The Insane World of VCs & Businesses like WeWork, Uber & Lyft (w/ Josh Wolfe and Michael Green)

13:43
By the way, talking about somebody being able to operate in India, the single best drone
pilot in the world today– any idea?
MICHAEL GREEN: Well, I’m guessing India.
JOSH WOLFE: 12-year-old girl in Thailand.
MICHAEL GREEN: Really?
JOSH WOLFE: 12-year-old girl.
And she started playing when she was 8.
And she is better on every metric.
In speed, accuracy, she beats everybody.
Her name is Milk.
And that’s, you know, her call sign.
But a 12-year-old girl in Thailand is the best drone pilot in the world.
MICHAEL GREEN: So it truly is actually Ender’s Game, which is the book by Orson Scott Card
where we rely on children to fight the intergalactic battle.
Fascinating.
That’s absolutely amazing.
Let’s think about the nonlinearity for a second.
And one of the topics you wanted to bring up was this idea of liquidity as a nonlinearity.
JOSH WOLFE: Yes.
MICHAEL GREEN: And so one of the things that we see within venture capitals is that there’s
been this explosion of liquidity, particularly exceptionally well-funded growth equity.
So not the true VC stage one, Series A-type round, although that obviously has benefited
from this dynamic, but the Series E pre-public here’s $1 billion, here’s a $20 billion valuation,
here’s a $100 billion valuation.
Talk to me about how you think about this liquidity switch and the impact that that
has on your industry and the impact that has on innovation?
JOSH WOLFE: Well, it ultimately is going to define all the returns.
And if you go back a little bit and say, well, why are we in this situation, where we’ve
called this in the past, the minnows and the megas?
You have lots of these small firms that are starting up that are doing the seed checks,
and then you have these large players that are writing these $100 million plus checks.
Going back 7 years or so, Andreessen— who I think is a brilliant investor, a brilliant
technologist– basically said, there’s only 10 companies that matter in a given year.
And statically, that’s probably true.
Now knowing which 10 is very hard, but he said, you just basically want to be in those
companies.
And I that was a meme that really went very wide.
And people said, OK, well, it doesn’t matter if you invest in Facebook at $1 billion, or
$5 billion, or $10 billion because we’re going to be hundreds of billions.
And so does it really matter if we’re negotiating here and quibbling over $1 billion or $2 billion.
Well, of course, it does, but that I think induced a lot of growth investors to
15:53
let’s just try to speculate on some of these big unicorns.
And you’ve got this phenomenon of companies that were pining to signal that they were
going to be that next Facebook by attaining a billion-dollar valuation.
And then you got a positive feedback effect where people were funding these things, and
to get access, would write an $100 million check at a $900 million pre.
And they would own 10% in a billion-dollar valuation.
And the problem for the early-stage investors and their limited partners is they were getting
these huge markups.

A Case of Too Many Viennas

THE drone strike that accidentally killed two hostages held by Al Qaeda, one of them American, in Pakistan’s northwest frontier was a rare moment of media attention for a seemingly endless military campaign. It’s six years old if you date it to President Obama’s escalation of drone warfare, 11 if you date it to the first American drone strike inside Pakistan, and 14 if you date it to when United States Special Forces first slipped into Afghanistan after 9/11. By any estimate, our AfPak intervention has lasted longer than most major wars in American history. By the third estimate, it’s lasted longer than several of the biggest ones combined.

There have been periods in this long conflict when the United States was arguably fighting with some hope of final victory. But that possibility went the way of most victories sought by foreigners in Central Asia, and now we’re in a very different mode. Our AfPak war today, with its drones and Special Forces and deliberately light footprint, is open-ended by design, a war of constant attrition that aims just to keep our friends (such as they are) in power and our enemies from gaining ground.

In essence, what we’ve chosen in Afghanistan and northwest Pakistan is a kind of “frozen conflict,” in which a war is pursued without any vision of an endgame, and that’s actually the point. “Frozen conflict” is a term you’re more likely to hear applied to the borderlands of Vladimir Putin’s Russia, where the Kremlin has encouraged low-grade civil wars (in the Caucasus, in Moldova, now Ukraine) thatare designed to just percolate and fester, keeping Moscow’s former satellites from turning fully to the West.

But while America’s motives are very different, we have this much in common with Putin: We, too, see advantages in managing conflicts, intervening just so far and no further, keeping a hand in (or a drone above) without seeking a final victory or a final peace. That’s true of the AfPak wars; it’s true for now of our interventions against the Islamic State in Iraq and Syria; it’s true of smaller antiterrorism forays the world over. It’s even true of our quasi-conflict with Putin himself: He wants to divide and destabilize Ukraine without actually conquering it, we want to limit his gains without provoking escalation, and the result is grinding violence without much chance of resolution.

A few weeks ago, I wrote that President Obama’s grand strategy (such as it is) is defined by a desire to lay down some of the burdens of the Pax Americana. I also wrote that it’s nearly impossible for a superpower to simply slip into a supporting role. Combine Obama’s vision with that Atlas-Can’t-Shrug reality, and frozen conflicts are the near-inevitable result: In theater after theater, this administration has us in just far enough to shape events, but without a plan to win it.

Over the next 18 months, you’re going to hear Republican politicians and — barring a Rand Paul upset — the eventual Republican nominee campaigning vigorously against this state of play, and arguing that America should be fighting more to win and less to draw. Napoleon’s maxim, “When you set out to take Vienna, take Vienna,” will be repurposed as a critique of this president and all his many half-fought, un-won wars.

That critique will have some teeth. Even frozen conflicts cost lives and treasure (and invite blowback), the world has grown more dangerous and chaotic across Obama’s second term, and the sense that American policy makers are constantly playing not to lose is plainly informing the calculations made in Moscow, Tehran and Beijing.

The problem is that Republican hawks have too many wars where they seem intent on turning up the heat, too many Viennas that they want to take at once. There is no sign as yet that the president’s would-be successors have clear strategic priorities; instead, the tendency is to treat every conflict that comes into the headlines, whether it involves Libya or Iran, Syria or Ukraine, AfPak or the Islamic State, as a theater where there’s no substitute for American-led victory.

Some of this is just posturing, and if elected no G.O.P. president (well, except maybe Lindsey Graham) would actually escalate militarily on every front at once. But it isn’t exactly clear what they would do, because their critique of Obama scores points without acknowledging the real limits on American power — and the structural, and not just ideological, realities behind the decisions that he’s made.There may be cases where America needs to fight to win, enemies that we need to actually defeat instead of managing. But there are also wars that shouldn’t be joined at all, and situations where a kind of frozen conflict really is the best out of our bad options. So the test facing this president’s would-be successors, the challenge that should be posed to them as candidates, is to tell us which kind of war is which.

Secret U.S. Missile Aims to Kill Only Terrorists, Not Nearby Civilians

Weapon doesn’t explode, but brandishes knives to shred target; it was used in high-profile strikes in 2017 and this year

The U.S. government has developed a specially designed, secret missile for pinpoint airstrikes that kill terrorist leaders with no explosion, drastically reducing damage and minimizing the chances of civilian casualties, multiple current and former U.S. officials said.

Both the Central Intelligence Agency and the Pentagon have used the weapon while closely guarding its existence. A modified version of the well-known Hellfire missile, the weapon carries an inert warhead. Instead of exploding, it is designed to plunge more than 100 pounds of metal through the tops of cars and buildings to kill its target without harming individuals and property close by.

To the targeted person, it is as if a speeding anvil fell from the sky, the officials said. But this variant of the Hellfire missile, designated as the R9X, also comes equipped with a different kind of payload: a halo of six long blades that are stowed inside and then deploy through the skin of the missile seconds before impact, shredding anything in its tracks.

The R9X is known colloquially to the small community of individuals who are familiar with its use as “the flying Ginsu,” for the blades that can cut through buildings, car roofs or other targets. The nickname is a reference to the popular knives sold on TV infomercials in the late 1970s and early 1980s that showed them cutting through both tree branches and tomatoes. The weapon has also been referred to as the Ninja bomb.

The missile was born of an emphasis, under former President Obama, on avoiding civilian deaths in long U.S. campaign of airstrikes in Afghanistan, Pakistan, Iraq, Syria, Somalia, Yemen and other locales. Aside from humanitarian and legal considerations, civilian casualties can undermine popular and allied support for U.S. strategic goals.

But there was another reason for the weapon, officials said: Increasingly, terrorist fighters were adapting to U.S. airstrikes, hiding among groups of women and children to put themselves out of reach.

The weapon was under development as early as 2011. A missile with similar capabilities was considered as a “Plan B” to kill al Qaeda leader Osama bin Laden in his compound in Abbottabad, Pakistan, that year, according to several of the officials.

In the end, officials opted to target bin Laden using select special-operations force fighters who confronted and killed bin Laden.

The weapon is used infrequently, employed only in specific circumstances, particularly when a senior terrorist leader has been pinpointed but other weapons would risk killing innocent bystanders, the officials said. Conventional Hellfire variants are more typically used against groups of targeted individuals or against a so-called high-value target who is convening with other militants.

But when a lone individual is targeted, the R9X is a sought-after weapon. The Defense Department has used it only about a half-dozen times, officials said, including in operations in Libya, Syria, Iraq, Yemen and Somalia.

.. The aftermath of such operations has prompted speculation about a possible new weapon among those who were there or viewed photos. The strikes bore no resemblance to the damage normally wrought by U.S. airstrikes.

.. A Hellfire, which is a little more than five feet long and weighs just over 100 pounds, typically leaves behind mangled, burned-out shells of vehicles, surrounded by debris and scorch marks over a large radius.

The R9X leaves no such signature. Photographs of the aftermath of the strike on Mr. Masri show an oblong hole torn into the roof of the car in which he was riding. There are no burn marks suggesting an explosion. The windshield of the Kia sedan is cracked, but the car’s windshield wipers are still in place.

.. One former U.S. official said the weapon addressed a longstanding “right seat, left seat” problem, suggesting it is theoretically possible to kill someone sitting in the passenger seat of a moving car, but not the driver. (Two militants reportedly were killed in the February 2017 strike.)

Development and refinement of the weapon drew impetus from Mr. Obama’s policy announcement in May 2013 that set new rules for using lethal force outside of declared war zones such as Afghanistan. When taking action, there must be “near-certainty that no civilians will be killed or injured,” Mr. Obama said then.

The weapon was developed “for the express purpose of reducing civilian casualties,” a second former official said.

A third former official said the weapon can be used when there are doubts about the structural integrity of a building, such as a mud-and-thatch hut, where a terrorist is located. It could kill the terrorist without collapsing the building and injuring or killing everyone else inside, this person said.

The U.S. officials said extraordinarily accurate intelligence about a target’s location and surroundings are needed to use the weapon. But there is also an intelligence and cost benefit, they said. Because the weapon minimizes the risk of civilian casualties, there are more opportunities to take a shot, reducing the number of hours the military has to keep surveillance and armed aircraft aloft.

President Trump in March rescinded an Obama-era requirement for an annual report of civilian casualties from airstrikes outside of conventional war zones. Mr. Trump has also given more flexibility to conduct drone strikes to the CIA, which faces fewer requirements for public accountability than the U.S. military.

Two of the officials who agreed to discuss the secret weapon said they believed the U.S. government should have acknowledged its existence years ago. Doing so, one said, would send a message to the Islamic world that the U.S. takes extraordinary care to avoid civilian casualties.

Sarah Holewinski, who has advised the U.S. military on reducing harm to civilians in warfare, cautioned that if civilians know about weapons such as the R9X, they may take fewer precautions against exposing themselves to risk from airstrikes. She said she hadn’t been aware of the R9X’s existence.

But Ms. Holewinski, a senior fellow at the Center for Civilians in Conflict, said “there appears to be a ton of benefits” from such a weapon.

Killer Politicians

What rulers crave most is deniability. But with the murder of the Saudi journalist Jamal Khashoggi by his own government, the poisoning of former Russian spies living in the United Kingdom, and whispers that the head of Interpol, Meng Hongwei, may have been executed in China, the curtain has been slipping more than usual of late. In Riyadh, Moscow, and even Beijing, the political class is scrambling to cover up its lethal ways.

Andrew Jackson, was a cold-blooded murderer, slaveowner, and ethnic cleanser of native Americans. For Harry Truman, the atomic bombing of Hiroshima spared him the likely high cost of invading Japan. But the second atomic bombing, of Nagasaki, was utterly indefensible and took place through sheer bureaucratic momentum: the bombing apparently occurred without Truman’s explicit order.

.. Since 1947, the deniability of presidential murder has been facilitated by the CIA, which has served as a secret army (and sometime death squad) for American presidents. The CIA has been a party to murders and mayhem in all parts of the world, with almost no oversight or accountability for its countless assassinations. It is possible, though not definitively proved, that the CIA even assassinated UN Secretary-General Dag Hammarskjöld.

.. Many mass killings by presidents have involved the conventional military. Lyndon Johnson escalated US military intervention in Vietnam on the pretext of a North Vietnamese attack in the Gulf of Tonkin that never happened. Richard Nixon went further: by carpet-bombing Vietnam, Cambodia, and Laos, he sought to instill in the Soviet Union the fear that he was an irrational leader capable of anything. (Nixon’s willingness to implement his “madman theory” is perhaps the self-fulfilling proof of his madness.) In the end, the Johnson-Nixon American war in Indochina cost millions of innocent lives. There was never a true accounting, and perhaps the opposite: plenty of precedents for later mass killings by US forces.

.. The mass killings in Iraq under George W. Bush are of course better known, because the US-led war there was made for TV. A supposedly civilized country engaged in “shock and awe” to overthrow another country’s government on utterly false pretenses. Hundreds of thousands of Iraqi civilians died as a result.

Barack Obama was widely attacked by the right for being too soft, yet he, too, notched up quite a death toll. His administration repeatedly approved drone attacks that killed not only terrorists, but also innocents and US citizens who opposed America’s bloody wars in Muslim countries. He signed the presidential finding authorizing the CIA to cooperate with Saudi Arabia in overthrowing the Syrian government. That “covert” operation (hardly discussed in the polite pages of the New York Times) led to an ongoing civil war that has resulted in hundreds of thousands of civilian deaths and millions displaced from their homes. He used NATO airstrikes to overthrow Libya’s Muammar el-Qaddafi, resulting in a failed state and ongoing violence.

.. Under Trump, the US has abetted Saudi Arabia’s mass murder (including of children) in Yemen by selling it bombs and advanced weapons with almost no awareness, oversight, or accountability by the Congress or the public. Murder committed out of view of the media is almost no longer murder at all.

When the curtain slips, as with the Khashoggi killing, we briefly see the world as it is. A Washington Post columnist is lured to a brutal death and dismembered by America’s close “ally.” The American-Israeli-Saudi big lie that Iran is at the center of global terrorism, a claim refuted by the data, is briefly threatened by the embarrassing disclosure of Khashoggi’s grisly end. Crown Prince Mohammed bin Salman, who ostensibly ordered the operation, is put in charge of the “investigation” of the case; the Saudis duly cashier a few senior officials; and Trump, a master of non-stop lies, parrots official Saudi tall tales about a rogue operation.

A few government and business leaders have postponed visits to Saudi Arabia. The list of announced withdrawals from a glitzy investment conference is a who’s who of America’s military-industrial complex: top Wall Street bankers, CEOs of major media companies, and senior officials of military contractors, such as Airbus’s defense chief.

.. Political scientists should test the following hypothesis: countries led by presidents (as in the US) and non-constitutional monarchs (as in Saudi Arabia), rather than by parliaments and prime ministers, are especially vulnerable to murderous politics. Parliaments provide no guarantees of restraint, but one-man rule in foreign policy, as in the US and Saudi Arabia, almost guarantees massive bloodletting.