:53] You know, like it's it it used to be it
[75:56] used to be acceptable to be
[75:58] conservative, but that was before the
[76:00] asset inflation rate went from 6% to
[76:02] 30%.
[76:03] You know, when the inflation rate goes
[76:05] to 30%, it's not necessarily something
[76:08] you can ignore. So, I think that a lot
[76:10] of people are getting catalyzed right
[76:12] now. I think
[76:13] I think it has to be kind of CEO CFO
[76:16] led,
[76:17] right? Because it it is an innovative
[76:20] thing. But, I I think that uh that we've
[76:23] shown people
[76:25] how to do it, you know, and and we've
[76:27] shown them that it's it's possible and
[76:29] straightforward and
[76:30] and once you it's like anything, if I
[76:33] tell you it's possible,
[76:35] go figure it out on the internet or go
[76:37] figure it out on YouTube. You can figure
[76:39] it out yourself.
[76:40] Right? All you got to know is that it's
[76:42] possible. You know, it's possible to run
[76:44] 52 miles in a single day. Go figure it
[76:46] out. You're going to go Google 52 miles
[76:48] in a single day and then all of a sudden
[76:50] fall down the rabbit hole. So, I think
[76:52] people now know it's possible, but I I
[76:54] don't think you can expect them to move
[76:56] in less than 6 months reasonably in in a
[76:59] in a year.
[77:01] How are you thinking about and last
[77:03] question before we get to the rapid
[77:04] fire, how are you thinking about the
[77:05] volatility? Right? So, obviously uh it's
[77:09] one of the most volatile assets uh that
[77:11] you could have chosen.
[77:12] Um and when we talk about volatility,
[77:14] it's not like, "Hey, may go up 2% or
[77:17] down 2%." You can have double-digit
[77:18] percentage days uh up or down. Um does
[77:21] that change your strategy? Is this just
[77:24] your long-term holding it for, you know,
[77:26] years and years? Kind of how how do you
[77:28] think about that?
[77:29] Well, so first of all, I think the
[77:31] volatility is falling. And I I I think
[77:34] all you got to do is look at the chart,
[77:36] and I there's a narrative like
[77:38] everybody's like everybody wants to say
[77:39] that they know something about crypto,
[77:41] wants to jump up and say, "Well, you
[77:42] know, it's volatile."
[77:44] Well,
[77:45] well, it was volatile in 2017,
[77:48] you know, when like individuals were
[77:50] trading it on their mobile phone.
[77:52] But, yeah, think about what I just what
[77:55] I just said about how we acquired it. We
[77:57] buy $175 million.
[78:01] I'm in the market every minute of the
[78:04] day for multiple days in a row. I'm
[78:07] damping the volatility.
[78:09] One person
[78:11] like me, right? In every every trading
[78:14] day that I'm in the market, I'm damping
[78:16] it to the upside and the downside, and
[78:18] I'm damping it with large sums of money,
[78:20] right? And and so, how many of how many
[78:24] institutions does it take before they
[78:26] damp it?
[78:28] Right? Like, I'm the I'm the dude I'm
[78:30] like, "Okay, I'll pay an extra whatever,
[78:32] but stop this thing. I'm holding it for
[78:34] 100 freaking years, right?" So, like,
[78:37] I'm not really I'm not the day trader
[78:38] guy that's worried about it. So,
[78:41] I think that as the institutions come in
[78:43] and as they buy bigger amounts, they're
[78:45] damping the volatility. That's my first
[78:47] observation. My second observation is
[78:49] crypto trades 168 hours a week. Every
[78:53] other asset trades 35 hours a week at
[78:56] best, and sometimes less on holidays,
[78:58] right?
[78:59] You're trading
[79:00] I look at this thing in awe, you know?
[79:03] When I look at these exchanges Saturday
[79:05] night, 9:30 p.m., and I'm watching
[79:10] the thing stream and I'm like, "This is
[79:12] the most magical, hardest working
[79:15] security in the history of the world."
[79:17] And and I would think everybody ought to
[79:20] be in awe that the thing's not going
[79:22] haywire. It's remarkably non-volatile in
[79:25] that regard. Like in my opinion, you
[79:28] could go and you could go into the
[79:30] market and you could liquidate 50 or 100
[79:34] million dollars worth of this stuff in
[79:36] the matter of an hour, any hour of the
[79:39] day, any day of the week, on a holiday,
[79:42] and maybe you take a 3% haircut.
[79:46] But go try to liquidate 100 million
[79:48] dollars of gold on a Saturday afternoon
[79:49] in Istanbul on the street side. You
[79:52] know? So,
[79:53] but so that my answer is I don't think
[79:55] it's that volatile, but my other answer
[79:57] beyond this, let's be honest, there's a
[80:00] negative real yield on everything else I
[80:03] can buy.
[80:05] Okay? Gold's got a negative 3, 4, 5%
[80:09] real yield in my opinion. We'll talk
[80:11] about why. Bonds have a negative real
[80:13] yield. It's just a question. We're just
[80:14] going to debate is it a 7% asset
[80:18] inflation or 15% or 3%? But it doesn't
[80:21] really matter. Every other non-volatile
[80:24] asset is a negative real yield, which
[80:26] means that everything else is lifeblood
[80:29] draining out of my veins. So, if my
[80:32] choice would be to accept some
[80:33] volatility and live,
[80:36] or
[80:37] I had non-volatile cash
[80:40] that bought 30% less in a matter of 8
[80:44] weeks.
[80:46] Non-volatile, that was 30% less. At that
[80:49] rate, you're not going to make it
[80:51] through the decade.
[80:53] And so, vol- volatility is just
[80:55] something you got to live with.
[80:57] But I but I really think that there's
[80:59] there's
[81:00] there's a group of crypto enthusiasts
[81:02] that lived the last 10 years.
[81:04] And and they are the result of their
[81:06] experience. They lived through a
[81:08] difficult time and they're heroes and I
[81:10] respect them. But you lived through
[81:12] that, you lived through volatility. I
[81:14] think the next 10 years are not going to
[81:16] look like that. I think the next 10
[81:18] years as you have people coming in that
[81:20] are that are moving hundreds of millions
[81:22] of dollars in and out of the market,
[81:25] they're going to tend to damp all the
[81:26] volatility and and and the institutions
[81:29] are going to damp because it's in their
[81:30] interest.
[81:32] And so, if there is any, it's just going
[81:33] to be to the upside for the good of
[81:35] everybody and
[81:37] otherwise not a big problem for me.
[81:40] I literally think that is the perfect
[81:42] way to look at this. Is
[81:44] uh what is it? 200 billion dollar asset
[81:46] today uh market cap wise,
[81:49] go to 8, 9 trillion, you're looking at
[81:50] 40 plus X, right? To gold's market cap.
[81:53] And uh you're talking about an asset
[81:55] that is superior uh in almost every
[81:56] single way.
[81:58] Um and so, if you think it's just going
[82:00] to be equal on a market cap basis, uh
[82:02] you're not a student of history uh
[82:05] because we know that they usually tend
[82:06] to uh have much larger market caps. And
[82:09] so, when you start to look at just the
[82:11] numbers, right? You can not like put big
[82:13] numbers to work in the market, but also
[82:15] the upside of this thing is incredible
[82:18] uh over a long enough time period.
[82:20] You know, digital gold is a great
[82:22] narrative, but to say that this is much
[82:25] better than gold undersells it. Because
[82:28] the truth is, if you look at these
[82:29] treasuries,
[82:30] there's something like 200 trillion
[82:33] dollars worth of debt instruments and
[82:36] other treasury instruments
[82:39] that have a negative real yield.
[82:41] And and precious metal is just one of
[82:43] them. So, if you're looking at 10
[82:44] trillion dollars in gold, there's easily
[82:46] 100 trillion dollars of
[82:49] you know, whatever this shadow money, 75
[82:51] trillion of that, 75 trillion of
[82:53] sovereign debt, 50 trillion of other
[82:55] stuff. So, you're really looking at 200
[82:57] trillion or more of negative real yield.
[83:01] The only debate is how negative it is,
[83:03] and Bitcoin is the only thing I could
[83:05] find is positive.
[83:07] You know, if I could find another thing,
[83:08] we'd be talking about it.
[83:10] No-brainer.
[83:11] I ask the same two questions to
[83:12] everybody to uh finish up. What is the
[83:15] most important book you've ever read?
[83:18] Okay.
[83:20] You're going to hate me for this, but
[83:21] it's the The Moon Is a Harsh Mistress.
[83:26] Okay? And uh you know, Robert Heinlein
[83:28] was my favorite author growing up. I'm a
[83:31] rocket scientist.
[83:33] And of course,
[83:35] it's
[83:36] it's uh it's about a protagonist
[83:39] computer whose name is Mike who saves
[83:43] the moon.
[83:45] So, I liked that a lot.
[83:46] And I like and I grew up with that. It
[83:48] was very inspirational.
[83:50] So, speaking of the moon, aliens,
[83:52] believer or non-believer?
[83:55] I think they're out there. I think that
[83:57] I think that there's so many stars and
[84:00] galaxies and planets,
[84:03] it statistically it just seems to be
[84:05] impossible that somewhere
[84:08] there isn't somebody.
[84:11] I uh I tend to agree with you. The
[84:13] galaxy is very, very big. Uh you get to
[84:15] ask me one question to uh to finish up.
[84:17] What's the one question you got for me?
[84:23] Jack Dorsey
[84:24] has a one-word Twitter bio.
[84:28] And that one word is Bitcoin.
[84:32] And he's also got 10 billion dollars in
[84:35] cash and cash equivalents between
[84:37] Twitter and Square.
[84:40] And to my knowledge, none of it is
[84:43] invested in Bitcoin, either Square or
[84:45] Twitter.
[84:46] You want to help me try to persuade Jack
[84:50] to like
[84:52] you know, break off a small 500 million
[84:54] or billion dollars and go buy some
[84:56] Bitcoin cuz I know he loves the
[84:58] community and I know he's doing
[85:00] as much as he can to help, but the
[85:03] single most useful thing he could do to
[85:05] help is lead on the corporate treasury
[85:09] side. If he bought a billion dollars
[85:11] worth of Bitcoin, what do you think
[85:12] happens the next day?
[85:15] Uh
[85:16] I think that he's thought about it uh
[85:18] would be my guess. Uh
[85:20] my guess is that there are uh bigger
[85:22] problems that he uh perceives uh in
[85:25] terms of activist investors and kind of,
[85:27] you know, he's a he's always the um
[85:30] I I joke and say uh show me another uh
[85:33] entrepreneur who's built two tens of
[85:36] billions of dollar market cap companies
[85:38] and is running them simultaneously
[85:40] and uh yet somehow people still have a
[85:42] problem with the guy.
[85:43] Uh which is insane to me. I don't. He's
[85:46] an amazing guy and he's inspirational,
[85:49] but it's not like he shirks controversy.
[85:52] Oh, no, no, no. Look, I I absolutely
[85:54] think that
[85:55] uh
[85:56] I
[85:57] Again, this is me speaking my opinion.
[85:59] Obviously, I've never talked to Jack
[86:00] about this. I don't have any inside
[86:01] information. Uh
[86:03] I would guess that if it was his choice,
[86:05] he would absolutely do it if he kind of
[86:07] had sole power. Uh I I think that um
[86:11] you know,
[86:12] you kind of pick your battles sometimes
[86:13] and my guess is that uh when Elliott uh
[86:16] Management is knocking on the door and
[86:17] basically got a a target on your back as
[86:19] the CEO, the first thing you don't want
[86:21] to propose in the board meeting is uh
[86:23] hey, why don't we take 500 million
[86:24] dollars and go buy Bitcoin? Fair enough.
[86:27] But at the same time, doesn't mean that
[86:29] that wouldn't be the right thing to go
[86:30] do. Just you got to pick your battles
[86:32] sometimes.
[86:33] >> If we can get the crypto community to
[86:34] give him some air cover or go wage a
[86:37] a a a a charm offensive on all of those
[86:40] What we need is we need uh the Bitcoin
[86:42] community to go like meme Elliott
[86:43] Management to death and then uh they'll
[86:46] back off maybe and leave him alone. So,
[86:48] I don't know. But we'll see. Look, it's
[86:50] um
[86:51] I tend to think that there will be many
[86:52] more people who will follow this. Uh I
[86:54] think you're right in terms it'll just
[86:55] take a little bit of time for them to
[86:56] kind of get geared up and and do it. Uh
[86:58] I don't know if people will do as much
[87:00] as you guys did on a percentage basis
[87:01] kind of out of the gate, right? It feels
[87:03] like maybe people start with 5, 10% just
[87:05] cuz humans are naturally
[87:08] just um they lack conviction, they want
[87:10] to be conservative, they kind of feel
[87:12] like they're being prudent, you know,
[87:13] whatever. Uh I tend to think actually
[87:16] the argument you laid out is not only uh
[87:19] conservative, cuz you're actually uh
[87:20] protecting the cash, uh but it's also
[87:22] very prudent in the sense of kind of how
[87:24] you did, you know, 50% into Bitcoin, 50%
[87:28] as a tender, and then kind of doubled up
[87:30] or or or um you kind of filled up uh
[87:32] with the rest in Bitcoin. Uh and so,
[87:34] we'll see what happens, but um you know,
[87:37] if uh if no one has said it to you yet,
[87:39] uh just
[87:40] we're cheering you on, so keep going
[87:42] because uh it's pretty incredible that
[87:44] uh that you did this and uh I um
[87:47] I said it when uh when you first put out
[87:49] the very first press release that you
[87:50] guys bought the original Bitcoin
[87:51] purchase,
[87:52] um I said it to multiple people. I said,
[87:53] "Look, this isn't somebody who doesn't
[87:55] understand what they're doing." Right?
[87:57] It was very clear in the language you
[87:58] used in the press release, etc. Uh this
[88:01] is a Bitcoiner who is running this
[88:03] company
[88:04] uh and very much understands the macro
[88:05] environment, uh kind of their their
[88:07] asset choices, if you will, uh and has
[88:10] chosen Bitcoin for I think all of the
[88:12] reasons that uh the Bitcoin community is
[88:14] attracted to it.
[88:15] Um and and so, that, you know, for
[88:16] whatever reason came through pretty
[88:18] clearly to me in that in that press
[88:20] release, so uh so, it's cool to see.
[88:22] Yeah, well, I got I guess I would end
[88:24] just by saying that
[88:26] that uh I find the entire Bitcoin
[88:27] community to be inspirational and I did
[88:30] note in our press release one of one of
[88:32] the key drivers of our belief in the
[88:35] success of this is the community ethos.
[88:38] It's a it's a pretty amazing group of
[88:40] people and uh and all of the thinking
[88:43] and all of the initiatives,
[88:46] I just find to be extraordinary and I
[88:48] think I think that
[88:50] we wouldn't be doing what we're doing
[88:53] without everybody that's ever passed
[88:55] through this podcast.
[88:58] Uh that means a lot. Um how can people
[89:00] find you on the internet or find out
[89:02] more about MicroStrategy?
[89:04] Um
[89:05] MicroStrategy is microstrategy.com.
[89:08] Um Michael_Saylor
[89:11] at Twitter.
[89:13] You can probably Google me and you'll
[89:15] get every single one of my contacts if
[89:18] you want.
[89:20] Awesome.
[89:21] Listen Michael, thank you so much for
[89:22] doing this. This was fantastic and uh we
[89:24] will absolutely do this again at some
[89:26] point in the future. Well, thanks for
[89:27] having me.