transcript

Speaker 1:
[00:00] It's not 10x better than gold, it's 100x. Maybe it's 1000x better than gold. We could go on for hours, I could tell you why I think it's 1000x better than gold.

Speaker 2:
[00:10] Hello everyone, today we've got a very special treat. I went deep into the archives, and I found a video that I did with Michael Saylor back in 2020. That video is the very first time that Michael Saylor publicly talked about Bitcoin anywhere on the internet. The context here is that strategy, which was known as MicroStrategy back then, had just put about $500 million from their balance sheet into Bitcoin. It was the first public company to ever do that. And I spoke with Michael because I wanted to understand who's Michael Saylor? What is MicroStrategy? Why are they doing this? What is his thesis on Bitcoin? And what is his plans for the future? It is fascinating to listen to him talk about this in late 2020, when Bitcoin is trading around $10,000 per coin, to now see what has become one of the largest holdings of Bitcoin in the world. Strategy and Michael Saylor own more than 800,000 Bitcoin. They've continued to relentlessly buy as much of the digital currency as they possibly can. And I think listening to this conversation will help you better understand what's happening there and why so many people over the last six years or so went from being skeptics to now being true believers. So here's my conversation from the second half of 2020 with Michael Saylor. It's the very first time he ever talked about Bitcoin, and I hope that it's very valuable to you to understand where we've been so you can better understand where we're going. All right, guys, bang, bang. I have Mr. Michael Saylor here. You're an absolute legend, my friend. Thank you so much for for doing this.

Speaker 1:
[01:35] Happy to be here.

Speaker 2:
[01:38] Let's start. You are Bitcoin famous now for being the CEO of the first publicly traded company to convert a material amount of your balance sheet into Bitcoin and use it as a reserve asset. We will get to all of that fun stuff in a minute. But let's just start with your background and kind of how you got to running MicroStrategy, what that business does, and kind of that background that really led you to this.

Speaker 1:
[02:04] Okay. I grew up in an Air Force family, lived on military bases my entire life. I went to MIT on an Air Force scholarship. I got a degree in astronautical engineering, studied spaceship design. While I was there, I got another degree in the history of science. I studied the structure of scientific revolutions and paradigm shifts and became very fascinated with how new technologies get introduced. Learned to fly in the Air Force, but I never went active duty because just as I was about to graduate, the Cold War ended. The Reagan Star Wars build up won it. And one day, my commanding officer walked into the room and said, you know, we paid for education, you're on the hook for five years, active duty, but if you want to join the reserve, you can do that. If you want to go active duty, then you're going to wait two years before you get called up. So, you know, the choice would get paid three times as much in the civilian world and serve in the reserve. Or, wait, so this was an easier choice for me because I was going to be a pilot and in my final semester, I was diagnosed mistakenly with a benign heart murmur and it disqualified me from flying combat jets. And so my hopes dashed to being a fighter pilot. I decided I did not want to wait around. And so I joined the Air Force Reserve and I became a civilian unexpectedly in the final month of my undergraduate career. I thought I wanted to be a professor. I got into a PhD program, but I had no money. And so I decided I would go work for a year, and then I would apply for a fellowship, and then I would go back and get my PhD. I worked for the first six months, the company I worked for blew up, and I ended up working at DuPont, and I was building computer simulations for DuPont. And around the 18-month point, I tendered my resignation to go back to MIT. And I was building computer simulations to predict the return on billion-dollar capital investments in the petrochemical industry. And the computer model is going to be used to justify a $1.5 billion investment. And the executive that wanted the money, I'm sure he said to his staffers, hey, tell the kid we need him to finish the job. And I was 24 and living in an apartment with milk crates for bookshelves, spending 700 bucks a month. And I knew I didn't want to stay and be a corporate bureaucrat. So I was like, no, I'm not staying. And the executive said, well, give him whatever he wants. And I said, well, you want to raise? I was like, no, I don't want to raise. He said, well, what do you want? I said, well, when I was in high school, I wanted to be a rock and roll star. And that was Dash. And when I was in college, I wanted to be a fighter pilot astronaut. And those hopes were dashed. And my third idea was be a professor. And that's what I'm going to go do. And there's only one last thing on my checklist, which is I'd like to be a CEO of my own company. And I said, okay, so if you want me to stay, you're going to have to let me start my company. I want, I think I got a quarter million dollars in cash, two and a half million dollars of contracts. They let me hire 10 people from DuPont. Get me free off the space and computer equipment for the first two or three years. I took the, you know, they said, we can't give you the money up front. You're just a 24 year old. And I said, you got to because this is the only time this negotiating strategy ever works. I said, you got to give me the money because I have no money. Like I had, you know, they said, well, but and they went back to their boss and they did this deal that you would never ever ever do. But I just happened to be the one guy on the East Coast that could make their computer program work. And the guy was 12 weeks from getting a billion dollar check from a mega corporation. And it was all irrelevant. Well, they gave me the money. I thought, holy crap, I have $250,000. This is enough capital to last me for seven years. So I figured seven years, good, let's start. And so age 24, I started MicroStrategy with the thought that I didn't want to work for anybody else. And when it failed, I would go back to college. And it never failed in the first year. We did 10 people and then 20, and then we were 5 million, then we were 10 million, then we were 20 million, then we were 40 million. And at some point, we were 80 million, and then we kind of came to the market in the 96, 97 timeframe, and the.com revolution's going crazy. Everybody's clamoring, you got to go public. So we came public in 1998. And then there was no going back. I got on the roller coaster. And so that's how I started MicroStrategy. I didn't mean to. I kind of fell off the turnip truck and hit my head on a pot of gold, and I'll keep it.

Speaker 2:
[07:21] So when you decided to go public, this was like right in the heart or at the start, really, of the kind of this mania phase. Talk a little bit about going through as a public company leader, kind of the multiple market cycles, right? Because if you went public in 98, you get 99, this big boom, you have to get the crash, you kind of then see another rise, 08, 09 happens, right? Then you kind of get this incredible decade in the equity markets and then you get Covid. It's like, how have you kind of navigated every single one of these? Because I don't think a lot of people realize, like you started a company at 24 years old, you're still running that company today, right? And so it's been a journey.

Speaker 1:
[08:01] You know, like, here's an irony. You know, I never got that PhD. I'm just like a silly MIT undergraduate. I remember I was competing in my early years with this guy, this professor from MIT who had like umpteen degrees and was so much more educated. And, you know, I would be running a million dollar company. He's got a million dollar company. And he said, what are you doing? I said, well, I'm building these computer simulations on a Macintosh. He said, you know, well, all the experts say the Macintosh is going to die. That's a bad idea. So, well, eventually, I, you know, eventually I ported it to Windows. And the next time I saw him, the company's five million dollars. And we're working on Windows. And he goes, what are you doing? I said, well, I'm building, I'm building executive information systems on Windows machines using this thing called Wings, this new spreadsheet with a programming language. He said, oh, well, experts say that Wings will never work. Excel is going to dominate this spreadsheet market and that's a bad idea. He was still running the million dollar consulting company, giving advice. I said, okay, well, it turns out he was right. And in a year, we flipped the company and we rebuilt the product on Visual Basic and we doubled again. And he said, what are you doing? I said, well, now we're doing this like executive information decision support system. And he goes, well, that won't work on Visual Basic, they're going to use C++. And he stayed one million and we were like 20 million. And then the next thing, you know, we started building decision support systems on relational databases. And he said, well, that will never work, that's too slow, right? And it kind of worked until we got to 40 million. And then along came the web and we flipped it again and we put a web interface on it. And that got us to 80 million. And every single two or three years, there's something new that was simultaneously an existential threat, like it's going to kill us or an opportunity if we embrace it. And we're always inventing the next thing. So eventually we found ourselves into the business intelligence business and we created business intelligence, web intelligence, relational intelligence and I had three big competitors, business objects, Cognos, Crystal Reports. And we got to like 2007, 2008 and Conventional Wisdom as well, they all had to sell out. So all three of them sold, one sold Oracle, one sold SAP, one sold IBM and we're still standing. And then we accrued some more customers and we kept motoring on and then along came the iPhone. And the iPhone, the first iPhone in 2007 was kind of a toy, had no cut and paste, no app store. 2009, the iPhone actually started looking pretty interesting and I became very enamored with the mobile wave. This, what happens when software leaps off of a PC, out from under your desk? Because that's what they were. I mean, the computers were rocks under your desk and they were ugly and they had lots of cables coming out of them. I thought, what if the software is running in your hand? And what if that phone's in your pocket? It's like software going from solid state block of ice. It gets the liquid, a laptop, and then it goes to vapor state. And a vapor state was on the phone. And then I thought, well, man, all of a sudden, instead of going to the office to sit down at a desk and run your software, maybe you have the software, your kid's soccer game on a Saturday afternoon, and then maybe rethink how the software works. So we started doing mobile stuff, and we implemented mobile intelligence. And that took us to the next level. Now, along the way, I took one path, but I was always kind of a tech inventor at heart, entrepreneur. So back in 96, when the internet hit, you needed an email domain. So we bought microstrategy.com. But I was too lazy. So I thought, why don't I go to type microstrategy.com? Why don't we buy strategy.com? So we went and we bought, back when no one cared, we bought strategy.com for like 50 grand. And then I thought, why don't we just start buying words? So we bought wisdom.com and then we bought usher.com. And by the way, do you know who owns Hope in the world?

Speaker 2:
[12:34] No.

Speaker 1:
[12:34] I own Hope. hope.com. Hope, Emma, I bought speaker, I bought alert, I bought angel, I bought alarm, I bought voice. I mean, and here's my thinking. You know, there are all these search engines. And if you go online and you search for voice, you get like 2 billion hits on Google. Okay. If you want to launch a company named Voice and you own voice.com, you go to the top of the list of the billion. And so my thinking was if 10 billion, 5 billion people go to school and they learn how to spell alert or Emma, right? Emma, E-M-M-A. If they know how to spell that, isn't that good for a brand? And so I started thinking about branding. And I launched a business, alarm.com. We eventually spun it off. It's a multi-billion-dollar publicly traded company on the NASDAQ today. And we made some money. We didn't make the billions, but we made a lot of money off of it, like 30, 40 million. And then we launched another company. Alarm was all about integrating your home alarm system with the Internet. Yeah. And then we launched another company called Angel. And Angel was like an earlier version of Siri. It was an interactive voice response from any telephone, like an angel on your shoulder talk to it and they respond. We eventually sold that for about 100, 120 million. And so what I learned was it's easier to invent things. And it's easier, you know, you can invent something, you can even get it to scale. Can you maintain it and can you commercialize it? Right. A lot of people find like you can buy that boat. Can you afford to maintain that boat? That's harder. Now you maintain that boat. Are you really going to enjoy that boat? Are you going to use that thing? That's harder. The analogy in business is just because you can buy it doesn't mean you can make it competitive. Even if it's competitive, doesn't mean you can make profit from it. Eventually, I learned that you can't keep inventing stuff. We streamlined, we sold those off, but I got to 2020 or 2019 where I sold voice.com. I tell you that story in a bit, but I got to 2020 and we had a portfolio domain names are sitting there. I appreciated digital scarcity. I thought these are unique in the universe. Only one person can own the work. By the way, you know who owns michael.com?

Speaker 2:
[15:10] Please tell me it's you.

Speaker 1:
[15:12] By the way, and you know who's lazy? I thought, well, what if someone just wants to type in Mike? I thought that too. I'm waiting for Michael Jordan to call me up. Why wouldn't you own michael.com?

Speaker 2:
[15:25] How much money do you think you spent on domains over the years acquiring all of these?

Speaker 1:
[15:31] Two million bucks, million bucks.

Speaker 2:
[15:34] Okay, so let's call it low single digit seven figure for a million, two million, three million, whatever it is.

Speaker 1:
[15:41] Back in the day, back in the 90s, and I just sat on them because I figured the English language is going to be around for a while.

Speaker 2:
[15:47] Okay. Before you sold voice.com, how much do you think that you had made from selling the domains?

Speaker 1:
[15:57] We made like 35 million in the alarm transaction and more than 100 million in the angel transaction. So, but we had commercialized businesses with them. So we sold the domain and the business with them as part of it. And voice was the first naked domain sale that we did that was material. And we did that one for 30 million and we just sold the domain, nothing else.

Speaker 2:
[16:24] And when you go to do this, when people hear, wait a second, the same guy who did this Bitcoin thing sold a domain for 30 million dollars. He also has a business that's worth over a billion dollars in the public markets, et cetera. He's spun off multiple companies that are now worth tens of millions, hundreds of millions of dollars. Like this guy just keeps hits after hit after hit after hit. How does something like voice.com come together? Do they approach you? Do you put it up on like a broker site and say, hey, there's a $30 million domain? How does that work?

Speaker 1:
[16:57] You know, at some point, I said to my marketing people, why don't you make a list of all of our premium domains? My definition of a premium domain is, is a domain where if you hit the Google search, you will get 500 million hits or a billion or 5 billion hits when you typed it in the search engine. And they're all just, you know, ideas like wisdom and hope, yeah? And I said, why don't you make a list of them and send them out to every, you know, everybody we know and see if anybody is interested in them. And we sent out the letter and we heard back, you know, nothing, right? Maybe I got like two venture capitalists called me, but nothing ever went anywhere. And I was like, okay, forget that. Go back running my own business. And with voice, you know, this is how this goes down. I'm sitting at my desk one day and one of my junior 20-something business development reps walks in and he goes, hey, some broker, you know, called us and they offered us like $150,000, you know, for this domain voice. And I looked at it and I'm like, look, I've been waiting for 20 stinking years. Like $150,000 isn't going to do much for me. I said, tell them no. Okay, so nothing goes on. And then they come back to, they offered us $300,000 now. I said, well, tell them no, don't bother me. So I waited. And then the next day they come back there, they doubled it to $600,000. I said, nope, still not interested. Tell them it's going to have to be something north of, you know, 10 million bucks. I'm just not interested. They go, well, they offered $1.2 million. And then it went to $3 million. And then it went to $6 million. And when it got to $10 million or something like that, finally, you know, I'm starting, I've got all these other people lobbing me, salespeople sitting like jackals, you know, like you're going to want to, you know, they're all like, you have to sell this, you have to sell this. And this is where we're selling, tangible assets like anything, artwork, it all comes down to how much are they worth to you, right? And so if you needed the $10 million, you would have taken the $10 million. But at this point, you know, I have $500 million of cash in the bank. If I, and I love my things, you know, like I, I love them. Tears, right? Maybe you can tell that I'm a little bit passionate about some of this stuff, you know? So I would rather own it and not have the $10 million than sell it for that. So I said, don't know. I said, okay, well, they want it to $22 million. I said, I think when they said $10 million, I said the numbers, I'll sell it for $30 million. So the only price I ever put on the table, $30 million. I didn't like nothing else. I was like, after I got to 10 million, I'm like, I will sell it for $30 million because that's enough. I thought, I didn't sell it for $30 million because I thought that's what it was worth. I think that the word voice in the English language is worth $100 million. Like I've seen people drop $100 million on an ad campaign and you want to drop $100 million on an ad campaign with the ivoice.net type domain. I thought it was worth more, but I thought, well, I need to market to market. I need to create some kind of market comp for it, so we'll do $30 million. So I told them $30 million. They said, they'll give you $22 million. I said, no, but tell them I'll talk to them. Around $22 million, I agreed to get on the phone, and so I'm talking to a broker and a lawyer. I'm like, all through this, we're like, well, who's the buyer? Who's the buyer? Not somebody. If someone has said, yeah, we're a startup and we've got $12 million in the bank, and we'll give you all of our cash, and this is all we've got, maybe they might have swayed me. But I just had a whale on the other end of the line that wouldn't identify themself. I thought, okay, well, that's the case. I'm just going to wait until they hit my bid. If you had an acre in Central Park and someone wanted to buy it from you, and the price is the price, you would wait. Then it's like, you don't want it, I'll wait. I got another decade. I'm not going anywhere. Somebody is going to eventually want to commercialize voice. Eventually, they got on the phone and I'm talking to a broker, but I hear a click, click, and there's other people eavesdropping on the line, so I'm just talking to myself. They said, well, we're authorized to go to 22 or 23 million. I said, sorry. I said, go to the Google search engine and type in voice right now. Then what you'll notice is that it's more popular than like, what's up with a billion users. It's a better brand than you would get, you know, if you were to get a billion people online, it's a better brand than Oracle or than SAP or than $100 billion plus companies. So this is how I value it. I said, like, this is like my daughter. I'll marry her off, but only to a man that's gonna treat her better than I will treat her. So if you guys really value this, then give me the $30 million. Otherwise, I'm keeping it.

Speaker 2:
[22:55] So at some point, they come up to $30 million, right? You guys agree.

Speaker 1:
[22:59] At that point, they agree to $30 million.

Speaker 2:
[23:01] But did you know who it was before you agreed?

Speaker 1:
[23:04] No. I never know who it was.

Speaker 2:
[23:07] Really?

Speaker 1:
[23:08] I never know who it was.

Speaker 2:
[23:09] Okay. So you agree.

Speaker 1:
[23:09] I sold it in the blind, basically saying no from 150 grand up to 30 million. And then finally, they did it. I still didn't know who it was until after the transaction closed. And then I hear it's some crypto company, and that's the end of it for me. And that's my introduction to crypto.

Speaker 2:
[23:29] I literally am thinking about the broker who's like, okay, just showed up to work $150,000 trying to buy a domain. And next thing they know, a couple of weeks later, they're brokering $30,000,000 deals, and probably they're peeing in their pants, right? Trying to just hope in the god this goes through, because they've already thinking about what house they're gonna buy based on the commission type situation, right?

Speaker 1:
[23:48] It was amusing.

Speaker 2:
[23:52] And so you do this, you say that it's your first kind of foray or experience with crypto, but there's this-

Speaker 1:
[24:00] I have no experience with crypto.

Speaker 2:
[24:02] All right, so there's this tweet.

Speaker 1:
[24:03] I just sold the domain.

Speaker 2:
[24:04] There's this tweet that everyone is begging me to talk to you about, which is in, I think it's 2012 or 2013. You basically put out a tweet. So you're early because it's 2012, 2013 about Bitcoin. You're also on Twitter then, which is still pretty early for Twitter in general. And you basically tweet out, kind of saying what I would consider a pretty down the fairway critique of Bitcoin, which is like, it's not going anywhere. Right. Fast forward seven.

Speaker 1:
[24:32] Online gambling, it's days or numbers. Yeah.

Speaker 2:
[24:35] Seven, eight years. And now you've got a material part of your balance sheet in Bitcoin. What happens? How does that happen?

Speaker 1:
[24:42] Okay, Anthony, can I tell you the truth?

Speaker 2:
[24:45] Of course.

Speaker 1:
[24:47] I got an iPhone back in the day. I installed Twitter on it and it used to be really fun. And I used to really enjoy reading the news and tweeting stuff, right? And it was like, you know, by the way, there are certain people on Twitter that still seem to enjoy just tweeting out whatever the heck they want. So I was in that stage and I had a lot of opinions. And so I'm tweeting stuff. And eventually, and by the way, I tweeted a thousand things. I forgot all the things I tweeted. So eventually, I realized that it's probably better for my communication effectiveness if I limit my tweeting to stay on brand. So like, I have a company, MicroStrategy. If I have something intelligent to say about MicroStrategy, I say it. And I have a non-profit foundation, the Saylor Academy, that gives away free education to hundreds of thousands of people, which is giving away a free college degree. And if I have something that I can do to help them, I say it. And then whenever anybody else does anything, that I might have an opinion, I keep my mouth shut now, because I've realized it's just an opinion, and I've lived long enough to be wrong on a lot of things. But now, coming back to that specific tweet, I really am ashamed to say, I didn't know I tweeted it until the day that I tweeted that I bought 250 million worth of Bitcoin, and then I discovered the hive mind crypto Twitter consciousness, where all of a sudden, they all went through all my tweets. They found it. They reminded me of it. They compared it. I'm like, oh my God, I literally forgot I ever said that. I took it as kind of like kind ribbing. I didn't get all worked up about it. I'm like, you're right. I was wrong. What an idiot I was. I wish I could go back and do it again.

Speaker 2:
[26:53] Today's episode is brought to you by Consensus Miami. I'm going to be speaking there on the main stage in a couple of weeks. This is the event the entire industry shows up for. Wall Street, the White House, all of crypto and Web3. This May 5th through May 7th, you can discover everything from crypto at scale to institutional integration and agentic commerce. It's the forces driving trillions on chain and reshaping global finance. 20,000 decision makers are going to be in attendance. Three action-packed days. Deals get signed here. Funds get raised here. And the next cycle starts here as well. You can't afford to miss it. I'll be there speaking. And you can use the code POMPLIANO to get 25% off your pass and join me there. Go in the description and look how to spell my name and use code POMPLIANO to get 25% off your pass to join me there. Well, the part to me that was so funny about all of this is, when you're right that the Internet never forgets. And it sounds like you were using Twitter early on, how I use it, which is sometimes I literally tweet things and I tweet them for myself to remember what I'm thinking. Like I just throw something out there. The problem is that the Internet doesn't forget. And even if that was a thought in the moment, you change your mind later, it's a stamp that never goes away. And so when they found it and I saw that, I was like, oh my God, this is amazing. Like literally in a six, seven year time period, it's not just from a, I don't believe it has value to, oh, maybe it has some value, right? I mean, would you consider the move of taking the 250 million, the first investment, is that a bet the company type move, or do you look at that as more conservative than a bet the company type decision?

Speaker 1:
[28:38] I would not say it's a bet the company decision. What I would say is we looked at it, and before I made that decision, before I was able to convince anybody on the board or the executive team to agree that was the right idea, we all needed to collectively be of the opinion that we were going to be generating cash ad infinitum, right? So there's a journey that we went through corporately over the past year, and there's a journey that Bitcoin went through over the last seven years. So if we focus upon our journey, we had 500, 600 million in cash, and we were buying our stock back a bit, and then we were thinking maybe we will need to buy another company, we need it for a rainy day, or maybe something really bad will happen and we'll really need the money. You know, one of my heroes is Steve Jobs, and Steve Jobs, you know, if you had a near bankruptcy experience, and he did, and I did too, by the way. By the way, I lived to see my stock go from $333 a share to 42 cents. Okay?

Speaker 2:
[29:55] Wait, wait, wait, wait, hold on. Back up.

Speaker 1:
[29:57] Yeah.

Speaker 2:
[29:57] The stock price fell. What time period is this?

Speaker 1:
[30:00] You know, it's not like I like to brag about this stuff, because it's not something you want to be proud of. But I will tell you that two of my bragging rights are, I am pretty much the longest lived public company CEO in my industry, because I've been public company CEO for 22 years. And the second thing is, I'm pretty sure I'm the only public company CEO that ever presided over a 99.8% drop in the stock price and kept his job.

Speaker 2:
[30:33] Okay, so when does this happen?

Speaker 1:
[30:34] That was 2003. Okay. Look, it's another story. I learned a lot of lessons. We don't want to get off the subject of Bitcoin, the subject of whatever. The short lesson there is, don't run out of money. Always have cash on the ballot sheet. And don't spend more money than you're taking in. And I feel like an idiot to give that advice to anybody. But it's still good advice right now. So let's fast forward back to 2020. So we had the money. We are very conservative, no debt, ready for a rainy day, ready to seize the opportunity buying our stock back. Covid hits, the pandemic hits. Everybody's, our equity is in the tank. We're losing momentum. And the first thing that happens in Q1 is, it's all kind of shock and awe. And in Q2, the question is, how does this impact my customers, our business, our product, our value proposition? And, you know, and by the way, everybody gets impacted differently, right? If you're running a cruise line or a theater or whatever, and sometimes counter-intuitively. And in our case, we sell enterprise software that helps you think better. We sell business intelligence. And we sell business intelligence to lots of governments, agencies. We sell it to massive banks. We sell it to, in essence, global 2000 companies, even the ones that get impacted, they're like the national airline, they can't go out of business. So that's our customer base. So we realized that our software kept working, demand was still there, everything is smooth. And in fact, the great thing about software is software, you can ship over the Internet, all of our services went remote. So our value proposition is intact. And the surprise for us is our productivity went through the roof and our cost structure compressed. All of a sudden, $20 million a year of flying around in airplanes went away. And $10 million worth of trade shows and $20 million worth of marketing things went away, but the customer and the demand didn't go away. So we actually found that we were much more efficient. So bottom line is, yeah, we got that black swan event, but that black swan event actually kicked us into a high gear of productivity. And so that was the positive on the P&L side. We realized that we were going to generate more cash. And there was no real rational business plan where I take $200 million and I spend it to make the business better. I can burn it to make the bit, but I can't spend it to make the business better. So simultaneously, we got a gift from the Fed and the macroeconomic side. So while we're trying to figure out what happens on the P&L, all of a sudden, what do we see? The long bond index goes up 22 percent. If you had asked me, Anthony, what's the investment that you do not want to make? I would never in a million years buy a 30-year bond that yielded 2 percent interest. Never, ever. Yet, that was a winner this year. If you bought a 30-year bond at 2 percent interest, when the interest rates go to 1.2, you've actually got a massive spike. So equity spiked, big tech spiked, bonds spiked, and we looked at our cash, and I had to listen to a litany of talking heads, Ray Dalio on down. If Ray Dalio didn't say cash is trash, every podcaster that trolled Ray Dalio said, Ray Dalio says cash is trash, cash is trash. And then I went to school at some point on you. This is probably, this is after I realized I had a problem. And I listened to you describe the plight of the working man. I go to work, I get paid five, okay, this is not a working man, this is a working lawyer. I get paid $500,000 a year. I save $50,000. I put it in my piggy bank. I have $500,000 in cash in the bank. I have kids and I have a future. And then all of a sudden I realized that the cost of college education is going up at 8% a year, and my cash is yielding zero. Now at that point, we've got The Pomp Podcast telling me, I'm crazy to work for dollars and save my cash. And if you take the $500,000 in the plight of the lawyer with the two kids, we're going to send them to Harvard and the $500,000 cash in the bank yielding zero. And now you multiply everything by a thousand. That's me. I have $500 million company. We're making $50 million a year. I got thousands of people working as hard as they can possibly work. We're sacrificing right and left. We're squiring our pennies away. We're putting it into the bank account. There it is. And in 2019 and before, we worried about the unknowable and we thought maybe we'll use it for something and I'm a bit old than you. I remember when you got 5% interest overnight on your money. And it wasn't that long ago that the risk-free interest rate was 5% before the great financial crisis. And I'm like, I'm going to make $25, $30 million a year on this. And I kept hoping and waiting for those good times to come back. I was the guy that when the interest rates, when the 30-year T-bill interest rates started to go to 3.5% only, finally, they're going to go to 4%, and then they're going to 5%, and they're going to go back to normal, right? Normal interest rates. And then, of course, hope was dashed, it went the other way. And what happens next? Well, acid inflation goes through the roof, right? And this entire conversation in inflation, it's really twisted, because everybody talks about consumer prices, CPI, CPI inflation, that we're not getting enough inflation. We're not getting enough inflation, okay? Well, like, you're not getting, you're not getting inflation on YouTube and Netflix streaming videos and candy bars manufactured by robots and factories and Domino's Pizza. You're getting inflation on everything you want. If you wanted an Ivy League education, if you wanted a beachfront house in Miami, if you wanted the apartment in New York, if you wanted anything scarce, everything you want is going up 7 percent. And that's asset inflation. All right. If I want, if I want a bond that's going to yield $50,000 a year, you know, it used to cost a million bucks. And this year, it cost $10 million. The cost of the asset went up by 2 percent? I have a house in Miami Beach. It was a nice house built in the 1930s. And I have the deed of sale for the house. $100,000 for that house in 1930. It's gone up in price by a factor of 100. It's like, you know, so no inflation, kind of inflation, but it's asset inflation. So I didn't really think about it until I got slugged in the face with the two by four, which kind of happened around March or April. When Main Street shut down, the economy shut down, and bonds went through the roof, when municipal ponds went up while every city is bankrupt, when Apple stock and every other public tech equity went up, and the multiples blew out, and the economy went to the worst place I've seen in 30 years, at that point, you start having a thought with yourself, which is, what is the true inflation rate? We should probably coin a different term. If you looked at asset inflation on a good year for the last decade, it's 7 percent a year normal. This year, you can make an argument it was 25 percent. If you look at the long bond index, and if you look at these equities, you can make an argument that the asset inflation rate leaped through 25 and 30 percent depending. Now, what does that mean to me metaphorically? Well, here's how I feel. I felt like I had $500 million of cash in the bank safe, and it was yielding 2, 3 percent, and I'm ready for a rainy day, and then I'm starting to do stuff with it. Then every month, some banker sends me a note saying, the interest went down, it went down. Now, there is no interest. Then someone took my cash out of the bank, and they put it in the backyard in pallets, and then they opened my back gate, and then every month, someone comes along and starts burning 2 percent of the money. Then I started thinking, well, in 12 months, 25 percent of the money is going to be gone. Then I started thinking, what is the point of all this? What am I doing wrong? Of course, the answer is, you can't hold cash, and so what do you do with it?

Speaker 2:
[40:44] Hold on a second here. You realize the macro issues. I think there was a couple of different things that happened. The macro issues happened, you're sitting there, you're in a very unique situation because you have so much cash on the company's balance sheet. You run a business that throws off a lot of cash, right? So you kind of have that advantage. It actually improves economically like you described in terms of your costs are going down, that the structure of your contracts kind of are weathering very well through the storm. And so you remain in a strong business position where you have cash. And actually the cash is growing, not through investment, it's growing from kind of your income, and you begin to get worried about that. How do you get to crypto, right? And I'm leaving you a little bit in terms of you've got a friend who basically kind of hit you over the head a second time. So let me tell that story as to kind of what pushes you to at least go explore crypto. And then we can talk about kind of what you do. But just talk through that process of like how you actually arrive at, okay, crypto is a potential solution.

Speaker 1:
[41:47] You know, when times are good, everybody's busy. You know, if you're in love with the iPhone, then the answer to everything is iPhone. If you're in love with your Apple Watch, when you're in love with Twitter, the answer is, you know, that, you know. So when times are good, everybody focuses on that and there's only limited time. So I think I was closed to the possibility. It's just there's so many other things going on. And when the Covid crisis hit, everybody got sent home, and we all had to contemplate ideas that we had previously rejected. And we had to embrace ideas that just were very foreign to us. So how do I discover crypto? Well, first, I have a mega, mega, mega problem. And the mega problem is I have a lot of cash and I'm watching it melt away. And I'm helped to realize I have a mega problem by this insane V recovery in the bond market and the equity market and all of the talking heads. So after that, then I have an opportunity, which is I've got a cash generating business. And then I've got one more problem, which is the investors, the outside investment community, you go to them and say, hey, we're a great enterprise software company and we've got all this cash. Their answer is, well, we don't really value the cash. What I mean, because they're smarter than I am, right? Now, I'm not being, I'm not joking. I'm being serious. They are smarter than I am. They knew before I knew that cash is trash and you're a fool to sit on the cash, you're just, if the natural asset inflation rate is 10%, it means that every time I generate 50 million in operating income, I burn 50 million in purchasing power on the cash and we're just running as hard as we can to stand still. We weren't getting any credit for the cash. We didn't need the cash. Ergo, we need to do something. What is the thing you're going to do? We started working through it. What do you do if you have 500 million dollars of cash you don't need? You can buy your own stock back, right? There's a limit to how fast you can do it. If you go into a market in a thinly traded stock and you're buying 20% of the float every day, that's going to take about four years. If your ice cube is melting 15% or 20% a year, you don't got four years or at least inflation is going to do a better job. So that didn't really make sense. We got kicked in to high gear. Everybody got kicked in to high gear this year. If you didn't know how to use Zoom, we started on a Monday morning with one video conferencing technology. We discarded it. I'm not going to say which one. We discarded it for another one by 11 AM. By 2 PM, we're using Zoom. By 4 PM, the CEO sends out an edict. Zoom is not a corporate standard. Everyone will switch over to Zoom starting tomorrow. And by the way, the same CEO that said, I don't believe in remote work. You got to show up to the office or else you're not working for me. And I would have sworn up and down, I hated remote work until Covid crisis hit. Flip. And so that same idea happened with the balance sheet. There are all these strongly held views. You got to be conservative. You got to invest in cash and short-term T-bills. And you don't contemplate anything else. And then all of a sudden, you contemplate other things. So, I mean, you're an expert. You tell me if you had $500 million of cash right now, where would you invest it?

Speaker 2:
[45:47] I'm cheating because you and I see eye to eye now, I'd go buy a lot of Bitcoin.

Speaker 1:
[45:52] Okay. And so if you didn't know what you know, but you were an intelligent person and you watched YouTube and you watched everything else, what would be your laundry list of assets to consider investing in?

Speaker 2:
[46:07] Yeah, it basically be all the inflation hedge assets, right? You look at everything from real estate, precious metals, Bitcoin. You kind of just go down the line, hard assets that have some sort of inflation hedge type qualities that really are more kind of wealth preservation than anything would be the general bucket to at least go start exploring with, right?

Speaker 1:
[46:25] So let's take through them. Commercial real estate. How do you go buy $500 million worth of commercial real estate at a fair price that's not an impaired asset by something happening in the economy right now? How many people want to sell you commercial real estate at a fair price right now that is not impaired?

Speaker 2:
[46:44] They all think it's still worth what it was worth in January.

Speaker 1:
[46:47] Okay. So that's kind of difficult. So what's my next thing? Go buy, I'm not so silly as to go buy like 20th century stock. Go buy Apple, Amazon, Facebook, Twitter. Oh, by the way, back in 2012, I wrote the mobile wave. You know what I said in the mobile wave? I said, go buy Facebook, Amazon, Apple, Twitter. It was a good idea in 2012. If you had done it, then you would have made 10 times your money. Very good idea. Not the same idea this week. I mean, at this point, is Apple computer going to go up by a factor of 10 from here? Right? Maybe it might double, it might be cut in half, but with the best equity in the world, you've got equal upside downside. You're really just-

Speaker 2:
[47:42] There's no asymmetric. Exactly. When you started to look at this, did you look at real estate, precious metals, and Bitcoin, or what was on the menu, if you will, for evaluation?

Speaker 1:
[47:54] I went, and this is where I got to give a plug to my friend, Eric Weiss. Eric Weiss running his own Bitcoin investment advisory service. He's saying, this is what I'm doing, and I'm just dismissing him like, whatever this Bitcoin thing, I don't know what it is, but it's crazy, crypto and it's like shell game. So he keeps mentioning it, and I keep thinking about it. And then one day, we're sitting around my pool in Miami, and he starts explaining it, and something clicks in my head, that maybe this is a pretty good idea. I have been beaten over the head with a 2x4. And so I'm a bit more open-minded, but I started thinking about it. And then I realized I really got to look at precious metal. Now you go to the Robert Kiyosaki, silver, gold or Bitcoin, choose one. And so we get down to choosing, are we going to invest in precious metals or Bitcoin? I already dismissed commercial real estate. I dismissed a market basket of equities, the Spider, NASDAQ 100. That stuff's just not compelling. I tell you what I want, right? What I want is something that might be cut in half, that can go up by a factor of 10. Asymmetric payoff. By the way, that's what any intelligent investor wants. That's what you want when you bought Amazon in 2011. That's what you were getting when you bought Apple computer, when the iPhone came out. That's what every rational winner is getting. You want a 10X upside and then you want... I can even live with losing all the money, although here's the catch. Every good investment, in my opinion, if you're going to put a lot of money at work, the winning formula for the past 10 years or 15 years has been, find a digital dominant network that's dematerialized some fundamental thing. The mobile network is Apple, the information network at Google, the video network, YouTube, the social network, Facebook, even Twitter, speech network, dematerialize and Amazon, the retail network. You buy them when they're $100 billion market cap. When something hits $100 billion, and by when they're 10 times bigger than the next biggest thing, and they're $100 billion, they're probably going to crush everything. At that point, I remember lecturing Wall Street guys in 2011, 2012 about Apple. Here's what they said. They said, well, we know you love Apple, and you think it's going to beat the world. Our idea is if Apple goes up too high, we're going to sell the stock and we're going to buy HP and Dell so we can diversify your computer portfolio. If all your tech names, if Apple and Amazon and Facebook go up too much, we're going to sell those so you don't get too much in technology. My answer was, what you know, if you think about it broadly, there's no example of a successful company in the history of the world that wasn't a technology company. Standard Oil was a technology company. If you go to Hershey's factory, you'll find they figured out how to manufacture 50,000 candy bars in a clean room, and it's the most sophisticated piece of technology you will ever see in your life. You think they're not technology companies, you're just ignorant. There is no winning investment in a company that's not a technology company at their time. General Electric, there was a time when electricity was interesting technology. Boeing, same thing before we could fly. The idea you sell too much tech is a foolish idea, in my opinion. The idea that you sell Apple when it gets too big is another foolish idea. Like, well, there's never been a company that was 500 billion in market cap. What? Or trillion, right? There are people saying that. There's never been a company as valuable as Apple because there's never been a company as valuable as Apple. And another way to say that is, there's never been a company that could create a software camera, change the way it works and ship it to a billion people overnight for a nickel. And if you could actually ship a product to a billion people overnight for a nickel, you could create a lot of value with no cost. So obviously, these digital networks, Facebook, Apple, Amazon, you could see them, they're all around us. They're insanely value generating. But there's another dynamic here, which is the network effect, Metcalfe's law. It's like, as soon as everybody uses Facebook, how do I get 257 of my closest friends to switch to the next thing? It's really hard, like Twitter. How do you get all of your followers on Twitter to switch to the next speech network? Even if a guy has a massive following on Twitter, you think he's going to switch to another thing. Probably not.

Speaker 2:
[53:23] He's going to be the last person to leave.

Speaker 1:
[53:26] So you're buried in concrete there. So now we come back to Bitcoin. Okay, the number one knock on Bitcoin for the outsider is, well, it's just software, someone else can copy it. And I think Bitcoiners, they don't do themself justice here. I mean, sometimes, I think the exchanges and some of the others, they over-promote the fact that there's 237 different crypto pairs you can trade, right? And I've done that. It's like that, it's that long tail, where all of a sudden, there's one thing, and I want to have a list of 47 things, but you know what's an epiphany? You know, the epiphany is when you're a young CEO, and you're like, I'm going to put a salesperson in every single state in America. There's 50 states, 50 salespeople. There's an epiphany when you go to New York City, and you realize that half of all the money in the country is in one city. And then you realize that maybe you're being captured by orthodoxy. So, in this entire crypto area, it's great to have all the innovation, and it's good to experiment with this and that and DeFi, and maybe that'll work, and maybe that'll work, and maybe that'll work. But to the outsider, the outsider, you look at it and you're like, well, what if everybody moves their money off of Bitcoin to Ether or to whatever or to YoYoCoin? And they stop. And then someone puts this language, eight pages of language in front of you, what happens if there's a hard fork or a soft fork? You know how debilitating, anxiety inducing that would be to deliver eight pages of legal disclaimers on hard fork, soft fork risk. Like you mean like my crypto can float away and they get all anxiety written. So you got to get beyond that. And it's easy to get beyond that. The easy way to get beyond it is to say, look, this is a proof of work, crypto network designed to be a store of value. And the only thing we're going to do is maintain a constant store of value as a digital gold. And we're going to expend huge amounts of energy to protect that network and upgrade that network. And you can take your $500 million out of the bank and put it on our network. And everybody in the community is going to spend every iota of their energy to make sure no one F's with that network. Okay?

Speaker 2:
[56:00] Okay.

Speaker 1:
[56:01] All right.

Speaker 2:
[56:01] So hold on. So when you start to understand this, it sounds like you pretty astutely Bitcoin everything else. There was a separation in your mind in terms of understanding that. And as you were learning about that, were you going into this with an open mind as, I don't even remember that I tweeted this thing in the past. I know I've got this problem. This is the promise of this thing is a store of value. Like, let me go explore it. Or do you basically have people who are kind of guiding you and pushing you and saying, hey, this is the solution. This is your solution. Like, is this a self-guided tour or is this an externally guided tour?

Speaker 1:
[56:43] I am completely oblivious to any previous opinion I had had. But I didn't follow Bitcoin all through the 2017 Bitcoin cash for any of the fireworks that were very colorful. I missed it all, right? Okay. So I show up with the Queen's Slate in 2020, and I'm reading about this, it's history, and I'm looking at Andreas' videos, and your videos, and Dan Held's videos, and I'm reading the Bitcoin Standard by Saifuddin, and I'm reading Parker Lewis' essays, and I'm...

Speaker 2:
[57:20] You got indoctrinated by the Bitcoin community. You got hit with all the content.

Speaker 1:
[57:25] Yeah, and then all the maximalists, and I'm seeing Max Kaiser, and I'm like, I'm starting to figure, oh, there seems to be some interesting drama here, but it's more entertaining for me, right? And here's the thing that really just, that just kicks you over the edge though. It's just, when you go to real Bitcoin dominance, and you look at Bitcoin, and then Bitcoin Cash, and then the next one, the next one, you realize, okay, Bitcoin is 92% of everything, and the next competitor is 2%, and then the next competitor is 1.5%. Okay? The number one knock on Bitcoin is, well, maybe it's the Myspace, to Facebook, it's like, absolutely not. If you know anything about Myspace, you realize that Myspace was never worth more than a billion dollars, okay? Myspace was 200 times smaller than Bitcoin is right now. It was never that case, right? There's never an example of a $100 billion monster digital network that was vanquished once it got to that dominant position. So all you got to do is see that chart, and then you think about the dynamic and the network effect, and you're like, this is already won, right? It's won, it's been tested. By the way, the hard forks I think are a big advantage. The fact that Bitcoin went through it, and we saw what happened, and we saw that the community would defend Bitcoin, that's what gives a person like me confidence to invest hundreds of millions of dollars in Bitcoin. I don't want to hear that you've got a new idea and you're upset over transaction fees and you would like to implement smart contracts, so you got to change everything. I don't want to hear that. I want to hear that you're going to defend the network to the death against someone that's going to break it or compromise it in any way, shape or form.

Speaker 2:
[59:30] When you decide personally, this is a good idea. I'm going to take a material amount of the $500 million and I'm going to go buy Bitcoin with it. You've got a board, you've got shareholders, you've got regulators, there's a number of stakeholders, that people who either have financial interest in what you're doing or really care about what you're doing from a regulatory standpoint. What are those conversations like? Do you just go to the board and say, hey, there's this thing called Bitcoin, I'm going to take $250 million, I'm going to go buy it. Do you warm them up with some information first? What is that conversation at the board level like?

Speaker 1:
[60:06] I started signing them homework. They all know you. They've all watched a variety of your podcasts. They all know Andreas. They all required to watch the debate between Eric Borges and Peter Schiff on Fiat versus Bitcoin, what is better money. Then a nonstop stream of essays on macroeconomics and Bitcoin theory, and the who's who, let me, and people you've interviewed. When Alden publishes her piece, it goes to my board. The bullish case for Bitcoin goes to the board. All of those things, and between them, and the general council, and the CFO, and myself, we're all basically just going down the rabbit hole. Following that is a series of discussions. One-on-ones with everybody. Everybody goes off, does their own homework. We all come together. Lots of group discussion. We all split. The CFO goes off to organize, and start to consult with arrays of accountants. The general council goes off to consult with arrays of attorneys. Then we go off and consult with arrays of financial advisors. Then we consult with arrays of bankers. Then we come back together again, and then we share. Then we have deliberations. Then we deliberate some more, and then we think very carefully about what is the appropriate and prudent way in order to begin to move forward with or affect this strategy.

Speaker 2:
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Speaker 1:
[65:24] Before we get there, I'll make one more point. We had $500 million in cash. We wanted to buy our own stock back with it or put it into some asset like Bitcoin. Our first step is to announce that we're thinking that through. Our second step is announce a tender offer for our stock, $250 million. That took place the same day we announced that we bought the $250 million in Bitcoin. Then we have a 20-day period where we wait for our shareholders to decide if they're going to tender and how much. We had to move through that. When we got done, we actually bought $60 million worth of our stock. That hit the wire in the last few days too. Our real goal was to invest it all.

Speaker 2:
[66:09] Got it. It was $250 million in Bitcoin, the tender ends up being $60 million or so. So you're at like $310 million. Then you had another $175 million that you could play with and still keep some cash in the bank.

Speaker 1:
[66:23] It's the shareholders' decision as to how much of that will be tender. We wait for them. Then after the tender offer, we had excess cash in our treasury. The next step is for us to invest our treasury cash. That's what we announced today. In fact, we've wrapped it all up. Substantially, 95% of that money is either invested in our stock or in Bitcoin, and we've accomplished that in short order, right? Like over the course of six weeks or four weeks. Now, regarding acquiring that much Bitcoin, first of all, I can't give you exact blow-by-blow details because I've got security issues and the world is watching and I can't. But what I can do is I can describe to you, if you were running a company, how you should think about this. If you were in my position, which is you're going to go and you're going to audition a bunch of institutional grade exchanges. You're going to work through and look for institutional grade custodians. You're going to look at all of the security issues, all the technology issues, etc. You're going to think about the team. You're going to build a relationship with them. And then if you're going to buy that much, you're going to buy it in thousands or tens of thousands or a hundred thousand plus small transactions, day and night, minute by minute, over the course of many, many, many days. So it's not like we're going in. I'll sit and I'll watch this happening. And I've got a great team, a great team that I've worked with and some excellent professionals. They are brilliant geniuses at what they do. But let me tell you, they've got great technology too. And you've got to have the right technology, you've got to have the right team, and then you have to be very patient. Like very, very patient. I'll watch people walk in on Monday morning and I was like, okay, some dude just got up at 9 a.m. and decided to buy some Bitcoin and the price spikes. Whenever I see that, I'm like, well, that guy won't be in the market very long because no one that really wanted to buy a lot of Bitcoin would be so silly as to spike the price so hard. You know, I can tell you this, which is we bought $425 million worth of it and we never ran the price. Not a dollar. Like you don't know.

Speaker 2:
[69:15] Impressive. Yeah, pretty impressive.

Speaker 1:
[69:17] If I'm in the market, you wouldn't know that I'm trading against you ever because that's just, that's not how you get stuff done, right? Let the market come to you. So the good news is if you want to buy hundreds of millions or sell hundreds of millions, you can do it and not be seen. And you can do it without moving the market materially or panicking anybody. But you have to have the right team, the right tools and the right discipline. You can't be in a hurry.

Speaker 2:
[69:47] Got it. That makes sense. How has the reaction been from other CEOs or people who are outside the company? I'm assuming that you've gotten people coming inbound that are peers. Are they laughing at you? Are they excited? Are they asking, how did you do this? Why did you do this? What are those conversations like?

Speaker 1:
[70:09] Well, first of all, I think this is a year where every CEO is busy. Like, minding his own business, right? Like, they've either got a business that has serious, serious solvency issues or struggle, or they've got a business that's being digitally disrupted or twisted one way or the other, or they've got all sorts of employee care and feeding issues. So this is not the year where a lot of CEOs are sitting around shooting the whatever about what's happening this year, right? Everybody's kind of all hands on deck, working hard. The people I do speak to though, and I speak to some, I would say, everybody has had a lot of their assumptions shaken this year. Assumptions about how the market will behave, assumptions about regulations, right? Assumptions about international business, assumptions about their balance sheet, and things that were inconceivable last year. Oracle, TikTok, all sorts of interesting things that you will see on the paper. People will just nod and they're not even a second thought, like, oh yeah, that's happening. All those things are being considered this year to a much greater degree. So I do have people coming to me, and they want to know how do we think about it, and why do we do it, and they're all starting to think, what's their angle on this now? And so I think it's catalyzing people to be much more open minded.

Speaker 2:
[72:00] Yeah, I think that makes a lot of sense. Do you feel like you've kind of broken the dam open, and now a bunch of people will follow, or do you think that this is kind of a slowly but surely it will take a lot of time for more to kind of follow in your footsteps?

Speaker 1:
[72:14] I think it's like the four minute mile. I think the people told themselves they couldn't do it, and then someone does it, and then in the next year, dozens and dozens of people do it. This particular case, there's a lot of stuff that I've done in my career that was a lot harder than this. And I will say any entrepreneur that ever successfully launches a business and gets to profitability, will have accomplished something much harder than what we did. So it's a challenging project, but it's not beyond the capability of any management team. I think that a lot of people just had a mental block, or it's just in this block of I just dismiss it, I don't even consider it, and then they get focused on something else. My own experience is from the day that I decided that I wanted to buy Bitcoin, if I decided on that day as an individual, you go to these high-end exchanges, it's going to be six weeks to get through the KYC for an individual if you want to do it. If you're a company, a private company, and if you had your team all around you, from the point that you thought it was interesting, you're 12 weeks to 18 weeks to get through the hopes. If you're a nimble publicly traded company, I think you're looking at six months. If you're a good company, like just a good rational publicly traded company, put on the docket, you would do it in nine to 12 months. I think that people were oblivious to the need slash the role of Bitcoin. The Bitcoin narrative of digital gold, this is the ultimate inflation hedge. This is, if it's not 10x better than gold, it's 100x, maybe it's 1,000x better than gold. We could go on for hours. I could tell you why I think it's 1,000x better than gold. But let's just assume since we're preaching to the choir that it's 1,000x better than gold. Once you realize that it's 1,000x better than gold, from that point, it's minimum 12 weeks, if you went like a bat out of hell, and probably six months. I feel that if people were waiting to see if this was possible, well, they saw our announcement in August. The six-month clock starts in August. If they were just perfectly configured, if they had all the same characteristics as us, then they start focusing on this in May or June. Nobody's thinking about this in March or April. I was just so busy trying to keep the doors open, and their bell's getting rung. So take August and say, August, September, October, December, January, February. I think that what you're going to see is over the next two, three, four months, something interesting. The other point that's not lost upon me is, there's 3,500 publicly traded companies, there's $5 trillion in their treasuries and it's all melting. At some point, you have a fiduciary obligation to not lose the money. It used to be acceptable to be conservative, but that was before the asset inflation rate went from 6% to 30%. When the inflation rate goes to 30%, it's not necessarily something you can ignore. I think that a lot of people are getting catalyzed right now. I think it has to be CEO, CFO led, right? Because it is an innovative thing. But I think that we've shown people how to do it, and we've shown them that it's possible and straightforward. And once it's like anything, if I tell you it's possible, go figure it out on the internet or go figure out YouTube, you can figure it out yourself, right? All you gotta know is that it's possible, you know, it's possible to run 52 miles in a single day. Go figure it out. You're gonna go Google, 52 miles in a single day, and then all of a sudden fall down the rabbit hole. So I think people now know it's possible, but I don't think you can expect them to move in less than six months reasonably in a year.

Speaker 2:
[77:01] How are you thinking about, last question before we get to the rapid fire, how are you thinking about the volatility, right? So obviously it's one of the most volatile assets that you could have chosen. And when we talk about volatility, it's not like, hey, it may go up 2% or down 2%. You can have double digit percentage days, up or down. Does that change your strategy? Is this just your long-term holding it for years and years? How do you think about that?

Speaker 1:
[77:29] Well, so first of all, I think the volatility is falling. And I think all you gotta do is look at the chart. And there's a narrative, everybody wants to say that they know something about crypto, wants to jump up and say, well, you know, it's volatile. Well, it was volatile in 2017, you know, when like individuals were trading it on their mobile phone. But yeah, think about what I just said about how we acquired it. We buy $175 million. I'm in the market every minute of the day for multiple days in a row. I'm damping the volatility. One person like me, right? In every trading day that I'm in the market, I'm damping it to the upside and the downside, and I'm damping it with large sums of money, right? And so how many institutions does it take before they damp it? Right? Like I'm the dude, I'm like, okay, I'll pay an extra whatever, but stop this thing. I'm holding it for 100 freaking years, right? It's like, I'm not really, I'm not the day trader guy that's worried about it. So I think that as the institutions come in and as they buy bigger amounts, they're damping the volatility. That's my first observation. My second observation is crypto trades 168 hours a week. Every other asset trades 35 hours a week at best and sometimes less on holidays, right? I look at this thing in awe, you know? When I look at these exchanges, Saturday night, 9:30 p.m. and I'm watching the thing stream and I'm like, this is the most magical, hardest working security in the history of the world. I would think everybody ought to be in awe that the things not go in haywire. It's remarkably non-volatile in that regard. In my opinion, you could go into the market and you could liquidate 50 or 100 million dollars worth of this stuff in the matter of an hour, any hour of the day, any day of the week on a holiday and maybe you take a 3 percent haircut. But don't try to liquidate 100 million dollars of gold on a Saturday afternoon in Istanbul on the street side. My answer is, I don't think it's that volatile, but my other answer, beyond this, let's be honest, there's a negative real yield on everything else I can buy. Gold's got a negative 3, 4, 5 percent real yield, in my opinion. We talk about why. Bonds have a negative real yield. It's just a question. We're just going to debate, is it a 7 percent asset inflation or 15 percent or 3 percent? But it doesn't really matter. Every other non-volatile asset is a negative real yield, which means that everything else is lifeblood draining out of my veins. So if my choice would be to accept some volatility and live, or I had non-volatile cash that bought 30 percent less in a matter of eight weeks. Non-volatile, there was 30 percent less. At that rate, you're not going to make it through the decade. And so volatility is just something you got to live with. But I really think there's a group of crypto enthusiasts that lived the last 10 years, and they are the result of their experience. They lived through a difficult time, and they're heroes, and I respect them. But you lived through that, you lived through volatility. I think the next 10 years are not going to look like that. I think the next 10 years, as you have people coming in that are moving hundreds of millions of dollars in and out of the market, they're going to tend to damp all the volatility, and the institutions are going to damp it because of their interest. And so, if there is any, it's just going to be to the upside for the good of everybody, and otherwise, not a big problem for me.

Speaker 2:
[81:40] I literally think that is the perfect way to look at this, is, what is it? $200 billion asset today, market cap wise, go to $8-9 trillion, you're looking at $40 plus X, right to the gold market cap, and you're talking about an asset that is superior in almost every single way. And so, if you think it's just going to be equal on a market cap basis, you're not a student of history because we know that they usually tend to have much larger market caps. And so, when you start to look at just the numbers, you can not only put big numbers to work in the market, but also the upside of this thing is incredible over a long enough time period.

Speaker 1:
[82:20] You know, gold is a great narrative, but to say that this is much better than gold undersells it. Because the truth is, if you look at these treasuries, there's something like $200 trillion worth of debt instruments and other treasury instruments that have a negative real yield. And precious metal is just one of them. So, if you're looking at $10 trillion in gold, there's easily $100 trillion of, you know, whether it's the shadow money, $75 trillion of that, $75 trillion of sovereign debt, $50 trillion of other stuff. So, you're really looking at $200 trillion or more of negative real yield. The only debate is how negative it is. And Bitcoin is the only thing I could find is positive. You know, if I could find another thing, we'd be talking about it.

Speaker 2:
[83:10] No brainer. I ask the same two questions to everybody to finish up. What is the most important book you've ever read?

Speaker 1:
[83:18] Okay. You're gonna hate me for this, but it's, the moon is a harsh mistress. Okay. And you know, Robert Heinlein was my favorite author growing up. I'm a rocket scientist. And of course, it's about a protagonist computer whose name is Mike, who saves the moon. So I like that a lot. And I like, and I grew up with that. It was very inspirational.

Speaker 2:
[83:50] So speaking of the moon, aliens, believer or non-believer?

Speaker 1:
[83:55] I think they're out there. I think that, I think that there's so many stars and galaxies and planets. Statistically, it just seems to be impossible that somewhere there isn't somebody.

Speaker 2:
[84:11] I tend to agree with you. The galaxy is very, very big. You get asked to be one question to finish up. What's the one question you got for me?

Speaker 1:
[84:23] Jack Dorsey has a one word Twitter bio. And that one word is Bitcoin. And he's also got $10 billion in cash and cash equivalents between Twitter and Square. And to my knowledge, none of it is invested in Bitcoin, either Square or Twitter. You want to help me try to persuade Jack to break off a small $500 million or a billion dollars and go buy some Bitcoin? Because I know he loves the community, and I know he's doing as much as he can to help. But the single most useful thing he could do to help is lead on the corporate treasury side. If he bought a billion dollars worth of Bitcoin, what do you think happens the next day?

Speaker 2:
[85:16] I think that he's thought about it would be my guess. My guess is that there are bigger problems that he perceives in terms of activist investors and kind of, he's always the, I joke and say, show me another entrepreneur who's built two tens of billions of dollar market cap companies and is running them simultaneously. And yet somehow people still have a problem with the guy, which is insane to me.

Speaker 1:
[85:45] I don't. He's an amazing guy and he's inspirational, but it's not like he shirks controversy.

Speaker 2:
[85:52] Oh, no, no, no. Look, I absolutely think that, uh, again, this is me speaking my opinion. Obviously, I've never talked to Jack about this. I don't have any inside information. Uh, I would guess that if it was his choice, he would absolutely do it if he kind of had soul power. Uh, I think that, um, you know, you kind of pick your battle sometimes. And my guess is that, uh, when Elliott, uh, management is knocking on the door and basically got a target on your back as the CEO, the first thing you don't want to propose in the board meeting is, uh, hey, why don't we take $500 million and go buy Bitcoin?

Speaker 1:
[86:26] Fair enough.

Speaker 2:
[86:26] Uh, but at the same time, doesn't mean that that wouldn't be the right thing to go do. Just, you got to pick your battle sometimes.

Speaker 1:
[86:33] If we can get the crypto community to give him some air cover or go waging a charm offensive on all of those boards.

Speaker 2:
[86:40] What we need is we need the Bitcoin community to go like meme Elliott management to death and then they'll pack off maybe and leave them alone. So I don't know. But we'll see. Look, it's, um, I tend to think that there will be many more people who will follow this. I think you're right in terms of, it'll just take a little bit of time for them to kind of get geared up and do it. Uh, I don't know if people will do as much as you guys did on a percentage basis, kind of out of the gate, right? It feels like maybe people start with five, 10%, just because humans are naturally just they lack conviction. They want to be conservative. They kind of feel like they're being prudent, you know, whatever. I tend to think actually the argument you laid out is not only conservative because you're actually protecting the cash, but it's also very prudent in the sense of kind of how you did, you know, 50% into Bitcoin, 50% as a tender and then kind of doubled up or, you know, kind of filled up with the rest in Bitcoin. And so we'll see what happens. But, you know, if no one has said it to you yet, just we're cheering you on. So keep going because it's pretty incredible that you did this. And I said it when you first put out the very first press release, you guys bought the original Bitcoin purchase. I said to multiple people, I said, look, this isn't somebody who doesn't understand what they're doing.

Speaker 1:
[87:57] Right.

Speaker 2:
[87:57] It was very clear in the language you used in the press release, et cetera, this is a Bitcoiner who is running this company and very much understands the macro environment, kind of their asset choices, if you will, and has chosen Bitcoin for, I think, all of the reasons that the Bitcoin community is attracted to it. And so that, you know, for whatever reason, came through pretty clearly to me in that in that press release. So it's cool to see.

Speaker 1:
[88:22] Yeah, well, I guess I would end just by saying that I find the entire Bitcoin community to be inspirational. And I did note in our press release, one of one of the key drivers of our belief and the success of this is the community ethos. It's a pretty amazing group of people. And all of the thinking and all of the initiatives, I just find to be extraordinary. And I think that we wouldn't be doing what we're doing without everybody that's ever passed through this podcast.

Speaker 2:
[88:58] That means a lot. How can people find you on the internet or find out more about MicroStrategy?

Speaker 1:
[89:05] MicroStrategy is microstrategy.com. Michael underscore Saylor at Twitter. You can probably Google me and you'll get every single one of my contacts if you want.

Speaker 2:
[89:20] Awesome. Listen, Michael, thank you so much for doing this. This was fantastic. And we will absolutely do this again at some point in the future.

Speaker 1:
[89:27] Well, thanks for having me.