Latest / Core Memory / Can California Ever Build Again? - EP 34 Jan Sramek

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Can California Ever Build Again? - EP 34 Jan Sramek · Core Memory

0:00
SPEAKER_02: Today's podcast is not in our usual studio.
0:03
SPEAKER_02: We are in Salado County.
0:05
SPEAKER_02: I'm with Jan Schramek, who is, are you the CEO of California Forever?
0:11
SPEAKER_02: All right.
0:12
SPEAKER_02: So we're in Salado County.
0:13
SPEAKER_02: This is the home of California Forever.
0:16
To just give some context for people who've never heard of it
0:20
before,
0:20
it's this long running
0:23
projects basically to create a new city in California and and
0:27
it's been backed I
0:28
think to the tune of about a billion dollars has gone through
0:32
some some maybe downs
0:35
and then some ups and ups and downs and then now ups just as to
0:38
how people were
0:39
feeling about this idea of building a new city in California
0:42
which which we used to
0:43
SPEAKER_02: do all the time and then suddenly became a
0:47
SPEAKER_02: strange, difficult concepts.
0:48
SPEAKER_02: But so I want to obviously we're going to spend some time,
0:51
SPEAKER_02: get into all of this,
0:53
SPEAKER_02: the history of the project,
0:55
SPEAKER_02: why you'd want to do such a thing,
0:56
SPEAKER_02: some of the journey and your background.
0:58
SPEAKER_02: But why don't for people who've never heard of California forever before,
1:03
SPEAKER_02: why don't you tell us what what it is?
1:05
SPEAKER_00: Yeah, it's great to be here.
1:07
SPEAKER_00: Thanks, Ashley.
1:08
California Forever is a company that I founded eight years ago
1:12
to build the next
1:13
SPEAKER_00: great American city.
1:15
SPEAKER_00: And when I say the next great American city,
1:16
I mean all of the things that you would find in one of the
1:20
great cities in America.
1:22
And so our focus has been on manufacturing and then more
1:26
recently on shipbuilding.
1:28
SPEAKER_00: And so as of now, the city includes the
1:32
SPEAKER_00: proposed Solano shipyard,
1:33
SPEAKER_00: which would become the biggest shipbuilding complex in America,
1:37
SPEAKER_00: the Solano Foundry,
1:38
SPEAKER_00: which is an advanced manufacturing pack that we rolled out recently,
1:42
SPEAKER_00: and then incredible neighborhoods around it with 175,000 homes downtown,
1:48
really focused on traditional American urbanism like you would
1:52
find in San
1:53
SPEAKER_00: Francisco or Philadelphia or Chicago.
1:56
SPEAKER_00: And we really
1:57
SPEAKER_00: doing this to create a place where California can build again.
2:02
And so we're doing this to bring back a lot of the legacy that
2:06
the state used to
2:06
have and solve some of the biggest issues that California is
2:10
dealing with.
2:12
SPEAKER_00: A place where companies can stay and grow in California,
2:15
a place where the next generation of Californians can afford to
2:18
buy a home,
2:19
and a place that brings back this sense of optimism that the
2:23
state used to have
2:24
SPEAKER_00: that we would love to come back.
2:26
SPEAKER_02: So a bit practical,
2:28
SPEAKER_02: solving some problems that the state and the nation face,
2:32
SPEAKER_02: and then a bit of symbolism on top of that.
2:35
SPEAKER_02: 100%.
2:35
SPEAKER_02: That's a good way to put it.
2:37
SPEAKER_02: And how many people, what's the goal for how many people would live here?
2:43
Yeah,
2:43
so we own about 68,000 acres,
2:47
so that's about almost 110 square miles.
2:49
SPEAKER_00: For context, that's about two and a half times the size of San Francisco.
2:54
It's five times bigger than the island of Manhattan,
2:57
70% bigger than Washington,
2:59
D.C.
3:01
SPEAKER_00: And the proposal for the city,
3:04
SPEAKER_00: which is on about 15,000 acres of that in the middle,
3:07
SPEAKER_00: is for 400,000 people.
3:10
And then the land around that is used for advanced
3:13
manufacturing,
3:13
it's used for shipbuilding.
3:14
SPEAKER_00: There's a lot of land that right now is in a long-term strategic reserve,
3:19
SPEAKER_00: which could be used for energy generation.
3:20
And then we would surround the entirety of that with a green
3:24
belt of open space and agriculture.
3:27
SPEAKER_00: And so it really allows us to master plan the entire area.
3:31
Music.
3:48
SPEAKER_01: Jan, thank you for joining us.
3:51
SPEAKER_01: It's great to be here.
3:51
SPEAKER_01: Tell me where we are.
3:54
We are in Solano County,
3:56
about an hour north of Silicon Valley,
3:59
where we're building a new city.
4:02
SPEAKER_00: And we're sitting at the southern edge of the holdings.
4:04
So the land holdings is 100 square miles,
4:06
basically between Travis Air Force Base.
4:08
SPEAKER_00: And what is the
4:11
SPEAKER_00: confluence of the San Francisco Bay with the Sacramento River.
4:14
And we're sitting at the tip of the land holdings in a very old
4:17
house that someone
4:18
SPEAKER_00: built here 50 years ago,
4:20
SPEAKER_00: and overlooking the...
4:23
SPEAKER_00: actually overlooking Mount Diablo just by Wallach Creek.
4:26
SPEAKER_02: And this is just somebody's house that used to...
4:30
Yeah,
4:31
my understanding is this was a fairly eclectic couple who built
4:35
this in the 70s.
4:37
SPEAKER_00: I think they were...
4:39
I want to say they were the descendants of one of the steel
4:43
fortunes in the
4:44
SPEAKER_00: country.
4:44
SPEAKER_00: Okay.
4:45
SPEAKER_00: And they built this for entertainment.
4:47
SPEAKER_00: And there's a lot of history in it.
4:48
I think this wood in the ceiling comes from the original YOLO
4:53
bypass when they were
4:54
SPEAKER_00: building that back during the gold rush.
4:56
SPEAKER_00: And so they reclaimed it.
4:57
SPEAKER_00: And there's a lot of history in that entertainment.
5:00
Then they sold it,
5:00
I think,
5:01
40 years ago,
5:01
and nobody's lived here for 40 years.
5:04
SPEAKER_02: I was told there were cows and sheep.
5:07
SPEAKER_02: They probably did.
5:09
SPEAKER_00: They probably were the only inhabitants.
5:11
SPEAKER_00: But amazingly, the quality of the workmanship is kind of astonishing.
5:16
SPEAKER_00: You swing the door here, and it's perfect.
5:19
SPEAKER_00: It hasn't moved in 40 years, which is pretty impressive.
5:21
SPEAKER_02: Yeah, that makes sense.
5:23
SPEAKER_02: Okay,
5:23
SPEAKER_02: well,
5:23
SPEAKER_02: for people who've never heard of California forever,
5:28
SPEAKER_02: give me the big idea,
5:30
SPEAKER_02: the big concept.
5:33
SPEAKER_00: We are,
5:34
SPEAKER_00: at the same time,
5:35
SPEAKER_00: the most obvious and,
5:38
SPEAKER_00: at least as of two years ago,
5:39
SPEAKER_00: the most controversial startups in California.
5:43
And we're doing the things that companies have done for a long,
5:45
long time.
5:47
SPEAKER_00: we're building a new city.
5:48
SPEAKER_00: And so all American cities are basically new cities,
5:51
SPEAKER_00: at least by the standard of the World War,
5:53
SPEAKER_00: right?
5:53
SPEAKER_00: I mean,
5:54
we've been building cities for 10,000 years and all American
5:57
cities are basically
5:58
SPEAKER_00: less than 300 years old.
6:00
SPEAKER_00: And in California, mostly less than 100 years old.
6:04
SPEAKER_00: And so about eight years ago, at this point, I set out to
6:08
create a place where California could build again and build a
6:10
city and that city
6:11
SPEAKER_00: could include manufacturing and homes and offices and today increasingly
6:16
SPEAKER_00: shipbuilding.
6:18
SPEAKER_00: But in some sense,
6:19
SPEAKER_00: the oldest idea in the world,
6:20
SPEAKER_00: which is when we run out of places to build,
6:22
we should find a piece of land that isn't particularly good for
6:25
agriculture or
6:26
SPEAKER_00: anything else in a good location and builder.
6:30
SPEAKER_00: And we've been able to find what
6:33
I thought and what I think has been proven to be probably the
6:36
best place to do this
6:37
SPEAKER_00: in America when you look at all of the different factors.
6:39
And just to help locate people nearish Napa,
6:44
nearish San Francisco,
6:46
help,
6:47
et cetera.
6:47
SPEAKER_00: Yeah, I mean, we are basically in the middle of this
6:52
SPEAKER_00: Well, it has become the Northern California megaregion.
6:54
SPEAKER_00: So this whole area between Sacramento and San Jose,
6:58
SPEAKER_00: actually between Tahoe and San Jose,
7:00
SPEAKER_00: really,
7:00
SPEAKER_00: has become this megaregion.
7:01
There's about 14 million people who live in that region,
7:04
if it was a state.
7:05
SPEAKER_00: Four, zero.
7:06
SPEAKER_00: One, four.
7:07
SPEAKER_00: One, four, one, four.
7:08
SPEAKER_00: 14.
7:09
SPEAKER_00: If it was a state, it would be the seventh largest state in America.
7:13
SPEAKER_00: And we are in the heart of it.
7:15
SPEAKER_00: And so we are...
7:17
SPEAKER_00: basically equidistant to San Francisco and to Sacramento.
7:21
SPEAKER_00: So San Francisco, Silicon Valley is an hour, hour 20 from here.
7:24
SPEAKER_00: Sacramento is about an hour to the north.
7:27
SPEAKER_00: And then we are about, from here, we are about 35 minutes east of Napa.
7:31
SPEAKER_00: So it's in the very heart of this region at this intersection of
7:38
SPEAKER_00: air and water and rail.
7:40
SPEAKER_00: And so the property that we own is on the one side,
7:43
SPEAKER_00: we have Travis Air Force Base,
7:46
SPEAKER_00: one of the biggest military installations in America,
7:49
SPEAKER_00: at least of the Air Force.
7:51
SPEAKER_00: We're obviously on the water, on the San Francisco Bay.
7:54
And so it's this really interesting crossroads of Northern
7:58
California where it all
7:59
SPEAKER_00: comes together.
8:00
SPEAKER_00: And by
8:02
SPEAKER_00: historical accidents.
8:04
There happens to be 100 square miles here that is a really
8:07
great place to build,
8:08
SPEAKER_00: and we haven't built it yet.
8:09
SPEAKER_00: And so it's kind of a miracle that the place even exists.
8:12
Yeah,
8:13
I mean,
8:14
when you look at it,
8:14
I mean,
8:15
it's been farmland historically?
8:17
SPEAKER_02: Grazing land.
8:18
SPEAKER_02: Grazing land.
8:19
SPEAKER_02: Yeah, because it's not the prime farmland.
8:22
SPEAKER_02: I mean, this is...
8:23
Yeah,
8:23
I mean,
8:23
people have tried to grow crops here and generally it hasn't
8:26
worked.
8:27
SPEAKER_00: And so it's,
8:28
SPEAKER_00: the soil is,
8:29
SPEAKER_00: my understanding is the soil is very heavy,
8:31
SPEAKER_00: there's a lot of clay in it,
8:32
SPEAKER_00: and so it doesn't really support crops.
8:35
SPEAKER_00: And so it looks, it's basically grazing land.
8:37
SPEAKER_00: It looks like the kind of, it's quintessentially Californian.
8:40
It looks like the hills that you drive through on the I-5 level
8:46
from Sacramento to L.A.
8:47
SPEAKER_02: And I want to get into some of the evolution of this idea.
8:51
SPEAKER_02: I mean, you mentioned you've been at it for eight years.
8:54
SPEAKER_02: Because now the political climate has changed.
8:58
SPEAKER_02: Some things have changed.
9:00
SPEAKER_02: And you guys are talking about manufacturing and shipbuilding,
9:04
SPEAKER_02: and we're going to get into all that.
9:05
SPEAKER_02: When you first started out eight years ago,
9:09
SPEAKER_02: was that fully the vision,
9:11
SPEAKER_02: or did you more want to just make a more modern...
9:17
family-friendly type city in a region where we just can't seem
9:21
to build any houses,
9:23
SPEAKER_02: and you saw it as,
9:23
SPEAKER_02: like,
9:24
SPEAKER_02: an opportunity to make,
9:25
SPEAKER_02: you know,
9:25
SPEAKER_02: kind of,
9:26
SPEAKER_02: like,
9:26
SPEAKER_02: an idealized community?
9:28
SPEAKER_02: Or, yeah, what was the very original vision?
9:31
SPEAKER_00: Yeah,
9:31
SPEAKER_00: I mean,
9:32
the original vision was to create a place in California where
9:37
you could build,
9:37
SPEAKER_00: and where you could build anything.
9:39
SPEAKER_00: And the reason for why...
9:44
going back all the way to 2016,
9:47
I decided that we would acquire as much land as we could.
9:53
SPEAKER_00: you wouldn't necessarily even know what you want to build.
9:55
SPEAKER_00: I mean, this is a 40, 50-year buildup, right?
9:58
SPEAKER_00: And you can't exactly predict what you're going to need.
10:01
SPEAKER_00: And the origin of the idea was when I landed in California in 2013, 2014.
10:08
SPEAKER_00: And at the time,
10:10
there were three distinct things that it was very clear that we
10:13
couldn't build in
10:14
SPEAKER_00: California.
10:15
SPEAKER_00: We certainly couldn't build housing.
10:18
SPEAKER_00: but we certainly also couldn't really do manufacturing.
10:21
SPEAKER_00: I mean, it was the beginning of the on-shoring.
10:23
SPEAKER_00: Hardware startups were beginning to come in.
10:25
SPEAKER_00: I mean, I think Android was founded, what, 2017, 2016?
10:29
And so that was happening,
10:30
but it was very clear that you couldn't do that in California.
10:33
SPEAKER_00: But it was also even just office space.
10:35
SPEAKER_00: I mean, it sounds unbelievable, but in 2018,
10:40
SPEAKER_00: In 2017,
10:41
there was a cap on the amount of office space that you could
10:44
build in San Francisco
10:45
and companies legitimately were leaving the Bay Area because
10:49
people couldn't afford
10:49
SPEAKER_00: to live there and they couldn't build offices.
10:52
SPEAKER_00: And so the idea was
10:55
SPEAKER_00: If we can acquire this extremely strategic landholding,
10:59
SPEAKER_00: then you won't always predict what you want to build there.
11:02
SPEAKER_00: But because of where it is and all of the access that it has,
11:05
SPEAKER_00: it will very likely support whatever we need to build.
11:09
And that's kind of been proven out,
11:11
for example,
11:12
with the shipbuilding component of it,
11:16
where
11:18
SPEAKER_00: That's become a thing in the last two years.
11:20
When we bought the property,
11:22
I knew they'd be buying a bunch of land on the border ship
11:24
channel.
11:24
And I was like,
11:25
well,
11:25
maybe we'll build a port there one day or who knows.
11:28
SPEAKER_00: But shipbuilding was on my radar eight years ago.
11:30
But when it popped up,
11:32
we actually had a place where you could do it really well.
11:34
SPEAKER_02: Yeah.
11:35
SPEAKER_02: All right, what do we do at Core Memory?
11:36
SPEAKER_02: We cover innovative,
11:38
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11:39
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11:41
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11:45
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11:50
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11:50
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12:21
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12:25
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12:26
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12:27
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12:27
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12:32
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12:35
SPEAKER_02: Okay.
12:36
SPEAKER_02: So,
12:36
SPEAKER_02: you know,
12:36
you mentioned there's so many questions and so many things I
12:39
want to get into,
12:40
SPEAKER_02: but,
12:41
SPEAKER_02: um,
12:42
The big headlines on some of this project have been a billion
12:46
dollars invested in
12:48
SPEAKER_02: the land,
12:49
SPEAKER_02: some of Silicon Valley's wealthiest people,
12:51
SPEAKER_02: I think,
12:52
SPEAKER_02: like,
12:53
SPEAKER_02: Matt Friedman,
12:53
SPEAKER_02: Marc Andreessen,
12:54
SPEAKER_02: Patrick Coulson,
12:55
SPEAKER_02: these big names.
12:56
SPEAKER_02: And this was all bought quite secretly for obvious reasons.
13:02
It's like if somebody knew that you were gobbling up land as
13:06
this concerted effort,
13:07
SPEAKER_02: you know,
13:07
SPEAKER_02: the prices of the property would start jumping up.
13:10
SPEAKER_02: But when this...
13:11
SPEAKER_02: you were able to keep that secret for a long time.
13:13
When news finally came out about this,
13:17
there was,
13:18
like,
13:18
this pushback of,
13:20
oh.
13:21
SPEAKER_02: And it's,
13:23
SPEAKER_02: like,
13:23
SPEAKER_02: understandable in some ways,
13:24
SPEAKER_02: and then very vague in others is,
13:26
SPEAKER_02: like,
13:26
SPEAKER_02: people were upset that rich people were acquiring land,
13:29
SPEAKER_02: but I don't know that they were fully upset why they were upset.
13:33
SPEAKER_02: But so, yeah, I mean, tell me about, like,
13:38
this initial,
13:40
like,
13:41
the two-year-ago view on this project,
13:43
or how you felt about it?
13:46
SPEAKER_00: Yeah,
13:46
SPEAKER_00: I mean,
13:46
SPEAKER_00: I think...
13:47
SPEAKER_00: We knew...
13:50
SPEAKER_00: So we obviously knew that it would be controversial when we announced it.
13:53
SPEAKER_00: I mean, you...
13:56
SPEAKER_00: For reasonable business reasons, you do buy the property quietly.
13:59
And we said this is a group of American investors buying it as
14:01
a long-term holding,
14:03
SPEAKER_00: which is all true.
14:05
SPEAKER_00: And then if you propose to come to a community and say,
14:08
we're going to build a major new city and a major new advanced
14:11
manufacturing zone,
14:12
SPEAKER_00: obviously,
14:13
SPEAKER_00: and particularly if you're coming in as an outsider,
14:15
SPEAKER_00: people have concerns,
14:15
SPEAKER_00: and we knew that that would be the case.
14:17
SPEAKER_00: We knew that it would be controversial.
14:21
SPEAKER_00: I think that
14:24
There's also a really interesting timing component to this
14:27
where I want to say I've
14:32
SPEAKER_00: been talking about abundance since 2016.
14:34
And so what happened in some sense is there was a component
14:37
locally here where
14:38
SPEAKER_00: people got to know us,
14:39
they realized that we are not here to just do something for a
14:41
year and then leave.
14:43
SPEAKER_00: We actually committed,
14:44
SPEAKER_00: we actually know what we're doing,
14:45
SPEAKER_00: we can actually bring the companies,
14:46
SPEAKER_00: we can actually bring the capital.
14:47
SPEAKER_00: So that's what's happened at the very local level.
14:50
SPEAKER_00: But then at the national level,
14:52
Obviously,
14:52
the vibe has shifted very profoundly in the last two and a half
14:55
years.
14:56
SPEAKER_00: And in some sense, what we said we're building hasn't changed.
15:00
SPEAKER_00: I mean,
15:00
SPEAKER_00: if you look at what we said the first time that we came out,
15:02
SPEAKER_00: we said,
15:03
SPEAKER_00: we want to build a major new city and bring a bunch of employers here,
15:06
SPEAKER_00: particularly in advanced manufacturing and defense.
15:09
SPEAKER_00: Day one is what we've said.
15:11
SPEAKER_00: But we were so...
15:14
SPEAKER_00: I think as a country and particularly as a state,
15:17
we were so caught up in this no-growth mindset and in this
15:21
zero-sum mentality for
15:22
SPEAKER_00: such a long time that we kind of,
15:25
SPEAKER_00: when we introduced the project in late 23,
15:28
SPEAKER_00: mid-23,
15:30
SPEAKER_00: we were still caught at the ending of it.
15:32
SPEAKER_00: And that's very profoundly shifted.
15:33
SPEAKER_00: And it's shifted in a really bipartisan way, right?
15:36
SPEAKER_00: I mean, you have
15:39
SPEAKER_00: My perspective on this has been that when the left and the right agree on
15:44
SPEAKER_00: something,
15:44
SPEAKER_00: there's not a lot that they agree on,
15:46
SPEAKER_00: but when they do,
15:46
SPEAKER_00: there's normally a deep,
15:47
SPEAKER_00: profound truth at work.
15:49
And so when you look at Ezra Klein on the one hand writing
15:53
about abundance and Marc
15:54
Andreessen writing about it's time to build and Tyler Cowen
15:57
speaking about state
15:58
SPEAKER_00: capacity and Joni Applebaum and all of other people,
16:02
SPEAKER_00: the fact that all of these people are saying something very,
16:04
SPEAKER_00: very similar in different ways means that there is a deep,
16:07
SPEAKER_00: found-aligned truth at work.
16:08
which is we de-industrialized the country for 50 years and we
16:13
completely forgot how
16:14
SPEAKER_00: to build things.
16:16
SPEAKER_00: And that has decimated the middle class,
16:20
SPEAKER_00: made the country unable to produce the very basic things we need.
16:28
SPEAKER_00: I think one of my colleagues put it the other way,
16:30
SPEAKER_00: and he said something like,
16:32
SPEAKER_00: you're not a superpower if you can't make anything.
16:35
SPEAKER_00: You're just an outsourcing customer to someone else, basically.
16:40
SPEAKER_00: And all of that is very quickly coming back,
16:42
SPEAKER_00: and we are basically at the heart of all of these trends,
16:46
SPEAKER_00: which is what's happened over the last few months.
16:48
SPEAKER_02: I mean, like you said, the climate has shifted.
16:50
SPEAKER_02: I remember when this got announced and there was a feeling,
16:54
SPEAKER_02: at least on me,
16:55
SPEAKER_02: you know,
16:56
SPEAKER_02: I know a lot of the people who are invested and obviously,
17:01
SPEAKER_02: like,
17:01
SPEAKER_02: pro the idea.
17:03
It felt kind of like hopeless to me in some ways because I just
17:07
thought you would
17:07
SPEAKER_02: get so much pushback against
17:10
SPEAKER_02: the optics of some of this,
17:12
SPEAKER_02: and then I just thought,
17:12
SPEAKER_02: it's like,
17:13
SPEAKER_02: well,
17:14
SPEAKER_02: good luck anyway,
17:15
SPEAKER_02: even if,
17:16
SPEAKER_02: you know what I mean?
17:17
SPEAKER_02: Even if everybody was okay with it.
17:21
SPEAKER_02: Like, I tweet about the California high-speed rail all the time.
17:25
It seems like even when we're trying to do something,
17:27
we can't actually do it.
17:30
And so,
17:31
yeah,
17:31
I just felt like you're battling California as a thing anyway.
17:37
SPEAKER_00: Yeah,
17:39
SPEAKER_00: I mean,
17:39
my original founding thesis here in 2016 was that the situation
17:45
in California would
17:45
SPEAKER_00: get worse until it got better.
17:47
And so when I looked at the structural forces that were making
17:50
it impossible to
17:51
SPEAKER_00: build here,
17:52
SPEAKER_00: my sense was basically we had
17:57
SPEAKER_00: This was the state for,
17:58
SPEAKER_00: I mean,
17:58
SPEAKER_00: for a century,
17:59
SPEAKER_00: this was the state that could build anything,
18:01
SPEAKER_00: right?
18:01
SPEAKER_00: This was the optimistic place in the country.
18:04
SPEAKER_00: We could build factories.
18:06
SPEAKER_00: We build these amazing public works.
18:08
SPEAKER_00: The Golden Gate Bridge was built in four years.
18:12
SPEAKER_00: We built the Golden Gate Bridge in four years,
18:14
SPEAKER_00: and then we were so excited about it that to celebrate it,
18:17
SPEAKER_00: we built Treasure Island.
18:18
SPEAKER_00: We built a 400-acre artificial island in the middle of the bay,
18:21
SPEAKER_00: and we did that in,
18:22
SPEAKER_00: like,
18:22
SPEAKER_00: three years to celebrate the completion of the Golden Gate Bridge.
18:25
SPEAKER_02: Well, we've talked about it.
18:25
SPEAKER_02: Even just San Francisco and Los Angeles,
18:29
two of the world's most iconic and productive cities have not
18:33
been around that
18:34
SPEAKER_00: long.
18:34
SPEAKER_00: Exactly, exactly.
18:35
SPEAKER_00: Anyway,
18:36
SPEAKER_00: there's photos,
18:37
SPEAKER_00: there's photos of,
18:38
SPEAKER_00: not photos even,
18:39
SPEAKER_00: there's drawings of San Francisco before settlement.
18:43
SPEAKER_00: And, um,
18:45
You look at those pictures,
18:46
they look almost identical to photos of the site.
18:49
I mean,
18:49
where we're sitting right now is de facto,
18:52
it's a quasi-peninsula.
18:54
SPEAKER_00: You have these windswept hills with grasslands on them,
18:58
SPEAKER_00: and it's surrounded by water on three sides.
19:00
You look at original pictures of San Francisco kind of from an
19:03
Oakland perspective,
19:04
SPEAKER_00: it looks almost exactly the same.
19:06
You look at the pictures of people laying down and building
19:10
Golden Gate Park.
19:11
SPEAKER_00: Golden Gate Park used to be sand dunes.
19:13
There's literally photos of people with horses preparing Golden
19:17
Gate Park to become a park.
19:19
SPEAKER_00: And they terraformed that whole place.
19:20
SPEAKER_00: The whole western side of San Francisco was sand dunes.
19:23
SPEAKER_00: And this was all like, what, 100 years ago, basically?
19:27
SPEAKER_00: And so we've known how to do this.
19:29
SPEAKER_00: We just kind of forgot.
19:32
SPEAKER_00: And if I oversimplify,
19:34
we basically started passing some well-intentioned
19:39
environmental laws in the 70s.
19:43
SPEAKER_00: we just kept adding for 50 years.
19:45
SPEAKER_00: And I say, having a glass of wine or two is a pretty good idea.
19:49
SPEAKER_00: Having 50 is not such a good idea.
19:51
SPEAKER_00: And that's kind of what we've did.
19:53
SPEAKER_00: All of these policies are generally well-intentioned,
19:55
SPEAKER_00: but we've just completely tied ourselves in knots,
19:58
SPEAKER_00: unable to build anything,
19:59
SPEAKER_00: and high-speed rail is a prime example of that.
20:01
SPEAKER_00: Now, my sense was that
20:04
it would get worse,
20:06
but it would get so bad that it would inspire a counter
20:10
movement.
20:10
SPEAKER_00: And I think abundance is basically that.
20:12
SPEAKER_00: I mean, in 2016, it was very clear that under the current
20:18
SPEAKER_00: it would be challenging to build this.
20:19
But my sense is,
20:20
at some point,
20:21
people get fed up with their kids moving to Texas.
20:24
SPEAKER_00: At some point,
20:24
people get fed up with having a two-hour commute because you
20:27
can't build a factory
20:28
SPEAKER_00: in Solano County.
20:29
SPEAKER_02: Well, they love California.
20:31
SPEAKER_02: They want to live here.
20:31
SPEAKER_00: They want to live here, and they want to believe in it.
20:33
SPEAKER_00: And I think, generally speaking,
20:39
On most of these big social issues,
20:41
we kind of overshoot,
20:42
and then we come back.
20:43
SPEAKER_00: And that was my theory of the case in 2016.
20:45
And it's been satisfying to kind of see it play out over the
20:49
last two years with
20:50
SPEAKER_00: everyone I'm suddenly talking about building.
20:51
SPEAKER_02: It is funny,
20:52
SPEAKER_02: because you and I met about like two years ago,
20:54
SPEAKER_02: and then,
20:55
SPEAKER_02: yeah,
20:55
SPEAKER_02: I mean,
20:55
SPEAKER_02: I've just seen this whole...
20:56
SPEAKER_02: When I first started coming here,
20:57
SPEAKER_02: it was still...
20:59
SPEAKER_02: it looked like politicians were gonna block,
21:01
SPEAKER_02: try to do their best to block you guys from allowing this to happen.
21:05
SPEAKER_02: And then now,
21:06
SPEAKER_02: I mean,
21:07
SPEAKER_02: like you're talking about with the abundance movement and everything,
21:09
SPEAKER_02: it seems sort of obvious.
21:11
SPEAKER_02: When I first started coming here,
21:12
SPEAKER_02: I thought this was like the last,
21:14
SPEAKER_02: the last great test for California,
21:17
SPEAKER_02: because I could see the,
21:19
SPEAKER_02: I could see the optics part of rich people taking over things.
21:23
SPEAKER_02: We don't trust them.
21:24
SPEAKER_02: That, I felt like, was against you.
21:26
SPEAKER_02: However,
21:27
SPEAKER_02: the other argument was like,
21:28
SPEAKER_02: okay,
21:29
SPEAKER_02: well,
21:29
SPEAKER_02: if the world's wealthiest,
21:31
SPEAKER_02: apparently most powerful people can acquire
21:35
If they can't build a city in California in 2023,
21:40
then,
21:42
like,
21:42
it's done,
21:43
you know?
21:44
SPEAKER_02: Like,
21:44
SPEAKER_02: if you have every...
21:45
SPEAKER_02: if you have all sort of...
21:46
SPEAKER_02: not,
21:46
SPEAKER_02: like,
21:46
SPEAKER_02: limitless resources,
21:47
SPEAKER_02: but if you have this much of a push and you can't build something new,
21:51
SPEAKER_02: then,
21:51
SPEAKER_02: like,
21:51
SPEAKER_02: it's just never gonna happen again.
21:53
And so I always felt like this was this grand experiment to see
21:58
where the will actually was at.
22:01
SPEAKER_02: 100%.
22:01
SPEAKER_00: I mean, I think that...
22:05
SPEAKER_00: Two levels to the answer.
22:07
I think the first one is...
22:08
And people look...
22:13
The community has recognized it.
22:16
SPEAKER_00: Who would you rather have built a city?
22:18
real estate developer or private equity firm who's going to
22:20
come in and need a
22:21
bunch of dividends in seven years and then toss it and sell it
22:24
to someone else and
22:25
disappear who has no incentive to do it right and who has no
22:28
incentive to um
22:30
brilliant employers or do you want it backed by a bunch of
22:33
people who care about it
22:35
for reasons other than money and who have a 40-year horizon and
22:38
who can actually do
22:39
SPEAKER_00: it right um and who by virtue of being in the
22:46
SPEAKER_00: tech and manufacturing ecosystem can actually help bring companies here.
22:51
SPEAKER_00: And that's what we've basically said, and people have seen that.
22:53
SPEAKER_00: And by the way,
22:54
SPEAKER_00: most of the fantastic American cities,
22:57
SPEAKER_00: or many of them,
22:58
SPEAKER_00: were basically founded by wealthy families who decided to do it,
23:02
SPEAKER_00: who had care about architecture,
23:04
SPEAKER_00: for example,
23:05
SPEAKER_00: for reasons beyond money.
23:08
SPEAKER_00: People complain about architecture in American subdivisions.
23:10
They're like,
23:10
oh,
23:10
this is bland,
23:11
and you shouldn't have some nameless corporation on it.
23:15
SPEAKER_00: Again,
23:15
do you want a private equity firm or do you want basically a
23:17
group of people who
23:18
SPEAKER_00: really care about it,
23:19
SPEAKER_00: both at the team and at the investor level?
23:22
SPEAKER_00: I do think this is California's final and first test.
23:30
SPEAKER_00: It's a landmark moment.
23:35
SPEAKER_00: The high-speed rail has become a symbol.
23:38
SPEAKER_00: It is a symbol of California's failure.
23:40
SPEAKER_00: Every time someone wants to bash California,
23:42
SPEAKER_00: they universally will pick up high-speed rail and say,
23:45
look at this progressive state that really cares about trains
23:48
and they can't build
23:49
SPEAKER_00: it.
23:49
SPEAKER_00: I mean, Obama said it a month ago.
23:52
SPEAKER_00: He said some version of...
23:54
SPEAKER_00: I don't care what your ideology is.
23:57
SPEAKER_00: If you can't actually build whatever you believe in, it doesn't matter.
24:00
SPEAKER_00: It's irrelevant to the people that you're trying to influence.
24:02
Especially in the tech capital of the world,
24:05
we can't even do what other people have done.
24:08
SPEAKER_00: China,
24:08
SPEAKER_00: in the time that we've been trying to build high-speed rail,
24:12
SPEAKER_00: China built like 22,000 miles of high-speed rail.
24:15
SPEAKER_00: And we've built zero.
24:16
SPEAKER_00: Not like 100 miles.
24:17
SPEAKER_00: We built zero miles of high-speed rail.
24:20
SPEAKER_00: And the company...
24:23
The contract was first given to a French company when they
24:26
started in 2007 or whatever.
24:28
SPEAKER_00: And then in 2011,
24:29
SPEAKER_00: they returned the contracts to the state of California,
24:31
SPEAKER_00: and they said,
24:32
SPEAKER_00: it is impossible to build here.
24:34
SPEAKER_00: We're going to go and build it in Morocco.
24:35
SPEAKER_00: I know.
24:36
SPEAKER_00: Because that's easier.
24:37
And that high-speed rail is operating in Morocco,
24:40
and we don't have a single station.
24:43
SPEAKER_00: But I do think this is California's final first big test.
24:48
And I think that,
24:49
I mean,
24:50
the state desperately needs to show that we can build
24:52
something.
24:53
SPEAKER_00: And I think we do need to,
24:54
SPEAKER_00: I think if we want Californians to feel proud about living here,
25:00
if we want employers to take California seriously and decide to
25:05
come here,
25:06
SPEAKER_00: we need a
25:09
an example that we can do stuff in California that is physical
25:14
and big enough to
25:15
SPEAKER_00: overcome the stigma of high-speed rail.
25:18
SPEAKER_00: At some point...
25:22
SPEAKER_00: At some point,
25:22
SPEAKER_00: people talk about...
25:23
SPEAKER_00: Everyone in Sacramento is talking about abundance right now.
25:26
SPEAKER_00: Well,
25:26
SPEAKER_00: at some point,
25:26
you have to stop talking about a book at expensive dinner
25:29
parties in restaurants
25:30
SPEAKER_00: over expensive wine,
25:31
and you have to be able to climb on top of a hill and look and
25:35
point at the
25:35
SPEAKER_00: distance and say,
25:36
SPEAKER_00: hey,
25:37
SPEAKER_00: we built that.
25:38
SPEAKER_00: And there's a lot of good things that are happening at the state with,
25:41
SPEAKER_00: for example,
25:41
SPEAKER_00: the housing reform,
25:42
SPEAKER_00: but it's not a potent political message to resend the narrative to say...
25:51
We built 15,000 units of multifamily housing in 500 buildings
25:56
across California.
25:58
SPEAKER_00: It's not a symbol, right?
25:59
High-speed rail is a symbol because people can imagine what
26:02
that looks like.
26:03
SPEAKER_00: And I think California needs a win.
26:05
And when I look at the list of projects that can demonstrate
26:09
that the state is back,
26:11
SPEAKER_00: I don't see another one.
26:12
SPEAKER_00: Like,
26:13
what else is there that we can build that someone could go and
26:17
campaign on it,
26:18
SPEAKER_00: or you could have a national election and they could say,
26:21
SPEAKER_00: California is back.
26:22
SPEAKER_02: This is it.
26:23
SPEAKER_02: Yeah.
26:23
SPEAKER_02: I just want to put a little more meat around the vision for the city.
26:28
SPEAKER_02: Like,
26:28
SPEAKER_02: there's some parts that I think are easier to wrap your head around,
26:30
SPEAKER_02: which is shipbuilding,
26:33
SPEAKER_02: manufacturing.
26:34
SPEAKER_02: You want...
26:36
SPEAKER_02: people to be able to,
26:37
SPEAKER_02: like,
26:38
work at their jobs and live somewhere nice and maybe have that
26:41
be close by each
26:42
SPEAKER_02: other,
26:42
SPEAKER_02: you know?
26:43
SPEAKER_02: In California over the last 20,
26:46
SPEAKER_02: 30 years,
26:47
SPEAKER_02: I mean,
26:47
SPEAKER_02: when I first started covering Silicon Valley,
26:49
SPEAKER_02: you could work at Sun Microsystems or Cisco or something like that,
26:52
SPEAKER_02: and we actually built the networking equipment in a factory
26:56
SPEAKER_02: I mean, you know, the shift has happened pretty quick in some ways.
27:02
SPEAKER_02: And so that part,
27:03
SPEAKER_02: again,
27:04
SPEAKER_02: when you,
27:04
SPEAKER_02: like,
27:06
SPEAKER_02: just to paint a picture for people of what the city would look like,
27:09
SPEAKER_02: are you trying to build...
27:11
SPEAKER_02: Is it going to look similar to another suburban city?
27:14
SPEAKER_02: Is it going to be ultra-futuristic and modern?
27:17
SPEAKER_02: Or what do you have in your head for what you want to look like?
27:22
SPEAKER_02: I get that this is like a 40, 50-year...
27:24
SPEAKER_00: Well, it's going to take four years to fully build it out.
27:28
SPEAKER_00: But at the same time,
27:30
SPEAKER_00: you can have people living in homes 18 months,
27:34
SPEAKER_00: actually 12 from when you break ground.
27:36
SPEAKER_00: So this can go really, very quickly, even in California.
27:38
SPEAKER_00: People think California can't build.
27:41
SPEAKER_00: California can't permit.
27:43
Once we've permitted something,
27:44
it goes as quickly here as it does in Texas.
27:46
SPEAKER_00: But that aside,
27:49
SPEAKER_00: There's three big components to what we're building in the city.
27:52
SPEAKER_00: So there's a proposed shipyard.
27:53
SPEAKER_00: There's a proposed Solano shipyard.
27:56
SPEAKER_00: There's a proposed place called the Solano Foundry,
27:57
SPEAKER_00: which is the biggest advanced manufacturing park would be in America.
28:01
And then all around that,
28:03
we have these incredible walkable neighborhoods.
28:06
And we want the city to be this really interesting fusion of
28:11
the new and the old.
28:12
SPEAKER_00: And the way that I would describe it is,
28:15
SPEAKER_00: Obviously,
28:15
a place like the Shipyard or the Advanced Manufacturing Zone is
28:18
going to feel very
28:19
SPEAKER_00: futuristic in terms of what you make there,
28:21
SPEAKER_00: right?
28:21
The industries we want to come here are the ones that have been
28:23
invented in Silicon Valley.
28:26
SPEAKER_00: And then we let China build all of the actual products, right?
28:28
SPEAKER_00: So robotics, drones, defense, I mentioned shipbuilding.
28:36
SPEAKER_00: all of those physical industries we want to have here.
28:40
SPEAKER_00: And so obviously those places will have a very futuristic sense to them.
28:44
But then we want to balance that out with what is a very
28:48
traditional American city
28:49
plan when it comes to the downtown and to all of the
28:53
neighborhoods around it.
28:55
SPEAKER_00: The places that I take inspiration from are these late 18th century,
29:00
early 19th century traditional American cities like Manhattan
29:04
and Brooklyn and
29:05
SPEAKER_00: Chicago and Philadelphia,
29:06
SPEAKER_00: or at a smaller scale,
29:09
SPEAKER_00: Charleston and Savannah,
29:10
SPEAKER_00: San Francisco,
29:11
SPEAKER_00: the older neighborhoods in San Francisco.
29:13
And I think that there's something really powerful and super
29:18
interesting about this
29:19
SPEAKER_00: fusion of the old and the new,
29:21
SPEAKER_00: where
29:23
SPEAKER_00: Once this place gets going, it is going to feel like America's frontier.
29:27
I think one of the things that we've lost as a country is the
29:29
sense of a frontier,
29:30
SPEAKER_00: and this can very much feel like that.
29:33
SPEAKER_00: But then one of the challenges that I think as a country we deal with is
29:40
Sometimes we don't do a particularly good job of painting the
29:43
vision of what the
29:45
SPEAKER_00: pro-tech future can be.
29:47
SPEAKER_00: And some of that is just the physical description of it, right?
29:49
SPEAKER_00: I mean,
29:49
you look at some of the descriptions of the future and it's
29:52
glass towers and
29:54
SPEAKER_00: massive skyscrapers and it looks like Blade Runner or whatever.
29:59
SPEAKER_00: And you can have that in small pockets,
30:01
SPEAKER_00: but if that's the entirety of how you paint the city of a future,
30:04
to most people that feels very cold and impersonal and not a
30:08
place that they want
30:09
SPEAKER_00: to live in.
30:09
And I think this combination of the new and the old could be
30:12
really powerful,
30:12
SPEAKER_00: and that's what we're aiming for.
30:14
SPEAKER_02: I've been to Shenzhen.
30:15
SPEAKER_02: I mean,
30:16
part of it is amazing because you go and there's these massive
30:18
skyscrapers,
30:20
SPEAKER_02: and they've got LEDs on all the outside of the building,
30:22
SPEAKER_02: and at night they'll do these incredible shows.
30:25
There's a horse galloping from building to building across the
30:29
whole thing.
30:30
SPEAKER_02: I do also think,
30:31
SPEAKER_02: though,
30:31
SPEAKER_02: that I'm not sure that the...
30:34
SPEAKER_02: I don't think that's necessarily the idealized version of where,
30:38
SPEAKER_02: like,
30:39
SPEAKER_02: the average American might want to...
30:41
SPEAKER_02: Some people would want to live there,
30:42
SPEAKER_02: but I think some people...
30:44
There is something about it that is Blade Runner-y and is maybe
30:48
like attractive to
30:49
SPEAKER_02: someone like me,
30:49
SPEAKER_02: but maybe not.
30:51
SPEAKER_00: Yeah, exactly.
30:52
SPEAKER_00: I think that there's a... I think that there's...
30:56
SPEAKER_00: There's a need to have the super futuristic high-rise tower part of,
31:02
SPEAKER_00: at least in some cities,
31:03
SPEAKER_00: we are not proposing to build it here,
31:05
SPEAKER_00: but there is a need for it,
31:06
SPEAKER_00: right?
31:07
SPEAKER_00: It's novel to go there and live there for a while,
31:09
SPEAKER_00: and maybe in your 20s,
31:11
SPEAKER_00: it's fun to go there for the weekend.
31:13
SPEAKER_00: I love going to New York and being on a 50th floor for the weekend.
31:16
SPEAKER_00: Do I want to live on a 50th floor, particularly with kids?
31:19
SPEAKER_00: Not really, and I try that.
31:22
SPEAKER_00: And I think you actually see it.
31:26
SPEAKER_00: We've had this huge movement towards modernist architecture,
31:29
which I think has been an absolute disaster and horrible for
31:32
the country and for
31:33
SPEAKER_00: the world.
31:33
And the paths that I find the best is you have these professors
31:39
who will teach
31:40
modern architecture and they'll be at universities and they'll
31:43
talk about how
31:44
traditional architecture is horrible and it's outdated and
31:47
building it again is
31:47
SPEAKER_00: kitsch and we should never do it.
31:50
And everything that you build has to be functional and sleek
31:53
and tall and modern and glass.
31:55
SPEAKER_00: And then you ask them, where do you live?
31:58
And they live in,
31:58
like,
31:59
an 1880 row house in Georgetown over in the West Village.
32:02
And so the revealed preference of even the people who spend
32:05
their life designing
32:07
these buildings is actually very often to live in places that
32:10
are much more human.
32:11
SPEAKER_02: And so you're kind of describing,
32:12
SPEAKER_02: like,
32:12
SPEAKER_02: when you talk about walkable and all this,
32:14
SPEAKER_02: I mean,
32:14
SPEAKER_02: you're talking about just a...
32:17
SPEAKER_02: I mean,
32:17
SPEAKER_02: I guess it looks a little bit conventional in some sense,
32:22
SPEAKER_02: and you do stress the walkable part,
32:25
so it's just that you would be in this community where you
32:30
don't have to hop in
32:30
your car for everything and kids are out playing in parks and
32:35
things like that.
32:36
SPEAKER_00: Yeah, it's that.
32:38
It is that it actually has good design and fairly traditional
32:43
architecture.
32:44
SPEAKER_00: I mean, why do...
32:46
Part of the reason for why we have these fights over housing is
32:49
that so much
32:50
SPEAKER_00: housing looks absolutely awful.
32:52
You look at most of these new buildings that we put up that we
32:55
call five over ones,
32:58
SPEAKER_00: they all look the same,
32:59
SPEAKER_00: and they look bad,
33:00
SPEAKER_00: and they have this
33:05
SPEAKER_00: fake asymmetry in them.
33:07
And they try to look like they are five different buildings
33:10
when they are not.
33:11
SPEAKER_00: And it's these gray,
33:12
SPEAKER_00: brown,
33:12
SPEAKER_00: indistinct boxes that look the same in LA and San Francisco and Dallas.
33:16
And then everyone is surprised that people don't want that in
33:19
their neighborhood.
33:20
SPEAKER_00: And I think it's, the standard is so low.
33:25
I mean,
33:26
if you say,
33:26
if in California what you want is you want to be able to
33:31
SPEAKER_00: Live in a neighborhood that is safe,
33:34
SPEAKER_00: where your kids can walk to school,
33:36
SPEAKER_00: and you can walk outside to go have lunch or dinner or a glass of wine.
33:42
And you have a commute that is less than 20 minutes,
33:45
however you get on the commute.
33:47
And the average person who makes the average salary can afford
33:53
to live in that place.
33:55
SPEAKER_00: That should be table stakes.
33:56
SPEAKER_00: That shouldn't be, like,
33:59
SPEAKER_00: That's just foundational California dream, American dream.
34:03
SPEAKER_00: We are nowhere near enough to do that.
34:06
I mean,
34:07
there's maybe 1% of the housing stock in California that can
34:10
provide that to people.
34:11
SPEAKER_00: I mean,
34:12
SPEAKER_00: I don't know,
34:12
SPEAKER_00: Santa Monica,
34:13
SPEAKER_00: parts of San Francisco,
34:14
SPEAKER_00: Berkeley,
34:14
SPEAKER_00: and the house in those places,
34:16
SPEAKER_00: other than like some small towns that are more remote,
34:21
SPEAKER_00: the average house in those places is like $4 million.
34:23
SPEAKER_00: Like, how did we get to a place where
34:28
SPEAKER_00: that is somehow ambitious.
34:30
SPEAKER_00: That is very basic.
34:32
SPEAKER_00: But I think that the
34:35
SPEAKER_00: The optimistic take on that is that if all we do,
34:39
if all we do is a place that is something that would be very
34:42
unexciting to someone
34:43
SPEAKER_00: 100 years ago,
34:44
SPEAKER_00: they'd be like,
34:45
SPEAKER_00: oh,
34:45
SPEAKER_00: yeah,
34:45
SPEAKER_00: someone is building another traditional neighborhood like this one,
34:48
SPEAKER_00: and people would be complacent.
34:49
SPEAKER_00: And I said,
34:50
I think it would be the hottest commodity on the market right
34:52
now because we've
34:53
SPEAKER_00: screwed up the design of our city so badly.
34:56
SPEAKER_00: Or at least, let me qualify that.
35:02
SPEAKER_00: There is a need and there's a place for the traditional kind of suburban
35:07
SPEAKER_00: neighborhoods that we built.
35:09
SPEAKER_00: And some people really love living in them.
35:11
SPEAKER_00: The problem is,
35:12
SPEAKER_00: if half of the population really wants that,
35:14
SPEAKER_00: the problem in California is 99% of the housing stock is that.
35:19
SPEAKER_00: I mean, it's like,
35:21
You look at most neighborhoods that are for sale in California,
35:24
and they all look the same.
35:25
SPEAKER_00: It's kind of like if 99% of restaurants serve pizza.
35:29
SPEAKER_00: I mean,
35:29
SPEAKER_00: I love pizza,
35:29
but at some point you want high on the Mexican and all of the
35:32
other places,
35:33
SPEAKER_00: right?
35:33
SPEAKER_00: And we've just created...
35:34
If you look at the diversity of products that you have in
35:41
fashion and music and
35:43
SPEAKER_00: cuisine and entertainment and everything else that we do,
35:46
SPEAKER_00: and you compare it to the diversity of products that we have in housing,
35:54
housing and kind of neighborhoods,
35:56
it's two orders of magnitude less diversity.
35:59
SPEAKER_00: And that's crazy because you spend 40% of your income on it.
36:02
So the biggest ticket item that we buy provides the least
36:06
choice to people.
36:07
And I think that the lack of choice is just deeply kind of
36:10
un-American in some sense.
36:12
SPEAKER_02: Okay,
36:13
I want to get people to like the status of the project and
36:17
where we're going for
36:17
SPEAKER_02: it,
36:17
SPEAKER_02: but I want to do the backstory a bit first because it's crazy.
36:22
SPEAKER_02: They're your Czech.
36:24
SPEAKER_02: That's right.
36:25
SPEAKER_02: And you said you came to the US in 2014?
36:28
SPEAKER_02: 2014, yeah.
36:29
SPEAKER_02: And you grew up... I mean, we've known each other a little bit.
36:32
SPEAKER_02: You grew up in a pretty small Czech town.
36:35
SPEAKER_02: You're not... 700 people, yeah.
36:37
SPEAKER_02: Yeah.
36:37
SPEAKER_02: And so what... I mean...
36:40
SPEAKER_02: Two questions.
36:41
Why does a Czech person care about California so much to go to
36:46
the trouble of
36:47
SPEAKER_02: dedicating their life to this?
36:48
SPEAKER_02: And then tell me,
36:50
SPEAKER_02: like,
36:50
a little bit of the journey of your background and then how you
36:55
got to this project
36:56
SPEAKER_02: on day one.
36:57
SPEAKER_00: Yeah.
37:00
SPEAKER_00: So I grew up in a very small town in an entirely blue-collar family.
37:06
SPEAKER_00: So my dad is a mechanic.
37:08
SPEAKER_00: My uncles work with CNC machines and in factories.
37:11
SPEAKER_00: My grandmother worked in a quarry.
37:13
SPEAKER_00: And I mean like doing physical work in a quarry and a steel mill.
37:19
SPEAKER_00: And I was born two years before the war came down.
37:22
SPEAKER_00: So I basically grew up in this very
37:26
SPEAKER_00: in this kind of burst of optimism in Eastern Europe in the 90s,
37:32
SPEAKER_00: which was heavily driven by American culture,
37:34
SPEAKER_00: which was heavily driven by Californian culture at the time,
37:36
SPEAKER_00: right?
37:37
So I grew up on this diet of entertainment and movies that
37:40
portrayed California as
37:41
SPEAKER_00: this deeply optimistic place that was on top of the world.
37:44
SPEAKER_00: And I wanted to come here in my teens.
37:46
SPEAKER_00: I got a scholarship to go to school abroad.
37:50
SPEAKER_00: My mom asked me to not go to America because she wanted to see me more.
37:54
SPEAKER_00: So I went to the UK, so I was closer.
37:56
So I spent 10 years in the UK and in Switzerland and then
38:00
eventually made it out here in 2013.
38:06
SPEAKER_00: I actually,
38:08
SPEAKER_00: I kind of think that the core of this idea really,
38:12
SPEAKER_00: I mean,
38:12
SPEAKER_00: it was literally the first time,
38:14
the first weekend when I arrived in California in some sense
38:17
was the foundation of
38:18
SPEAKER_00: this,
38:19
SPEAKER_00: where I remember
38:21
So I grew up with this vision of California,
38:23
deeply multi-place,
38:24
build anything.
38:25
SPEAKER_00: I get on this super modern train in Switzerland.
38:28
SPEAKER_00: I go to a beautiful new airport in Zurich.
38:30
SPEAKER_00: I fly to San Francisco.
38:32
SPEAKER_00: This is before the airport had a makeover.
38:34
SPEAKER_00: So the airport doesn't look great.
38:35
SPEAKER_00: And then I get embarked.
38:37
SPEAKER_00: to go to San Francisco.
38:38
SPEAKER_00: And I literally couldn't believe it.
38:40
SPEAKER_00: I was like, what the hell is this?
38:42
SPEAKER_00: This looks like it's 50 years old, and nobody's using it.
38:45
SPEAKER_00: And then I got off Bart at Market and Powell.
38:50
SPEAKER_00: Oh, like the Tenderloin.
38:52
SPEAKER_00: And then basically almost at the Tenderloin.
38:54
SPEAKER_00: And so I landed in San Francisco, and this is 2014.
38:56
SPEAKER_00: And this was a Saturday.
39:00
SPEAKER_00: And I was like, what should I go?
39:01
SPEAKER_00: And I didn't know anyone at all.
39:02
SPEAKER_00: And it's like, what should I see in San Francisco?
39:05
SPEAKER_00: And Twitter just opened an office.
39:06
So not only did I land on Market Street,
39:08
and I was like,
39:09
let me walk to the Twitter office.
39:10
SPEAKER_00: So I walked through the worst part of the city,
39:14
SPEAKER_00: through everything that was happening at the time.
39:17
SPEAKER_00: And it was just a cultural shock.
39:19
Because I grew up,
39:20
I mean,
39:20
at the time,
39:21
Silicon Valley was on top of the world,
39:22
right?
39:22
This is the time when 100,000 young people are leaving New York
39:25
every year to move
39:26
SPEAKER_00: to San Francisco.
39:27
And it was before the media really kind of made that notorious
39:33
all over the world.
39:34
SPEAKER_02: Yeah, it was before the 2016 election.
39:36
SPEAKER_00: Exactly, exactly.
39:37
SPEAKER_00: And so it was just a cultural shock at the end, that first day.
39:41
SPEAKER_00: And then the second day,
39:44
SPEAKER_00: And this actually goes to the walkability piece of the story.
39:48
I had spent 10 years living in these incredible traditional
39:51
cities like York and
39:52
SPEAKER_00: Cambridge and London and Zurich,
39:53
SPEAKER_00: didn't have a car,
39:54
SPEAKER_00: then drive a car for 10 years.
39:55
It was so bad that I felt that I forgot how to drive a car,
39:59
so I had to rent a car the Sunday.
40:01
SPEAKER_00: I had a meeting on Sunhill the next day,
40:02
so I rented a car on the Sunday just to drive it around to make
40:05
sure that I could
40:05
SPEAKER_00: actually physically do it.
40:08
SPEAKER_00: And I drove around Silicon Valley
40:10
SPEAKER_00: And I had the same reaction that many people before me did,
40:12
SPEAKER_00: which is,
40:13
SPEAKER_00: where the hell is Silicon Valley?
40:16
SPEAKER_00: We have these strip malls, and we have these subdivisions.
40:19
SPEAKER_00: Like, where is it?
40:20
SPEAKER_00: We've got a Quiznos.
40:21
SPEAKER_00: Where is it?
40:24
And it was kind of...
40:26
Because if you look historically,
40:29
this combination of
40:33
How many times did this combination of human capital and
40:36
financial capital and
40:37
creativity and openness to innovation and people from all over
40:40
the world coming
40:41
SPEAKER_00: together happen?
40:43
SPEAKER_00: Florence, Paris, London, New York, Chicago, Bay Area, and maybe LA?
40:48
SPEAKER_00: That's it, at least in the Western world.
40:52
SPEAKER_00: And every time when it happened prior to the West Coast,
40:56
it created these gorgeous cities that stood for hundreds of
41:00
thousands of years and
41:01
SPEAKER_00: they had public art and they had these institutions.
41:04
SPEAKER_00: And even in New York,
41:05
SPEAKER_00: I mean,
41:06
people love to criticize the tycoons of the first industrial or
41:13
the second
41:13
SPEAKER_00: industrial revolution,
41:14
SPEAKER_00: right?
41:14
But you have Carnegie Hall and you have the Met and you have
41:17
all of the beautiful
41:18
SPEAKER_00: buildings on Central Park and
41:20
SPEAKER_00: You can see where that money went, and you can see what it made.
41:25
SPEAKER_00: Where is it here?
41:26
SPEAKER_00: It's not here.
41:27
SPEAKER_00: And so that first weekend was a cultural shock.
41:29
SPEAKER_00: And then I landed here.
41:34
Kim Mike Cutler is writing about borrowing owls in TechCrunch
41:38
and the origin of the
41:38
SPEAKER_00: housing crisis.
41:40
SPEAKER_00: People are throwing rocks at Google buses.
41:42
SPEAKER_00: And I'm like, wait a second.
41:45
SPEAKER_00: I grew up in this place where there was no opportunity.
41:48
SPEAKER_00: You have to work for it.
41:51
SPEAKER_00: Everything was blue-collar.
41:53
SPEAKER_00: There was no free lunch.
41:54
SPEAKER_00: And the whole world was trying to become Silicon Valley.
41:58
SPEAKER_00: And here people were upset that Google was creating good-paying jobs.
42:04
And sometimes it takes an outsider to look at it and be like,
42:06
this is completely insane.
42:09
SPEAKER_00: It's the same as, like, you live in San Francisco for six years.
42:11
SPEAKER_00: I did.
42:12
SPEAKER_00: You get used to some of the challenges of the city, right?
42:15
It takes that moment of arrival and the shock to be like,
42:19
this is completely budget crazy.
42:20
SPEAKER_00: This cannot be crazy.
42:21
SPEAKER_00: Well, you know, it curtailed the massage program.
42:23
SPEAKER_00: Yeah, yeah, exactly.
42:26
And so I land here at that time,
42:28
and then San Francisco passes an office cab.
42:32
SPEAKER_00: Like, you have...
42:34
You have capital from all over the world wanting to come to San
42:38
Francisco to build
42:40
SPEAKER_00: offices,
42:41
SPEAKER_00: housing,
42:41
SPEAKER_00: whatever.
42:42
SPEAKER_00: And the money is literally waiting on outside of the city.
42:46
SPEAKER_00: And all they had to do is to say, OK, you can build.
42:49
SPEAKER_00: By the way, all of these jobs were union jobs.
42:51
SPEAKER_00: All of the offices in San Francisco are getting built with union labor.
42:55
SPEAKER_00: And they pass an office cap.
42:57
SPEAKER_00: Like, we don't want any more jobs here.
43:00
SPEAKER_00: It was just completely bad shit crazy.
43:01
SPEAKER_00: It seemed like a bad dream.
43:04
SPEAKER_00: And that was kind of the foundational story.
43:07
SPEAKER_00: So for two years, this was an interest.
43:11
And I went on this deep dive of how did we get here as a state
43:14
and as a country.
43:15
SPEAKER_02: And you're what?
43:16
SPEAKER_02: You're a business person.
43:18
SPEAKER_00: I was running a small tech startup, basically.
43:22
SPEAKER_00: It was in software, in training and education.
43:26
SPEAKER_00: And then eventually we sold that, and I had some time.
43:30
SPEAKER_00: And so I just kind of went on this deep dive,
43:32
SPEAKER_00: and I went and read 500 books about the history of cities and real estate
43:37
development and land use of regulations in California and the
43:41
patterns of just
43:43
SPEAKER_00: general development in America,
43:44
SPEAKER_00: like how do we build new cities,
43:48
SPEAKER_00: how do governments work at a municipal level,
43:50
and what are all of the issues that cause these land use
43:53
battles and CEQA and
43:55
SPEAKER_00: California regulations.
43:57
SPEAKER_00: And it was an interest, but eventually it was an obsession.
44:00
SPEAKER_00: And the whole time the situation is getting worse.
44:03
SPEAKER_00: There's more and more money getting pumped into the venture ecosystem,
44:07
SPEAKER_00: and more and more of it is just getting completely lost by
44:11
SPEAKER_00: basically paying for overpriced real estate.
44:13
SPEAKER_00: And then these companies are beginning to leave to Phoenix.
44:15
SPEAKER_00: And this is the time when all of that is happening.
44:16
SPEAKER_00: I'm kind of like wanting to scream.
44:19
SPEAKER_00: I'm like,
44:19
SPEAKER_00: guys,
44:20
SPEAKER_00: the whole world is trying to create,
44:21
like governments all over the world are pumping billions of
44:24
dollars to create the
44:25
SPEAKER_00: next Silicon Valley.
44:26
And we are killing it by just,
44:28
and the only thing we have to let is let these companies build.
44:31
SPEAKER_00: That's insane.
44:34
Then I decided to go and work on how we would build more in
44:38
existing cities.
44:40
SPEAKER_00: So not from a regulatory reform perspective, but
44:46
Can you buy buildings that have too much parking around them
44:49
and then get the
44:50
SPEAKER_00: permission to build more offices,
44:52
SPEAKER_00: more manufacturing,
44:53
SPEAKER_00: more housing on it?
44:55
Potentially,
44:56
I was looking at,
44:57
well,
44:58
if we get self-driving cars,
44:59
parking demands go down.
45:00
SPEAKER_00: Can you do that?
45:01
But what that experiment did for about a year was I was more
45:05
depressed at the end
45:05
of it than at the beginning because it was very clear that we
45:08
had set up a system
45:09
SPEAKER_00: where you couldn't solve the under-building in just the existing cities.
45:13
SPEAKER_00: And then eventually,
45:16
SPEAKER_00: in 2016,
45:16
because I'd read about people building new cities all over
45:20
America for 200 years.
45:24
SPEAKER_00: So in 2016, I thought, well, wait a second.
45:27
SPEAKER_00: What if you built a new city at the edge of the Bay Area,
45:30
SPEAKER_00: somewhere close enough that you could get there?
45:33
And then you brought a bunch of jobs there,
45:35
both office and manufacturing.
45:37
SPEAKER_00: You build a lot of really high-quality, walkable neighborhoods.
45:40
SPEAKER_00: you could make a huge dent in the problem.
45:43
And within seconds of thinking of that idea,
45:47
I thought,
45:49
you should do that.
45:50
SPEAKER_00: I should do that in Solano County,
45:52
because I had come through here to go fishing in Rio Vista
45:55
about four months before
45:56
SPEAKER_00: that.
45:56
SPEAKER_00: And so I remember driving through this gigantic,
45:59
SPEAKER_00: open,
46:00
expansive area that clearly wasn't being used for prime
46:03
farmland or crops.
46:04
SPEAKER_00: It wasn't forest.
46:06
SPEAKER_00: It wasn't something that people really were
46:10
SPEAKER_00: very actively using, and that was the very beginning of that idea.
46:14
SPEAKER_02: Okay,
46:15
SPEAKER_02: since day one,
46:16
the Core Memory podcast has been supported by the fine people
46:19
at E1 Ventures.
46:20
SPEAKER_02: They are a young and ambitious VC firm in Silicon Valley,
46:25
SPEAKER_02: investing in young and ambitious companies and people.
46:28
SPEAKER_02: Thank you so much to E1 Ventures for all your support.
46:32
SPEAKER_02: How did you hit on Solano County in particular?
46:36
So basically immediately when I thought of building a new new
46:39
city at the edge of
46:39
SPEAKER_00: the Bay Area,
46:40
I thought of Solano because I had completely randomly come
46:45
through here about four
46:46
SPEAKER_00: months before then to go fish in Rio Vista,
46:48
SPEAKER_00: which is a small town out here.
46:50
SPEAKER_00: And I remember seeing this gigantic,
46:52
SPEAKER_00: expansive area that it was basically brown grass in the summer.
46:56
SPEAKER_00: And I thought that could be a really interesting place to do it.
47:00
SPEAKER_00: And
47:02
Particularly because I remember talking to a fishing guide on
47:04
the river and asking,
47:06
SPEAKER_00: where does your wife work?
47:07
SPEAKER_00: And he said, Mountain View.
47:09
which in morning traffic is an hour and a half easy,
47:12
if not more than that.
47:13
And he had a two-year-old son,
47:15
and he said,
47:15
well,
47:15
I asked him,
47:16
how does that work?
47:17
SPEAKER_00: And he said, well, she leaves at 4 a.m.
47:20
SPEAKER_00: in the morning to see the traffic.
47:22
SPEAKER_00: And then we never see each other, and we kind of overlap.
47:24
SPEAKER_00: And it was just this insanity of,
47:26
SPEAKER_00: you have these people here who want local jobs,
47:28
and you have these companies in Silicon Valley who want to stay
47:31
in California and
47:32
SPEAKER_00: who want to build,
47:33
SPEAKER_00: whether it's office or manufacturing,
47:34
SPEAKER_00: and they are being pushed to
47:37
SPEAKER_00: Arizona.
47:37
SPEAKER_00: So the companies are losing,
47:39
SPEAKER_00: the residents in Solano County are losing,
47:41
SPEAKER_00: the state of California is losing.
47:43
SPEAKER_00: If you could just orchestrate it and put it here, everyone would win.
47:46
SPEAKER_00: There would be a win for Solano,
47:48
SPEAKER_00: win for the Bay Area,
47:48
SPEAKER_00: win for tech,
47:50
SPEAKER_00: win for the country,
47:51
SPEAKER_00: by the way,
47:51
because you can clearly innovate much faster if you don't have
47:54
to get on planes to
47:55
SPEAKER_00: go to those places.
47:56
SPEAKER_00: And so that was the foundation of that.
48:02
Well,
48:02
everything you said makes sense as to why you would want to do
48:05
this.
48:06
It's obviously insane for some Czech guy who's been in the
48:09
United States for two
48:10
SPEAKER_02: years to be like,
48:11
SPEAKER_02: I'm going to go make a new city.
48:14
Yeah,
48:14
although I think,
48:16
you know what,
48:17
I think it's a,
48:18
and I did feel insane.
48:19
SPEAKER_00: My third reaction, my first reaction was great idea.
48:21
My second reaction 10 seconds later was,
48:23
this is completely bullshit insane.
48:25
SPEAKER_00: And if it was a good idea, someone would have done it already.
48:28
SPEAKER_00: But now,
48:29
SPEAKER_00: 10 years later,
48:29
SPEAKER_00: looking at it with the benefit of hindsight,
48:33
SPEAKER_00: I think it's quintessentially American and Californian.
48:36
SPEAKER_00: I mean,
48:36
SPEAKER_00: you read these stories of how,
48:40
SPEAKER_00: I mean,
48:41
SPEAKER_00: obviously companies in the valley,
48:42
SPEAKER_00: but also cities,
48:43
SPEAKER_00: I mean,
48:44
they were generally founded by like some crazy guy who came
48:47
from somewhere else in
48:48
SPEAKER_00: the world.
48:52
SPEAKER_00: That's how all these stories start.
48:53
SPEAKER_00: And it doesn't feel like that when you were there at the beginning,
48:55
SPEAKER_00: but now that I look back,
48:56
SPEAKER_00: it kind of actually all makes perfect sense.
48:58
SPEAKER_00: My immediate reaction, my first reaction was, this is an amazing idea.
49:01
SPEAKER_00: This is the best side for it.
49:04
My second thought immediately after that was,
49:06
this is completely batshit crazy.
49:08
SPEAKER_00: Someone would have done this already.
49:10
SPEAKER_00: And then over the next two weeks,
49:12
SPEAKER_00: I basically oscillated between those two ideas about every five minutes,
49:16
SPEAKER_00: which as it turns out is really bad for your mental health.
49:20
particularly if you've just spent two years thinking about this
49:23
problem or three
49:23
SPEAKER_00: years thinking about this problem.
49:26
And so then I did the rational thing,
49:30
which is I said,
49:30
okay,
49:30
let me prove that it's a bad idea.
49:33
And I basically wrote down every single reason that I could
49:35
think about for why it
49:36
SPEAKER_00: was a bad idea.
49:37
SPEAKER_00: There's not enough water.
49:38
SPEAKER_00: There's an issue with the soil.
49:39
SPEAKER_00: The politics doesn't work.
49:41
You can't build transportation infrastructure,
49:44
whatever it is that you can think about.
49:46
And then I just went and systematically tried to answer those
49:49
questions for about six months.
49:51
SPEAKER_00: And I couldn't find the fatal flaw.
49:54
Every one of them had either an engineering solution or
49:57
actually it was a really good site.
50:01
SPEAKER_00: And then at the end of it, I still wasn't sure.
50:04
SPEAKER_00: So I thought,
50:05
SPEAKER_00: if it's such a good site,
50:07
someone must have done some kind of a long range plan that at
50:10
some point someone
50:11
SPEAKER_00: thought of what should go here.
50:13
SPEAKER_00: And I remember from years ago,
50:16
reading about this study called the Future Development of the
50:18
San Francisco Bay
50:19
SPEAKER_00: Area,
50:19
SPEAKER_00: 1960 through 2020.
50:21
SPEAKER_00: It was done by the U.S.
50:23
SPEAKER_00: Commerce Department and the Army Corps of Engineers.
50:26
SPEAKER_00: And...
50:28
SPEAKER_00: I read about it, but I never got it.
50:30
SPEAKER_00: And you couldn't get it online, but you could buy it on eBay.
50:32
SPEAKER_00: So I ordered it on eBay.
50:33
SPEAKER_00: It was the original binders from 1958.
50:35
SPEAKER_00: And it was the longest two weeks to wait for it to arrive, but it did.
50:40
And what they did is they mapped in the Nine County Bay Area
50:43
where development
50:44
SPEAKER_00: should go over that 60-year period of time.
50:47
SPEAKER_00: in 58.
50:48
And I remember sitting in my apartment and turning over these
50:51
maps one by one.
50:52
SPEAKER_00: And you look at the 58 map and there's still orchards in Santa Clara.
50:56
SPEAKER_00: East Bay basically doesn't, almost undeveloped.
50:59
And then I get to the 80s and the 90s and they really correctly
51:02
predicted the
51:03
SPEAKER_00: growth of Pleasanton and Dublin and Walnut Creek.
51:06
SPEAKER_00: And so I'm like, okay, they're getting a little stuff right.
51:08
SPEAKER_00: And I get to 2000 and I'm looking at our area and there's nothing there.
51:11
SPEAKER_00: So I'm kind of getting depressed of like, okay, maybe this is a bad idea.
51:14
SPEAKER_00: And then I flip open the 2010 map.
51:16
SPEAKER_00: And I remember I'm sitting there in 2016, 2017.
51:20
SPEAKER_00: And where I thought there should be a city, there was a city.
51:24
SPEAKER_00: So they had predicted.
51:25
SPEAKER_00: It's crazy to the point where
51:30
Where they had the origins of that city is where we've put the
51:34
downtown of the city
51:35
SPEAKER_00: that we are putting in there.
51:37
SPEAKER_00: And we are not putting in there because they did.
51:39
We're putting it there because it actually is the best place to
51:42
do it within those
51:43
SPEAKER_00: hundred square miles that we control.
51:46
So they got all this other stuff right and then external forces
51:53
had stopped the
51:54
SPEAKER_02: simulation from continuing.
51:56
Yeah,
51:57
you know,
51:57
yes,
51:58
but also they didn't predict it would start until about 2010.
52:04
SPEAKER_00: And so they,
52:05
SPEAKER_00: I mean,
52:05
SPEAKER_00: in some sense,
52:06
what we're doing is taking off these very old plants and
52:10
dusting them off and then
52:13
SPEAKER_00: breathing new life into them.
52:14
SPEAKER_00: And obviously we're modifying what nobody could have predicted
52:19
that we would want to be building here something that is
52:24
focused on manufacturing
52:25
or something that's focused on shipbuilding or that it would
52:27
have a East Coast
52:29
SPEAKER_00: European flavor to it.
52:30
But the idea of this being a great place to build was there
52:33
very much in the beginning.
52:35
I think it got delayed by some of that kind of California
52:39
anti-growth bad dream
52:40
SPEAKER_00: that we are waking up from right now.
52:43
SPEAKER_00: But they even got the timing right.
52:45
SPEAKER_02: Are you married in 2016?
52:47
SPEAKER_00: No,
52:48
SPEAKER_00: I was dating Nathan,
52:51
SPEAKER_00: who's now my wife,
52:53
SPEAKER_00: but I was dating her and I remember bringing her out here,
52:58
SPEAKER_00: actually.
52:59
SPEAKER_00: What's that conversation?
53:02
SPEAKER_00: It was interesting.
53:03
SPEAKER_00: I've got an idea.
53:04
SPEAKER_00: She knew that.
53:05
I mean,
53:06
I spent two years obsessing about it and nonstop talking to her
53:11
about it.
53:11
SPEAKER_00: And she was a great intellectual partner in walking through it.
53:16
But I remember bringing her the first time and she kind of
53:19
looked at the scale of
53:20
SPEAKER_00: it and she was like,
53:21
SPEAKER_00: are you sure this is not too much?
53:24
SPEAKER_00: But she very quickly grew converted.
53:26
SPEAKER_00: You've been thinking about this for a couple of years.
53:28
SPEAKER_02: You start to...
53:30
SPEAKER_02: put some shape around it.
53:32
At some point,
53:32
you have to get a lot of money to make something like this
53:38
real.
53:38
I keep trying to picture in my head being in your shoes and
53:42
walking into somebody
53:44
SPEAKER_02: like a Marc Andreessen's office and be like,
53:46
SPEAKER_02: I've got an idea I'm gonna create.
53:48
A city and I can understand that some of those people are
53:51
actually inclined that
53:52
SPEAKER_02: way,
53:53
SPEAKER_02: obviously,
53:53
but it still seems like a difficult discussion to not seem like
53:57
a crazy person as
53:59
SPEAKER_02: you're you're presenting this idea.
54:01
SPEAKER_02: And it's not it's clearly not your typical startup.
54:05
SPEAKER_00: Yeah, I mean, Mark actually got it within about five minutes.
54:09
SPEAKER_02: What did you do?
54:10
SPEAKER_02: You just started knocking on doors, being like, hi, I'm Jan.
54:14
SPEAKER_00: Did you have a network?
54:15
SPEAKER_00: I knew a couple of people, and you know how it goes with these things.
54:22
The very first time that I tried to raise money for it from a
54:25
bunch of different
54:25
SPEAKER_00: people,
54:26
SPEAKER_00: nobody would invest.
54:27
SPEAKER_00: I mean,
54:27
SPEAKER_00: people generally said,
54:28
SPEAKER_00: yeah,
54:28
SPEAKER_00: this is a good idea,
54:29
SPEAKER_00: but there must be some reason for why this wouldn't work.
54:32
SPEAKER_00: And it was too crazy, right?
54:34
SPEAKER_00: The benefit you have if you're raising money for a SaaS company,
54:37
SPEAKER_00: like the product is crazy,
54:38
SPEAKER_00: but the business model exists,
54:39
SPEAKER_00: and I've seen this work before.
54:40
SPEAKER_00: Nobody has built a new city in America since 1960s.
54:43
SPEAKER_02: Right, well, you're going to get rich from some product.
54:46
SPEAKER_02: You know what I mean?
54:47
SPEAKER_02: It's like, I want you to give me a lot of money for this crazy idea.
54:52
SPEAKER_02: Maybe you get some land, but it's unclear.
54:56
SPEAKER_00: Yeah.
54:59
It must have been like trying to raise money for a hard tech
55:03
startup in 2010,
55:04
right?
55:05
SPEAKER_00: People just weren't doing it.
55:06
SPEAKER_00: So the first time, people just said no.
55:11
But I was so convinced it would work that I basically decided
55:16
that I had to prove it.
55:17
And so what I did is I took everything I had and I borrowed way
55:20
too much money that
55:21
SPEAKER_00: probably shouldn't have been allowed to borrow.
55:23
SPEAKER_00: Personally, not a company because nobody would learn to a company.
55:26
And I used it to go and tie up the initial few parcels of land
55:30
that were listed on the market.
55:31
SPEAKER_00: And then I used it to do some
55:35
SPEAKER_00: basically hire experts who would validate what I was telling people.
55:39
SPEAKER_00: So I told people there's enough water,
55:41
SPEAKER_00: or the politics works,
55:43
SPEAKER_00: or this is how you would solve this problem,
55:46
SPEAKER_00: or there's no issues with the soils.
55:48
SPEAKER_00: The soils, in fact, are really great for building stuff.
55:51
SPEAKER_00: I'd been able to get a set of feasibility studies done.
55:56
And with all of that,
55:58
I was then able to go and raise money,
55:59
but it was a tight,
56:02
I remember,
56:04
I started tying up the first properties in the summer of 2017
56:06
and I had to raise 10
56:10
SPEAKER_00: million dollars by,
56:11
SPEAKER_00: it was like January 18th of the next year,
56:14
otherwise I would lose all of the money that I had invested in
56:18
deposits and
56:19
SPEAKER_00: feasibility studies and whatnot.
56:23
SPEAKER_00: And so I had four months, and it was a very stressful four months.
56:27
SPEAKER_00: My wife at the time,
56:29
SPEAKER_00: my girlfriend,
56:30
she would say I was not a very pleasant person to be around
56:33
those four months.
56:35
SPEAKER_00: But no, I got it done, and I think we closed the round on January 16th.
56:41
SPEAKER_00: Who were the first couple people that bought in?
56:45
SPEAKER_00: The very first two were Charlie Songhurst and Patrick Collison.
56:50
SPEAKER_01: OK.
56:51
SPEAKER_02: So that gives you a little momentum and some belief and some hope.
56:56
SPEAKER_00: Yeah, I mean, they were two of the early ones.
56:58
SPEAKER_00: And then there was probably about,
57:03
I think it was about eight or 10 people who basically did the
57:07
first $10 million
57:08
SPEAKER_00: raise.
57:09
SPEAKER_00: Mark was one of the people.
57:10
SPEAKER_00: Mike Moritz was another one who was in the early days.
57:12
SPEAKER_00: Nat Friedman was in that first round as well.
57:15
SPEAKER_00: Patrick, a few other people.
57:16
so then you know if this is going to work and you're going to
57:19
have to buy more land
57:20
and you're going to have to do this secretly you're going to
57:24
have to figure out how
57:25
to do that i mean do you just tap on some expert in creating
57:31
like a string of shell
57:32
company how do you even begin to figure out how to buy land
57:35
secretly um so i had
57:39
SPEAKER_00: done that
57:41
SPEAKER_00: I mentioned earlier, I kind of got on this deep dive.
57:44
And so I'd done a bunch of that as part of that over the
57:46
preceding two years of
57:47
SPEAKER_00: looking at how other people had done big,
57:49
SPEAKER_00: large scale city building.
57:51
SPEAKER_00: And a good example of that is Columbia,
57:55
SPEAKER_00: Maryland,
57:55
SPEAKER_00: which is a planned city that was built in the 60s,
57:57
SPEAKER_00: just outside of DC.
58:00
SPEAKER_00: Actually, a fascinating similar story.
58:03
SPEAKER_00: I want to say an Austrian immigrant comes to the US,
58:08
SPEAKER_00: spends four years quietly assembling parcels outside of DC.
58:12
There's massive speculation that it's the Soviets buying land
58:16
outside of DC.
58:17
SPEAKER_00: A project is announced, huge opposition from everyone.
58:21
SPEAKER_00: How dare you?
58:23
SPEAKER_00: Within two years, that completely flips.
58:25
Today,
58:26
one of the most beloved neighborhoods to live in outside of DC,
58:29
one of the safest
58:31
SPEAKER_00: communities in D.C., tons of jobs.
58:33
SPEAKER_00: Very similar story by that.
58:37
SPEAKER_00: I tried to find experts in kind of land assembly.
58:41
SPEAKER_00: Turns out that there aren't any.
58:42
I mean,
58:43
it's such an unusual thing to be doing that happens so
58:45
infrequently.
58:46
And so I learned what I knew about it from basically reading
58:50
historical accounts of
58:51
SPEAKER_00: how people have done it,
58:52
both in kind of rural settings as well as people have done it
58:56
in Manhattan,
58:57
SPEAKER_00: for example,
58:58
SPEAKER_00: to put together parcels for big skyscrapers and so on.
59:01
But a lot of it was eventually a lot of it was thinking from
59:05
first principles about
59:06
SPEAKER_00: how to do it here.
59:07
SPEAKER_02: Well,
59:07
SPEAKER_02: because you must want to protect your identity,
59:09
but then you must also want to buy the land at a certain rate
59:12
where word of mouth
59:13
SPEAKER_02: is not.
59:15
Yeah,
59:15
I mean,
59:15
it seems like there's so many strategic things that are going
59:18
on.
59:18
SPEAKER_00: Yeah,
59:19
SPEAKER_00: no,
59:19
SPEAKER_00: there's,
59:20
SPEAKER_00: I mean,
59:20
SPEAKER_00: I think the biggest foundational decision that I made was some people,
59:27
the natural inclination for people when you do something like
59:29
this is to say,
59:30
SPEAKER_00: I'm going to go and set up 17 differential companies
59:35
SPEAKER_00: And they all kind of pretend to be buying something in that area.
59:38
SPEAKER_00: And that would be the natural inclination for anyone.
59:41
And I decided for a bunch of different reasons that it was a
59:45
bad idea in this case.
59:46
SPEAKER_00: And so my view was we would set up one company.
59:50
We would be open about the fact that we're buying and we would
59:54
pay a premium,
59:54
obviously.
59:57
SPEAKER_00: And we knew we would be asked about, who is this?
1:00:00
SPEAKER_00: And so the view that I took was, we would say, this is American money.
1:00:04
SPEAKER_00: And we would say, this is a very long-term hold.
1:00:06
SPEAKER_00: And we will not comment on what it is.
1:00:09
And I felt that was much more likely to be successful than
1:00:12
setting up a bunch of
1:00:12
SPEAKER_00: shell companies.
1:00:13
SPEAKER_00: And it worked much better than I think it would have otherwise.
1:00:16
SPEAKER_00: But we took a very unusual approach to land assembly in that regard.
1:00:20
SPEAKER_02: So my experience,
1:00:21
SPEAKER_02: I mean,
1:00:21
SPEAKER_02: even if you have that initial pool of eight or ten investors,
1:00:26
SPEAKER_02: my experience as a reporter,
1:00:27
SPEAKER_02: the second more than one person knows anything,
1:00:29
SPEAKER_02: keeping something a secret does not work.
1:00:34
SPEAKER_02: How were you,
1:00:35
SPEAKER_02: even among the people who wanted this to happen,
1:00:37
SPEAKER_02: who appreciated the secrecy,
1:00:40
SPEAKER_02: I'm still surprised that you were able to go,
1:00:42
SPEAKER_02: whatever it was,
1:00:43
SPEAKER_02: close to eight years,
1:00:44
SPEAKER_02: I think.
1:00:45
SPEAKER_02: Eight years, yeah.
1:00:47
SPEAKER_02: This happens all the time, man.
1:00:49
SPEAKER_02: I mean, startups doing pretty secret stuff.
1:00:53
SPEAKER_02: It just always leaks.
1:00:55
SPEAKER_02: And it's always like, a lot of times it's a lawyer, it's a money person.
1:00:59
I still don't even understand how you were able to keep that
1:01:06
group so tight.
1:01:07
SPEAKER_00: Yeah, I mean, I think, so somewhat it started by kind of
1:01:11
I didn't want to just raise money from random people,
1:01:16
from a scattershot approach.
1:01:18
SPEAKER_00: And that wasn't just because of the confidentiality.
1:01:22
I wanted to raise money from people who clearly saw that this
1:01:24
was a commercial
1:01:25
SPEAKER_00: investment,
1:01:25
SPEAKER_00: but they also cared about it for reasons other than money.
1:01:28
SPEAKER_00: And the reason other than money is different for different people.
1:01:32
SPEAKER_00: I mean, people like...
1:01:34
SPEAKER_00: Nat and Patrick care a great deal about urbanism.
1:01:37
Someone like Marc Andreessen cares a great deal about building
1:01:40
stuff again in
1:01:41
SPEAKER_00: America and manufacturing.
1:01:42
Someone like Laureen Powell Jobs cares about sustainability and
1:01:47
economic opportunity and so on.
1:01:48
SPEAKER_00: So people have different reasons, but that was part of it.
1:01:52
And then within that,
1:01:53
it was having a small number of investors and it was
1:02:00
SPEAKER_00: explaining clearly the importance of keeping this confidential.
1:02:04
We kept the teams pretty small for each of the investor groups
1:02:09
that came in.
1:02:15
Every time that I would meet up with any of the investors to
1:02:18
give an update,
1:02:19
SPEAKER_00: I basically began with a
1:02:22
sermon slash admonition of uh you remember that that meme from
1:02:27
lord of the rings
1:02:29
keep it secret keep it safe yeah i had that meme at the
1:02:31
beginning of every
1:02:32
presentation and then at the end uh when i would meet them and
1:02:35
it was just
1:02:36
SPEAKER_00: explaining like for a
1:02:40
For an early stage social media company,
1:02:43
the key thing to not screw up is product market fit.
1:02:45
SPEAKER_00: And for this effort,
1:02:47
SPEAKER_00: for the first seven years,
1:02:48
the most important thing was just protect the confidentiality
1:02:51
of the endeavor.
1:02:53
And so I would just over-communicate and tell people over and
1:02:57
over and over again,
1:02:58
SPEAKER_00: this is really important.
1:02:59
And I would say,
1:03:00
look,
1:03:00
every company says that confidentiality is important.
1:03:03
SPEAKER_00: Everyone says it.
1:03:04
SPEAKER_00: This is on a different level, and you have to treat it as such.
1:03:08
SPEAKER_00: And there was a... And it worked, basically.
1:03:12
SPEAKER_02: You committed to this.
1:03:14
SPEAKER_02: I remember the basics of the story,
1:03:16
SPEAKER_02: but I think even your in-laws,
1:03:18
SPEAKER_02: your family didn't know what you were doing,
1:03:21
SPEAKER_02: right?
1:03:21
SPEAKER_00: Yeah, I mean, I...
1:03:25
SPEAKER_00: No,
1:03:25
SPEAKER_00: look,
1:03:25
SPEAKER_00: it was a real commitment for,
1:03:27
SPEAKER_00: we had,
1:03:30
SPEAKER_00: my wife and I got married in 2019 and we had 12 people at our wedding.
1:03:35
SPEAKER_00: And the reason why we had that is,
1:03:37
SPEAKER_00: because obviously you can't go to all of your friends and say,
1:03:39
SPEAKER_00: oh,
1:03:39
SPEAKER_00: I'm building a new city an hour outside of San Francisco,
1:03:42
SPEAKER_00: right?
1:03:42
SPEAKER_00: To your point,
1:03:43
SPEAKER_00: someone is going to get drunk at some party and tell someone,
1:03:46
SPEAKER_00: even if they have very well intentioned.
1:03:48
SPEAKER_00: And so for seven years,
1:03:49
SPEAKER_00: I would tell my people,
1:03:51
SPEAKER_00: my friends,
1:03:51
SPEAKER_00: most of my friends,
1:03:53
SPEAKER_00: I am helping some families invest their money.
1:03:58
SPEAKER_00: Which is true, but it's not the entire truth, right?
1:04:01
SPEAKER_00: And so when we got married,
1:04:03
I didn't want to throw this big party and all of my friends
1:04:05
come in and everyone's
1:04:06
SPEAKER_00: like,
1:04:06
SPEAKER_00: how is life and how are you doing?
1:04:08
SPEAKER_00: And then you have to tell them some stupid story.
1:04:10
SPEAKER_00: And so we delayed that and then we wanted to throw a bigger party later,
1:04:14
SPEAKER_00: but then COVID happened.
1:04:15
SPEAKER_00: So we still have to do that at some point.
1:04:17
SPEAKER_00: But yeah, there was a lot of personal sacrifice that went into it.
1:04:19
SPEAKER_00: Didn't your in-laws think you were kind of maybe possibly unemployed?
1:04:26
SPEAKER_00: Oh, yeah.
1:04:27
SPEAKER_00: They couldn't quite figure it out because I would tell them,
1:04:29
SPEAKER_00: like,
1:04:30
SPEAKER_00: I'm working to buy something,
1:04:32
SPEAKER_00: something.
1:04:33
SPEAKER_00: And they were like, what is he doing?
1:04:35
SPEAKER_00: And does it really make sense?
1:04:36
SPEAKER_00: And yeah, there was a long seven years.
1:04:39
SPEAKER_02: OK.
1:04:39
SPEAKER_02: And you were talking about, in Colombia,
1:04:44
SPEAKER_02: they thought he was doing stuff for the Soviets.
1:04:46
SPEAKER_02: I mean,
1:04:46
SPEAKER_02: that starts to come back here in the more modern twist,
1:04:50
SPEAKER_02: which is people start to think,
1:04:52
SPEAKER_02: or at least,
1:04:53
SPEAKER_02: I don't know,
1:04:54
SPEAKER_02: people,
1:04:55
maybe a couple people start to spread the idea that China is
1:04:59
buying up all this
1:05:01
SPEAKER_02: land and they don't know that you're behind,
1:05:03
SPEAKER_02: you know,
1:05:03
SPEAKER_02: there's some group buying land.
1:05:06
SPEAKER_02: And so that started to become this
1:05:10
this,
1:05:10
I don't know if it's a meme,
1:05:11
this idea that was traded around here.
1:05:13
SPEAKER_00: Yeah,
1:05:14
SPEAKER_00: I mean,
1:05:14
SPEAKER_00: that started happening,
1:05:15
SPEAKER_00: I want to say in 2021,
1:05:17
SPEAKER_00: probably,
1:05:18
SPEAKER_00: about a couple of years before we eventually announced the project.
1:05:21
SPEAKER_00: And it really started because
1:05:24
China did buy a piece of land outside of the Grand Fork space
1:05:28
in North Dakota.
1:05:29
And so then people made the assumption that this was happening
1:05:31
here as well.
1:05:32
SPEAKER_00: Because you've got Travis.
1:05:33
SPEAKER_00: Because we've got Travis here.
1:05:35
SPEAKER_00: And look,
1:05:35
SPEAKER_00: we knew that if you,
1:05:37
SPEAKER_00: I knew that if you're going to go and buy 100 square miles around in,
1:05:42
SPEAKER_00: I mean,
1:05:42
SPEAKER_00: anywhere in America,
1:05:43
SPEAKER_00: but particularly outside of Silicon Valley and next to a military base,
1:05:46
SPEAKER_00: people will want to know about it.
1:05:50
SPEAKER_00: My assumption from the beginning was,
1:05:51
SPEAKER_00: at some point,
1:05:52
SPEAKER_00: someone from the government,
1:05:54
SPEAKER_00: broadly speaking,
1:05:55
SPEAKER_00: is going to call me and say,
1:05:58
SPEAKER_00: who are you and why are you buying this land?
1:06:00
SPEAKER_00: And that happened.
1:06:00
SPEAKER_00: I mean, we got called in 2020.
1:06:02
SPEAKER_00: It's probably 2021 or 2022.
1:06:05
SPEAKER_00: So just around that time.
1:06:07
SPEAKER_00: So it took the government, like, kind of
1:06:10
SPEAKER_00: four years-ish?
1:06:12
SPEAKER_00: Yeah.
1:06:12
SPEAKER_00: I mean, look, it started slow, right?
1:06:13
SPEAKER_00: And we didn't,
1:06:14
SPEAKER_00: in the very first,
1:06:16
SPEAKER_00: in the first couple of years,
1:06:17
SPEAKER_00: we didn't really buy much close to Travis.
1:06:19
SPEAKER_00: That happened later.
1:06:20
SPEAKER_00: So it took a year or two.
1:06:21
SPEAKER_00: Okay.
1:06:22
SPEAKER_00: But eventually we got a call from the treasury, basically.
1:06:24
SPEAKER_00: We have a group in the treasury called CFIUS.
1:06:28
SPEAKER_00: Yeah.
1:06:29
SPEAKER_00: Committee on Foreign Investment in the United States.
1:06:32
SPEAKER_00: And they basically tasked with making sure this doesn't happen.
1:06:36
SPEAKER_00: And so they called us in...
1:06:39
SPEAKER_00: 2021, 2022 and said, you guys are buying land.
1:06:42
SPEAKER_00: Tell us who you are and why are you buying it?
1:06:44
And so we told them and I flew to DC and met with them and
1:06:47
said,
1:06:47
this is the list of investors.
1:06:50
SPEAKER_00: Here are the passports.
1:06:52
SPEAKER_00: Here is the full list of investors.
1:06:54
SPEAKER_00: We have no Chinese money.
1:06:55
SPEAKER_00: We have no Russian money.
1:06:56
SPEAKER_00: In fact, we have
1:06:58
SPEAKER_00: We are 97% American owned by design, by the way.
1:07:01
I knew this would be important and that's why we didn't take
1:07:03
any money from anyone.
1:07:05
SPEAKER_00: A couple of shady Irishmen.
1:07:07
Yeah,
1:07:07
we have a couple of shady Irishmen and Charlie Songhurst is
1:07:11
British.
1:07:12
SPEAKER_00: But other than that, it was, look, 97% is American.
1:07:16
SPEAKER_00: I have a US passport, I've had it for a long time.
1:07:19
SPEAKER_00: The average S&P 500 company is 40% owned by foreigners.
1:07:25
This company is more American than any listed company in
1:07:27
America right now by design.
1:07:29
SPEAKER_00: And so we kind of we turn over the evidence.
1:07:32
SPEAKER_00: And that was that.
1:07:34
Obviously,
1:07:35
people kept speculating because it or the media kept because
1:07:38
it's a story that sells.
1:07:40
SPEAKER_00: But the government knew for years and years and years who was buying.
1:07:43
I feel like the media,
1:07:44
when did the media,
1:07:44
when was the first time anyone did anything?
1:07:47
SPEAKER_00: I mean, in the local community, about a year into us buying.
1:07:53
People knew that someone was buying land and they didn't know
1:07:57
who it was and people
1:07:58
SPEAKER_00: would be speculating about it.
1:08:00
SPEAKER_00: And by the way, we did the same thing with the local community.
1:08:04
SPEAKER_00: When we heard,
1:08:04
SPEAKER_00: we said,
1:08:05
this is a group of American investors and we're buying it as a
1:08:08
long-term holding
1:08:08
SPEAKER_00: and we're not gonna be discussing the purpose beyond that.
1:08:13
SPEAKER_00: And so in the local community, I mean, people,
1:08:17
SPEAKER_00: This was known.
1:08:18
SPEAKER_00: This was known for years that someone was buying.
1:08:20
And by the way,
1:08:21
we paid,
1:08:21
I think on average,
1:08:23
we paid about four times market value.
1:08:26
SPEAKER_00: And so we put almost a billion dollars into land.
1:08:29
SPEAKER_00: Most of the land was owned by people who lived in Solano County.
1:08:33
SPEAKER_00: I think we bought from 700 individual owners.
1:08:37
So we minted 700 millionaires who,
1:08:41
on average,
1:08:42
sold us property for four times all its worth.
1:08:44
SPEAKER_00: And so that gets sometimes lost in the story as well.
1:08:46
SPEAKER_02: And lots of these,
1:08:46
SPEAKER_02: I think,
1:08:47
SPEAKER_02: were families where the parents or grandparents had owned the land,
1:08:51
SPEAKER_02: and then it was just kind of like sitting here,
1:08:53
SPEAKER_02: right?
1:08:53
SPEAKER_02: And the children in a lot of...
1:08:55
SPEAKER_02: I mean,
1:08:55
SPEAKER_02: tell me if I'm wrong,
1:08:56
but I think the children in a lot of cases didn't know even
1:08:58
what to do with it
1:08:59
SPEAKER_02: or...
1:09:00
SPEAKER_00: Yeah, I mean, it was a combination.
1:09:01
SPEAKER_00: So there was a lot of it.
1:09:02
A lot of it was kind of land that had been at some point that
1:09:06
had been owned,
1:09:07
SPEAKER_00: that was then passed down to generations.
1:09:08
SPEAKER_00: And now you had 12 people who each owned 8%.
1:09:12
SPEAKER_00: And they had been maybe leasing it, but they were not living on the land.
1:09:15
SPEAKER_00: A lot of people actually...
1:09:18
SPEAKER_00: There were a bunch of homesteads in this area that had been abandoned.
1:09:22
And so we'd spent a lot of time over the last two years really
1:09:25
cleaning up a lot of
1:09:26
SPEAKER_00: the abandoned buildings here.
1:09:29
And then you had some,
1:09:31
there was also a good number of people where the owner was
1:09:35
maybe 65.
1:09:36
SPEAKER_00: They had been ranching, but the kids didn't want to do it.
1:09:42
SPEAKER_00: Generally,
1:09:42
SPEAKER_00: the structure that a lot of them liked to do was to say,
1:09:46
SPEAKER_00: I want to keep branching for the next 10 years.
1:09:49
SPEAKER_00: Then I want to retire.
1:09:50
SPEAKER_00: My kids don't want to do it.
1:09:51
SPEAKER_00: Why don't I sell it to you?
1:09:53
SPEAKER_00: You guys give me a 10-year lease back.
1:09:54
SPEAKER_00: I can keep doing that and then retire over time.
1:09:58
SPEAKER_00: Those have been very popular, and people have been pretty happy.
1:10:02
SPEAKER_02: You must have felt like a spy or something at some point.
1:10:05
SPEAKER_02: A little bit, sometimes.
1:10:07
SPEAKER_02: A little bit.
1:10:08
SPEAKER_02: Maybe a little James Bond-y.
1:10:11
SPEAKER_00: I wish it was as exciting as being a spy of that kind.
1:10:15
SPEAKER_02: Like the accountant version or something?
1:10:17
SPEAKER_02: Yeah, something like that, exactly.
1:10:20
SPEAKER_02: And then, okay, so as the families...
1:10:23
So they're getting a good price on this land and in some cases
1:10:27
didn't even know
1:10:27
SPEAKER_02: what they would do with it.
1:10:28
SPEAKER_02: Did you have any people that were more hardline and they're like,
1:10:33
SPEAKER_02: we're not going to sell you this key square that I know you need?
1:10:37
SPEAKER_00: Yeah.
1:10:37
SPEAKER_00: I mean, we had, we had, we had some people who didn't want to sell.
1:10:41
SPEAKER_00: Um,
1:10:41
SPEAKER_00: and I mean,
1:10:42
SPEAKER_00: that's probably,
1:10:42
SPEAKER_00: I mean,
1:10:43
SPEAKER_00: we own about maybe 80% of this area,
1:10:45
SPEAKER_00: uh,
1:10:46
SPEAKER_00: depending on exactly where you look.
1:10:47
And there's a bunch of people here who didn't want to sell and
1:10:50
they haven't sold
1:10:51
SPEAKER_00: and they continue to live on the land and ranch it.
1:10:55
SPEAKER_00: Where we're building the city,
1:10:57
we own 99% of the land and the rest of it is generally kind of
1:11:01
rides away and so
1:11:02
SPEAKER_00: on.
1:11:02
SPEAKER_00: And then similarly down here where we're proposing to build a shipyard,
1:11:06
SPEAKER_00: we own all of the land basically.
1:11:08
SPEAKER_00: So we've been able to acquire enough in that regard.
1:11:10
SPEAKER_02: Okay.
1:11:11
And then I'm going to mess some of this up because I forget the
1:11:13
sequence of events.
1:11:14
But I remember like kind of a bigger news story breaking either
1:11:18
in the San
1:11:19
SPEAKER_02: Francisco Chronicle or the New York Times.
1:11:21
SPEAKER_02: It was the Times.
1:11:21
SPEAKER_02: The Times.
1:11:22
SPEAKER_02: And so now like the cat's out of the bag.
1:11:25
SPEAKER_02: And then I remember the...
1:11:28
politicians doing the china stuff and some of the pushback and
1:11:32
then there was like
1:11:33
this legal part of this where you guys were trying to push
1:11:36
forward i think with um
1:11:38
your proposal of what you wanted to do and you had to get the
1:11:42
local communities
1:11:44
probably yep to to like sort of allow that to go forward and
1:11:49
then i remember it
1:11:51
SPEAKER_02: looking kind of bleak because
1:11:53
SPEAKER_02: It seemed like they were not going to let you even begin to,
1:11:57
SPEAKER_02: it seemed like they were going to block you from,
1:12:00
SPEAKER_02: you definitely weren't putting anything in the ground.
1:12:03
SPEAKER_02: It was like,
1:12:03
SPEAKER_02: you guys can't even,
1:12:04
SPEAKER_02: we're not even going to let you continue to think about this,
1:12:06
SPEAKER_02: was the way I remember.
1:12:08
SPEAKER_00: Yeah, I mean, so basically, yeah, so it was introduced.
1:12:12
SPEAKER_00: And then there's two main ways that you can build this.
1:12:16
SPEAKER_00: And this is going to get a little technical, but it's useful context.
1:12:20
SPEAKER_00: So you can build a new city as what's called an unincorporated community,
1:12:24
SPEAKER_00: which basically means the county governs that.
1:12:27
SPEAKER_00: It's outside of an existing city.
1:12:28
SPEAKER_00: One day it can become a city, but it starts out that way.
1:12:31
SPEAKER_00: That's how a lot of things in California start.
1:12:33
SPEAKER_00: Or you can build it as an extension of an existing city.
1:12:38
SPEAKER_00: And because none of the existing cities in the beginning told us,
1:12:41
SPEAKER_00: hey,
1:12:41
SPEAKER_00: we want to build this as part of our city,
1:12:43
we have kind of defaulted to we're going to build it as a new
1:12:46
unincorporated
1:12:47
SPEAKER_00: community in Solano County.
1:12:49
SPEAKER_00: Now,
1:12:49
there's a long tradition here of if you're trying to do that in
1:12:54
Solano County,
1:12:55
SPEAKER_00: you must bring it to the voters for approval.
1:12:59
So sometimes there was a sense in the media of we were trying
1:13:02
to go to the voters
1:13:03
SPEAKER_00: with a ballot initiative to bypass some local government.
1:13:06
SPEAKER_00: That was never the case.
1:13:07
They have a rule in place here that you must first go to the
1:13:10
voters before you can
1:13:12
SPEAKER_00: even engage with the county.
1:13:14
SPEAKER_00: And so we started doing that and
1:13:17
SPEAKER_00: What we learned throughout that process were two things.
1:13:20
Number one was people didn't like the idea of this being its
1:13:25
own brand new city.
1:13:27
SPEAKER_00: It kind of fed into this narrative of like,
1:13:29
SPEAKER_00: we are not theme players and we want to do our own thing.
1:13:32
SPEAKER_00: So that was one thing that was happening.
1:13:33
SPEAKER_00: And that caused a lot of the controversy.
1:13:36
SPEAKER_00: Then at the same time,
1:13:37
SPEAKER_00: several of the existing cities came to us and said,
1:13:39
SPEAKER_00: hey,
1:13:40
SPEAKER_00: this is a good idea,
1:13:41
particularly after the first six months when we were able to
1:13:44
explain what we're
1:13:44
SPEAKER_00: doing.
1:13:45
SPEAKER_00: They started to say, this is a good idea.
1:13:48
SPEAKER_00: If you guys did it as part of an existing city,
1:13:51
SPEAKER_00: you would have a lot of political support for this.
1:13:53
SPEAKER_00: We just wanted to help one of the existing cities.
1:13:56
SPEAKER_00: And so as a result of that,
1:13:57
SPEAKER_00: what we did about in the middle of 2024 is we said,
1:14:01
SPEAKER_00: okay,
1:14:02
SPEAKER_00: we happy to do it as part of an existing city.
1:14:04
SPEAKER_00: And we pulled the ballot initiative.
1:14:08
SPEAKER_00: And what that did is in number one, it showed that
1:14:12
SPEAKER_00: We care about building the physical footprint of it,
1:14:16
SPEAKER_00: but we don't have to kind of have our own thing.
1:14:19
SPEAKER_00: We can be a player within the bigger ecosystem.
1:14:23
And then because it was a ballot initiative,
1:14:31
it kind of forced everyone to take a side.
1:14:33
SPEAKER_00: Are you a yes?
1:14:34
SPEAKER_00: Are you a no?
1:14:34
SPEAKER_00: Instead of a pragmatic discussion about what do you like about it?
1:14:37
SPEAKER_00: What do you not like about it?
1:14:39
SPEAKER_00: And so the moment that we pulled it, the tone completely shifted.
1:14:43
Because the media fed this narrative of the tech guys are going
1:14:47
to come in and
1:14:48
SPEAKER_00: they're going to run a ballot initiative to cram it down.
1:14:50
SPEAKER_00: That was never the idea.
1:14:51
SPEAKER_00: We're running the initiative because people wanted us to run it,
1:14:53
SPEAKER_00: because the rule is there in place.
1:14:57
SPEAKER_00: The moment we pulled it, it changed.
1:14:58
Then what you've seen over the last year is two of the cities
1:15:03
have voted six
1:15:04
SPEAKER_00: different times to basically proceed with the annexation.
1:15:07
SPEAKER_00: It's called an annexation when an existing city takes it.
1:15:10
SPEAKER_00: And then most recently, with a place called Susun City, which is this.
1:15:14
SPEAKER_01: Yeah, it drove through it.
1:15:15
SPEAKER_00: Yeah, really interesting place.
1:15:16
SPEAKER_00: It was one of the oldest cities in Solano County.
1:15:19
SPEAKER_00: It used to be the center of commerce.
1:15:21
SPEAKER_00: It had a little harbor.
1:15:24
SPEAKER_00: The rail used to go through it or still goes through it.
1:15:27
And then it kind of got surrounded on all sides by other cities
1:15:29
that grew around it.
1:15:30
SPEAKER_00: Very proud tradition.
1:15:33
And so what happened is they kind of had been looking for a
1:15:38
solution for a bunch of
1:15:39
SPEAKER_00: their issues with where to grow.
1:15:41
And then they looked at this and said,
1:15:42
this is the perfect solution for us.
1:15:44
SPEAKER_00: And so we've now worked with them for the last few months.
1:15:48
SPEAKER_00: We've signed what's called a reimbursement agreement two months ago,
1:15:51
which basically says we are going to fund them hiring the whole
1:15:56
consultant team to
1:15:57
SPEAKER_00: evaluate this.
1:15:58
SPEAKER_00: And what they've said in their reimbursement agreement is that
1:16:02
They are looking to take essentially the plan that we had in 24
1:16:07
and instead of
1:16:07
SPEAKER_00: making it its own thing,
1:16:09
SPEAKER_00: they would annex that into Susun City,
1:16:11
SPEAKER_00: make it part of Susun City.
1:16:12
SPEAKER_00: And so that's what's happening right now.
1:16:14
And I think they've stated publicly that they are looking to
1:16:19
publish the draft
1:16:20
SPEAKER_00: environmental document for this in Q1 of 26.
1:16:23
SPEAKER_00: And so it's now, this is about six months from now.
1:16:26
SPEAKER_00: And so this thing is now kind of proceeding at full speed.
1:16:31
SPEAKER_00: And they've been great partners so far.
1:16:33
SPEAKER_02: Okay.
1:16:33
SPEAKER_02: So all that is on the up and up.
1:16:34
SPEAKER_02: Are you still frustrated?
1:16:35
I mean,
1:16:36
you know,
1:16:37
these environmental stuff,
1:16:38
all this stuff takes so much time.
1:16:39
SPEAKER_02: I mean, I guess this is just the nature of something like this.
1:16:43
SPEAKER_02: I would feel frustrated, I think, on some level.
1:16:46
SPEAKER_00: Yeah.
1:16:47
SPEAKER_00: I mean, I think that there is...
1:16:51
SPEAKER_00: So I think there's issues with how,
1:16:53
SPEAKER_00: there's a bunch of issues with how land using California works.
1:16:57
SPEAKER_00: I don't,
1:16:58
SPEAKER_00: for something of this scale,
1:16:59
SPEAKER_00: I can actually,
1:17:00
SPEAKER_00: I think that,
1:17:03
I think you can make an argument that if you're building a
1:17:05
apartment building in
1:17:06
SPEAKER_00: San Francisco,
1:17:07
SPEAKER_00: you shouldn't have to do an environmental impact report.
1:17:09
And in fact,
1:17:10
the state literally just passed a law in June that made that
1:17:14
the case.
1:17:15
SPEAKER_00: If you're gonna build a city for 400,000 people,
1:17:18
I actually am sympathetic to the argument that some
1:17:20
environmental analysis should be done.
1:17:22
SPEAKER_00: And we're doing that right now.
1:17:23
SPEAKER_00: We're doing this gigantic.
1:17:25
It's probably going to be the biggest environmental impact
1:17:27
document in Californian
1:17:29
SPEAKER_00: history,
1:17:30
SPEAKER_00: thousands and thousands of pages.
1:17:31
SPEAKER_00: Congratulations.
1:17:31
SPEAKER_00: It's going to be a riveting reading for anyone who wants to read it.
1:17:36
But I'm sympathetic to the people that say that you should do
1:17:38
something like that.
1:17:40
SPEAKER_00: But I do think that
1:17:44
There is this really unique window right now that is the
1:17:50
subject of a lot of
1:17:51
SPEAKER_00: discussion in the local community,
1:17:53
SPEAKER_00: which is,
1:17:57
SPEAKER_00: so this is,
1:17:58
we've now had a bunch of companies who basically come out and
1:18:01
said publicly and
1:18:02
SPEAKER_00: told elected officials,
1:18:04
SPEAKER_00: if we,
1:18:05
SPEAKER_00: manufacturing companies,
1:18:06
SPEAKER_00: so both shipbuilders and manufacturing companies who say,
1:18:09
SPEAKER_00: this is the best place to do manufacturing in California.
1:18:12
SPEAKER_00: If we are to do anything in California, this is where we would do it.
1:18:15
SPEAKER_00: As a result of the proximity to the valley,
1:18:17
SPEAKER_00: as a result of the size of the site,
1:18:19
as a result of the fact that we're building these amazing
1:18:21
neighborhoods right next
1:18:22
SPEAKER_00: to it,
1:18:23
SPEAKER_00: how we've designed it,
1:18:24
SPEAKER_00: the fact that you can do both advanced manufacturing and shipbuilding,
1:18:28
SPEAKER_00: and obviously one of them is a supplier to the other.
1:18:31
SPEAKER_00: And then you have this huge moment where
1:18:35
SPEAKER_00: We just passed reconciliation.
1:18:38
SPEAKER_00: There's $150 billion in reconciliation for defense.
1:18:41
SPEAKER_00: There's $29 billion for shipbuilding.
1:18:43
SPEAKER_00: There's $25 billion for Air Force.
1:18:45
A lot of that money is going to companies that need to build
1:18:50
new facilities.
1:18:51
Many of them,
1:18:51
by the way,
1:18:52
headquartered somewhere in California,
1:18:53
often in Silicon Valley.
1:18:57
SPEAKER_00: And then you have this,
1:18:58
SPEAKER_00: on top of reconciliation,
1:18:59
SPEAKER_00: this massive wave of kind of tariff and onshoring driven investments.
1:19:03
SPEAKER_00: And so there's this unique moment in time right now.
1:19:06
And a lot of these companies are coming here and telling the
1:19:08
local community,
1:19:10
SPEAKER_00: we want to come to Solano,
1:19:11
SPEAKER_00: but we need to be able to break ground very quickly.
1:19:14
SPEAKER_00: And so there's a bigger debate that's happening right now about
1:19:18
SPEAKER_00: not about waiving any of the environmental studies,
1:19:22
but about how do we reshuffle the process where we can actually
1:19:28
allow a company
1:19:28
that wants to create thousands of jobs in Solano County to
1:19:31
break ground next year
1:19:33
SPEAKER_00: or in early 27.
1:19:34
SPEAKER_00: And so that's a big debate that I think is,
1:19:36
and it's a bigger debate that's happening in California right
1:19:38
now as well,
1:19:39
SPEAKER_00: right?
1:19:39
SPEAKER_00: I think a good example of that is
1:19:43
So Apple just announced $600 billion in investments in
1:19:47
manufacturing in America.
1:19:50
SPEAKER_00: Apple is a quintessentially California company, right?
1:19:53
SPEAKER_00: It says it on the back of the phone.
1:19:57
SPEAKER_00: Do you know how much of the $600 billion is going into California?
1:20:00
SPEAKER_00: Probably none.
1:20:03
SPEAKER_00: I think there's one company on the list.
1:20:06
SPEAKER_00: They announced six big ones.
1:20:08
I think it says Kentucky,
1:20:09
Texas,
1:20:10
Texas,
1:20:10
Texas,
1:20:10
Texas,
1:20:11
Texas,
1:20:12
Texas,
1:20:12
and California.
1:20:14
SPEAKER_00: I would guess less than 5% of it is going to California.
1:20:18
SPEAKER_00: And that's not because Apple doesn't want to invest in California.
1:20:21
That's because if they have to go through five years of
1:20:23
permitting to build a
1:20:25
SPEAKER_00: facility,
1:20:26
SPEAKER_00: or even worse,
1:20:28
SPEAKER_00: if their suppliers have to do that,
1:20:29
SPEAKER_00: they just won't do it.
1:20:30
SPEAKER_00: And so as a state right now,
1:20:33
SPEAKER_00: we have to decide,
1:20:35
SPEAKER_00: do we want these generational investments in California?
1:20:38
SPEAKER_00: Because there is a path dependency to it, right?
1:20:41
SPEAKER_00: Like once a place becomes the manufacturing cluster,
1:20:44
There's a window of opportunity when these investments are made
1:20:47
and then it closes
1:20:48
SPEAKER_00: and people have made them and they're going to invest around the existing
1:20:51
SPEAKER_00: facilities.
1:20:52
And I think that's a big debate that's happening right now at
1:20:54
California at all
1:20:55
SPEAKER_00: levels about how do we go back to it,
1:20:57
SPEAKER_00: which is part of the abundance agenda and the build agenda.
1:21:00
SPEAKER_00: Yeah.
1:21:00
And there's another part to it that you and I have talked
1:21:02
about,
1:21:03
which this is not...
1:21:05
It's not like this is crazy or out of the realm of possibility,
1:21:09
any of this.
1:21:09
I mean,
1:21:10
SpaceX started in the middle of Los Angeles,
1:21:14
right by LAX,
1:21:15
roughly like 2002,
1:21:19
2003.
1:21:19
Tesla had the benefit of taking over an existing auto
1:21:23
manufacturing facility,
1:21:25
SPEAKER_02: but started in the heart of Silicon Valley.
1:21:27
SPEAKER_02: I think they're probably...
1:21:30
SPEAKER_02: the two most iconic and successful and transformational U.S.
1:21:36
SPEAKER_02: manufacturing companies of the last 20 years.
1:21:39
So this happened in California at a time when you're supposed
1:21:43
to not really be able
1:21:45
SPEAKER_02: to do that,
1:21:45
SPEAKER_02: but we had the two biggest success stories were here.
1:21:48
SPEAKER_02: And then obviously,
1:21:49
SPEAKER_02: subsequently,
1:21:50
SPEAKER_02: Elon's moved a lot of his growing ambitions to Nevada,
1:21:55
SPEAKER_02: to Texas,
1:21:56
SPEAKER_02: to different states and is not
1:21:59
SPEAKER_02: like really building new stuff in California.
1:22:01
SPEAKER_02: So,
1:22:01
SPEAKER_02: I mean,
1:22:04
SPEAKER_02: this is just to say,
1:22:04
SPEAKER_02: it's like,
1:22:05
SPEAKER_02: I don't know,
1:22:05
sometimes California gets this reputation that everything's
1:22:09
already lost and people
1:22:12
SPEAKER_02: don't even realize basic stuff.
1:22:14
SPEAKER_02: Like LA is a massive manufacturing city and just this huge aerospace,
1:22:22
SPEAKER_02: automotive,
1:22:25
SPEAKER_02: all types of manufacturing power.
1:22:26
SPEAKER_02: And so, yeah, I mean, if you just can put the right,
1:22:29
SPEAKER_02: conditions around some of this.
1:22:31
SPEAKER_02: We have the talent and the will and the ability.
1:22:36
California still employs more people in manufacturing than any
1:22:40
other state in America.
1:22:41
SPEAKER_00: It's not even close.
1:22:43
SPEAKER_00: But we are not getting any of the new facilities.
1:22:47
SPEAKER_00: And we still lead at the cutting edge.
1:22:50
SPEAKER_00: I mean,
1:22:50
SPEAKER_00: even for the companies that you mentioned,
1:22:52
a lot of the cutting edge stuff is still in Rothorn and in the
1:22:57
Bay Area for Tesla.
1:22:59
And then you look at what's happening in El Segundo and that
1:23:01
whole ecosystem,
1:23:02
right?
1:23:02
SPEAKER_00: Some of the most dynamic new companies are still in LA.
1:23:06
SPEAKER_00: But right now, we have this really unfortunate industrial policy where
1:23:13
We invest all of this money as a state in some of the best
1:23:16
universities and
1:23:17
SPEAKER_00: research universities in the world.
1:23:19
SPEAKER_00: We incubate these companies here.
1:23:21
SPEAKER_00: They start here.
1:23:24
And just at the point when they start raising tons of money and
1:23:27
investing,
1:23:27
SPEAKER_00: when they would be creating the very jobs that build the middle class.
1:23:32
SPEAKER_00: Because some company starts in El Segundo,
1:23:35
and they hire 50 engineers and software and hardware engineers
1:23:39
and the more
1:23:44
SPEAKER_00: white-collar talent.
1:23:45
SPEAKER_00: And just at the time when they go and they raise
1:23:49
SPEAKER_00: $400 million, by the way, often from people in the Bay Area.
1:23:52
So you've got a Californian company that raises a bunch of
1:23:56
money from other
1:23:56
Californians that is now about to go and build a facility
1:24:00
that's going to create
1:24:01
hundreds of construction jobs and then hundreds of permanent
1:24:04
jobs and exactly the
1:24:05
kind of jobs that basically anyone can get with some
1:24:08
determination and training
1:24:09
SPEAKER_00: that pay enough to go and build a middle-class life on the back of it.
1:24:14
That thing is the thing that we sent to Texas,
1:24:15
which is just feeding the insanity of
1:24:21
SPEAKER_00: of this huge self-inflicted loss on the state.
1:24:25
SPEAKER_02: Well, you look like Andrell's based in Southern California.
1:24:28
SPEAKER_02: They're going to build their massive new factory in Ohio.
1:24:30
You've got companies like Archer that spent a decade making air
1:24:34
taxi in California.
1:24:36
SPEAKER_02: I think they're building in Mississippi.
1:24:37
SPEAKER_02: I see it all over the place.
1:24:39
It's always,
1:24:39
it's Mississippi,
1:24:40
it's Ohio,
1:24:41
it's Texas,
1:24:42
it's Georgia,
1:24:43
Alabama.
1:24:45
SPEAKER_02: doing exactly what you said,
1:24:47
which is we just did all the work to get this product to be
1:24:51
viable and took all the
1:24:52
SPEAKER_02: risk and proved it out.
1:24:54
SPEAKER_02: And now it's going to get made somewhere else.
1:24:58
But the great irony is because we've done this work over the
1:25:00
last two years,
1:25:01
SPEAKER_00: when you go and you talk to the founders and CEOs of those companies,
1:25:05
SPEAKER_00: And you ask them, did you want to stay in California?
1:25:07
SPEAKER_00: Almost universally, they say yes.
1:25:09
SPEAKER_00: And they will give you these painful stories of,
1:25:12
we looked at all of these sites and we looked at how long it
1:25:14
would take to get
1:25:15
SPEAKER_00: permits.
1:25:16
And we looked at availability of power or availability of
1:25:20
workforce housing.
1:25:21
SPEAKER_00: And we really, really wanted to stay and we couldn't make it work.
1:25:25
SPEAKER_00: Before Elon put the Gigafactory in Nevada,
1:25:30
SPEAKER_00: they had a site on the contract in Patterson in the Central Valley.
1:25:35
A bunch of the people who live in that area in Stockton and
1:25:40
Merced and that whole
1:25:41
SPEAKER_00: area,
1:25:43
SPEAKER_00: do you know what they do in the morning?
1:25:44
SPEAKER_00: They get up in a car and they drive two and a half hours to the Bay Area.
1:25:48
SPEAKER_00: Tesla could have put a huge factory there.
1:25:50
SPEAKER_00: They would have employed thousands of people,
1:25:53
SPEAKER_00: but they couldn't get the environmental permitting to
1:26:01
SPEAKER_00: to break around quickly.
1:26:02
And I think the story goes as he's dealing with the
1:26:05
environmental permitting,
1:26:06
SPEAKER_00: the mayor of Sparks,
1:26:09
SPEAKER_00: or one of the cities in Nevada,
1:26:11
SPEAKER_00: is texting him,
1:26:12
SPEAKER_00: showing him pictures of earth moving equipment,
1:26:14
SPEAKER_00: moving dirt on the side for the Gigafactory,
1:26:17
SPEAKER_00: right?
1:26:23
SPEAKER_00: And that's the same for these younger companies.
1:26:24
SPEAKER_00: They want to stay in California.
1:26:25
SPEAKER_00: By the way,
1:26:26
it's a huge loss for the country as well when you separate
1:26:30
production and R&D by
1:26:37
SPEAKER_00: the match,
1:26:38
SPEAKER_00: right?
1:26:38
SPEAKER_00: You look at most of the breakthrough products that we built,
1:26:41
SPEAKER_00: the Boeing 747 was built 20 miles from where it was designed.
1:26:46
SPEAKER_00: Tesla, they made that first car in Fremont, right?
1:26:49
SPEAKER_00: Do you think, I mean,
1:26:51
Do you think they would have been able to iterate so quickly if
1:26:53
R&D was in the Bay
1:26:54
SPEAKER_00: Area and the first factory was in Texas?
1:26:56
SPEAKER_00: Maybe no.
1:26:57
And so I think if your engineers need to get on a plane to go
1:27:00
to Ohio and then come
1:27:02
SPEAKER_00: back,
1:27:02
SPEAKER_00: that's a three-day trip.
1:27:04
SPEAKER_00: Here, if we can build a cluster here, you spoke about Archer.
1:27:07
The moment that you have VTOL,
1:27:09
we are no longer an hour 20 for Mandlow Park.
1:27:12
SPEAKER_00: We are 10 minutes or 15 minutes.
1:27:14
SPEAKER_00: I mean,
1:27:14
SPEAKER_00: imagine having R&D in Cupertino or in Menlo Park,
1:27:18
SPEAKER_00: and then you get on a Beetle and you land here in 15 minutes.
1:27:21
SPEAKER_00: You can come,
1:27:22
SPEAKER_00: you can do R&D,
1:27:23
SPEAKER_00: you can inspect the production line,
1:27:26
SPEAKER_00: you can adjust things and go back.
1:27:29
SPEAKER_00: That's how China does it.
1:27:30
SPEAKER_00: That's why those ecosystems in Shenzhen or Guangzhou work that well,
1:27:35
SPEAKER_00: is because you have the proximity.
1:27:37
And that's why this has such a potential to radically improve
1:27:42
the productivity of
1:27:43
SPEAKER_00: the whole manufacturing base in California,
1:27:45
SPEAKER_00: if we can make it work.
1:27:46
SPEAKER_02: Okay, just a couple last questions.
1:27:48
SPEAKER_02: I mean, I'm looking out the window and all the surrounding area.
1:27:54
SPEAKER_02: Things like power.
1:27:55
There's a lot of infrastructure that would need to be built to
1:27:59
make all this work.
1:28:02
SPEAKER_02: Give me your, everything goes as well as possible.
1:28:05
SPEAKER_02: What does this look like in three years?
1:28:09
SPEAKER_00: I mean,
1:28:11
SPEAKER_00: from the moment when we get a permit to build,
1:28:18
it's about 12 to 18 months until the first person can move into
1:28:21
a finished home.
1:28:23
SPEAKER_00: So it's a lot faster than you think.
1:28:25
SPEAKER_00: And then if you look at the growth of these cities,
1:28:32
SPEAKER_00: they generally end up being demand constrained.
1:28:35
SPEAKER_00: And the demand is here.
1:28:36
I mean,
1:28:36
there's infinite demand for companies who want to come here,
1:28:38
who want to build.
1:28:39
SPEAKER_00: There's infinite demand from people who want to come live here.
1:28:41
SPEAKER_00: I mean, we're looking out over this bay.
1:28:45
SPEAKER_00: We were on the phone with a shipbuilding company on Monday,
1:28:50
SPEAKER_00: and they are looking at scaling production very rapidly for the Navy.
1:28:54
And they were asking us,
1:28:58
how quickly from breaking ground could you have a...
1:29:01
SPEAKER_00: finished pad where you could be building that.
1:29:04
SPEAKER_00: And I think our engineering team came back and said,
1:29:07
SPEAKER_00: if you started building in these,
1:29:09
SPEAKER_00: basically these mega tents that people have used,
1:29:11
SPEAKER_00: I mean,
1:29:11
SPEAKER_00: SpaceX has used them in Boca Chica,
1:29:14
SPEAKER_00: right?
1:29:16
SPEAKER_00: We could have that temporary tent up in four months.
1:29:19
SPEAKER_00: We could have a finished pad with infrastructure ready in a year.
1:29:23
SPEAKER_00: And so again, even in California, the building is fast.
1:29:27
SPEAKER_00: The promo thing is the bottleneck.
1:29:29
SPEAKER_00: And so it really is up to
1:29:32
SPEAKER_00: I mean,
1:29:33
SPEAKER_00: up to us,
1:29:33
but up to the local community and the broader stakeholders of
1:29:37
how quickly can we
1:29:39
SPEAKER_00: clear the pathway so that we can break ground.
1:29:41
SPEAKER_00: But the companies are there, the capital is there, the demand is there.
1:29:45
It's about can California take advantage of the current moment
1:29:50
or are we going to
1:29:50
SPEAKER_00: let it pass and watch these companies,
1:29:54
SPEAKER_00: watch this investment,
1:29:55
SPEAKER_00: watch our kids move to Texas.
1:29:58
SPEAKER_02: Do you think it was
1:30:02
SPEAKER_02: I mean, there's sort of the Trump of it all.
1:30:04
SPEAKER_02: And then there's this,
1:30:06
SPEAKER_02: like you said,
1:30:07
SPEAKER_02: I mean,
1:30:07
SPEAKER_02: a little more bipartisan wanting to re-industrialize the U.S.
1:30:14
SPEAKER_02: Like I remember two years ago when you and I first started hanging out,
1:30:18
SPEAKER_02: I have to confess,
1:30:19
SPEAKER_02: you know,
1:30:19
SPEAKER_02: like in my heart,
1:30:20
SPEAKER_02: I was like,
1:30:20
SPEAKER_02: this seems like a good idea,
1:30:21
SPEAKER_02: but I'm not so sure this is going to happen.
1:30:24
SPEAKER_02: Whereas now I feel like I see a much clearer path.
1:30:28
SPEAKER_02: Did you...
1:30:31
Did you have a couple dark moments a couple years ago and this
1:30:39
seems dependent on
1:30:40
SPEAKER_02: some of this political will and I never know how long that lasts.
1:30:44
SPEAKER_02: Yeah.
1:30:45
SPEAKER_00: Yeah, I mean, I think I expected this would get
1:30:52
SPEAKER_00: controversial.
1:30:53
SPEAKER_00: I told this to the team.
1:30:56
SPEAKER_00: I told this to everyone.
1:30:57
SPEAKER_00: I said, look, this is a huge change to the county.
1:31:00
SPEAKER_00: Obviously, we have to buy the land in secret.
1:31:04
SPEAKER_00: You've got the investor component of it.
1:31:06
SPEAKER_00: This is going to be a big controversial discussion.
1:31:10
SPEAKER_00: I think some of the vitriol around it surprised me.
1:31:15
SPEAKER_00: And
1:31:21
SPEAKER_00: That was probably the biggest difference.
1:31:25
SPEAKER_00: I hadn't been in politics before,
1:31:27
and so I was surprised at the extent to which people will just
1:31:30
make complete lies
1:31:32
SPEAKER_00: and fake arguments and just bad faith claims about the whole thing.
1:31:37
SPEAKER_00: But the thing that we had
1:31:41
from the beginning that actually kind of insulated me from a
1:31:45
lot of the otherwise
1:31:47
SPEAKER_00: could have been dark moments is,
1:31:48
SPEAKER_00: you know,
1:31:49
what's the most surprising thing about this is I fully expected
1:31:52
that as we
1:31:53
SPEAKER_00: announced it,
1:31:55
SPEAKER_00: I would have, because I live here, I live in Solano County.
1:31:58
And so I would have incidents where like we would be at a
1:32:00
restaurant or something
1:32:01
SPEAKER_00: and people would come in and they would be like,
1:32:03
SPEAKER_00: you assholes,
1:32:04
SPEAKER_00: this is a terrible idea,
1:32:05
SPEAKER_00: you shouldn't be doing this.
1:32:06
SPEAKER_00: And sure,
1:32:06
SPEAKER_00: we had town halls where someone yelled at me,
1:32:08
but I've been approached by people hundreds of times at this
1:32:12
point when I'm
1:32:12
SPEAKER_00: somewhere out in the public.
1:32:15
SPEAKER_00: There were like two times when someone was,
1:32:18
SPEAKER_00: and it wasn't even like two times someone said like,
1:32:21
SPEAKER_00: hey,
1:32:21
SPEAKER_00: I don't really like that idea,
1:32:23
SPEAKER_00: but nice to meet you.
1:32:24
SPEAKER_00: The other times, universally positive.
1:32:28
SPEAKER_00: And that's the most surprising thing,
1:32:29
SPEAKER_00: where in some sense I was expecting some heated discussions.
1:32:34
SPEAKER_00: But even in the times when someone started approaching me and I was like,
1:32:37
SPEAKER_00: oh,
1:32:37
SPEAKER_00: I'm not sure how this is going to go,
1:32:40
SPEAKER_00: it would be a delightful surprise.
1:32:41
SPEAKER_00: It would be people who would come in and they would say,
1:32:45
I served at Travis Air Force Base and I'm a veteran and I live
1:32:49
here and I love this
1:32:50
SPEAKER_00: community,
1:32:51
but my kids live in Nashville and I never see my grandkids and
1:32:54
don't let anyone
1:32:55
SPEAKER_00: tell you otherwise,
1:32:55
SPEAKER_00: what you guys are doing is great and it's going to be fantastic.
1:32:59
SPEAKER_00: And even and that was consistent,
1:33:02
SPEAKER_00: by the way,
1:33:02
also from a bunch of the elected officials from the beginning
1:33:05
where there was a
1:33:08
There was an atmosphere of fear that was created where people
1:33:12
felt afraid of
1:33:13
SPEAKER_00: backing this in the public,
1:33:14
SPEAKER_00: but behind closed doors,
1:33:16
SPEAKER_00: the vast majority of people had been supporting from the beginning,
1:33:19
but you needed to kind of build the coalition where people felt
1:33:23
like they could say
1:33:24
SPEAKER_00: that publicly.
1:33:25
SPEAKER_02: But did you ever have a moment where you're like, we're fucked?
1:33:32
SPEAKER_00: I don't think so.
1:33:33
SPEAKER_00: I had moments when I was annoyed.
1:33:34
I had moments when I was upset that someone who told us that
1:33:39
they would support it
1:33:40
SPEAKER_00: didn't say that,
1:33:41
SPEAKER_00: didn't back us up.
1:33:44
SPEAKER_00: Or I had moments when
1:33:48
SPEAKER_00: we would screw up some kind of a comms roll up.
1:33:51
SPEAKER_00: I was upset that we that we that was before Julia's time.
1:33:56
SPEAKER_00: She had nothing to do with that.
1:34:01
SPEAKER_00: We so I was upset that we kind of screwed up execution.
1:34:07
But I don't I don't think I've had a moment where I was like,
1:34:09
this isn't going to work.
1:34:10
SPEAKER_00: I mean, obviously you have you adjust
1:34:15
There was moments where I felt it might happen faster or it
1:34:18
might happen longer.
1:34:19
SPEAKER_00: But part of how I was able to...
1:34:26
part of how I was able to raise the money is I was my own
1:34:29
biggest skeptic all the
1:34:30
SPEAKER_00: way in the beginning.
1:34:30
SPEAKER_00: I mean,
1:34:31
SPEAKER_00: I told you,
1:34:31
SPEAKER_00: I spent six months trying to prove myself that I was wrong,
1:34:34
SPEAKER_00: but I am pretty good at arguing this kind of stuff.
1:34:36
And so by the time that I spent six months brutalizing myself
1:34:39
over,
1:34:39
is this a good idea?
1:34:40
I kind of felt like I had gone the idea maze and I was so
1:34:44
convinced that it would work.
1:34:45
SPEAKER_00: And the same reason for why,
1:34:47
SPEAKER_00: and a big part of the reason was political from the beginning,
1:34:49
SPEAKER_00: right?
1:34:50
SPEAKER_00: And so, um,
1:34:54
SPEAKER_00: When we had prospective investors who were skeptical,
1:34:56
that's how I was able to convince people because I had kind of
1:34:59
done that exercise.
1:35:00
And so then even during campaign where it was controversial and
1:35:03
people are calling
1:35:04
SPEAKER_00: us names and so on,
1:35:05
SPEAKER_00: I would look back at the fundamentals of it.
1:35:08
SPEAKER_00: I'd be like, this is going to improve lives for
1:35:11
in a really direct way for hundreds of thousands of people and
1:35:14
indirectly for
1:35:15
SPEAKER_00: millions of people.
1:35:16
And all of the arguments that the opposition is making are
1:35:18
basically bogus.
1:35:19
SPEAKER_00: And so I don't know how long it's going to take people to realize this,
1:35:22
but they are going to come to that conclusion because there's
1:35:25
no other good
1:35:25
SPEAKER_00: solutions.
1:35:26
I mean,
1:35:26
a good example of this is people in Solano County,
1:35:29
including elected officials,
1:35:31
have been talking about how much of a huge problem it is that
1:35:34
more than half of
1:35:34
this county gets in a car every day and they drive two hours to
1:35:37
work and then they
1:35:38
SPEAKER_00: never see their kids,
1:35:40
SPEAKER_00: there's health issues,
1:35:41
SPEAKER_00: there's cost issues,
1:35:42
SPEAKER_00: all of these things.
1:35:44
In 40 years of working on this,
1:35:47
do you think the situation has gotten better or worse?
1:35:49
SPEAKER_00: Worse, yeah.
1:35:53
SPEAKER_00: The idea just makes too much sense.
1:35:55
SPEAKER_00: I mean, at the bottom of it is this is a good idea.
1:35:57
SPEAKER_00: This is the right place for it.
1:35:59
SPEAKER_00: It's the right product for it.
1:36:01
SPEAKER_00: It's the right focus with the manufacturing.
1:36:04
SPEAKER_00: And we have an incredible team of people who are working on it from
1:36:09
SPEAKER_00: from the planning to the business side to bringing the companies here.
1:36:12
And then we funded it with people who care about it and who
1:36:14
want to be invested in
1:36:16
SPEAKER_00: this for the next 40 years.
1:36:18
SPEAKER_00: And so ultimately, this is going to happen.
1:36:24
The thing that I kind of get upset or annoyed about is I just
1:36:30
think it would be a
1:36:30
huge waste to miss this unique moment when there's a wave of
1:36:35
investments that
1:36:36
SPEAKER_00: wasn't here five years ago,
1:36:37
SPEAKER_00: by the way.
1:36:38
SPEAKER_00: If we had announced this five years ago,
1:36:39
SPEAKER_00: it would be a lot harder to get companies to say,
1:36:41
SPEAKER_00: hey,
1:36:41
SPEAKER_00: I want to come and build a factory here.
1:36:43
SPEAKER_00: But right now they are here.
1:36:44
SPEAKER_00: And so I just hope that we don't
1:36:46
waste the moment because California as a state,
1:36:49
we've tied ourselves in knots over process.
1:36:52
And if we can build something spectacular while following all
1:36:56
of the California
1:36:57
SPEAKER_00: values,
1:36:58
all of the environmental regulations and clean air and water
1:37:00
and all of that,
1:37:01
SPEAKER_00: but just do all of that faster,
1:37:04
SPEAKER_00: so that we capture the investment and also get going.
1:37:08
SPEAKER_00: I mean,
1:37:08
I think that the last thought that I had is I once had to
1:37:15
promise my wife that our
1:37:17
SPEAKER_00: first kid would go to school in the New City and she's four years old.
1:37:20
SPEAKER_00: So I'm running out of time a little bit.
1:37:22
SPEAKER_00: And my wife is a very harsh arbiter.
1:37:25
SPEAKER_00: And so I'm definitely on the clock.
1:37:27
SPEAKER_00: But no, look, I think that
1:37:31
SPEAKER_00: I think that as a country, we lost the sense of frontier.
1:37:33
And I think that it's going to be an amazing thing for
1:37:37
California and for America
1:37:39
SPEAKER_00: to again have a sense of frontier.
1:37:41
And there's nowhere better where to put it than in California
1:37:46
and in the Bay Area.
1:37:47
SPEAKER_00: And just for the people, I think about my kids.
1:37:50
SPEAKER_00: We have three kids now.
1:37:52
I just think about how deeply optimistic it would be to grow up
1:37:55
in a place like this,
1:37:56
right?
1:37:59
SPEAKER_00: As a kid, because you kind of soak in all of that, right?
1:38:02
SPEAKER_00: So imagine you growing up in a place and when you're five years old,
1:38:06
SPEAKER_00: there's like 5,000 people living there.
1:38:08
SPEAKER_00: But then every year,
1:38:09
SPEAKER_00: 5,000 people move in and you see the city rise around you,
1:38:12
SPEAKER_00: you see these companies,
1:38:13
SPEAKER_00: and then you start hearing
1:38:16
SPEAKER_00: the stories about like,
1:38:18
SPEAKER_00: this is one of the things that turned the story of California,
1:38:21
SPEAKER_00: and this is this optimistic place,
1:38:23
SPEAKER_00: and you see a whole city grow up around you.
1:38:26
SPEAKER_00: I think you can't help it, but be a really optimistic human, right?
1:38:31
SPEAKER_00: That believes that we can do things.
1:38:33
SPEAKER_00: And you don't have to live there to do that,
1:38:35
SPEAKER_00: even just to come and visit and to see that,
1:38:37
SPEAKER_00: I think would be spectacular.
1:38:39
SPEAKER_00: And so just very selfishly,
1:38:41
SPEAKER_00: I want that to start happening as soon as possible,
1:38:43
SPEAKER_00: because building is a lot more fun than planning.
1:38:46
SPEAKER_02: That seems like a good spot to end.
1:38:47
I will do the very last question that maybe I should have asked
1:38:51
is the first question.
1:38:52
SPEAKER_02: Why is it California forever?
1:38:56
SPEAKER_00: Because I think that I think California is this
1:39:01
SPEAKER_00: I think for 150 years, the state stood for something.
1:39:04
SPEAKER_00: I think it was the symbol of a new frontier of optimism,
1:39:09
a place where people could come from all over the world and
1:39:12
build a new life.
1:39:13
SPEAKER_00: And then in the course of that,
1:39:17
mean California invented the modern world right like you think
1:39:20
about all of the
1:39:21
stuff around us it was basically invented here from radio and
1:39:25
tv to satellites and
1:39:29
planes and microchips and the internet and iphones and now ai
1:39:35
like basically we
1:39:36
live in a world that was invented by california and then by the
1:39:39
way when we are
1:39:41
And then all of the entertainment that we consume was basically
1:39:43
built here,
1:39:43
right?
1:39:44
SPEAKER_00: And so for 150 years, the state was the symbol of optimism.
1:39:52
SPEAKER_00: If you go anywhere in the world and people ask you where you're from,
1:39:55
you get a different reaction than if you say I'm from
1:39:57
California than if you say
1:39:58
SPEAKER_00: I'm from America.
1:40:01
SPEAKER_00: The world meant something.
1:40:02
SPEAKER_00: And I think that the world is better for it.
1:40:04
I think that if the computer industry or if the software
1:40:09
industry was invented in
1:40:11
SPEAKER_00: Sweden,
1:40:12
SPEAKER_00: the world would be a worse place.
1:40:13
SPEAKER_00: I do.
1:40:14
SPEAKER_00: I do.
1:40:14
SPEAKER_00: I don't mean to pick on Sweden, but pick anywhere else in the world.
1:40:19
But there was a sense of optimism and then you had this
1:40:23
frontier spirit that was
1:40:24
SPEAKER_00: imbued with the counterculture.
1:40:29
SPEAKER_00: And it was something really special that happened here.
1:40:31
SPEAKER_00: And then,
1:40:32
SPEAKER_00: by the way,
1:40:33
it didn't happen in some northern part of this country where
1:40:38
it's dark and cold.
1:40:39
It happened in a natural paradise outside of Napa and Tahoe and
1:40:42
the ocean.
1:40:45
SPEAKER_00: It's a complete fluke of...
1:40:49
SPEAKER_00: all the way back to the big bang that California exists.
1:40:52
SPEAKER_00: What are the odds, right?
1:40:54
SPEAKER_00: You replay the history of the world.
1:40:55
What are the odds that the future of the world is being
1:40:58
invented in this natural
1:40:59
SPEAKER_00: paradise at the end of a continent where
1:41:03
people from all over the world landed on the East Coast and
1:41:06
they crossed the
1:41:06
continent and then they landed here and there was kind of
1:41:09
nowhere else to go
1:41:10
SPEAKER_00: further west.
1:41:11
SPEAKER_00: So they invent Silicon Valley and they invent Hollywood.
1:41:15
And then the word becomes synonymous with sunshine and optimism
1:41:23
and opportunity.
1:41:25
SPEAKER_00: And then it kind of starts going away in the last 15 years.
1:41:28
SPEAKER_00: I mean, it's still the brand of California.
1:41:34
SPEAKER_00: But it's slipping away.
1:41:35
Like if you ask someone in London or New York what comes to
1:41:39
mind when you say
1:41:39
SPEAKER_00: California,
1:41:40
a lot of times they will now say homelessness and nobody can
1:41:46
afford to live there
1:41:46
SPEAKER_00: and people are leaving.
1:41:47
SPEAKER_00: And I think it would be such a shame if we screw it up.
1:41:51
SPEAKER_00: I do.
1:41:51
SPEAKER_00: I think there's nowhere else like it.
1:41:53
SPEAKER_00: And so that's why it's California forever.
1:41:55
I think it would be a great honor if this company got to play a
1:42:02
part in bringing
1:42:03
SPEAKER_00: some of it back.
1:42:04
SPEAKER_02: Cool.
1:42:04
SPEAKER_02: Well, it seems like a fantastic spot to end the podcast.
1:42:07
SPEAKER_02: And then I have the pleasure of we get to go cruise around.
1:42:10
SPEAKER_02: That's cool.
1:42:10
SPEAKER_02: See you.
1:42:11
SPEAKER_02: See everything.
1:42:13
SPEAKER_02: So thank you so much for your time.
1:42:15
SPEAKER_02: I'm excited to show you next.
1:42:16
SPEAKER_02: Thank you.
1:42:20
core memory podcast is hosted by me ashley vance it is produced
1:42:26
by david nicholson
1:42:27
and me our theme song is by james mercer and john sortland and
1:42:34
the show is edited
1:42:36
SPEAKER_02: by the john sortland
1:42:39
SPEAKER_02: Thanks as always to Brex and E1 Ventures for making this possible.
1:42:45
Please visit our Substack YouTube and podcast channels to get
1:42:51
more of what Core Memory makes.
1:42:52
SPEAKER_02: Thanks, y'all.