Preston Pysh (00:05:02):
Yeah. It’s funny. I know whenever I was just starting my business, I used Elance a lot and it was almost like a cheat code that nobody else out there was really… And I think… What was it? oDesk bought them. I think if you search for Elance right now, it won’t even take you to that site, but I just remember using it and just being like, “Wow, I can get deliverables, digital deliverables for just unbelievable prices. That’s fascinating.” So you’re building these sites. Probably, you’re flipping them. You’re selling them, but not for a lot of money, like a couple of thousand here and there and just kind of…

Jay Gould (00:05:39):
The Raid or Date was the first one I sold. I had a body jewelry website. I had a lot of other stuff that I didn’t sell. I was just making money on. But on Rate or Date, I copied Hot or Not. I’m actually friends with the founder of it or not, James Hong. Now, I am. Back then, I copied him. He had Hot or Not. Actually, on his website, he had a link at the bottom. I think it was called the copycat sites or something like that, and that was one of the copies. It was like tons of like rate this or that, rate my car, rate my prom dress, rate my dog, cat. And then I had Raid or Date, which was a little bit more directly competitive to what they’re doing, but they were obviously the best, him and Jim. It did really well.

Jay Gould (00:06:11):
It was a free thing when online dating was still paid. It seemed ridiculous to me that you would pay a membership for dating when I could create it for free and monetize it through advertising. I was like, “This is not sustainable for Match.com.” What a little bit, I know they’re huge companies today, right? But back then, 20 years ago, I was like, “That’s not sustainable.” If I could offer this for free through ad support, I know I’ll make less money than if I had a subscription base, but I’ll have a place in the world and I’ll compete and siphon off some of their customer base, right? And that’s what I did. And so, I got to maybe 100,000 members and I sold it to MatchNet PLC, which I think is now Spark Networks. They own Americansingles.com, Jdate, and a bunch of these dating sites.

Jay Gould (00:06:47):
So there’s a guy named Pud. That’s his nickname. Pud.com is his blog, Phil Kaplan. He started AdBrite. He now runs the largest music distribution service on the web, which is called DistroKid. In the early days, he created before even Instagram was around, I think it was called Mobug. He had this mobile… Before we had iPhone apps and stuff, before the even iPhone, he had like a mobile app uploading site for photos, believe it or not, right? Really cool. He sold a site through eBay, which was like, I was like, “Oh, that’s a great idea.” So I listed it on eBay.

Preston Pysh (00:07:19):
On eBay?

Jay Gould (00:07:20):
Within days… Yeah. But I didn’t sell it, but I listed it. I got all this inbound. I took the listing down, and I negotiated and I sold it. I saw what he did. This guy’s a smart guy. I’m always tracking some of the guys in the industry and I said, “That’s a good idea. Let me see if I list it.” All of a sudden, this big company reaches out and they were like… They didn’t even know about me, right? And they’re like, “How are these guys getting these numbers?” They verify the numbers and we negotiate it and we sold it. I didn’t get rich or anything off of it, but it did show me that there is a there there there, and I was like, “Holy cow, I got to run with this.”

Jay Gould (00:07:50):
And so, then, I built another social network, which was SocialTree.com. People never heard of this, but SocialTree.com was competing with Friendster back in the day, right? So Rate or Date was pre-Friendster or right around that time. Back then, they were like… We used to call them profile sites. There was BlackPlanet. There was Asian Magenta. There was MySpace. There was Friendster. There was FaceTheJury.com, the Dilly.com. There was all these profile sites, where you go and you create a profile. They were social networks, but nobody was calling it that yet. And so, I thought, “Well, the dating thing, the stigma was hard to get people to join because of the stigma of dating and not everybody’s looking to date.” Right? But I do think like the early days of AOL chat rooms, I do think people want to just hang out and communicate. I think generally people are bored and looking for community and connection.

Jay Gould (00:08:35):
I saw that early on. And so, I built Social Tree. We built a little audience and I was trying to compete with Friendster. Then, Friendster got beat by Myspace, as we all know, because we hear it all the time in Bitcoin. Is Bitcoin the next Myspace, right? But it’s not. We can get into that. But the long story short is that I saw that there was there with Rate or Date, I created Social Tree. With Social Tree, it actually introduced me to the biggest idea I’ve ever had. So we were now competing with Friendster and moving towards competing with MySpace. MySpace allowed, if you remember, you to customize the CSS, the style sheets and stuff of your page. You can change the colors and embed things. So we said, “Well, that’s cool. We should do that too. If that’s what kids want to do, we should do that. Lots of kids do that.” And so, we did it and a kid took a video and he embedded it into his profile. He sourced the source SQLs from a video file that he found somewhere else-

Preston Pysh (00:09:25):
Somewhere else. Yeah.

Jay Gould (00:09:26):
… and pulled it into the video player. I said, “Wow, it’s really smart.” And my programmer-

Preston Pysh (00:09:29):
Embed.

Jay Gould (00:09:29):
Yeah, he embedded it in, right? It was just like, you could do for an image, right? He in-sourced it in with the video and I was like, “That’s really cool how he did it.” Because he had a Windows Media Player and he sourced the SQL file. I was like, “He’s really genius.” My programmer was like, “We should take it down because of the copyright.” I was like, “No, obviously, this is cool. We’re fascinated by it. I’m looking at his video. I thought it was kind of cool.”

Preston Pysh (00:09:47):
You weren’t even hosting the video. You just had the reference.

Jay Gould (00:09:51):
The way he did it, he had the… That’s right. And then when we first did it… By the way, that website that I’m about to tell you about, that was called Music Video Codes. This is not rocket science here, Preston, right? So I’m looking at the HTML code and I’m like, “It’s a music video. Let’s call it Music Video Codes.” If you go to Google… What are they called? Trends, I think, where you can see search terms and stuff, Music Video Codes is like flat. And then there was a moment in time flying way off, and then it came down. It was like insanely popular in the mid-2000s. That led me to building a video sharing site because when I put all the music videos uploaded to the site and gave everybody the codes, so they can embed that code…

Preston Pysh (00:10:30):
Now, you’re switching and now you’re hosting.

Jay Gould (00:10:32):
That’s right.

Preston Pysh (00:10:33):
Yes.

Jay Gould (00:10:33):
So I gave everybody every music video ever been created. We created a directory. Everything is there. I thought, “Well, this will help Social Tree become really popular. We’ll have the two sister sites and you just keep people in. We’ll get them coming from Myspace, but then we’ll cross-promote my social net…” That was my master plan, was to be like what Facebook is today. I was like, “Oh, you know…” I never thought it would be that big, but I thought it would be a big thing. What ended up happening is we started to bring people in and Music Video Codes just took off and nobody ever clicked the other link to go to Social Tree. It just was going. Within a couple of days, it was thousands, tens of thousands, hundreds of thousands, and then millions. We ended up getting over 40 million views a day in 2005.

Preston Pysh (00:11:09):
My God.

Jay Gould (00:11:10):
This is before YouTube existed, right?

Preston Pysh (00:11:12):
Wow.

Jay Gould (00:11:13):
And the story goes… I’m going to tell you the inside story and I’d love to hear Chad or Steve tell me something different. Copy me, okay? Because I was out first and I know it’s true because one of my investors, another company I had was Reid Hoffman, the founder of LinkedIn.

Preston Pysh (00:11:27):
Yeah. Yeah.

Jay Gould (00:11:29):
So Reid told me that those guys squatted in the offices of LinkedIn because they used to work for him when he worked at PayPal. They were junior guys, right? They were graphic designers and programmers. And so, they came over and they were like, “Can we use some space?” They had a dating thing first. Sounds familiar, right? A dating thing for YouTube, and then it converted over and became a video. They had the technology, but they converted over to video sharing. In the very early days, I was the only ones who allow you to upload the video, give you a code, and then take that code and embed it on the third-party site. I was the first one to do that.

Jay Gould (00:12:00):
It wasn’t very long after that that people started to say, “Well, if he can do it, it must not be not profitable. So there’s got to be a way to monetize this. How was he able to do that?” So that’s what we were doing. So we kind of like showed everybody. I got to tell you, I sat down with a spreadsheet, dude, and I modeled this out for days and days and days. I was worried that this would scale, and then I would just rack up server bills and be out of business real quick, right? I’m not going to be able to pay this stuff. It was a little worrisome for the first month or two, because you’re waiting on checks from ad networks and stuff. I was really worried. I maxed out credit cards. I started getting credit cards and applying for 2,000 here, 5,000. I was just paying for all the servers and stuff with SoftLayer and The Planet. I was racking up. I had like 65 or $75,000 in debt before any checks came in.

Preston Pysh (00:12:44):
And this was just all for surfer space?

Jay Gould (00:12:46):
Yeah.

Preston Pysh (00:12:47):
Wow.

Jay Gould (00:12:47):
This was all operational costs.

Preston Pysh (00:12:49):
Oh my God.

Jay Gould (00:12:49):
It was crazy how fast the scale. It’s [inaudible 00:12:51]. My thing was this. At the beginning, I was very nervous and I thought to myself, before I pulled the trigger, I said, “What’s the worst that could happen?” The worst that can happen is the server bills go crazy, which is not a bad thing. I means you have scale and you have traction. People care, right? The worst thing is if the advertising networks don’t pay me, I go bankrupt. But then I thought about it and I was like, “But I am bankrupt.” When you really think about it, everybody listening to this, you’re already bankrupt for the most part, right? Unless you’re already rich, right? But most people, they just don’t know they are.

Jay Gould (00:13:19):
You have a job, right? You have income and you have expenses, like a mortgage and a car payment, but effectively, you owe everything to the bank. They own everything. You don’t own anything, right? So take a risk. Worst can happen is you wipe it out, and seven years from now, you start over, right? I got over that really quick. I was like, “If it doesn’t work out, I’m so young.” I was like early 20s. What’s the worst that can happen? Before I’m even 30, I’ll be back to fine. I took the bet and it scaled really fast. And then I ended up selling that company to a company in New York City, because once I hit scale-

Preston Pysh (00:13:51):
This is Bolt. This is Bolt.

Jay Gould (00:13:52):
This is Bolt that bought it. Yeah. Once I hit scale, like tens of millions of people, I didn’t realize, and I was a young kid in my early to mid 20s, everybody started calling me, like Benchmark, Capital, Sequoia, like all these venture capitalists. I didn’t even know venture capital was, so I’m like, “Who are these guys?” They’re analysts that worked there. Yeah. They’re all like, “We’d love to get a meeting with you.” I’m like, “How do they even know who we are? Where are they finding me? Are they on these websites and they found my website and they… But we don’t have a phone number.” I’m like, “How do they even get my phone?” It was really weird, right? But they know what they’re doing. So I was really afraid. And then companies started to call. “We’d like to buy you.”

Preston Pysh (00:14:25):
So it sounds to me like they were getting their queuing from the hosting companies. That’s probably the only way that they would be able to know. They’re probably pinging these hosting companies saying, “Hey, which websites are just growing like crazy and how can we get the number?”

Jay Gould (00:14:40):
What I didn’t know, I know now, but I didn’t, they were using Comscore Nielsen. And so, I was showing up number one for music and number one for entertainment and video and stuff. I was number one in Comscore.

Preston Pysh (00:14:50):
Wow.

Jay Gould (00:14:50):
They’re like, “Who is this site? We never heard of these guys.” So everybody wants to invest in this thing that comes out of nowhere and it’s really fast growing, right? So, everybody contacted me. I just didn’t understand venture capital. From a very young kid, I didn’t go to school for economics or finance. I was like, “It sounded like they wanted something out of me, and I was going to get the raw into that deal because I didn’t have to negotiate it.” But when the guys came in with offers to buy it, that was a different story, right? It was like, “Okay. Sense of ownership, control.” These guys were talking about board seats, two to one. It was crazy and preferred dividends. There was all kinds of terms I didn’t understand. Again, like I said earlier, the Navals of the world didn’t exist on these blogs, like venture hacks to teach anybody this stuff in 2005, right? So how would you know? And I wasn’t in that circle.

Jay Gould (00:15:34):
So Gorilla Nation, StupidVideos.com, Bolt.com, there was a lot of these mid-size internet companies that had raised some funding and stuff like that, had investors. They understood that game better than me. The founders of Bolt, we were very close. It was New York City. I live in Jersey. I’m not that far from them. Lou Kerner who started .tv and sold it for, I think, $100 million, Aaron Cohen, who was the founder of Bolt.com. Bolt.com was founded in 1996 as the first social network. So I’m like, “These guys, they know what they’re doing?” So I said, “Well, what’s the deal?” So I negotiated a deal for an equity deal. I didn’t get very much cash on that transaction, but I came a third partner with Lou and Aaron. I thought to myself, “I’m a third partner with these guys. These guys sold a company for 100 million. They used to work at Goldman Sachs. They went to Ivy League schools, like Columbia and they went to Stanford.” I’m like, “This is way out of my league.” Right?

Jay Gould (00:16:19):
So my dad, who’s a carpenter, my stepdad, he said… At the time, he was like, “What are you crazy? There’s a guy offering you $2 million in cash. Take the cash.” I’m going with Lou and Aaron. I’m like, “I’m not taking the cash. I’m going with these guys.” He’s like, “You’re crazy.” My dad is not rich. He’s like, “Take the money.” I’m like, “If I take that $2 million, I’m going to pay taxes. I’m left with $1 million to buy a house. I got to go find a job? No, I don’t think so. I’d rather go to school.” For me, I wanted to go become a student of Aaron and Lou. Again, I built a network through these guys too. I didn’t think that at the time I’d built a network, but I built a network very quickly, credibility, authority, network. That’s what I did.

Jay Gould (00:16:57):
And so, I sold to them. We kept scaling. YouTube eventually surpassed us. They beat us, right? They came out of nowhere and they beat us. That’s a whole different story. And then we got sued by Universal Music, because of the earlier days of Music Video Codes. They came back to haunt us and it killed the company.

Preston Pysh (00:17:15):
Jay, leading up to all this, you have lightning in a bottle. It’s scaling. It’s exploding. And so, a person who’s listening to this, they’re sitting there looking at themselves and they’re saying, “How can I replicate this?” So, what in any of this was replicable versus just being the guy who’s in the right spot at the right time that has… And I don’t want to take away from the situation that you created because you worked extremely hard to grow this, but what is replicable or what would you say the takeaway is for somebody listening to this who’s inspired by the story and wants to do some of the same for themselves?

Jay Gould (00:17:56):
I would say that some of it is luck. I always say that to people. I think success is a function of, in my opinion, having opportunities available. A lot of people don’t have opportunities. If I was born in Kenya, I wouldn’t have been able to do any of this, right? So opportunities are important, right? Even if you’re in the U.S., there’s different opportunities in different parts of the country, different socioeconomic backgrounds, all this kind stuff. So opportunities are available to a lot of people that I had, very similar opportunities that I’ve had to probably millions of people, right? So it wasn’t very unique in that sense unless I was born with a silver spoon. But then you got to make the right choices, Preston. And that’s a function of having pattern recognition, in my opinion, and good instincts and intuition, which is based through your experiences growing up.

Jay Gould (00:18:31):
And so, for me, I think there was just… I call that a little bit of luck. You sprinkle a luck right there. You got opportunities, making the choices, and then you need a little bit of luck. I think the lightening in the bottle is a good way to describe Music Video Codes. But then from there, you have to then be able to have that pattern recognition to know the adapt and evolve and the iteration of building a product to scale, because it’s not like you had that one thing, and then it was like… There’s a lot. I’m over-simplifying things. It took months and months for us to get to a product market fit before I even knew a product market fit was.

Jay Gould (00:19:02):
Eric Ries, in his book, Lean Startup, none of that existed back then. You just figured all… I was in his generation. This is all of us figuring this out on the fly. So for those listening to try to figure it out, you got to be able to see what’s happening in the market, see what’s happening in your life, understand the way people worked from a psychological perspective when you’re doing social, because it is all about the mind, and then you have to be able to build a product around that.

Preston Pysh (00:19:25):
You really recognize the technological change that was happening as a young kid. You were like, “Hey, this internet thing is going to be huge.” Right? So when you look across the landscape today, what do you see out there from a technological standpoint that would be akin to this that’s happening right now?

Jay Gould (00:19:44):
Well, I met you on Clubhouse. I think audio, I don’t know if it’s going to Clubhouse, but I think drop-in audio, whether it’s going to be on Twitter for Spaces or something, I think that’s the next movement. It’s surprising in many ways. I had the opportunity to meet Ev Williams, the founder of Blogger. com, Medium and Twitter, co-founder of Twitter back in 2006, December of 2006, introduced at a party. Somebody said, “Go ask him about this Twitter thing.” He was running a podcasting platform called Odeo. He started Blogger, sold it to Google. Pre-IPO, I think he sold it to them, pre-IPO Google, obviously. He starts Odeo next, and then he goes to the investors and says, “I’m going to return the capital because it’s not working out and I don’t think the world is quite ready for Odeo, but I actually think we have something else we built,” which they used internally to communicate, which I guess was Jack Dorsey, I think, who we created it for him, because he was working for Odeo, if I remember the story correctly.

Jay Gould (00:20:34):
So he creates this and they were communicating internally using it, I guess. They were like, “We liked it.” So I talked to Ev at this party and I said, “Well, describe this to me.” This is ’06, pre-iPhone. Imagine the understanding… Imagine just thinking [crosstalk 00:20:47] that Twitter is going to scale before-

Preston Pysh (00:20:49):
iPhone.

Jay Gould (00:20:49):
… an app. Yeah, it’s like a web-based product, right? His description of it was really interesting. He was kind of like a typical programmery tech guy. He was a little awkward. He’s like, “Well, you go to Twitter. You sign up, create an account.” I was like, “Okay.” He goes, “And then you go on your phone and you go on your contacts and you add a short code.” I was like, “What’s a short code?” He’s like, “It’s like this…” I forgot many digits, but five or six digits, like 4-0-4-0-4. I was like, “Okay.” He goes, “Name it Twitter.” I’m like, “Oh, there’s a lot of friction here. Who was doing all this, right?” But I didn’t say that to him. I’m like. “Okay.” And then when you do that, every time somebody that you follow on, once you go back to website, you start following your friends or people you like, and they follow you. When you send something out to that short code, they’ll receive the text messages.

Jay Gould (00:21:29):
I’m like, ” So isn’t this like…” I said to this to him, “Well, isn’t this almost like a group text message?” He goes, “Yeah, I guess it is like group texting.” I was like, “Okay. So why do I need to use Twitter?” I was so confused, right? He’s like, “Well, maybe you don’t.” I was like, “Okay. You’re giving all the money back for Odeo to your investors,” because-

Preston Pysh (00:21:45):
To do this.

Jay Gould (00:21:45):
… one of the investors told me, I think he came out of pocket to make them whole in what he spent, if I’m not mistaken. “You’re getting all your money back. And then you’re saying, if you want to invest in this other thing, you obviously see something here. What are you seeing that I’m not hearing?”

Preston Pysh (00:21:56):
Yeah. Yeah. Yeah.

Jay Gould (00:21:57):
He goes, “I don’t know. Maybe we’re just drinking the Kool-Aid or something like that.” I was like [crosstalk 00:22:01].

Preston Pysh (00:22:00):
That’s when you want to ask even more questions.

Jay Gould (00:22:03):
I had to leave, right? I walk over to Reid. I think it was Reid and Josh Kopelman. I walk over and they’re like, “Well, what’d you think?” “I think he should just take the money back.” [inaudible 00:22:09] worse than buys ever. It seems like a 15, $20 billion company, right? But how could you know without… This is the difference between great entrepreneurs. Ev is obviously a great entrepreneur, and I’m a good entrepreneur, right? But he’s unbelievable. They can see that vision in the future. I could see it. I’ve been good at that several times. We can go through a couple of those, like social network, online video sharing, video ad networks, things like that, but he’s been hitting it every time. Every one of these companies are billion-dollar companies. So he was able to envision that it’s probably going to… He probably envisioned it’s going to go to mobile in the future, and I couldn’t understand that.

Jay Gould (00:22:46):
I mean, he was talking about mobile, but he’s talking about it from a text message perspective. I think in his mind, it’s like we think about Bitcoin, it’s only going to get better. This isn’t the end of the road. He’s envisioning the growth story in the future, the secular growth trend of internet usage and adoption and speed of the internet, which I did with online video desktop when I was doing the video sharing site. Everybody was like, “Ah, most people don’t have broadband.” I’m like, “But the penetration growth numbers are going up when you look at Forrester and stuff.”

Preston Pysh (00:23:12):
They were seeing it in application there as a messaging within their company. It’s completely different when you’re seeing something versus somebody just explaining.

Jay Gould (00:23:21):
He was just telling me. Yes, I didn’t use the product. Literally, if you look at my account, I think I joined a few months after he… I didn’t even joined that day, right? So if you look at my account, I think it was like March of ’07 or something like that. I met him in December of ’06. So early, early days, I was like, “Oh, really interesting,” but I’d stopped you. I wasn’t even using it that much. But then, you know what I thought Twitter was like what it is today? When I saw Ashton Kutcher join, then I was like, “Ah, I get it. This is a broadcasting platform for famous people. This is not a communication tool for the average person.” Although most were on here and you see all like the Bitcoin plugs and stuff, and I have like 50 followers and they’re adding you and you hit them back, but it can’t be as enjoyable for you as 250,000 followers. You put out, you get great feedback right away.

Preston Pysh (00:24:04):
Well, you can have access to somebody you’d never have access to.

Jay Gould (00:24:07):
That’s true.

Preston Pysh (00:24:07):
You can have interactions with people that you would never have interactions with.

Jay Gould (00:24:11):
100%, which is why to your question what’s next is why I really love the audio because it’s more context. It’s not a tweet and a meme. You could send it out. And then if you say something like Bitcoin Tina, right? Let’s talk about Tina, right? So Tina comes on Clubhouse and he says these inflammatory crazy things and he does the same thing on Twitter. He acts the same way in Clubhouse, but nobody actually does the follow-up question with him. They love how he acts, right? Because he’s like a character.

Preston Pysh (00:24:35):
Yeah, [inaudible 00:24:35].

Jay Gould (00:24:35):
I pissed him off the other day and that was like, “You always ask so many questions.” I was like, “Isn’t that why we’re here? I’m not here to listen you do a diet trap and then not question what you’re saying.” He was saying something and I was like, “Well, explain why.” He’s like, “Well, it’s because of this.” I go, “But you didn’t really explain it. Can you go in a little deeper?” And then he tried to say something very high level, and then I go, “No, no, no,” because I’m not like everyone else who just listened to him. I’m like, “I’m really just trying to understand what you’re saying.” In Twitter, he would tweet it and you can ask him and he could just ignore it. But on Clubhouse, you’re pressed. I want to ask you and you got to… And so, that’s why I love the audio because we’d have a conversation. You can really learn from people.

Preston Pysh (00:25:10):
It’s the equivalent… I would say the equivalent of listening to a radio station versus high-def TV, where Twitter right now is like, you can put out a little tweet and it’s text, it’s really hard to understand the context. It’s hard to understand the confidence in the person’s voice, right? You’re not hearing any of that.

Jay Gould (00:25:29):
That’s right.

Preston Pysh (00:25:30):
You get onto Clubhouse or you get on… What do they call it on Twitter? Spaces?

Jay Gould (00:25:33):
By the way, you should be doing Spaces. I think you got so many-

Preston Pysh (00:25:37):
I know, man. I’m just-

Jay Gould (00:25:37):
You’d be getting like 10,000 people in these rooms.

Preston Pysh (00:25:40):
I guess I’m just too lazy to do it-

Jay Gould (00:25:42):
That’s what it is.

Preston Pysh (00:25:43):
… just to be honest with you. I’ve done it a few times. It’s been good. I’ve enjoyed-

Jay Gould (00:25:49):
Let me know. Ping me when you do it.

Preston Pysh (00:25:49):
I’ve enjoyed the conversations. It’s just, I don’t know. I see people doing it all the time and I’m just like, “Oh God, I just don’t-

Jay Gould (00:25:55):
Yeah, too much is too much. Yeah.

Preston Pysh (00:25:55):
I don’t want to do that right now. I just want to sit down and just relax and have a bourbon or something. Hey, so let’s go back to-

Preston Pysh (00:26:00):
… a bourbon or something. Hey, so let’s go back to the legal piece of this. So you’ve done the music video codes website, you have to know that you’re in that gray space. I’m onboarding, would you say 40 million a day which is?

Jay Gould (00:26:18):
Well, we were getting like five to 10,000 uploads of videos a day in 2005. It was crazy.

Preston Pysh (00:26:25):
Crazy.

Jay Gould (00:26:25):
And I think at some point it peaked to like maybe 50,000 plus there’s on and the number of people viewing the videos throughout the web virally was 40 million a day. Yeah.

Preston Pysh (00:26:34):
You got all that going on and you have to be in the back of your mind saying, okay, I’m probably getting a lot of traction because I’m on this cusp of a legal battle potentially with these content creators that are making the music and the videos that are being hosted there. So what were you doing leading up to the lawsuit to protect yourself or to guard against this? Just walk us through the thought process, especially with your background. You’ve got this background in law, right?

Jay Gould (00:27:07):
So two things. Number one, I actually wasn’t so sure that I was breaking any copyright laws because I looked into this and we’ll fast forward from what I’m saying about two years later, I sat down with Wendy McGrath, the CEO of MTV networks. And so what I suspected was actually true because I Googled it, did all these searches and I talked to lawyers and I couldn’t find a license agreement for music videos. I could find it for audio music, but I couldn’t find it for music-

Preston Pysh (00:27:32):
Videos.

Jay Gould (00:27:32):
Sorry, music video. Yeah. I can’t find music video licensing agreements anywhere. They didn’t exist in 2004 and five. So I thought, is it promotional value? Because they do call them promotional videos. And the interesting part was you have labels that are major labels, you have the Universal’s and the Sony’s and the EMI’s, the big four. And they have smaller labels underneath each of those. And those smaller labels found out who we were too. And they would send, this was so funny this like old school stuff, they would send you CDs of their new artists and they would give you on the CDs, their music videos, please put this on your website.

Jay Gould (00:28:04):
Meanwhile, a few years later, their parent label is suing me and they’re giving me these stuff and say, “Please put it on the website.” So they’re not even communicating left hand right hand.

Preston Pysh (00:28:12):
Wow.

Jay Gould (00:28:12):
So I didn’t even think it was necessarily illegal because I couldn’t find anywhere that there’s licensing. There’s no one, but at some point before I even sold the company, Universal reached out to me and they said, “We don’t have a licensing agreement for this, but we need to put one in place with you because of the scale of it.” And I was like, ” That doesn’t make sense if you don’t have it.” And they were like, “Yeah, we need to define something.” So they gave me a licensing agreement. I said, “Well, how am I going to pay licensing fees for all the stuff that’s on other websites? The stuff that’s on my website, I can track, but I…” I’ve kind of lied. I was like, “I don’t really know how many views those are.”

Preston Pysh (00:28:47):
You’re saying for the embedded plays. I got you.

Jay Gould (00:28:50):
I knew exactly what we have, but I was like, “I don’t really know that.” But I know it’s on my website because I could track it with a pixel on the page, but if the video gets taken somewhere else and they’re like, “Yeah, yeah, that makes sense.” So we signed a contract. I had an agreement with them that I only paid for the licensing on a CPM basis on my website.

Preston Pysh (00:29:07):
But if it got played in some other player-

Jay Gould (00:29:08):
But nowhere else.

Preston Pysh (00:29:09):
Okay.

Jay Gould (00:29:10):
They said, we’ll deal with that later. We’ll make them pay for the licensing when your video gets embedded. They’re going to have to contact all these butts. I go, “Oh, that’s fine.” So I’m thinking it’s way bigger off my site. I was paying them thousands. I don’t know, 10, $20,000 a month at some point. It was crazy just from the licensing on our website, not virally.

Preston Pysh (00:29:28):
Just Universal.

Jay Gould (00:29:29):
Universal.

Preston Pysh (00:29:30):
How did they know which videos were Universal videos versus non-Universal videos.

Jay Gould (00:29:36):
I’ll ask you a question. How does the IRS, how much money you made last year? It’s the same thing. It’s self-reported.

Preston Pysh (00:29:41):
I got it. Got it.

Jay Gould (00:29:43):
And they can audit. If they want it to because under the contract, they can come in audit the servers [crosstalk 00:29:47].

Preston Pysh (00:29:47):
But the burden of purchase is crazy. Yeah. I got you.

Jay Gould (00:29:50):
They were happy to get their $20,000 a month or whatever these numbers were, right?

Preston Pysh (00:29:53):
Yeah.

Jay Gould (00:29:53):
So they were like, “Whoa, this is crazy.” It’s like they weren’t getting that from any video company for music videos. So when I sold it to Bolt, I told Lou and Aaron, I had this licensing agreement it’s in place, but why we got to keep this, they threw it away. They sunset my website. They merged the traffic into bolt.com in the two month period I was the one that ran the product for them because I was the product developer guy. My role in the beginning of the company, I think was like VB product when I first came in, eventually I became the president of the company. But I came in, I basically reshaped the entire social network into a video sharing site.

Preston Pysh (00:30:23):
So they weren’t concerned at all? They weren’t thinking Universal’s the best stop seeing the cheque show off.

Jay Gould (00:30:28):
Yeah. I said, ” Guys, you can’t just not write the cheque.” What are we doing? Weighing it down maybe, but like you can’t just cold Turkey. And within a year they filed the lawsuit against us, Myspace, really Fox because they bought Myspace. So they sued us, Fox and Sony, their competitor, Sony owned what is now Crackle. Then it was called Grouper. Grouper with an R.

Jay Gould (00:30:49):
So they sued us. The three of them had wouldn’t might’ve made a fourth one in there, but they sued the three of us. For sure. if you just Google like bolt.com, Universal laws, there’s all kinds of articles in the times. And Financial Times, New York Times, it was everywhere. Wall Street Journal. It was a big deal. If I’m not mistaken, I want to say it was $150,000 fine per occurrence based on where they would have done it with the lawsuit. I think it was like a billion dollar plus if we had to pay the fines at the end. It was not nearly possible to pay.

Preston Pysh (00:31:18):
It’s just a total stop. Everything. You pulled down the site or?

Jay Gould (00:31:23):
No, no, no. They filed the lawsuit like a year or so later. And then we fought it for a while and we were just draining and draining and it was taking all the profitability of the business. And then we raised a bit of money from some angel investors and basically fighting-

Preston Pysh (00:31:36):
This is where Mark came in. You were telling me Mark Cuban into the mix here.

Jay Gould (00:31:41):
Yes. I reached out to Mark on his blog Maverick website. He has his email. Anybody could email him. He’ll probably write you back 10 minutes. He’s pretty cool like that. But I went back and forth and he was writing a lot about YouTube, which I think he was a little salty, to be honest because he did broadcast.com and he sold for 5 billion and YouTube was like, you know this… And he didn’t sell yet when he was talking on his blog all the time. And he’s like, “There’s no model here.” He just didn’t like what they were doing.

Jay Gould (00:32:04):
He thought that they were building the business on the backs of copyrighted content. He was a copyright owner because he owned the HD, I think the HDNet was the name of it. Remember he had the TV thing, and the movie business. He had the movie business with Wagner. Anyway, I think he was a little frankly, I think was a little salty in hindsight. I didn’t think that at a time. Thank God at the time because he was like, “I can help you guys. I know Doug Morris from Universal.” I was like, “Really?” And he’s like, “I could get rid of this.” And then his offer to me was, he goes, “But I got to invest. I got to do this for free.” And I was like, “Sure.” And he’s like, “But I got to invest, I want 75%.” I’m like, “How much are you investing?”

Jay Gould (00:32:35):
It’s just like, this is what I want. And it was almost like a blank cheque, the way he was going back and forth in email. We never spoke to him on the phone. This is like weeks and weeks with Mark on emails. Every five minutes, it was like crazy. And he basically came back and he’s like, “It’s 75%. It’s almost like you said it was a blank cheque.” He’s like, “Whatever it takes, I’m obviously going to put the money in and then if it keeps growing, then we’ll raise money from VCs and stuff.” And I was like, “I went back to Lou and Aaron, I couldn’t sell it.” They were like, “75%. this is a 25% between the three of us.” And they were like, ” No, we’ll take our chances.” And it was a bad decision in the end.

Preston Pysh (00:33:04):
Well, you don’t know what would have happened. Maybe it would have failed with Mark as well.

Jay Gould (00:33:09):
They may have. Doug Morris, CEO Universal, he said to us on a conference call with the lawyers once, if you Googled Bolt back then, I don’t know if you can find it now, they had previously raised $60 million for venture capitalist. I think Highland Capital was the main VC, but they recapped the company before they bought me like a year or two before. So they were running out of money after the dotcom crash in 2000.

Jay Gould (00:33:29):
About 2002 or three or four, I forget exactly when, they recapped the company. It was about to go bankrupt. They ran out of money and everything was dying in the internet, back in the early 2000’s, but Lou and Aaron said, “We’ll buy it back.” And the VC said, “Sure, if you want to buy it back.” So I think they bought it back for like a half a million dollars after they’ve raised $60 million totally recapped the company. The investors are not involved anymore.

Jay Gould (00:33:46):
So when Universal sued us they we’re like, “Oh.” And they did their research and they said it on a call with us, they’re like, “Didn’t you…” It was like, “We’re going back and forth negotiating, we’ll try to figure find a buyer and this…” And Doug comes off of mute once. He’s like, “This is Doug don’t you guys have like $60 million raised can’t we just do a settle down, what the hell’s going on here?” Here in Highland your VCs were like, “No, we recapped the company.” You could hear a pin drop for like, “Hello.” And he’s like, “Yeah, that’s unfortunate.” We’re like, “Well, yeah. But can we just work that out?” He goes, “Well, unfortunately we’re not dropping the lawsuit. You might be a casualty of war here. Sorry. I didn’t really mean to do that to a private company.” Well he’s apologetic about it. He’s like, “But unfortunately we’re not dropping the lawsuit over this.” He hit mute. We never heard his voice ever again.

Preston Pysh (00:34:25):
I’m thinking about, I’m sure you’ve war gamed like, “What could I have done different so that I come out of this with whatever amount.” Any amounts better than zero. So thinking about it, would you try to then sell it to Universal if you had to do it all over?

Jay Gould (00:34:42):
We did try to do that. So what they ended up doing, you might remember, and I can’t remember the name is this the website? Let me just look real fast. So what they ended up doing was building vivo.com. So it was a consortium of all the labels. Just like you saw Hulu. They all got together and they did Hulu. I think they did Vivo if I’m not mistaken. So they were like, “We don’t need you.” And they thought we own the content. We don’t need these guys, we have the content. I’m like, “But we have the scale dude.” You’re not going to just get 40 million people like that.

Preston Pysh (00:35:09):
You have the SEO juice. It’s already in place.

Jay Gould (00:35:12):
It was insane that they wanted to shut it down. I was like, “Why don’t you just bring it in and then we can make this go in a whole different direction? And they had no interest of even giving an offer. I will say this though-

Preston Pysh (00:35:23):
Really.

Jay Gould (00:35:24):
No, not even an offer. It was just like, “No.” They wanted precedent going back to my pre-law degree, they wanted that precedent and we didn’t want to give it to them. We ended up shutting the company down through an ABC and assignment for the benefit of creditors. We didn’t actually file bankruptcy. We liquidated and whatever was left everybody got whatever they got. And we did that because we’re like, if you’re not going to work with us, we’re not going to give you the right to just use this lawsuit and a verdict as a precedent for everybody else.

Jay Gould (00:35:49):
So we took one for the team being the whole internet. And what ended up happening was Viacom sued Google, it’s like war stores, Viacom sued Google for YouTube and Google ended up beating them. And I remember it was like maybe a couple of years after we were done and I was moved on to the next thing, and I remember reaching back out through instant messenger back then to like Aaron or Lou and I was like, “Look at this.” It was like a 10K filing. They ended up spending $100 million dollars defending it.

Preston Pysh (00:36:13):
Oh, my God.

Jay Gould (00:36:15):
$100 million. I was actually happy to see that. I was like, “We would have never been able to do that.” We were trying to go the distance but actually would just be inevitable.

Preston Pysh (00:36:22):
That’s right.

Jay Gould (00:36:23):
Inevitably we would’ve gotten shut down.

Preston Pysh (00:36:26):
Okay. So let’s transition to the company that you founded GamersMedia, which was then ultimately rebranded as Yashi. This was your really big win, right? Jay?

Jay Gould (00:36:40):
Yeah. Again, YouTube sold for $1.5 billion. We did the back of the napkin Preston and we’re like, “Well, we have this much traffic and they have that much divided. Oh my God, we’re worth a few hundred million dollars and then worth nothing.” But in between those two companies was a company called WikiYou. So on the heels of this, this was going to be shut down. A guy named Raj Kapoor, who was just a guest on my show recently, the founder of Snapfish at that time, he was at Mayfield Fund. So one of his investors was Mayfield for Snapfish. He sold Snapfish for-

Preston Pysh (00:37:10):
Reid was involved in this too, right? Reid Hoffman.

Jay Gould (00:37:13):
Correct. Which came through Raj. And this is what I found. So the first time around I have traction and I shut all the VCs and I go down with these entrepreneurs and do I go down. And it didn’t work out. And then I said, “I got an idea.” And I had this idea for a while, which was, and this is really interesting too, because there was a notebook bound from Mark Zuckerberg. I forgot what he called it.

Jay Gould (00:37:36):
One of the ideas he had was basically WikiYou. It was one of these things like we might do this and the idea was he wanted to get more adoption for the social network. In the early days, it was hard to get people to join these things. They didn’t join like they do today because there was a stigma about, it sounds like dating, this is like early 2000’s. And the idea was, if you don’t want to be on there Preston, I’ll just create your profile and then you’ll claim it. It’s like Wikipedia bid.

Jay Gould (00:38:00):
That was my idea. I had this idea. I always talked about it when I was at Bolt and then Raj Kapoor knocks on the door calls up says, “Hey, I will be in a city. You mind, if I come by the office.” He comes by the office. He says, “I’m an investor in a social network called tag Tagged.” T-A-G-G-E-D. I think it’s called MiWay now or something like that. But anyway, so he comes in, he’s like, “I’d like to merge you guys.” So he was seeing an opportunity of a distressed company, merged these guys in, bring the founders in, merged the assets and bankrupt the liabilities kind of thing. There’s a common thing that you say when the company has problems. We weren’t open to that.

Jay Gould (00:38:31):
I have happily flew out to San Francisco, met with Greg and John, his co-founder and sat down at a coffee shop. They’re real great guys and really smart guys, I think of the Harvard and I was like, “I got one question for you guys, when we merge in, if this happens, who’s the boss?”

Preston Pysh (00:38:48):
The critical question.

Jay Gould (00:38:49):
I was 26 years old. I knew Aaron cared, started running Bolt since 1996. And this is like 2006. So 10 years he put into his life into this thing. I said, “Who’s going to be the boss.” And Greg’s like, he looks over John, Aaron looks at me and I’m just like, “What are they all going to say?” And I just knew that I would never not be the boss because he is a great CEO. He was that kind of guy. And they were like, “Ah, this isn’t going to work, is it?” And he’s like, “They’re arguably the same type prior or not.” It’s just unreal. We wasted our time flying out.

Jay Gould (00:39:18):
So we come back to New York, Raj comes back the next week for another meeting and he’s like, “Do you mind if I stop by? I want to talk about the meeting.” He already heard from Greg. He’s like, “I hear it’s not going to work out.” I was like, “No, I don’t think it’s going to work out.” I was like, “We flew out to give it a shot.” The good old college dry I go but I don’t think that was going to work out egos and stuff.” And he’s like, “But you got nothing.” Aaron’s like, “Jay, tell him your idea.” I was like, “What? The Wiki thing?” And I was like, “Oh, why would I tell him that?” And he was like, “Tell me the idea. I like you guys, maybe I can invest in the next idea.” I was like, “Really?” He was new into venture capital and so he was trying to make investments, I think. And you really should invest in people, not ideas.

Preston Pysh (00:39:51):
No doubt. Yeah.

Jay Gould (00:39:53):
So we were great entrepreneurs that scaled businesses. We demonstrated that we have the ability to do that. Execution wise, he wasn’t worried about our ability to execute. There’s a little bit of light in a bottle in every idea you have not everything works. But anyway, I tell him the idea. I said, “This is my pitch. If MySpace is your autobiography, then WikiYou is your unauthorized biography.” And he was like, “Wow, I really liked that.” And then I explained how this would work. We’ll get into the details.

Jay Gould (00:40:16):
When you’re raising money by the way, I think everybody needs that. They call that a high concept pitch. You need a 10 words or less like an analogy of some sort that clicks and they’re like, “I get it.” And you want them to put the pieces together because they feel smart. Like, “Oh, I got that. And if I got it, then everybody else would get it.” And it has to be digestible and easily be repeatable to their other partners.

Jay Gould (00:40:35):
So it was easy. We said, “WikiYou is the biography of every person on the internet. Everybody creates everybody else’s biography and in a world in which everything is digital and we can keep a record of everything, why is it that my mother there’s no record of her and in 25 or 35 years or 50 years, her descendants great grandkids that they’ll never even know what she did or who she was other than oral history. I think that’s crazy. We live in a world where they have Wikipedia.” So Raj says to me, he’s like, “I like it. I want you to go meet with a guy who might know a thing or two about this.” I’m like, “All right.” He goes, “Let me set it up.”

Jay Gould (00:41:13):
So we fly back out to San Francisco and we meet with Jimmy Wells, the founder, Wikipedia and Gil Penchina, who was the CEO and the real thing was number one, “Will you invest?” And Jimmy’s like, “No, I can’t.” I was like, “Okay, are you guys going to do this, if we do it?” Because they had the scale. There’s no point in trying, if these guys are just going to copy it.

Jay Gould (00:41:33):
And he goes, “We don’t control Wikipedia. It’s like, Bitcoin is decentralized.” He’s like, “So at this point, it’s open-source, everybody else is controlling it. So the community may do that.” He’s like, “But I can tell you, that’s probably not going to happen as you probably know.” He said this to me. He goes, “Because I create a profile for Preston Pysch and I can do that because there’s notable articles about you and all this stuff. So there has to be a notable person to remain there. Or the editors will take you down. So you just can’t create profiles of people that there is no record of it’s true or not.”

Jay Gould (00:42:01):
And he’s like, “How are you guys going to manage the truth?” I was like, “We don’t know about that yet.” We never figured that part out that’s why it failed. But Raj liked it when it got blessed that it’s not going to be copied. You don’t have to worry about a threat of competition from Wikipedia. At least we didn’t think we did, it made sense to see if we can get some money, and then build it.

Jay Gould (00:42:17):
And then he’s like, I want you to meet with Josh Kopelman the founder of half.com. So meet with Josh and Josh sold half.com to eBay and I guess PayPal sold to eBay. So there’s like a fraternity of these guys. So he knew Reid and he’s like, “I like it. I want you to fly out, to meet, Reid. If you don’t mind go to the LinkedIn office. And if he invests that I’m in. Convince him, you got me.”

Jay Gould (00:42:37):
Okay, fly out there. I told him my pitch with within literally I’m not even kidding, I give that out analogy thing. And I said, “It’s a biography of every person on earth and reads like this.” “I’m in. How much?” What sort of guy. Had my laptop there and I was like, I want to open it, but I have a deck. And Aaron goes, “You don’t sell someone who sold.”

Preston Pysh (00:42:52):
Who sold. Exactly.

Jay Gould (00:42:54):
I was like, “I’m a young kid.” I was like, “Wait a second.” And then they start talking because they’ve been in the ’90s and they’re like, “Oh PayPal. I know this guy. I know that VC.” They’re doing all this crap. And I’m sitting there like this and Reid is like. He goes, “What’s wrong. Aren’t you happy? You got the investment.” And I was like, “I don’t understand how.” And Aaron was like, “Dude enough, I don’t understand. Just take the money and shut up.”

Preston Pysh (00:43:11):
Just shut up Jay.

Jay Gould (00:43:12):
I said, “No, I just want to know how you’ve been able to…” Because he was an investor in Facebook in Dig and all these big things, he had like a hundred plus investments. And I like idolized the guy. I was like, “How did you do that so quickly?” This is crazy. You’re just spraying and praying. Like what’s happening. When the YouTube guys came into my office, I knew who you guys were already because you already knew the competitors. And they asked me to invest in YouTube and I said, “Sure, I’ll invest.”

Jay Gould (00:43:37):
Why don’t you go meet with Roelof Botha over at Sequoia Capital. He used to be at PayPal. It’s this whole PayPal mafia thing you heard of.

Preston Pysh (00:43:43):
PayPal mafia. Yeah.

Jay Gould (00:43:44):
So they send the former PayPal junior level guys who were running a scaling product, called YouTube from LinkedIn over to Sequoia and they say, “Yeah, it’s interesting. We’ll make the investment.” I think they upped the valuation. And when it went back to Reid, they said, “We’re really excited.” They said, “Yes, they’ll do it.” But they want to increase the amount of capital going in but without diluting us, there’s going to retrace the valuation. And Reid was like, “Oh, okay. I don’t like that valuation. I think I’m going to pass, but don’t worry they will not invest. I’ll talk to Roelof. It’s not a big deal. You don’t need that.”

Jay Gould (00:44:13):
He goes, “I ain’t making that mistake twice.” Great entrepreneurs. There was actually a third co-founder people will talk about Jawed Karim. So there was the three co-founders of YouTube. He liked them. He liked the market. He liked that it was starting to scale a little bit but he didn’t like the evaluation-

Preston Pysh (00:44:26):
Didn’t like the valuation, isn’t that crazy?

Jay Gould (00:44:29):
It’s so dumb. He goes in the end. What matters in venture is getting it right? Because if it’s right, it’s multi-billions and the only reason this didn’t remain private is because of all the labels. That’s why they had to sell too. Same issue that I had. You had to get out, or you had to deal with lawsuits because once you sell it to the buyer, Google had to deal with it anyway. They just couldn’t sustain as a private company at that plus all the server bills and everything. It’s just an unprofitable venture.

Jay Gould (00:44:55):
So anyway, he passed based on valuation. He’s like, “I’m not doing that with you guys.” So we raised the money to half a million dollars roughly and never scaled it. It just didn’t work out. We were cross-promoting it off a bolt trying to migrate users over. And it was getting there. We had like tens of thousands, maybe hundreds of thousand. But it was thousands of people, not millions.

Jay Gould (00:45:11):
And it just didn’t get there in time. And I went back and we raised the money in like late ’06 going into ’07. By the summer of ’07, the iPhone comes out and we already built a product and we’re live. And we had a tech crunch article and this and that. And they were comparing us to another former PayPal mafia guy who created geni. com, G-E-N-I, genealogy kind of thing. And I think it was David Sacks when I was taken. So we were competing with his site in the article, but we really didn’t think of ourselves as competing with them. But that’s how Michael Erickson wrote the article. We’re like, because it’s like not good with other investors and stuff.

Jay Gould (00:45:45):
The long and the short of the story was we didn’t get the scale. I went back to them and I said, “I think we have to reshape this product to make it an app.” And at the same time that summer Facebook launched the apps that they called them on Facebook. So I was like, we need to make it so that it’s a Facebook app and an iPhone app and on the Facebook thing. And I think anybody can do this by the way. If you are a programmer out there I think you should create WikiYou, I think I would invest actually, if they did it the right way because I think it’s a great idea and it saw them execute executed properly.

Jay Gould (00:46:11):
But the way to solve the issue that we had was we couldn’t solve for duplicate profiles. I can create a hundred famous people like you, by the way and Zay. I was telling you I just interviewed Zay the other day, Isaiah Jackson. A lot of you guys that have like hundreds of thousand followers, you end up having all these fake accounts, actually Jason Williams does too. I was talking to him about this. He’s like, “They won’t verify me on Twitter.” He’s like, “It’s so annoying.”

Preston Pysh (00:46:33):
It’s crazy.

Jay Gould (00:46:34):
I always mess with him because I have been verified. I’m like, “You’re just not famous enough.”

Preston Pysh (00:46:40):
You would think the AI would be able to just pick up like… Yeah, it’s kind of crazy to me.

Jay Gould (00:46:46):
I was thinking the problem we had was duplication and then the lying. So I create a hundred profiles of Preston and we don’t know what’s real or not. I have a solution for that. It’s called Facebook Connect. I don’t know they call it now. But when you log in with your Facebook so we could set it up that a profile goes public when you create your own profile for it to be edited and created and you do it through Facebook connect.

Jay Gould (00:47:07):
So essentially once you have the full profile up there, it can be edited by people, either that you approve, people that are connected to you or something like that, that you follow, something like that. So you have your family and friends creating your profile for you so that your biography lives on for your descendants or whoever else for the rest of them.

Jay Gould (00:47:23):
But we didn’t get there. And I went back to reading them and I was like, it told them then 2007 Preston, I was like, “This is how we got to fix it. I see it now. I couldn’t see it before the iPhone and the Facebook apps and the connect and all that was there.” I was like, “I need a little bit more money because we’re running out, we’re running low. We had like 50 grand left.” And we were trying to raise money as it was.

Jay Gould (00:47:41):
And we went to the Sandhill road thing. We met with Sequoia and Lightspeed Ventures and Kleiner, everybody. And Jeremy Liew at Lightspeed was a friend of mine. When we finally got to his office, he’s like, “It’s great to see you guys here.” We walk into the office, sit down, he goes, “You’re not getting any money.” I was like, “Why?” He’s like, “Just so you know, I’ve gotten 10 phone calls over the last day that you’re meeting with everybody, this is how it works.” I was like, “What are you mean?” He goes, “All the VCs talk like. Did you guys meet with WikiYou yet?” I was like, “No.” Well Ried’s introducing us. They introduced, yeah. I can meet with them tomorrow. It’s like such an insider thing. A lot of entrepreneurs don’t know this, that aren’t in the circle.

Jay Gould (00:48:14):
They all are friends. All these VCs, they co-invest and syndicate. And he told me straight up. He’s like, I’m just going to be honest with you. “You’re not getting any money. You should stop there as yourselves going around the street because there ain’t going to happen.”

Jay Gould (00:48:25):
I go, “Why is it happening? I don’t understand.” And he told me straight. He goes, “I love the strategy, but you have an adverse selection problem here. Why isn’t Regis answering it up right now? The guy’s a billionaire.” If it’s that good of an idea, it’s almost like they know something we don’t know. And I was like, “There’s nothing that they know. He’s maintaining his pro-rata rights. They go, yeah. That’s not enough for us. What they got for the last percentage and the amount they put in, they should just do the whole next round. The fact that they’re not, I’d be a syndicate on that round, but they got to lead it because if you convince them to lead, it I’m in. But if you can’t, you’re not getting money from anybody.

Jay Gould (00:48:56):
So I’m back and talk to them. And they were like, I talked to Josh and Josh says I’m for first round capital. He’s like, I don’t really know if that’ll work or not. But the way his mindset was, at least then he’s like, fail fast. You tried it, you iterated, you build it. You had a couple chains and let’s just move on. I was like, “really?” So I had two failures back to back. So bolt goes under sued, bankrupt. And then I tried WikiYou and within like eight months I run out of money. I’m a loser. But I had this idea.

Preston Pysh (00:49:23):
The stress though.

Jay Gould (00:49:24):
I know, right.

Preston Pysh (00:49:25):
For people that have never tried entrepreneurship and they’ve always just worked for a company. You just can’t imagine the stresses that’s surrounding all this. it’s nuts.

Jay Gould (00:49:34):
It is crazy.

Preston Pysh (00:49:35):
You’re there building late nights, just-

Jay Gould (00:49:39):
Seven days a week?

Preston Pysh (00:49:40):
Yeah. This new hardware on a phone came out and it just completely disrupted our whole plan. My Lord stressful.

Jay Gould (00:49:49):
It was stressful, but I was young and I didn’t have kids. I had a mortgage and all that kind of stuff, like I said earlier, I didn’t care if I went to zero, I was never afraid of losing all my money. That wasn’t a thing to me as well. No, they just keep printing more of it. So I always thought that before I even thought about inflation, I was like, they make more money all the time. I could just get more of it. It’s not like it’s a zero sum. It’s not like the money goes here and I can’t get it there. There’s going to be more to make. There’s always opportunities. You can create new things.

Jay Gould (00:50:16):
I was never afraid that this is a one-shot deal in anything I’ve ever done. That’s just the way my mindset was. And I don’t know where that comes from, but I was never afraid of that. I’m still not afraid if I lost it all. I know I can make money back. I’m not worried about that. Anyway, long story short that failed. And I go to my girlfriend who I met at Bolt. She’s now my wife with four kids. And I said to Kate, she was our number one salesperson at Bolt and nobody knew we were dating for a while when I was there just trying to be as professional as I can in front of everyone. But this is all in winding the businesses getting shut down the first one and the next one’s not working out, we’re not getting any funding. And I said, “I got an idea, but I mean the track record doesn’t look so good right now, babe. But you got to trust me on this one.”

Jay Gould (00:50:57):
She was like, what’s the idea I go, “So I popularized video sharing and it’s happening on YouTube, but it’s not going to be the only destination for video. You have to remember back in the early ‘2000s. If you went to cnn.com or fox.com, they had subscriptions to watch the videos.” I don’t know if you remember that?

Preston Pysh (00:51:10):
Yeah.

Jay Gould (00:51:11):
It’s crazy. I’m going to pay you to watch the video content because they didn’t have a lot of video advertising to support it. I said, “Why don’t we build a video advertising network so that they can be supported and there’s no more subscriptions. Doesn’t that make sense?” And she’s like, “Okay.” And she was doing like $6 million in sales at Bolt.

Jay Gould (00:51:25):
I was like, “Let’s go. Let’s rock.” So I went to her father, my now father-in-law and I said, “Will you meet me in Soho for lunch.” So we go into the city, I sit down with him. I said, “I would like to ask for your hand in business.” And he’s like, “What’s this guy about to say? I’ve only been dating his daughter for like eight months or so.” And he’s like, “In business? What are you talking about?” And Kate was here at the table and I said, “I want to go in business with your daughter.” And I was like, “And I don’t want to do that without the consent. I don’t need your consent obviously, but we’re dating. I’m not close with the mom and dad and this and that. And the aunts and uncles that go to Christmas, all this stuff.” And I was like, “Hey, I’ve had two failures back to back. I can’t guarantee a success. I will guarantee I’ll give-

Jay Gould (00:52:00):
I’ve had two failures back to back. I can’t guarantee a success. I will guarantee you I’ll give everything I got. That’s how I am. And I’ll work as hard as I can. I will work 24 hours a day. I will tell you there’s going to be good times, there’s going to be a lot of bad, rough times. And I was saying this to her as much as I was saying to him that day. I said, “So if you think this is…” Because he was a teacher and his and his wife was a teacher, and I think that in their mind, they’re like go to work and put in your… They put in 38 years and have a pension from their time.

Preston Pysh (00:52:27):
Very very different, yeah.

Jay Gould (00:52:27):
Totally different mindset. I think he wanted his daughter to be teachers. Kate was an English… My wife was an English major when she went to Boston College. So I think that was the plan, at least. Obviously she has a different outcome than she would have been a teacher, because she did this. But I said, the opportunity… It’s an asymmetric risk thing. I was like, “The opportunity on the upside is worth what it is on a downside. Worst case scenario, Bob, is it doesn’t work out. And we just get jobs.” That would have never happened for me, but for her, she’d maybe just get another shot. So he leans over and he’s like… No eye contact to me at this point. He looks at his daughter and he’s like, “So you know Julia,” whoever her name was, “that you went to high school with?And she works at Google. I can reach out to her. I still keep in touch. They’re always hiring.”

Jay Gould (00:53:11):
And I was like, “Hello, what are we talking about?” I was like, “Bob, are you saying you don’t want to do it?” He goes, “It’s up to her.” And I was like, “Okay. You guys talk about this. I know I’m doing this. It’s either going to be with one of the guys, [inaudible 00:53:24] or Lou, or it’s going to be with you. I’d rather it be with you.” Because I knew I wanted to marry her. So I was like… Either way we’re going to be together. It’s not like this girl and you’d break up in the middle of it. I knew I was going to marry her. I just didn’t want to propose and get married in the middle of all this happening. Like you said, it was stressful time.

Jay Gould (00:53:39):
So we did, we went down that path. We built it. And my way to get into what I believe that it would grow into, Preston, which it did. I didn’t know where it would end, because that’s the iteration of adapting and evolving in technology. But I knew that we needed to start in a niche market that we can own. So we at Bolt had that social network slash video sharing site, but we also had a good sales team there. So we repped miniclip.com, if you ever heard of that gaming site, the largest gaming site in the world. We were the exclusive Salesforce for them at Bolt for US sales. We also repped Runescape and a bunch of other large gaming sites. So I said, “Well this is getting shut down.” Bolt, right, it’s going away, and WikiYou’s gone. That’s not going to work out.

Jay Gould (00:54:23):
Let’s just reach out to all the gaming sites and sign contracts with these guys, rep the inventory, and then we’re basically an agency. This is not that complicated. We have the relationships, we know all the advertisers, we just got to build a business around it. We did that initially, very services agency like in the beginning. We would do homepage takeover banners and things like… They call them advert games where you make a game. We did one called the Oscar Meyer Deli Creations, which is a thing they sell in the store. And it was like the hands putting sandwiches together as you’re playing. You grab the bread and you get this… And it gets faster and faster round by round. And it was all branded Oscar-Meyer. So we did a lot of that kind of stuff. Kraft, Disney, Underoos, the underwear. We did all these games and I was like, “This is terrible, what we’re doing.”

Jay Gould (00:55:04):
It was great. We’re making a lot of money. It was very profitable. Day one, we were profitable the whole time around that company, and the revenues were growing really fast. I thought year one we’d do like three million in sales based off of what we did previously and the relationships, but what I didn’t see happening… We started the company in July, I think it was August or July of 2007. By December, we had no sales. I was like, “Ooh, this isn’t working out.” We finally get a sale in January, 2008. And in that first year of 2008, we only did $750,000 in sales. So it was basically me, Kate, and a couple of contractors remote, and I was like, “This isn’t working where I thought it was going to go, but it’s an income and I’m making a lot of money and that’s cool, but I don’t see…” Hold on, I got a thing here. “I don’t see how this is going to scale the way we’re doing it.”

Jay Gould (00:55:47):
I was like, “We have to get some more automation.” And this is before RTB, real-time bidding and all this kind of stuff right. Before you saw the programmatic buying. But I knew that that’s where it was going to lead to. And about a year or so later, PubMatic and Rubicon Project came out and some of these platforms and we started to get connected with these platforms, we started to build technology with the profits, we hired programmers and we built out a real platform. And then we changed the names of Yashi because it kind of had like a gamey Asian… It’s an Asian name in India, a female name, and I was like, it’s got that Asian gamey ring to it. Almost sounds like Yoshi from the video game Mario and stuff.

Jay Gould (00:56:19):
So the gaming community accepted the name, and then it was kind of this just ambiguous name. It didn’t mean anything. It was like Yahoo. And what people didn’t realize is that Yashi was owned by Yahoo at one time. 1995 they owned the domain name. So who knows. Might’ve been Yashi. So we started that business, and in 2008 we did like 750,000 in revenue. By the time we sold it, we were doing like 36 million of revenue. So we just kept scaling and scaling and scaling, and it starts to scale a little bit faster as we started to kind of automate things a little bit. So I saw that early on, I was like, “This video thing. I don’t think it’s going anywhere.” And a lot of websites and blogs and everything would want to monetize this, so we just got to lock them up, started in gaming, we moved outside of gaming, and we went from services to more automation by the time we sold it.

Preston Pysh (00:57:02):
All right, so talk to us about the transition to you becoming a Bitcoiner. What was the timeframe that this started coming on your radar? How did it come on your radar? Take us to your, I guess, core story.

Jay Gould (00:57:16):
The first time I heard of… It’s actually funny. I interviewed Howard Lindzen, the first investor in Robinhood, put a million in, they went IPO today for a hundred million. I retweeted my interview with him today. Good for him, bro. It’s unbelievable. He learned about Bitcoin… And on an interview, I asked him and it reminded him of my story because it’s so related, it’s crazy. I said, “How did you learn about Bitcoin?” No, no, no, this is the question I asked him. I said, “What percentage of your net worth is in Bitcoin today?” First I said, “Do you own it?” He said yes. “Which percentage of net worth?” He says, “Too much.”

Jay Gould (00:57:47):
He doesn’t want to tell me. I was like, “Okay, that’s fine. I got you.” I said, “Is it because you just haven’t sold it and it keeps growing?” He goes, “Yeah, basically.” He’s like, “I bought a small amount a while ago and it’s becoming a larger…” He’s like, “I probably should sell some of it.” I was like, “Nah, just leave it alone. You did great.” I go, “But what’s your favorite book on Bitcoin? The Bitcoin Standard, Hard Money You Can’t Fuck With? What do you like?” “I never read a book on Bitcoin.” I was like, “What do you mean you never read a book? What do you know about Bitcoin? Tell me what do you love? What are your attributes? “He goes, “Fred Wilson told me to buy it, so I bought it.”

Jay Gould (00:58:16):
I swear to God. I was like, how did I learn about Bitcoin? Fred Wilson. Not personally. I’ve read his blog of avc.com. It’s the first time I ever heard about Bitcoin was from avc.com. Fred Wilson’s blog. He was talking about it maybe in 2012, probably the first time I really read about it. But I was very skeptical because, again, I’m very skeptical of venture capitalists. So I was like, “Well, why are they talking about this? What is the nefarious angle that they have? Are they pumping and dumping? I can’t imagine it’s the Bitcoin itself that they’re pumping and dumping. They want Bitcoin to grow because how are they going to make money? They’re not going to just, as a venture capitalist, just buy Bitcoin and hold it for their [crosstalk 00:58:53].”

Preston Pysh (00:58:53):
Clearly it’s not own the Bitcoin. It has to be some tangential thing that’s…

Jay Gould (00:58:59):
It’s like BlockFi. It’s all this other stuff. And that didn’t exist then, but I was like, “There’s got to be an ecosystem that they’re hoping develops, and they’re going to invest in the ecosystem around this coin.” So I’m going to buy the coin, like the sucker, and they’re going to invest in the company and they call the money. I’m not buying this coin so that you could go and create your company’s pump it and then dump it into an IPO or an exit. I was like, “That doesn’t benefit me.”

Preston Pysh (00:59:17):
Jay, you’re seeing that right now. You’re seeing this right now in 2021. You’re seeing people take that same mindset. They’re like, “It just can’t be that easy. There’s no way I can just buy Bitcoin. [crosstalk 00:59:29].”

Jay Gould (00:59:28):
It’s always going to happen. It’s going to get worse as the price keeps going high too. I mean, I’m saying this in 2012, look at those prices. And at that time there was two things that prevented me from wanting to get in. Number one thing was I thought I’m not in the inside club of what’s really going on here. So that’s how I felt.

Preston Pysh (00:59:44):
Yeah, I got to figure it out.

Jay Gould (00:59:46):
I don’t get it. I just didn’t get it. For people in 2021, it’s easier to get, because you have places like Clubhouse to learn, you have the blogs, you have Twitter, you have Max Kaiser, you have Preston, you have all these people teaching you about Bitcoin. Nobody was teaching anybody about Bitcoin in 2012. It was this magic internet money. And it was like this nefarious thing that it felt like. And not only that, the market cap was so small. It just didn’t seem stable. [crosstalk 01:00:12] price per. I don’t care about price per because I understand stock, so that doesn’t matter. So it’s all about what it divides into and stuff. The market cap was too small. I was like, “This is nothing. This could go away.” Now I say that to people like Bitcoin Dean, and he’s like, “No, it can’t.” I’m like, “No, it can’t now. In 2012 it could have, so don’t tell me it can’t.” Because it didn’t, he’s right. So I’ll give him that. But I just didn’t believe it. So I was an idiot. I just didn’t say it.

Jay Gould (01:00:36):
So then in 2013, running gamers media Yashi, we had a customer, this guy, Francisco, he kept asking me every month, “Will you accept Bitcoin for payment?” I’m like, “I don’t know about that. Let me look into it.” So I start looking around and I’m like, “How do you even sell it?” It didn’t make any sense. How’s this guy even getting this Bitcoin. Nothing registered. After like a month or so, I figured out what he was doing. He was buying traffic from us. We were driving visitors to his site through his advertising that he’s buying from us, to push to a site, and then he was working with other ad networks and he was selling ads. So he’s arbitraging, and I’m like, “Why is he insisting to want to pay me in Bitcoin.” I never accepted the Bitcoin, but he kept asking.

Jay Gould (01:01:11):
He was mining it, and back then you can mine GPU, so he was making a lot of money, I think. So he’s getting traffic for free, essentially, electricity costs, which was low back then, and driving the traffic to him, and then he… In the end he’s… I mean, if I feel bad about not taking it, he’s got to feel like an idiot that he was spending it as fast as he made it.

Preston Pysh (01:01:32):
Do you know that he was mining it back then? Are you just assuming that’s what…

Jay Gould (01:01:36):
Yes.

Preston Pysh (01:01:37):
Did he talk to you about that way back then?

Jay Gould (01:01:40):
Yeah. Funny story. I went to his office once after the first payment didn’t come in and he’s like, “No, no.” He was Italian. He’s like, “You just take the payment. I give you a Bitcoin. I transfer it.” I go, “No, no, no, no, no, no. You have to send me a…” No, no, no. That’s okay, you take it.” He’s trying to convince me by just saying, “Yes, I’ll take Bitcoin.” I was like, “I’m going to come up to your office today.” I’m not that far from New York. I go up there with my wife, let’s go. We’re going to go to the city, we’re going eat lunch, and then we’re going to go hang out with this guy and he’s going to wire me the money. You see me. I’m not a small guy. He’s going to a me the fucking money.

Jay Gould (01:02:05):
So I go in his office, this is no joke, and he was sitting in his office and on the back wall, I didn’t notice, there was all this stuff on his wall, but I walk in and there was like a hundred plus people. It was a content business. It was like a news website, almost. I go into the office, I was like “Where’s Francisco?” “Oh, he’s in the back. I’ll bring you.” I go, “No, I’ll go.” I walked out so pissed. I was like, “This guy owes me $50,000. I want my money.” So I go in his office and I was like, “Hey.” He goes, “Hey Jay, how you doing?” I go, “I’m doing great. Where’s the money?” He goes, “I give you the Bitcoin.” I go, “There’s no Bitcoin. I want you to wire me the money right now.” “Not so easy. I have to sell it first.”

Jay Gould (01:02:35):
I go, “Okay.” I sat down, I go. “Sell it.” He goes, “No, no, it doesn’t work like that.” I go, “We’re going to go to lunch. When I come back, I want the money.” So I leave, we go to lunch, come back an hour or so later, he’s like, “I got about a little bit of it, but not all of it.” I go, “What are you talking about?” He go, “It’s not so easy to sell.” I go, “You want me to take this shit and you can’t sell it that fast? No way. You wire this when I go home.” And I’m standing at his desk and I’m trying to be like a tough guy, and my wife’s going like this. She’s like… And she’s doing this. And I’m like… Her eyes are moving around, looking at the… And I look at the back wall and he’s talking and he’s all happy. He’s leaving his [inaudible 01:03:05], “It’s no big deal. I sell all the Bitcoin, I give you the money. Don’t worry about it. You calm down.”

Jay Gould (01:03:09):
And I’m like, “What’s she looking at?” And on his wall are these plaques and trophies for Taekwondo. And I’m thinking like, “You wire me the damn money, bro.” He’s all relaxed, Preston, because he’s thinking, “I’ll whoop this dude’s ass.”

Preston Pysh (01:03:21):
Oh my Lord.

Jay Gould (01:03:22):
And I’m like, “You wire the money now,” and he’s just looking at me like, “Get out.” But he did. And every month he would convert his Bitcoin to Fiat and he would send me the money.

Preston Pysh (01:03:31):
Send you the fiat.

Jay Gould (01:03:32):
Man, do I regret that, because I probably collected by 250 to $350,000 from him that year, and probably 60% of that was profitable that could have just remained in Bitcoin on the treasury. I would have never done it. I have no regrets, but that’s my missing a Bitcoin story. When I got, it was a couple of years later. So running Yashi for a while, Bitcoin’s definitely coming on the radar more and more. People are asking me, I even have an email from a friend that worked for me and he said, “What do you think of this Bitcoin?” And I had those stories, and I’m like, “It’s a scam.” I have to see, I took a screenshot of it on my desktop. It’s a scam, from me to him. I’m like, “Oh my God, I’m such an idiot.” And I don’t think it was actually a scam. I was just like, it’s speculative.

Preston Pysh (01:04:10):
It was weird. I could only imagine based on this story you just said, how can you take that seriously?

Jay Gould (01:04:17):
The thing is, we know, like Kaiser and all these guys, they did. [crosstalk 01:04:20]. Kudos to them, man. I didn’t, and I don’t know how they saw that because they don’t… When you look at some of these guys… I don’t know Max’s background necessarily, but a lot of the others, what else have they seen? Nothing, from what I can see. They got this, but what else did they invent or create? They saw it so early. My hat is off to all these guys. I have all the respect in the world for anybody that saw it way earlier than me, because I’ve seen things early, like social network, online video sharing, ad networks, a lot of the investments that I’ve done, angeling and stuff. I totally missed this one in the beginning. And I was like… When I finally clicked, it was like around 2015.

Preston Pysh (01:04:58):
Five years from now, ten years from now, people are going to look back at you telling people you missed it in 2021, and it’s going to be like, “This guy didn’t miss nothing.”

Jay Gould (01:05:07):
My first purchase was 2016. I sold the company in 2015, January. Now I’m just sitting around just chilling. I was supposed to work for Nexstar for two years. Six months in… From the buyer who bought Yashi, I call up the CEO and I was like, “I want to quit.” And the guy’s like… It’s Perry Sook, the CEO. He’s like, “What are you talking about? You can’t quit.” I was like, “Yeah, I can. I don’t want to do this anymore.” “You told me you would work for two years. I don’t know anything about Yashi.” I go, “But my guys, they know it. No, one’s going to screw you. Everyone’s going to stay. I could be an advisor. Whatever you want. But I don’t want to do this anymore?” He goes, “Why?” “Because you’ve taken over two of my conference rooms with auditors every day. I’ve got people bringing me and my executives in nonstop asking me questions about revenue recognition. I can’t do this.”

Jay Gould (01:05:49):
He goes, “But you have to go.” “No, I don’t. I sold. I’m done. This income that you’re giving me, which was a nice income, I don’t need it. I don’t care. So I’m out.” So he’s like, “All right, I’m going to come to the office tomorrow.” I was like, “Tomorrow?” He’s in Texas. He’s like, “I’m jumping on the private jet. I’m there tomorrow.” I was like, “Okay.” So comes there. We go to a diner. We hang out. And he’s like, “You can’t quit, dude.” I was like, “What do you mean I can’t quit? Are you going to sue me?” “I’m not going to Sue you. I’m just telling you from an integrity perspective, you said, ‘I’ll give you two years.'” I was like, “Oh God.” And I have integrity. I was like, “You’re right. I’m sorry.” I go, “I just don’t want to deal with this. Can I step down?” He’s smart. That’s why he’s a CEO of a $5 billion company, I’m not.

Jay Gould (01:06:24):
I was like, “Can I just step down and make my number two,” which was this guy Scott Offman, he was like the 70th employee at Yahoo, so he’s got a lot of experience. I go, “Just make him the CEO or president or whatever and just make me an advisor.” He goes, “Listen, if you stay home,” and I don’t live that far from where the office was. I live on the water over here in [crosstalk 01:06:45].

Preston Pysh (01:06:45):
You’re going to lose your mind.

Jay Gould (01:06:46):
Yeah, he is. And I did. He goes, “If you home, you can go any office whenever you want. But I’ll give you the opportunity to just kind of just chill at the house.” You want to talk about petty. He’s like, “But I got to cut your salary.” And I was like, “I don’t care, dude. You don’t even got to pay me.” He goes, “No, you have to be on payroll because I need the NDAs in place and the non-competes and all this… Non-disparagement.” All this stuff that we sign. He’s like, “That’s all got to remain in place.” I go, “Dude, whatever you need to do.” Six months after that, they called me up, they’re like, “Would you resign?” And I was like, “Why am I residing now?” And they were like, “Well, we’re merging you with media general.” The two major [crosstalk 01:07:23].

Jay Gould (01:07:24):
“And they’re going to be like, ‘Who are these guys? You’re just staying home on payroll and they don’t do anything.’ Unless you want to start coming to the office.” I go, “No, I’m good. I’m happy to quit. It’s what I wanted to do about a year ago.” So long story short with that is after I quit, I had a lot of time on my hands, hanging out with the kids, playing with toys all day, and my wife’s like, “You need to do something.” I was angel investing, all that kind of stuff. Bitcoin keeps coming up on the radar and I’m like, “Man, did I miss this go?” I’m watching the price movement. And I was like, “I got to get it.” So I make my first purchase, 2016 start buying in 2017, 18, and so on.

Preston Pysh (01:07:55):
What was your narrative for owning it? Like you were watching the network grow or what?

Jay Gould (01:08:00):
I was watching the price action and the market cap. I know this sounds so stupid.

Preston Pysh (01:08:05):
It doesn’t sound stupid at all. I think for most people, that’s the thing was they hear about it two or three years ago from some crazy friend or some person who just wouldn’t shut up about it. They know what the price was when that person was there talking about it, and then they reassess three or four years later or like [crosstalk 01:08:26].

Jay Gould (01:08:25):
I’ve become pretty good friends with [inaudible 01:08:27], and he tells me, he’s like, “It takes three touches,” in his opinion not everybody’s the same. like that third touch is when you’re like, “What am I doing? I got to go in.” The first touch, I forget what the exact… I wish he was here, he could say… But the first touch it’s like, “This is a scam.” The second touch, it’s like, “I missed it.” And the third touch is like, “I better get in before I really miss.” It’s something along those lines. And he’s right. The first time I saw it, I thought, “It’s highly speculative. It’s not going anywhere. I could lose all my money on this.” The second touch I was angry about it. And then the third touch I was like, “I can’t be an idiot here. I got to do this.” I didn’t put a lot in in 2016, but I put some in, I put a little bit more in, and as everybody will say, I should have put more in earlier. And what happens is every time I buy, I buy more and more and more as it goes up in price. And I found, because I had angel investors in Yashi that were Wall Street executives, hedge fund guys, this is how they buy in the stock market. A lot of people don’t realize this, particularly in Bitcoin, because now the new money coming in is a lot institutional money in Bitcoin, and I kind of have an idea of the way these guys think. They buy on momentum. So where we’ve been at for the last few months, it’s sideways and it will remain this way until the catalyst goes one way or the other.

Jay Gould (01:09:32):
They’re either going to short pitch out to the drop where they’re going to go long as it starts to go up, because nobody wants to miss the momentum. That’s just the way it works in Wall Street. And that was kind of the way I started to think about it. I was like, “I got to get into this.” I’m not worried about it dropping because it wasn’t that low to begin with, and I definitely saw that this has the opportunity to scale in terms of network externalities, which most my businesses were based off of. I got that. What I didn’t really understand until probably in the last six months becoming friends with [inaudible 01:09:54], I kept thinking of it as a network effect business like social networks, and [inaudible 01:09:58]’s like “No, no, no, no, no. This is a monetary network, not a social network. We could have 500 people in this thing and it could be worth $10 trillion because of all the billionaires just put their money in. It goes up.”

Jay Gould (01:10:08):
And I was like, “I thought about that, but that seems pretty unstable if it’s a small number of people, concentration risk.” But he is right. It is a monetary network, it’s not a social network, so when people say there’s only a hundred some million people that own it, that doesn’t matter, what matters is the substance of the people that own it and the dollars they bring it to the table. Because every dollar is a participant, not the people.

Preston Pysh (01:10:25):
Yeah, and I think he’s using a more extreme example in what he’s saying, but I agree with him 100% in that people that want to deal in exchange of value in a unit that can’t be the base, as that trust in that system, and that it’s unmanipulatable, moving forward, you’re just going to have more people that want to participate in a network like that, especially if the underlying value keeps appreciating because more and more participants want to use it. So yeah, I’m with him.

Jay Gould (01:10:56):
What I didn’t understand earlier on on Bitcoin, was the stuff that’s the most important stuff. When I started the [crosstalk 01:11:03] crazy I was buying and I didn’t fully understand. I think most people do that. They buy when they don’t fully understand, and they buy out of FOMO and all this other stuff. And then when you own something, that’s when you really start to do your research on anything, it seems, at least for me. I’ve researched enough before I buy something, but once I’m in it, I’m really researching as my money is in it now. So now I have risk. There’s risk capital involved. And what I didn’t understand early on about Bitcoin was really that it is the hardest money. That part totally escaped me at the beginning. I just saw it as if you were buying a stock. It sounds so silly, but that’s kind of how I thought of it. I was like, “This is an asset class that’s taken off.”

Jay Gould (01:11:38):
But when people talk about the shitcoin, which I never got into, the only thing I ever bought was Ethereum, because it was a real close… Not close, but first as anything else, it was a close competitor. And I was like, “Well, it’s not so clear to me what will end up winning,” and the Ethereum argument made a lot of sense to me because whether you believe in the defi movement or not, there is an ecosystem built on top of Ethereum is my thinking at the time. What I realized is that it’s not truly decentralized, and that part escaped me in the earlier days. I sold all my Ethereum.

Jay Gould (01:12:08):
I had Ethereum. It was my second… I have probably 20% of Ethereum in terms of the dollars invested, and 80% in Bitcoin. It’s 100% Bitcoin now. I’ve never bought any other of these shitcoins. I just thought, again, just like the VCs calling me, obviously I don’t know enough about what’s going on. What I realize now, it took me years to figure out, last year or so, is it’s the presale. The VCs and all their inside buddies are getting these things at under a penny and then they bring it to an ICO or it goes those public essentially, and everybody else, they’re dumping it on them for like 3, 4, 5 cents, or 10 cents.

Preston Pysh (01:12:40):
After they market the living hell out of it.

Jay Gould (01:12:42):
That’s exactly right. And it’s like their coin does this and that. I’ve learned this through the guys on Clubhouse, actually, the narrative, at least against it, which totally makes sense. They’re creating a marketing scheme of some sort to get you to buy in around some technology. But what they’re saying is that it’s based off a blockchain, but it’s really just a database, because it is mostly centralized, all these companies.

Preston Pysh (01:13:05):
The thing I ask people when they talk about shitcoin whatever is just what application that is currently exist on the internet is this token or protocol going to try to replicate, but on the protocol layer where it has a need for a native token? So what is that application that it’s currently replacing? And anytime I ask that, people just, they look at me and they’re glazed [crosstalk 01:13:31].

Jay Gould (01:13:31):
They don’t know what you’re talking about.

Preston Pysh (01:13:32):
“What are you even talking about?” So let’s say Twitter wanted to tokenize a coin, and for anybody that wants to advertise on their platform, they’d have to buy the Twitter coin in order to do that. And I think that in the end, that’s going to lose, even if a large platform that already has a massive user base tries to migrate and port all their users over to this protocol that would be doing this stuff. I think it’s going to lose in the long run because I think there’s going to be such a massive network effect for Bitcoin in the long run that they’re not going to be able to compete.

Jay Gould (01:14:06):
The other day Amazon… We’re digressing, but I’m going to have to do it.. But Amazon said, “We’re not going to accept Bitcoin payments.” And then the fear that I was hearing on Clubhouse… I love clubhouse for that reason, you kind of hear what people are thinking. And they were like, “Well, they’re going to create their own token.” These are people come up from the audience, and I’m just like, “But it’s different than having credits on these websites been doing this for years.” You buy credits and then you use your credits for, like music sites and all kinds of… So if they create a coin at Amazon, it’s not transferable necessarily outside of their ecosystem, and even if it does become transferable outside the ecosystem with a wallet and stuff, it has to get adopted, and even then it’s-

Preston Pysh (01:14:40):
It’s centralized. Bingo.

Jay Gould (01:14:41):
It’s centralized. At the end of it all it always goes back to it’s not decentralized. And that’s the key that escapes a lot of people, I think.

Preston Pysh (01:14:50):
I guess the whole reason I brought that idea up, and I don’t think that it would work long longterm for scaling and centralization purposes, but the reason I bring that up is that’s the question to ask. So what application, because you’d call it Amazon, Twitter, whatever, that’s the application, what application is this shitcoin replacing that would then become a protocol that requires a native token, and when you ask that question, it’s just like, you can’t answer it. It’s just crickets.

Jay Gould (01:15:18):
It doesn’t exist.

Preston Pysh (01:15:20):
Look how smart Jack is. He’s trying to incorporate Bitcoin SATs into Twitter. I don’t know what the timeline is for that, but he knows that that’s where all roads lead and he’s just cutting to the chase. He’s not trying to tokenize anything.

Jay Gould (01:15:36):
And I know we’re about to get into a conversation we probably shouldn’t, but the other day when Kathy, Elon, and Jack were talking, it blows my mind that Elon is still promoting and saying he owns… Even if he owns Doge-

Preston Pysh (01:15:50):
It’s just crazy.

Jay Gould (01:15:52):
This is the thing that I don’t understand. This is the part that I can’t understand.

Preston Pysh (01:15:55):
This is how I rationalize it, is I think he just wants to see something weird and something a nonstandard that’s goofy and kind of thumbing his nose at the system and the status quo. I think he wants to just see… He would find it really funny if Dogecoin became like a [inaudible 01:16:19], because of that alone.

Jay Gould (01:16:21):
I know.

Preston Pysh (01:16:22):
It’s nuts.

Jay Gould (01:16:23):
Well, he’s definitely weird. I mean, I’m weird too. But the weird thing, and this is where he’s weirder than me. The weird thing is if you look at all of these other influential people that have come before him and before us. Bill Gates, Steve Jobs, just think of these titans, who is ever went out publicly and said, “I’m really invested in this highly speculative thing.” They probably have been invested in highly speculative things, but they felt a personal responsibility to the public to not tell people that they’re invested in highly speculative things because they’ll copy them thinking, “Well, he’s smarter than me.” And this is where Elon, if he’s listening to this podcast, can’t imagine, if the clip ever gets to him, you’re going to wreck people if this doesn’t work out and you should feel some responsibility for that.

Preston Pysh (01:17:01):
Probably already has.

Jay Gould (01:17:02):
I’m sure he has. I’m sure. I think I almost feel like he’s doubling down because it was a joke, and now he’s trying to act like it wasn’t a joke for maybe the CFTC or something. I don’t know.

Preston Pysh (01:17:13):
He has such a massive platform that could be used for good in the impact, in the education.

Jay Gould (01:17:19):
I think it’s frustrating Jack.

Preston Pysh (01:17:20):
And it’s just kind of like, “Hey dude, you got to have a little bit of like responsibility here or feel a little bit of an obligation to all these people.” I mean, dude, his account is massive.

Jay Gould (01:17:33):
Look, I got a few rules that I live by. Really simple ones. Integrity is important to me. The most important thing. The most important thing. Integrity, empathy for others. I have a relentless behavior that I… That’s why I was able to do what I did because I worked nonstop 10, 15 hours a day, seven days a week for eight years on the last company. Not including all the other ones before. You have to be, like you do, putting in the hours. You got to do that. Pattern recognition is really important for business and stuff. I said it earlier. I think that’s key.

Jay Gould (01:18:00):
… [inaudible 01:18:00] for business and stuff. I said it earlier. I think that’s key. Win-win solutions I think are really key too. You try to seek something that’s beneficial to both parties or all parties involved. And a lot of people, I don’t want to name names or anything, but there’s been people I’ve done deals with in the past and they don’t have any operates. They don’t operate this way. They’re like, well, it’s beneficial to me and my family, I’m not trying to hurt you but-

Preston Pysh (01:18:23):
I think that one’s huge and I think so many people miss the mark on that one.

Jay Gould (01:18:28):
Yeah, it’s important.

Preston Pysh (01:18:28):
And what they don’t realize is when it’s not a win-win and it’s just you winning and crushing the soul out of the counterparty, there’s some type of force in nature that destroys your win through that. I just firmly believe it. I don’t know how to describe it or what it is, but the people that are so… I mean, it’s selfish nature, right? It’s just-

Jay Gould (01:18:58):
This is what I’m leading to, the selflessness is another one. And if you die tomorrow, what are they going to say about you at your funeral? For Elon they’re going to say a lot of great things, but on the dosh thing, there’s a footnote unfortunately, and there’s going to be millions of people that lost their life savings I think. And their life savings to him is a joke, their life saving maybe $10,000, this guy’s the richest man in the world and he’s like, oh, come on, they can make that again. But dude, they might not. And some people may even commit suicide over this kind of stuff. Who knows? There’s some responsibility of treating people with the respect and dignity that you should be treated with. And you can’t think that everybody’s as smart as you, and I’m not saying that you should assume everybody’s stupid, but I don’t think that it’s a stupid versus smart thing necessarily. I think it’s a in the know versus not in the know and people are looking to him for guidance and well, we can move on, but it really does bother me when I see what he’s doing.

Preston Pysh (01:19:48):
I saw somebody commented on Twitter that you think the timeline for Bitcoin potentially becoming a unit of account is way out there to the right. Explain this to me. I’m curious to hear your thoughts on.

Jay Gould (01:19:59):
It’s kind of like Amara’s law where people will say you overestimate things in the short term, but underestimate things in the longterm. And I think that problem with the Bitcoin community is that we’re living in a bit of an echo chamber and we’re very, very bullish. I try to remove myself from this all the time in everything I’ve ever done. That’s why I was able to do the things I was able to do because I know I’m not the smartest guy in the room, I’m not an Ivy league or I don’t have pedigree so I’m humble enough to recognize that about myself. So I’m constantly trying to learn and what I’ve seen with the fed is I think Amara’s law applies to the fed. Now the Bitcoiners will say it applies to Bitcoin. And that is true. I think in the longterm now comes down to time preference. And are you saying what’s long-term because I saw the tweet today that you both [inaudible 01:20:48] and I was like-

Preston Pysh (01:20:49):
Yeah, define it.

Jay Gould (01:20:51):
I’m 42 years old. I say my lifetime, I’m talking about the lifetime that matters. If I’m 80 or 90 and it happens, maybe, I don’t know but I’m just saying in my working years and the years that matter over the next 20 or 30 years I would say, I don’t see it happening because I think that people underestimate the ability of the fed to keep this going as long as they want. And I think that the Bitcoiners believe it’s all just going to collapse overnight. Max says that the dollar is going to collapse in mid August. He was saying this on Clubhouse two months ago.

Jay Gould (01:21:18):
I was like, well, you’re living in your own… You’re drinking our own kool-aid. We all want to see these kinds of things happen because Bitcoin was through the roof so it’s like hopium the Bitcoin community has. And I love all these Bitcoin maximalists but I think that they’re underestimating that the fed can keep the party going longer. And I’m not saying they can keep it going forever Preston, there’s no question that’s not going to be the case and I might be the one that’s wrong on this. I just think that it should have failed a long time ago based off of what’s happening, it should have failed in 2009 and they inject the money. 2018, they inject the money, 2020, they inject the money. They’re buying $120 billion in bonds every month right now, this is crazy talk.

Jay Gould (01:21:53):
I mean, when you really think about it, everything is completely fake right now. The stock market, real estate, bonds, it’s all fake. And we all know it’s fake and we know that the inflation numbers aren’t even real. And the fed even just said something the other day, he was like, well, you know I was like, wait what? I don’t know the exact quote he had, but he said something along the lines that it’s not a real number almost, it was interpreted that way when I read it. And I was like, what the hell are we what kind of bizarro land are we living in? And when I talk to people outside of the Bitcoin world, which I do a lot, friends of mine that are doctors, lawyers, smart people, wealthy individuals, I bring people on my show. I brought Greg Olson on my show. This guy sold his company.

Jay Gould (01:22:28):
He sold his company at 48 years old I think for $600 million, bought it back for six, then sold it again for $60 million. I said, how much Bitcoin do you own? This guy’s like, Bitcoin? I don’t own any Bitcoin. I’m like, why not? He’s like, I don’t need to own Bitcoin. People don’t realize if you’re that wealthy, you actually don’t need Bitcoin. And when I say that to a maximalist they go, oh no, he needs it. I’m like, no, he has time. He has time. He’s invested in assets that are inflating with inflation right now. So he has time to make that decision in the future. And that’s why and I’m trying to explain when I say it’s probably not going to go to a unit of account or a lifetime or it’s going to be so far out. Some of these guys think it’s in 10 or 15 or 20 years.

Jay Gould (01:23:04):
And I’m like, you want that to happen, I want that to happen. Clearly we have a vested interest and we’re aligned. We’d love that to happen, but I don’t necessarily see that happening because I don’t see the adoption from everybody who has the money because again, it’s a monetary network. You need that money to believe. And it’s not as simple as saying, hey, I give this to my two-year-old and in five minutes, he knows how to use it, 10 minutes, he’s using an iPhone. I’d show him how to use YouTube, my six-year-old using YouTube all day long. These are simple things. Simplicity works in tech, Facebook, Google, Twitter, whatever, Google I could do just simple input search box. This is not complicated stuff that’s why it scales really quickly. This is complicated. I’m sure you can admit you don’t know everything about Bitcoin, but to the average person, you know 99% more than most people and yet you still don’t know anything about Bitcoin. Like to me, there’s a learning curve that needs to come, understanding about money and monetary policy. And most people don’t know anything about this. Even people have a lot of money know. And that part, I wouldn’t say it’s worrisome. It’s a slower adoption than I think people believe.

Preston Pysh (01:24:04):
I like your point. And if I was going to summarize your point, it’s really kind of like Larry David, it’s like curb your enthusiasm, just pull it back a touch and you know what? If you’re wrong so be it, you’re able to plan around and kind of not be so dependent on this crash happening for you to materialize what all your expectations are and what the performance is. If I was going to push back on what you’re saying, I think that your argument there at the end was it’s going to be really hard for users to onboard and fully understanding what this is all about to bring it to the table. I don’t think that’s where the value appreciation of Bitcoin actually comes from. I think the value appreciation of where when Bitcoin goes from 100,000 to a million to 10 million per coin happens through a just total meltdown fixed income. So as fixed income, and when you think about user count compared to fiat value, there’s a handful of people that are controlling hundreds of trillions of dollars in fixed income. And so I guess why I think the timeline is pretty fast so I think in the coming 10 years and I guess the reason why I think it’s going to happen faster-

Jay Gould (01:25:18):
By the way, I hope you’re right because I own a lot of bitcoin so I’m not anti Bitcoin in any way.

Preston Pysh (01:25:19):
Yeah, no, it doesn’t matter with either one of us are right. But I guess what I think you’re going to see is as they’re continuing to compress these fixed income yields down to, I mean, they’re already at nothing. You got a little bit a nominal yield here in the US still, but it’s getting so compressed. And then you just look at the trajectory of how much Fiat’s being added into the system, you’re going to be down to zero. You’re going to start going into negative rates. They’re going to try to take it even more negative. And I think there’s going to be this point where especially if the price appreciates to 100,000 goes to 200,000 where people in the fixed income space are going to start to say, all right, I think I can see how this story might actually start to end here. And I need to stop allocating so much into these contracts that are a guaranteed loss of capital if I hold it through maturity, which is based on just this further hopium Alice in wonderland kind of scenario that’s happening out of central banks.

Preston Pysh (01:26:22):
And I need to start putting at least one to five whatever percent into Bitcoin. And I think once that trust is lost in the fixed income space, those few people that control so much of the capitalization of that asset class start transitioning it over, I have a feeling that it’s going to happen quickly and it could happen at a timeline that’s fairly abrupt.

Jay Gould (01:26:48):
I’m with you that that is and I believe that a little bit stronger in the beginning of the year when Saylor and Ross Stevens had their, I forget the name of their conference that they did that was remote. What was that called? I forget the name of it, but they were teaching people about Bitcoin basically. And that’s when, by the way, I think Michael Saylor has been great for Bitcoin. You need more people like Michael Saylor. We don’t just want one, but we need more people like that. The Bitcoiners say that we don’t need anybody, but I think you do need people like you and Michael, because I think you take a complex problem and you simplify it for people, you explain it in a simple way that they can understand and in a coherent way.

Jay Gould (01:27:25):
And he does a really great job. He talks about $400 trillion in assets. It’s like his brain is moving. It’s like he’s reading a slide show in his head. It’s amazing. It’s unbelievable. I want to interview this guy so bad. It’s like, God, can I get him on my show? I love this guy, but he’s amazing. And the narrative makes sense. It all makes sense. I’m not saying it doesn’t make sense. The question I have is the timing of it. I’m not saying that institutionally [inaudible 01:27:51] I had Anthony on my show as my first guest and he was talking about a wall of money coming in from Wall Street and the one thing he said that was simple taking complex things and making them simple rather than get into all the intricacies about Bitcoin and the strengths of Bitcoin and all that.

Jay Gould (01:28:03):
Here’s a simple one for the average public. And he goes on CNBC’s says the whole time, there’s 21 million Bitcoin., There’s 48 million millionaires in the world so it’s not even a one Bitcoin for every millionaire. That’s a pretty simple thing to say [crosstalk 01:28:14] It’s like, you’re sitting at the baseball game of the Yankees stadium and it’s like, who wants a hot dog? It’s like supply and demand scarcity kind of thing. They all want the hot dog but I only got 10 of them here. So it’s the same idea and so I get it. I get that. But Wall Street’s really smart about figuring out how to create new products to sell that will replace the fixed income bonds. And they’re starting to do it at Blackstone. Warren Buffet said it years ago in 2009 collapse. He’s like, man, what I’d really like to do is go buy a bunch of single family homes. And it’s like, how would he say that? Remember that?

Preston Pysh (01:28:48):
Isn’t this crazy what they’re doing. So when you think about how this plays out, the fools at the table are the ones that are issuing the fiat at nothing percent interest rate. And so think about BlackRock. I mean, they’re a fixed income house at the core. And so you’re like they are the Patsy at the table here. Now I understand hey got all these policy type things that they’ve got to do to get the money out the door that the fed and the government is kind of putting on them. And so when just recently in the last six months when they started buying all these homes down in Texas and they’re-

Jay Gould (01:29:23):
The whole neighborhood before [crosstalk 01:29:25] it’s a resale.

Preston Pysh (01:29:26):
Exactly. What are they doing? They’ve stopped being the Patsy at the table by issuing the fiat that they’re going to get paid back as worthless currency over a 30 year period of time at a fixed rate. And they’d become the owner of the equity so that they can adjust the rent rates as the inflation and the debasement occurs on-

Jay Gould (01:29:49):
I had Grant Cardone on my show and Grant and I’ve had multiple different conversations on and offline and he’s obviously a real estate guy and I got him buy Bitcoin by the way, just so everybody understands the bitcoin community I got Grant Cardone to buy Bitcoin. I convinced his ass because when it dropped like 29,000, he goes on Clubhouse and he’s like, “Jay, you’d be proud of me. I bought a bunch of Bitcoins.” This guy’s funny. Who knows if he really did, but he told us all. But he’s been saying that America is going to turn into renters.

Jay Gould (01:30:14):
Americans are going to go away from home ownership. It’s going to turn into renters. Garrett Camp said this obviously, and Travis for Uber with car ownership as well. But he’s been pounding the drum on the real estate side. And he said, I’m going to sell, he has $2.5 billion of assets under management right now with all his properties that he has at Cardon Capital and his buyer he said, will be Blackstone someday. He’s like, but I don’t have the scale yet. It’s got to be way bigger. 2.5 Billion is not enough, it’s got to be 10 to 20 billion. Yeah, it’s got to push the needle. They just went out and raised $6 billion from investors to buy up single family homes like you said, to replace dead instruments. This is crazy. So no no, Blackstone, I said did the 6 billion.

Jay Gould (01:30:52):
So Blackstone just gets the 6 billion. It says yeah, enough grant, yeah, [crosstalk 01:30:56] grant tried to get the six. The point that I’m getting to is there’s 100 and what is it? 118 $120 trillion in debt globally, this is Saylor’s numbers, and I think 18, 20 trillion of that is negative, effective real rates of returns of negative. That money is not [inaudible 01:31:10] so my bullishness in the beginning of the year, after hearing Saylor say it I was like, wow, that’s really bullish because that money has to come into Bitcoin because their yield chasing. And they’re not going to get a yield on Bitcoin. But the appreciation, if you look at the history of it, but that’s a big bet for a bond holder to say, we’re not looking for a yield anymore. We’re just going to buy something for the appreciative gain on the going forward. That’s not what bond holders like to do.

Jay Gould (01:31:32):
They like to get a yield annually off of the asset that they purchase and that’s real estate. And I think the first, this is where the slowness happens of the adoption I’m telling you. I think that it’s something that I didn’t foresee happening. I couldn’t see that coming that they’re just going to buy up houses, they’re going to keep finding things they can buy as an asset that gives them a yield until they’ve ran out of everything with all the money they’re getting from the fed and then what’s the last thing to buy? That’d be [inaudible 01:31:57] I’m not saying everything’s first and then Bitcoin, I’m saying, they’re going to start doing this to dilute what could have been Bitcoin adoption. They’re going to do other things that we’re all in the Bitcoin community saying, what are they doing?

Jay Gould (01:32:07):
Eventually everyone’s going to do a run on housing and buy Bitcoin. That’s what you and I believe I think they’re going to be the ones holding the bag. But to your point, they could just the underlying asset value of the real estate isn’t actually important to the bond holder and that’s incense. It’s about like you said, the adjustment on the rents for their yield on the inflation as it’s changing year to year. And that’s the most important thing. I went to some of my investors about three years ago and I said to them, I want to get into triple net real estate. I want to raise a fund because they had contacts in Wall Street and I was like, let’s go out and raise like $100 million, 50 to 100 million bucks and we’ll buy triple net.

Jay Gould (01:32:41):
We’ll buy corporate, a Starbucks corporate run properties. You buy the land. It’s triple net. They pay for all the maintenance of the bid for the audience. They pay for the maintenance of the building. They pay the property taxes, et cetera, et cetera so you do nothing but collect money, basically. It’s just great. And it’s a fixed product. It’s better than a negative interest rate from a bond because you’re getting five, 6% yields on these properties. And what they said to me was, if you look at the history of the way assets have worked for the last 30 plus years in the early ’80s, we had 20% interest rates. They drove all the way down to 0% by 2009. And the guy said to one of my own investors, if you took a ball and I threw it at the ground, what’s it going to do?

Jay Gould (01:33:16):
It’s going to hit the ground and bounce off. He goes, and that’s what rates are going to do. I go, no, the fed can’t raise the rates. And this is three years ago. This is after 2018 so I saw the crash in December and then it popped right back up like bam. [inaudible 01:33:29] went on 60 minutes, Jay went on 60 minutes and calmed everybody’s nerves, bam, the markets recovered instantly, literally instantly the next day. And I said after I saw that, and by the way, just to be clear, 2015 sold the company, the [inaudible 01:33:43] is going to be familiar with this. You’re sitting on this pile of cash that you windfall and you had to risk it. I had to buy stocks and equities and things like that because after [crosstalk 01:33:51].

Preston Pysh (01:33:50):
After they were up over 150 or 200% at that point, yeah.

Jay Gould (01:33:55):
I’m taking all this money and I’m putting it in a savings account yielding me 0.1%? What? Are you kidding me? A 10th of 1%. That makes no sense. I wasn’t doing that. So anyway, some of the money was in that unfortunately, but not all of it. And so I just believe to be honest with you Preston that you’re going to see money moving into real estate and other types of vehicles. They’re going to create vehicles. It’s what they do. Wall Street creates products and vehicles, and then they sell it to their constituency. And that’s just what I see happening before I see full adoption to Bitcoin. So that’s why I’m saying you need an account? Bro, we’re ways away from pricing a house in sats if you don’t have all the money moving into at first because I’m not saying you don’t get to a multi-million dollar coin first, what I’m saying is, and this was the tweet you got today. The tweet was Jay doesn’t believe we’re going to a unit of account.

Jay Gould (01:34:44):
I was explaining this to my wife because I saw a tweet, we’re at soccer and I was like, look at this [inaudible 01:34:48] this was before earlier today. And I said, this is crazy. Imagine looking around this room right now and you’re so conditioned that everything you look at, you’re like, oh, that’s 50 sats, Oh that’s 200,000 sats. No, this is crazy town. This is maximalism at its best where you’re in the echo chamber and you’re visioning and projecting out where you see things will go. But the rest of the world isn’t. You have to have the rest of the world doing that. That means you have to have a market cap that goes up, but you need adoption. And again, market cap can go up before you have unit of account because you need everybody thinking this way. So we can get a multimillion dollar quote, I’m not saying you don’t get there first. I’m saying for everything to be priced in Bitcoin, you need full adoption. You need a major collapse for that.

Preston Pysh (01:35:29):
It doesn’t prevent somebody from using Bitcoin as a unit of count or for how they value everything on the planet today. Me personally? The way I run my business, the way I think about investing in equities in general, Bitcoins my unit of account right now. That’s how I do valuations and let me tell you, I’m not saying this to brag, you can give me whatever investor you want. I’m pretty sure I’ve clobbered them over the last five or six years. So and I truly don’t say that to try to sound egotisitic or whatever, I’m saying it because once I made that shift to looking at everything through the lens of that being my unit of account, I go back, I look at the Apple top-line revenue, I’m going back and reverse engineering it so that I’m looking at it in Bitcoin terms. And guess what? The top line at Apple for the last six years has gone down every single year when I value it in Bitcoin. The free cash flows, they’ve gone down. So when I’m doing a dollar discount cashflow analysis on that, and I’m looking at a trend line that’s trending down, it’s real easy for me to do-

Jay Gould (01:36:28):
I do the same thing Preston. I look at when I sold my company, had I moved all of the proceeds into Bitcoin? Multi-billionaire. It’s a multi-billion dollar number. And I’m like, oh my God, why did I not do that? But I didn’t because of fear and uncertainty and doubt, just be honest, that was the reason why I didn’t do it. I didn’t have the conviction and understanding that I have now. But anyway, long story short is I do believe we’ll have multimillion dollar coin in the next 10 years. I believe that. I just don’t think I’m going to price it, not me, but I don’t think people would be pricing the one [inaudible 01:36:59].

Preston Pysh (01:36:58):
Yeah, I can buy that. The one thing that I want to say for people that are listening to our conversation about the real estate piece and BlackRock stepping in and buying the real estate, I don’t think this is a good thing for society. I want that to be very clear, we’re kind of laughing and joking and to us it’s just really obvious as to why this company is doing this and why any other big fixed income house is probably trying to put those “positions” on of buying people’s houses, they’re going to bid the prices of real estate. And it’s going to be a mess, but this is a company that is reacting to the policy decisions that are being made on a global scale. It’s not that they’re trying to be bad people, they’re just trying to protect their equity holders by making sound decisions to protect themselves against future debasement that’s happening in the double digits based on M2 money supply growth and they’re just reacting, just like everybody else’s reacting, just like you out there buying Bitcoin are reacting to the circumstances of what’s being dealt. So I just want that to be clear and I know Jay feels the same way is like-

Jay Gould (01:38:12):
One thing I wanted to tell you that I agree with that it’s dangerous is that what’s going to happen I believe is that there’s $40 trillion in value for single family homes in the US so from a perspective of the negative interest rates, they could probably suck up a lot of that dollar shift from the negative interest rate of bonds over to real estate. So if there’s $40 trillion, you’re not going to get all the single family homes in the US, but can they get 10 or 15% of the single family homes? And then when there was a cataclysmic collapse and the bailout comes from the fed, they’re going to own our houses, too. They’re going to own our bonds, our houses, our stocks at some point. The government’s going to own everything if this keeps on. You can’t allow this to keep, we have to boat this crap out with politicians. It’s got to stop.

Preston Pysh (01:38:52):
They’re nationalizing everything, but they’re doing it in a fractional kind of way where they just slowly, it’s not like, oh, we now own this company. It’s like, no, we own 5% of this company. Now we own 10%, now we just own everything.

Jay Gould (01:39:07):
It’s crazy. And the bonds, I’m not so worried about because they have maturity dates, you don’t own the bond forever. They’ll probably not sell them off the balance sheet. I don’t think they’ll ever sell the bonds that they’ve been buying, $120 billion a month, they just let them expire as maturity date, which is fine. They will come off the balance sheet based off of duration. So I’m not too worried about that. I am worried that the next leg will be that they start buying equities because they bought ETFs for bonds. It’s a symbol. They’re going to start buying the SPY and everything else. And then the next thing will be when there’s a major collapse after all these hedge funds start buying up real estate, they’re going to have to buy their houses because they didn’t work out. And then they own all our houses too. What are we doing? This is scary. They’re going to hold the bag sack. So to your point, you might go to hyper Bitcoinization much faster if the collapse happens in the next 10 or 15 years after they bought everything up and you have the major, major great reset.

Preston Pysh (01:39:53):
Honestly, I love your point which is curb your enthusiasm. Hey man, let’s wrap this up. Give people a hand off. I know you’re active on Twitter, but if there’s anything else you want to highlight, give them a hand off. Dude, I love this conversation. This was so much fun just jiving on business and entrepreneurship and all this fun stuff so-

Jay Gould (01:40:14):
Yeah. Well, the one thing we didn’t touch on, I’m an angel. So if people are looking to for investors, you hit me up through Twitter on a DM. I have my DMs open. You can hit me up on Twitter. You’ll probably have it in your bio or something like that. But it’s J-A-Y G-O-U-L-D, you can find me there but outside of that, I’m not operationally running anything. I’m just an investor. That’s it.

Preston Pysh (01:40:34):
Jay, thanks so much for making time and coming on. I love the chat.

Jay Gould (01:40:37):
Thanks Preston, appreciate it.

Preston Pysh (01:40:40):
Hey, so thanks for everybody listening in to the show. If you enjoyed the conversation, be sure to subscribe to the show on whatever podcast app you’re using. We really appreciate that. And if you have time, leave us a review. So thanks for joining us this week and we’ll catch you next Wednesday.

Outro (01:40:54):
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