Coronavirus: A Silicon Valley Analysis (w/ Balaji Srinivasan)
ASH BENNINGTON: You were very early on coronavirus. And many people know you now from your Twitter feed, the things that you've been tweeting, your analysis and the framework that you've brought to that through academic rigor and the background in biotech, kind of converging to give us a bit of a sense of the way you think about the world. BALAJI SRINIVASAN: That's very kind of you. I, basically, have a few filters that I was putting on it as a diagnostics person also, certainly, as like a VC, as a biotech entrepreneur. As an academic, I would study this kind of stuff for a long time. The space is very interdisciplinary. There's nobody who's an epidemiologist and a pulmonologist and a cardiologist and this and that. But from a bioinformatics and genomics and diagnostic standpoint, I think, at least on those angles, I think I was qualified to comment. ASH BENNINGTON: Right, and there were certainly no COVID-19 experts as recently as six months ago. BALAJI SRINIVASAN: Yeah, that's right. That's right. And I think one of the things about this is it's so broad. Everybody has to have some-- if you're doing any kind of economic planning, you're basically going to have to be an amateur epidemiologist in the sense that you have to have your personal forecast of how bad that things are going to be. And you simply can't just, quote, trust experts because enough experts disagree with each other that there isn't a obvious consensus, number one. And number two is, in such a high stakes situation, you probably want to do your own diligence to some extent. So it's something where I don't think anybody can possibly be an expert in everything. There's a great article in, actually, BMJ recently, which said, hey, we need to create experts, not hoard expertise, not pretend that there's a finite pool of it because that person was, at one point, just an undergrad, read a textbook, and leveled up in the space. And you might be able to do that in a day. But, in a month, you can actually get reasonably conversant with some of these terms. I'm not saying expert, but I am saying like conversant. And I think that's actually a valuable thing to do. Everybody's been talking about serology and IFRs and all this type of stuff. The vocabulary is filtered out there. And I think this is actually generally good. Maybe we can get into that. ASH BENNINGTON: Yeah, so set the stage for us a little bit, where you were in January, how you came to be aware of it, and what your first exposure to it was. BALAJI SRINIVASAN: Yeah, so Twitter is a hobby of mine, like it is for many people who enjoy wasting time in the Uber or whatever. And so I was basically following this virus like 20 other things you might follow in your peripheral Vision It just kind of pops up on your radar because, when you're an investor or something like that, this is what you do. You're tracking a bunch of trends. And many of them fizzle out before they get anywhere. But this one in particular, what was, obviously, a huge deal was the lockdown of Wuhan on January 23. And the thing is that the Chinese government is not known for committing economic harakiri. It's not known for committing economic suicide. There's a lot of other things it does that we might disagree with. And I might well agree with you in that disagreement. But it's not dumb or self-destructive in quite this way. And, for it to do that, that was an unfakeable signal to the world that something very serious was going on that endangered the regime's legitimacy to a greater extent than potentially causing a huge economic crash could. And so that got my attention. The other thing is-- some of my friends here in tech, we were talking about this. But, in Silicon Valley, in technology, you're dealing with folks, Chinese entrepreneurs, who are very competent and, often, frankly, will defeat you, certainly in China and often abroad because they just execute really, really fast. And they work very hard. And they're smart. And they can clone your stuff really fast. But now they've also been able to innovate. And so we have a healthy respect for them as peer competitors and folks who we have to give it our A game with. It's possible to win. I think, for example, Facebook, and Google have done well against Tencent and Alibaba, internationally. It's possible to win. They're not unbeatable. But you have to give your A game or your A-plus game. And, when we saw that China was having trouble with this, not just trouble but overturning society to control it, that made us very concerned because we don't have the model of them being a thirdworld country. This is a very sophisticated, very technologically advanced country that's ahead of the United States and the rest the world, in many ways, especially things like WeChat or what have you. For them to struggle with this, I really had to pay attention. So that was a big trigger. And then I started digging into literature. ASH BENNINGTON: Yeah, that's such an interesting frame, the notion that the Chinese were certainly not about to shut down a city in such a key industrial area if they did not absolutely have to. So, when you began to see that, at what point did you begin to understand the biology of it and what was happening in terms of the actual disease itself? BALAJI SRINIVASAN: Well, so the first thing I did after I saw what was going on there is I went to PubMed, and I went to NEJM, New England Journal of Medicine, and the Lancet. And I just started reading every article I could on it. Now this space is gigantic. There's thousands and thousands of papers. It's actually awesome from a research standpoint, in that sense. You can't keep up on all of it. There's actually a good site-- I think, it's covid19primer.com that is like an automated natural language trusting review of the whole thing to kind of keep on [INAUDIBLE] that way so you don't do a hand filter it. But I went to the New England Journal of Medicine and the Lancet and read the early case studies on the patient zeros and so on. And some of the stuff was very concerning. the first study of somebody who had gotten the coronavirus in the US, healthy 35-year-old who was knocked to the ground in Washington state. And basically, he was going to die until he was put on remdesivir intravenous. And then he suddenly bounced back. But at that prescription was-- to the best of my knowledge of but I can reconstruct from public sources, and I'm open to correction on this-- but appears to have been done via "right to try" laws since it looks like they just worked with state regulators and only notified the FDA rather than actually going through the FDA. And that's a very big deal because it means that maybe the first case in the US was treated with the "right to try" laws as opposed to going through a traditional pathway. That's a theme we can come back to, what I call the decentralized response as opposed to a centralized response, a bottleneck through the federal government, for example. ASH BENNINGTON: Yeah, I think it's so interesting to have you talk about this because you bring what I think of as kind of a West Coast perspective to this, a West Coast thinking of framework where the centralized authorities are not the ones who are controlling solutions, that it's very entrepreneurial and experimental, which is really an interesting view. BALAJI SRINIVASAN: Yeah, I think, to linger on that for a second. I actually think we're now about to actually snap to a new realignment slash political alignment of the US, that the northsouth divide is, I think, much less relevant. And what actually matters is broadly East Coast versus West Coast, centralized versus decentralized modern monetary theory versus bitcoin, the state versus the network, politics versus technology. And I think that is really where things are going to shape up. And it's kind of the emerging axis. And what's interesting is I sort of put myself, in some ways, dead center on that, even though I'm a West Coast person, because, right now, I think the emerging political axis in the US and probably the world is not traditional left-right but antivirus versus pro market. And what I mean by that-- maybe that's obvious. But let me just drill into that for a second. Antivirus means the total state, the unlimited government, because you're talking with a government that's able to put you under house arrest for doing nothing wrong, not just you but an entire town, an entire city. What was unprecedented in China on January 23 is now common practice in the west, hundreds of millions of people under so-called lockdown. So, OK, house arrest for anybody, no due process-- and I am saying that these extraordinary measures may actually hold back the virus. But they will not be given up by governments at the end. The first lockdown maybe to protect you from the virus and the end lockdown maybe to protect you from each other, especially if a huge chunk of people are out of work, there's civil unrest, or something like that. I can't say it's 100% probability, but there's some percentage probability of that. So you have the total state. You have lockdowns. You have price controls. You have border controls. You have the ability to tell people that they need to get tested, for example, in China, that you have to have forehead thermometers and all these scans, so like repeals, effectively, on search and seizure. So lots and lots of due process goes out the window because you're basically in a wartime situation against a virus. I think-- people have been talking about, this is a recession. This is depression. And I think those are fundamentally bad metaphors for what this is. This is the first successful invasion of the United States of America in modern times by a virus and, really, by anything. But, really, an invasion is really the best metaphor because tens of thousands of people are being killed, millions are being sickened, like actual physical production is being shut down involuntarily, not due to fully for economic reasons but to physical reasons. People are getting sick and dying and leaving their posts. Or are getting sick enough that, for example, meatpacking plants want to shut down. So on the one end is this total state. And on the other end is the market. And that's where the kind of anti-lockdown protests and a lot of that sentiment comes from, very understandably. You've got 25 million people out of work. And so this is a reaction to price controls, to seizures of masks, to bailouts, to all of this type of stuff. And that's kind of the libertarian-ish end of the spectrum, the freedom end, the privacy end, the "don't tread on me" end, et cetera. And that's kind of the axis, I think, that's there not just in the US but the whole world. And I think that's kind of dead center of where East versus West Coast is. ASH BENNINGTON: And where do you see yourself on that continuum as you look at this problem? BALAJI SRINIVASAN: My preferred strategy-- so it's interesting. A lot of people are thinking about this as a trade off between how many cases you get with the virus and how long your lockdown is, with the implication being that you'd get fewer cases for the virus the longer you're locked down or vice versa, that economic damage and viral damage were inversely correlate with each other. But I actually don't think that's the case. I think that, when all is said and done, the countries that have the short, sharp, competent lockdowns will have much less economic damage and less viral damage. So New Zealand or, actually, China, I think, on net is going to turn out to have a relatively better outcome than many other countries, potentially, so, certainly, Taiwan, South Korea, et cetera. Even these Asian countries that are having second waves are jumping on top of it very aggressively. And I think that model of aggressively jump on this thing, don't just let it get to 100%. Drive new cases to zero. And then gradually open up with testing, tracing, isolating, such that you don't just let a case happen until you've got a cure or a vaccine and you deploy that, that's the New Zealand strategy. That seems to me to be a smart strategy. The opposite of that is just kind of what I call "let it rip". And my friend from Twitter, John Stokes, calls it "the great yolo". And that's kind of what we're defaulting into, which is the sort of disorganized thing where we kind of do a halfway lockdown. People understandably yell. I don't make light of them yelling. They're losing jobs and livelihoods. But then what they're going to find, I think, is they come back and half the business isn't there already because people will social distance even without a lockdown. And then more business will disappear because people will get sick. And then they'll stay home at home. And now you've got both the virus and the economic destruction and kind of worst of both worlds. Unfortunately, I think that's where countries in the west, many of them are headed.