Episode Transcript
Preet Bharara:
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From CAFE and the Vox Media Podcast Network. Welcome to Stay Tuned. I’m Preet Bharara.
Marc Lore:
If the city doesn’t work the way we all dream it can, it’ll probably be because it doesn’t have soul or it won’t be diverse. It’ll be some homogeneous group. And then it just never really turns into something that we’re really super proud of.
Preet Bharara:
That’s Mark Lore. He’s an old friend of mine. He’s also a self-described serial entrepreneur who’s had massive success at nearly every turn of his career, thriving in the hyper competitive world of e-commerce. Earlier this fall, he announced his biggest challenge yet, creating a new city from scratch that he hopes will set a global standard for urban living and become a blueprint for future generations. Mark joins me to discuss why he decided to embark on such an ambitious project, how he thinks about risk, and why the success of his new city, which he’s named Telosa will only succeed with soul at its center. That’s coming up. Stay tuned.
Preet Bharara:
Now, let’s get to your questions. This question comes in a tweet from Greg Burgess, who asks, how long does it take to go to a grand jury and make a decision for a case like Steve Bannon’s? Of course, that’s something we’ve been talking about for many weeks now. Steve Bannon, who was pardoned by President Trump, former President Trump, for his role in a fraud in connection with building a wall on the southern border is now in the cross hairs again, in my view, very legitimately, because he has openly defied a subpoena from the January 6th panel of the Congress. The committee itself, that panel itself voted unanimously to make a referral for criminal contempt of Congress of Steve Bannon to the justice department, and then the house as a whole voted to refer him to the justice department as well. That was on October 21st, 13 days ago.
Preet Bharara:
You might have heard Joyce Vance and I discuss how quickly that could happen. My view is it could be any day. It’s not a complicated case. It doesn’t involve wire transfers. It doesn’t involve international information. It doesn’t involve a whole host of communications. It’s a simple matter of the justice department, notably the DCUS attorney, and Merrick Garland presumably will be heavily involved to figure out whether or not it’s fair and just to prosecute Steve Bannon for a misdemeanor violation because he defied the subpoena without having any basis for doing so. I don’t think it requires other witnesses. It doesn’t require going through any massive kinds of documentary information. I think it’s a simple call. They’re probably deliberating over it internally.
Preet Bharara:
There are very few precedents for this, but there was one back in the early ’80s, and it took about nine days from the time that the house of representatives voted for a referral for criminal contempt of Congress to the time when the US attorney made the charge. So I think this will be soon.
Preet Bharara:
This question comes in an email from Ellis who asks, what are your thoughts on the recent John Eastman revelations? John Eastman, of course, is a figure who’s come into sharp relief over the last number of days and weeks as an outside lawyer for then President Donald Trump, who is actively involved in the business of the January 6th insurrection. Most famously, a few weeks ago, it was reported, and we saw a copy of a memo he wrote that outlined the steps that Mike Pence, then the vice president could take to basically turn the election to Donald Trump.
Preet Bharara:
But it’s not only the case that he wrote that memo, which he, by the way, since then has alternately distanced himself from and also embraced, which is a weird mix of reaction for him. But it’s also come to light that on the actual day of the insurrection, after violence had occurred, after the capital had been invaded, he had an exchange with an attorney for Mike Pence, and it’s pretty shocking. While Mike Pence, the sitting vice president was actually being hidden and protected from a mob through the January 6th insurrection, there’s an exchange back and forth between John Eastman and Greg Jacob, a Pence aide, in which Jacob describes the siege that’s happening at the Capitol at that moment. How does John Eastman respond? Like this, “‘The siege’, which he puts in quotes, ‘the siege’ is because YOU, capital Y-O-U, YOU and your boss, meaning Mike Pence, did not do what was necessary to allow this to be aired in a public way so that the American people can see for themselves what happened.”
Preet Bharara:
And then encourages him even after the insurrection is underway to turn the election to Donald Trump. What do I think? There’s been talk that the January 6 panel will subpoena John Eastman, I think that’s an actual certainty. His testimony, I think, is vital to figuring out the advice he gave to Donald Trump, the advice that came back from Donald Trump, what instructions he gave, what directions he gave, what was the mental state of the former president of United States, and how close we came to actually having an election overturned. It’s crucial to our understanding of who should be held accountable. It’s crucial to our understanding of what happened that, and also as will be important in these debates in court, crucial to understanding what laws need to be changed or what laws need to be passed. Will John Eastman come and testify? I don’t know. Maybe he will find himself in the same position as Steve Bannon.
Preet Bharara:
Now, usually, I answer questions during this portion of the show from regular people. But this week I got a question from someone you may know, it’s my friend and frequent Stay Tuned guest, Ian Bremmer. He’s been on Stay Tuned so much that I sometimes refer to him as my Regis Philbin. That’s a reference to how many times Regis Philbin was on David Letterman show. And Ian Bremmer, twitter form, asks a very, very important substantive question that really goes to the heart of our democracy, and it’s this, what’s your new favorite Massachusetts origin prohibition era cocktail? Ian Bremmer, though he’s not a lawyer, understands the principle, never ask a question that you don’t know the answer to.
Preet Bharara:
The reason he’s asking the question is a couple of weeks ago, Ian and I went out for a drink at a nice place off of Madison Square Park in Manhattan, and he laughed at the boring drink choice that I made, and suggested I try what he had. And I liked it very much. So if you’re looking for a new cocktail, take it from Ian Bremmer, what you want to try is something called a Ward Eight, which according to liquor.com is a turn of the 20th century concoction, one of Boston’s major contributions to craft cocktails. It was created at the Locke-Ober cafe in Boston’s eighth ward. The ingredients in case you’re curious, two ounces rye whiskey, half ounce lemon juice, half ounce orange juice, two teaspoons of grenadine, and garnish with two or three speared cherries.
Preet Bharara:
Of course, I kept forgetting the name of the cocktail and kept referring to it as District Nine instead of Ward Eight. District Nine, of course, is not a cocktail. It’s a 2009 sci-fi film. Thank you, Ian Bremmer for asking such an important question. Stay tuned. There’s more coming up after this.
Preet Bharara:
It’s not every day that someone comes along with the smarts and determination to build a new city, but that’s what entrepreneur Mark Lore has set out to do with his latest moonshot, an urban center that will test a novel model for society implementing nothing short of what he intends as a reformed version of capitalism. Mark Lore, welcome to the show.
Marc Lore:
Thanks, Preet. Great to be here.
Preet Bharara:
I have to begin this interview a little bit differently from how I do other interviews, and that is to make sure we put on the table a few things. We went to the same K through 12 private school in Tinton Falls, New Jersey, the Ranney School. I was trying to figure out how many years. Is it 40? Is it more than 40?
Marc Lore:
I think 40, yeah, to be. Yeah. I think it’s 40, exactly.
Preet Bharara:
40 years. So we’ve been friends for 40 years. You’ve been my brother’s best friend since childhood.
Marc Lore:
40 years.
Preet Bharara:
We’re going to talk about some of this background before we get to the big project that you’re undertaking. But you and my brother started a number of businesses together, including diapers.com. You have been an investor in CAFE, so we have a lot of entanglements. We’ve been friends for a long time, and I’ve watched your growth and success with a lot of pride, my friend. It’s a pleasure to have you on.
Marc Lore:
I have as well, Preet.
Preet Bharara:
We went to this weird high school, which is very, very good, so no offense to the people who are going there now, but it was a little bit of a throwback. You didn’t love high school. Did you?
Marc Lore:
I did not, no. I didn’t love school to be honest.
Preet Bharara:
Why is that? Because as we’ll discover, if you want me to have more of this conversation, you’re basically a human computer. So you didn’t even like math?
Marc Lore:
I mean, sure, I liked math, but I just didn’t like… there was too many rules and guardrails. You weren’t able to be creative and think about unique solutions. You had to show your work. Even if you found a new way to do and solve a problem, it didn’t count or matter. Yeah. I didn’t enjoy it. It was very frustrating.
Preet Bharara:
You’re a bit of a jock, right?
Marc Lore:
I was. I was. I did love sports.
Preet Bharara:
You ran track, right?
Marc Lore:
I did. I did. Started the track team as a matter of fact.
Preet Bharara:
You started the track team?
Marc Lore:
Yeah. There was no track team there.
Preet Bharara:
The Panthers.
Marc Lore:
Yeah. That’s it.
Preet Bharara:
One way that you’ve been described, which I think is accurate, serial entrepreneur, is that fair?
Marc Lore:
Definitely. Yeah.
Preet Bharara:
You started a company with my brother after being in finance for a while called The Pit that you sold to Topps. And then as I always tell the story, because it’s interesting to people, you then started something with my brother a number of years ago called 1800Diapers, which was a play on what was it, 1-800-FLOWERS?
Marc Lore:
Yeah.
Preet Bharara:
Before the internet, you would call that number, you’d get flowers delivered. I think there was also 1-800-MATTRESS.
Marc Lore:
Exactly. Yep. 1-800-CONTACTS.
Preet Bharara:
1-800-CONTACTS, 1-800-Whatever. I love telling the story because it’s not that well known about how when I was US attorney, Vinit called me up, my brother, and he said, I’m starting this new company to sell diapers on the internet. I will say to the crowd, so imagine how my parents felt when my brother, and this includes you, went overnight from being the general counsel of a publicly traded company, Topps, to selling diapers on the internet under the slogan, and this is true, we’re number one in number two. That always brings the house down and people laugh. And I say, yeah, that’s, that’s, that’s right, you’re laughing, my brother laughed too when he sold the company to Amazon for $545 million. How the hell did that happen?
Marc Lore:
Well, it’s funny, just funny story too. When I moved to Mountain Lakes, New Jersey, with my family at the time, back in this was 2006, and my neighbor tells a story about the first time he met me, and he says, “Oh yeah, well, it’s great. Welcome to the neighborhood. What do you do?” I said, “I’m in the diaper business. I sell diapers over the internet.” And he said that night, he went back and told his wife, “Don’t get too friendly with them. I don’t think they’ll be here that long.”
Preet Bharara:
Well, because it sounds crazy. And you quickly went from 1800Diapers to diapers.com. But obviously for people who are not in the know, it was a play for a population of consumers in the country, moms, particularly young moms, who you thought you could sell a lot of stuff to. So you ended up starting a number of other websites operating under the company named Quidsi. Can you tell us about what some of the other ones were, and then how it got successful?
Marc Lore:
Yeah. I guess basically when we started, nobody was selling diapers over the internet, even though they’re bulky, you don’t really like going to the store to pick them up and bring them home, and it was sort of a commodity you didn’t need to see it or touch it, feel it to know what you were getting. And so it seemed perfect for the internet. But when we told people about this idea, especially people in the actual market for diapers, they said, it’s never going to work because they’re a loss leader for brick and mortar companies like Walmart and Target, and now you have to pay for shipping. It’s just not going to be economical. I think what we thought at the time in thesis was well, if Walmart and Target is in these products as lost leaders not making any money on these, there’s a reason, because they drive traffic to the store to sell everything else.
Marc Lore:
We thought, well, online, selling everything else is a lot more than what you could sell in the store, so there’s a lot more margin. So we theoretically should be able to sell the diapers for even a bigger loss leader, lose even more money because we could sell more products to people if we were able to build that relationship. That was the original thesis going in proved to be correct. We did build incredible relationships with busy parents, and we were able to sell them everything else they needed for their baby, including eventually things they need for their pets. We launched a site called wag.com. We launched a website called soap.com, which was basically an online drugstore, yoyo.com, which was an online toy store. Basically, we were in 10 different verticals selling parents stuff in every category. Casa.com was a home site. And so the strategy was proving out. Then we sold to Amazon.
Preet Bharara:
What’s funny is when I would tell people this, people in retrospect think, oh, I wish I had thought of that, as if it was about the idea alone and not about the execution. Does that irritate you when people say stuff like that?
Marc Lore:
Yeah. Yeah.
Preet Bharara:
As if you would have built from scratch.
Marc Lore:
Exactly. A lot of people had the idea.
Preet Bharara:
A half billion dollar company simply by having the idea, oh, let’s sell diapers on the internet.
Marc Lore:
Right. It definitely wasn’t about the idea. I often tell people, it really is never about the idea. I think any idea could really work and turn into a meaningful business if it’s a big enough market. It was about the execution and it was about more than execution. It was really about risk-taking. So Vinit and I, we had to basically… we weren’t able to buy diapers direct from Procter & Gamble and Kimberly-Clark.
Preet Bharara:
Because you didn’t have the relationship with the manufacturers, you had to buy them from a store like BJ’s-
Marc Lore:
Yeah. The Wholesale Club.
Preet Bharara:
… or Costco. I went once with dad… You remember this, right? I went with my dad-
Marc Lore:
I remember this. Yeah.
Preet Bharara:
… and he had more credit at the time than you guys did. And he literally goes into the BJ’s some years ago and he buys $83,000 worth of diapers for your website. I remember the woman who was working at the time, and took the order, and looked at my dad, says, “Can I get you a hot dog or something?” He’s like, “No, I’m good. Thank you.”
Marc Lore:
Remember he was reading through the… Vinit always does the… When he was reading through the receipt and he was going through with his accent, that always cracked me up every time.
Preet Bharara:
How do you think about risk when you enter a new market or think of a new enterprise?
Marc Lore:
How do I think about it?
Preet Bharara:
Yeah. Well, because this is going to be relevant to talking about the city.
Marc Lore:
Yeah. I don’t really think about… if you define risk as sort of probability of success, I don’t really think about that in isolation like I think many people do. Certainly big companies, that’s exactly the way they think about it and why it stands taking big swings, because if something has a low probability of success, they immediately write it off. I think entrepreneurs, and this is what differentiates entrepreneurs from everyone else is when you see a low probability of success, you don’t necessarily write it off. You ask, well, how big is the upside if it does work? If the upside is out-sized relative to the probability, then it’s the shot we’re taking. So if you have a 20% chance of something working, most people would say, you know what, I don’t want to fail 80% of the time. No, thank you. But I’ll say, wait, 20% chance of what? What’s the upside? Oh, it’s a 1000X.
Marc Lore:
Well, that I’ll do, because if that doesn’t work, I’ll find another opportunity. There’s a 20% chance of success with 1000X, and eventually, I’m going to hit one of these things. Maybe not. Maybe you never hit the 20%, but that’s entrepreneurship, is you see that and you go for it, and you put everything you’ve got into something that is most likely not going to work. Give it the best chances it can by working hard and putting everything you possibly can into it, but it doesn’t mean it’s going to work.
Preet Bharara:
So you started diapers.com. That was a success. You were bought by Amazon. You worked there for awhile, then you left. Then you started another even more improbable thing, a direct competitive website to Amazon called jet.com, which was also very successful, which you sold to Walmart for $3.3 billion. At the beginning of either of those enterprises, what did you think the likelihood of success was? Was it 20%, lower, higher?
Marc Lore:
I mean, when you’re an entrepreneur, you don’t think about it not working. You go all in, and you have to operate on the assumption it’s going to work. But if you looked at the objective probability of it working and just for an odds maker, I think you’d probably have to say Diapers was 20% and Jet was probably not much more either. Maybe you could say access to capital at Jet, we had more access to capital, so maybe it was 30 or-
Preet Bharara:
So the likelihood was higher. Now, when you have a track record of success, does it not become easier for people to believe in you and for you to believe in yourself?
Marc Lore:
I think it does. I talk about this framework that I operate by as an entrepreneur called VCP, vision capital people. And I think you need all three ingredients. If you get them right, magical things happen. When you have a successful startup behind you, the C and P, capital and people, you have an advantage. So certainly had an advantage raising capital after success with diapers.com and equally with people, people, like you said, believing in you. You’re able to go out and hire the very best talent. If you have the best people and you have capital and you have a really big, clear vision, you have a good chance that things will work out.
Preet Bharara:
Can we talk about one more improbable thing? It’s one of my favorite stories, before we talk about your city project. I think people find this hard to believe. You at one point qualified for the national bobsled team. How the hell did that happen? You’re working in the World Trade Center some years ago before you started becoming a serial entrepreneur. My memory is, because I remember hearing about it at the time, you’re in your business suit, you’re walking out to get lunch or something, and what do you see?
Marc Lore:
Yeah. So the US Olympic bobsled team was going city to city spending a week in each city trying to raise awareness for US bobsled, raise money. They had set up a track down at the World Financial Center. They were basically just saying, hey, I don’t remember how much it was, like 10 bucks, $20, whatever, and push the sled and they’ll time you. It was just for fun. They were there for a week. As one of the carrot there, they said, if you had the fastest time during the week, we’ll invite you up to Lake Placid and you can take this other test to see if you could actually qualify to train up there and learn how to be a bobsledder. I saw that-
Preet Bharara:
Wait, had you ever bobsled before?
Marc Lore:
No. I never bobsled. I ran track in college.
Preet Bharara:
So you’re in your business suit, you’re leaving the building. You see the bobsled track and you say to yourself, what the hell, I’ll give it a shot. Is that fair?
Marc Lore:
Yeah. I took my jacket and tie off. I had sneakers because I was going to the gym. So I went back, got my sneakers, came back. I had basically, still pants, in a shirt and sneakers on, and yeah, proceeded to push the sled down the track. I remember them thinking it was fast time. It was impressive to them, whatever. I was like, “Oh, okay. That was kind of fun. That was cool.” They think it was a fast time. And then like, I don’t know, a week later, I get a call. This is so-and-so from the US national bobsled team. We just wanted to tell you that you in fact had the fastest time during the week, and we did say that you’d get an invite. So we’re inviting you to Lake Placid. They said, you could come up to Lake Placid and take this test. If you happen to pass the test, you need to stay up here for a month to learn how to bobsled. And then we’d have the time trials to see if you make the US national team. And so I took a month off from work.
Preet Bharara:
That’s so insane. So you took a month off, and how did you do?
Marc Lore:
Yeah. I went up there, and then they had this test. It was speed, jumping, strength, all these tests, and you had to score over 700 points to stay there for the month. And I don’t know, maybe like 30 people passed and I was one of them. And so I stood up there for a month, lived up there in Lake Placid and basically trained every day. And then at the end of the month, there was the time trials and you had to finish in the top 13 to make the US national team. I was like 30th or something. I was towards the bottom on sort of the testing metrics. So I just assume I wasn’t going to be in the top 13, but I gave it a shot and finished 13th. And so now they said, all right, well, welcome to the US national bobsled team. We’re going to be traveling around the world, and we’re going to Germany, and we’re going here and there, and two years is the Olympics. It’s like-
Preet Bharara:
I remember at the time was like, my best friend from high school, Jessica, would say, have you heard the latest with Marc? Okay. So then finish the story, because we’ve got to get to your city.
Marc Lore:
Yeah. No. That’s it. I mean, I had to make a decision. Did I want to travel all over the world for two years before the Olympics and quit my job, or I was a couple of years into my career, and I decided I wasn’t going to quit for two years to do it. I stuck with banking and that was the whole story.
Preet Bharara:
Wait a minute, it just continues to get just crazier and crazier. On a luck, you take off your tie and jacket, that leads you down a path where you actually qualify for the national bobsled team. You have a shot at being in the Olympics representing the United States of America in the Olympics. Having done all that, you’re like, nah, I’m going to stick with banking.
Marc Lore:
I know it seems silly now, but no regret.
Preet Bharara:
You and I have spent a lot of time over the last four and a half, five years talking about this idea you have that some people think is terrific, some people think is outlandish. You yourself have said you don’t know what the likelihood of success is. We have a baseline of 20% that you think makes something worthwhile to try if it’s bold and aggressive and potentially world changing. Let’s talk about the city that you have imagined, Telosa. My first question is given the resources and means that you have, how much you care about society and urban life, why not put those resources to bear on actual cities? You live in Manhattan, in New York city, the best city in the world in my mind, and I think you enjoy it. Why not advocate for improvements and reforms in existing cities, rather than undertake something so massive and difficult by creating a new city? What’s going on there?
Marc Lore:
Yeah. I mean, first of all, I think the best way to impact existing cities is to show how it could be done, and I think doing it with a clean slate from scratch enables you to do things that existing cities wouldn’t even know were possible. And if you proposed it to an existing city, they’d be hard pressed to do it because of the investments they’ve already made in existing infrastructure, in the ways of operating that it would be too much of a risk. But if you saw it working and the benefits, you’d be able to do the cost benefit analysis, and I think more likely to do it, and so not impacting one city, but impacting all cities. And so that’s one thing.
Marc Lore:
The other thing is that this was more than just building a city. It was really sort of proving a new model for society, a new economic model. I think like many of us, we’re just really frustrated with how divided this country has become and how perplexed it is to see despite all the material progress we’ve made in this country, why there are still so many people just barely getting by. One of the things that occurred to me was I think capitalism is a great economic model, but it certainly has its flaws. There were flaws that have been exposed over time. The best example is really monopolies. Monopolies don’t work in a capitalistic economic system. It wasn’t until antitrust laws that really [inaudible 00:26:53] workers protected from that. If you go back in time when there weren’t antitrust laws, workers’ rights were abused, and that hole need to be plugged.
Marc Lore:
I think after doing research and reading about the current system and why it’s still flawed, I came across this book called Progress and Poverty, by an economist called Henry George back in the late 19th century, who proved through economic theory, and I believe it that the real problem is that land ownership is essentially a monopoly that’s not regulated in any way. So there’s a finite amount of land and a few own a piece of land, you basically have a micro monopoly, and can charge and profit in a way that will always make it the case that there’s a class of people barely willing to work. He proves it in economic theory. We don’t have time to get into that, but I definitely bought into it. And then got me thinking down this path of, well, what if things were different? What if the land wasn’t just given to people that put a stake in the ground and said, yeah, this is my 160 acres, and that land was then never to be claimed again by anyone else, because there’s a finite amount of it.
Marc Lore:
I said, what have you started from scratch, and you took land that was worthless, and you had the land bought by rather than give it away to individuals, it was given to, or bought by a community foundation whose sole mission was to help create and build a city over that land so that the land would appreciate to such an extent that the land would be very valuable and the foundation would sell the land and create an endowment, and that endowment would be used to provide advanced social services like healthcare, education, jobs training, affordable housing.
Preet Bharara:
To such a degree that you wouldn’t need a tax base in your theory, or to supplement the tax base?
Marc Lore:
To supplement the tax base. You wouldn’t certainly need to increase taxes to have the most amazing social services. You’d have equal opportunity education, healthcare, housing, job training without having to increase taxes, so it’s sort of the best of both worlds.
Preet Bharara:
Kind of like an urban sovereign wealth fund?
Marc Lore:
It basically is. It basically is. The wealth is created through the rapid appreciation of land that happens when communities are formed and tax dollars are invested in infrastructure. So it stands to reason that the people that created the communities whose their tax dollars are invested in bridges and roads and tunnels and things, that all the appreciation of land caused by that come back to the citizens that made it so. It’s not socialism or anything like that. The land is bought fair and square by community foundation when it’s worthless. And then when it’s worth something, the foundation sells it off. It’s not a government owned sort of thing. It literally is, like, if you can imagine on a small scale, a group of people agreeing that we’re going to create value in the land that we create a community around. When we create that value, we’ll all share in it. That’s essentially what would happen if a community foundation bought land in a desert and helped bring a city of five million people there.
Preet Bharara:
Is there a catch 22 there in the sense that because it’s you, and if people thought, well, there’s going to be a lot of value in this land going forward, because we believe in the enterprise, some may think it’s a lot more than 20%, with the sellers of the land, because you have to buy land from someone. Let’s say you found a patch of land in Nevada. Is there a concern on your part as a pragmatic and practical matter that a seller of that land would raise the price higher up because they think you’ll succeed and there’ll be a lot of value later?
Marc Lore:
I think that is definitely a concern. There is a lot-
Preet Bharara:
So you want to downplay the prospects for success a little bit for the initial land purchase.
Marc Lore:
Or downplay who’s buying the land. I think Disney did that successfully at the time. I think people do that all the time. Will buy up land without disclosing the buyer so that, yeah, it doesn’t increase the value before the land is acquired.
Preet Bharara:
That’s one practical thing. Are people surprised? Because this idea has been germinating for a long time with you. We’ve been talking about it for five years just informally. The idea was on the cover of Bloomberg Businessweek magazine a few weeks ago. Are people surprised when they learn that the idea was born in your head to address income inequality? Is that weird to people?
Marc Lore:
I don’t know. It depends on who it is. Everyone has a different opinion, I think, but I’ve really yet to run into anyone that’s objecting to the idea that we’d be able to offer these incredible benefits to the citizens without increasing taxes. I think the previous thinking is if you want to have the world’s best social services, you need to pay for it somehow, and that is going to be from increasing taxes. That’s where there’s a divide. I think if we find a solution where we could not have to increase taxes at all and have these amazing social services, I think most people have bought into it.
Marc Lore:
The other thing that is a real focus here is to, unlike many other cities being built, they feel more like real estate projects where people aren’t at the center, or they’re technology sort of showcases, like Google tried to do, or is happening outside of this country. But the idea that if we focus on people, put people at the center and start with this set of values, we have three values, open, fair, and inclusive. We want to be the most open, the most fair, the most inclusive city in the world, and that’s what drives us. The mission is to create a more equitable and sustainable future. So yeah, we want it to be more equitable through this idea that I just said, but also want it to be the most sustainable city in the world. There are a lot of things that we’ve learned over time that we could apply now that could make cities more sustainable. The city will be 100% renewable energy, for example.
Preet Bharara:
All these things sound great, but one of the threads of conversation you and I have had and I know you care about is when you plan a city, it can become antiseptic. And you worry that it becomes a city of monorails that have a lot of gadgets and high tech, but it doesn’t have-
Marc Lore:
Soul. Yeah.
Preet Bharara:
… the charm or grit. You said it. I’m going to quote from you, you have said about this project, “How does a city have a soul? It’s not about buildings and roads. It’s about the values and the city standing for something. We don’t know what that is yet, but we want to find out.” If you, billionaire Marc Lore, and other folks plan it and think about every detail of the city center as an initial matter, and think about all the sustainable things you’re going to do, housing, transportation, museums, schools, and everything else, we’ll get to some of those, how do you build a city that has a vibrancy and a soul if it’s pre-planned?
Marc Lore:
Yeah. I think it has to be… I mean, we think about this a lot, and if the city doesn’t work the way we all dream it can, it’ll probably be because it doesn’t have soul. And so that’s obviously really important. Or it won’t be diverse. It’ll be some homogeneous group that goes out there first and then it just never really turns into something that we’re really super proud of. I think on the seeding of the city, and this is controversial in its own right, trying to get the first 50,000 people that move there to be as diverse a group as possible across race, religion, profession, income level, to give it the best chance of organically growing from that point forward-
Preet Bharara:
You got to get that right, because it… How do you prevent it from being very homogeneous?
Marc Lore:
I know. This first 50,000 people, unfortunately, the only solution we could come up with, and if someone has a better solution, we’re open to it, would be to sort of do it and create it like a university class where you’d literally have applications, and you’d build a class of citizens that represent the first 50,000 and try to do it in the most diverse way possible to give it the best possible chance of organically growing, because after the first 50,000, you can’t continue to… it’s not a private city, it’s an open public city. So you’ll have one shot to sort of do this. I think it’s important that we get the right people in the room helping to ensure that that first 50,000 is diverse and also the type of people that are encouraging organic growth from there.
Marc Lore:
In terms of building of the city itself, we can’t have one single architect, for example. It needs to be… I mean, there’ll be a master planner, but we’ll need to engage the best and brightest minds and creative minds to think about different parts of the city, and making sure that there’s creative diversity as well. The worst would be if the city has a very similar look throughout it. I think that we’d be missing soul if it wasn’t organically grown. Our intention is to bring in the beginning, sort of a destination is to potentially talking about this, making music and entertainment sort of a focal centerpiece to bring creative minds and creative talent into the city early, because I do think it will take creative people to expand the city in ways that give it soul and vibrancy.
Marc Lore:
But there are things that we can do also that we’ve learned with nature to infuse that into the city, to make it walkable, bikeable, to have the ability of people to work, live, play all within sort of a five-minute walk.
Preet Bharara:
Will there be cars in the city?
Marc Lore:
The way we’re thinking about it now, because of the benefits of going fully autonomous in terms of vehicles, we’ll probably head down that route where there won’t be any non autonomous vehicles at least in the center of the city, it would all be autonomous, which would allow you to have narrower roads, fewer roads, no street lights and street signs. It’ll be a lot safer. So lots of advantages. All the vehicles would be electric, so it would be better for the environment as well. But the safety is a big thing. It’s more efficient, and you have fewer roads and fewer cars. That’s something that is very possible today. The only reason why autonomous vehicles aren’t more mainstream is because combining autonomous vehicles with normal cars just doesn’t work. The complexities are just incredibly challenging and difficult.
Preet Bharara:
We’ll be right back with more of my conversation with Marc Lore after this. Can we talk about the name for a second?
Marc Lore:
Sure.
Preet Bharara:
Should have done at the beginning. I know from our discussions that Telosa, and also from my study of political philosophy in college comes from Aristotle’s term, telos, which means purpose or end or the highest purpose. My question to you is, have you thought about in the last week changing the name to Metta?
Marc Lore:
Metta. Yeah. I mean, it’s funny. There will be, and we’re talking about this a lot, likely a sort of metaverse of Telosa that’s built simultaneously.
Preet Bharara:
This is new.
Marc Lore:
Yeah. This is-
Preet Bharara:
Breaking news. You’re hearing it right here, folks, for the first time.
Marc Lore:
It is new. We’ve got this feedback, we’re very open to feedback, and we’ve got this feedback from quite a number of people, so we’re now exploring that.
Preet Bharara:
By the way, less people think this is grand hypothetical, not withstanding the amazing millions of challenges that you would face in succeeding on this, you’re years into this project. You have spent millions of dollars of your own money. Am I right?
Marc Lore:
That’s correct. Yeah.
Preet Bharara:
You have actually engaged a chief architect. Could you tell us about what concrete things have happened?
Marc Lore:
Yeah. We’ve engaged the architect from BIG. Bjarke is the founder. Yeah. We’ve been working with them for quite some time now to develop the master plan, and we’ve got it on the Telosa website, cityofTelosa.com. You can see imagery. We’ve got a lot more imagery that’s not up there yet that should be coming up soon. But yeah, we’ve spent a lot of time thinking about the layout of the city. We’ve spent a lot of time thinking about water and water rights, about how to make the city 100% renewable energy, and how much solar and wind would we need, and where would we ideally be located to be able to pull that off. We’ve looked into autonomous vehicles, EV Talls, essentially, passenger drones and how they would play into the city, vertical farming in lots of different areas. There’s so much more to unpack, but we’ve got experts and teams in lots of areas looking at these different problems.
Preet Bharara:
People keep asking me first, where is it going to be? You don’t know that yet.
Marc Lore:
Yeah. We don’t know that yet. I think that 2022, that’s really the plan is to build out sort of what we’re calling the Jonto Group, sort of this board of governors where experts in each area come together to help answer a lot of these really tough questions, and at the same time talking to governors and meeting with states to try to figure out where the best location is, one where it’s doable and where we can get the land. One is getting the land. Two is, okay, you have the land, but can you build a city of five million people?
Preet Bharara:
What’s the timeframe over which you expect the city to grow that big?
Marc Lore:
We’re targeting 2030 is when the first 50,000 people move in. So you’d have the center core of the city built out enough to house 50,000 people, and work and have a high quality of life. And then we grow there over the next decade from 50 to a million, and then from a million to five million over the following decade. So it’s really like 30 years from today, a city of five million people. That’s I think the most realistic goal at this point.
Preet Bharara:
This has been tried before. There are a lot of instances, and I’ve talked about this also. What’s interesting is you think of these kinds of planned cities being a feature of authoritarian governments. Been tried in China, and it often fails. What’s the reason for the failure of other projects to build cities from scratch?
Marc Lore:
I don’t think from my research and what we’ve looked at, they’re really starting with people at the center and focused on how to offer people a higher quality of life, education, jobs, and a place where you feel like you’d want to raise a family. I think a lot of those cities that are pre-planned and built, there’s definitely lacking a soul. There’s not as much… it’s not the kind of place that you’d be excited to raise a family. There’s just a lot of skyscraper-type buildings, a lot of technology, a lot of cement. The way we’re designing this is it’s going to feel great. It’s going to have a really good feeling when you come to Telosa, the amount of nature and how nature is infused in everything. There won’t be skyscrapers. The buildings will be, with few exceptions, will be kept the major focus on culture, arts, entertainment, restaurants, all the things that make… things that you love about the city you live in. We’re going to put a major focus on that early.
Marc Lore:
And then the other thing is a lot of times, there’s a chicken and egg thing with people not wanting to go there because other people aren’t there, and the people that do go there are certain kind of people that doesn’t resonate. So I do think this-
Preet Bharara:
Yeah. That was my worry. It’s going to be a self-screened group of a certain kind, which can work against diversity.
Marc Lore:
No. This is why basically nobody moves in until the 50,000 people have been selected. The people who are applying, selected, okay, here’s the 50,000 people, now, these 50,000 people, just like opening day at a university, 50,000 people move in over the course of a six week period. So nobody’s there. And then six weeks later, 50,000 people are there. People will move in in waves.
Preet Bharara:
On day one, how are people going to work? Or I guess maybe now everyone can work on Zoom.
Marc Lore:
Yeah. No. That’s another whole part of the thinking. A lot of the original people will be entrepreneurs that aspire to build tech companies that could be located anywhere, and-
Preet Bharara:
That sounds very white and male.
Marc Lore:
It doesn’t have to be. No. I mean, it wouldn’t be. The first 50,000 people are going to be diverse across race, religion, income level. There’ll be doctors, there’ll be teachers, there’ll be lawyers, there’ll be construction workers, there’ll be people running and operating restaurants, small business, city workers. It’ll be day one, 50,000 people will have to have jobs across every sector that matters in a city. Do we know if 50,000, by the way, is the right number? Could it be 30,000? Could it be 100,000? We sort of think back in the envelope 50s, right, but whatever it takes to basically have that diversity out of the gate and to cover all the professions that are needed to manage and run a fully functioning, vibrant city, even if it’s small.
Preet Bharara:
Is this the biggest issue that people raise, how you seed the city in the first place? Because it’s going to be a human… It’s not going to be done by algorithm presumably, right?
Marc Lore:
Yeah. Human beings. Right.
Preet Bharara:
Human beings, and human beings have biases explicit and implicit.
Marc Lore:
It will have to be the diversity of the team that actually does the selection is probably more important than even the people that are selected. We’re engaging with some of the best diversity inclusion minds in the world to help us think through this problem about who should be the team of people that actually go through the selection process to try and make sure it is fair and inclusive. Again, our values are a fair, open, and inclusive, and we need to live those values in a way that no other city in the world does or ever has lived.
Preet Bharara:
We’re talking about education, because that’s a very important part of any community. How’s education going to be financed?
Marc Lore:
Well, again, it would be-
Preet Bharara:
Not property taxes.
Marc Lore:
No. It would be property taxes that would fund education up to the point that it is funded today, but then we’ll take-
Preet Bharara:
Can I push back?
Marc Lore:
Yeah.
Preet Bharara:
I think a lot… I’ve always been of the view it’s very odd thing to fund public education through property taxes because some people own land, some people don’t own land. This is a problem that’s at the base of your strategy here, and it works certain kinds of unfairnesses.
Marc Lore:
Oh, totally agree. Sorry, Preet. Let me just explain, because I wasn’t clear. When I said property taxes, I didn’t mean, and I agree with you 100%, it wouldn’t mean local property taxes fund local schools. If you’re in Mountain Lakes, New Jersey, the property taxes of the Mountain Lakes homeowners fund the Mountain Lakes school system. That is not fair at all.
Preet Bharara:
Even people who don’t live in houses, and even if you don’t have children, so it works in both directions, based on your ownership of land, you pay or don’t pay for local education. How would Telosa be different?
Marc Lore:
These are things that still need to be worked through. At the highest level, though, the taxes that you currently pay collectively, if you live in any city, you pay taxes. Those taxes offer education system. That system, we know is lacking. It’s flawed in many respects because there’s not enough financing to bring in the very best teachers. In Telosa, because we’d have this endowment that would have at the end of the day, $50 billion a year spend, a big chunk of that 50 billion would go into education, that would supplement the education system as we know it today to be able to have much better teachers and much better facilities. It would be a much better education system, and everyone in Telosa would have equal access to that system. It wouldn’t be different in different parts, wealthier parts of Telosa, less wealthy parts wouldn’t have a different education system.
Preet Bharara:
Well, would you ban private schools? What if among the 50,000, an entrepreneur there said, I want to start a private school, that’s okay, right?
Marc Lore:
I think it’s a great question. I mean, just thinking about it now, that’s a great question to put out to the Jonto Group to talk through. I don’t see any reason why you… We’re trying to be open and fair. So if somebody had an idea to do and wanted to create a private school because they felt that the public system was lacking, I mean, this public system, we think would be incredible given the amount of resources. But certainly, somebody wanted to build a school, I don’t see any reason why, but I’m saying that without having discussed that with the broader diverse team. I think with all these questions, Preet, it takes many discussions to make sure that you’re not making a decision in one way that has unintentional consequences in another way. But that would be my knee jerk reaction would be sure.
Preet Bharara:
It’s really hard. Every time we talk about this, my mind spins in how complicated all this is. Would this city have a mayor like most cities?
Marc Lore:
Yep. It would be run just like any other city. If you think about it, it’s just like if New York city tomorrow, a community endowment foundation popped up that had $50 billion a year to spend to improve the lives of the citizens that live there, then that foundation would sort of work with the government and say, hey, I’ve got 50 billion to donate this year. We’d like to donate and make the education system better. We’d like to improve the hospitals. We’d like to make housing more affordable.
Preet Bharara:
Where does the 50 billion come from again?
Marc Lore:
The appreciation of the land, the way we’ve calculated it would be worth about a trillion dollars when sold. And so if you sell the land for a trillion dollars, you create a trillion dollar endowment, Telosa endowment fund. And that fund would then be invested in a diversified asset portfolio that generates 5% a year, which is 50 billion, similar to the way university endowment generates cash every year to put back into the university.
Preet Bharara:
When the economy crashes, because it happens from time to time, does Telosa suffer disproportionately because of its reliance on investment?
Marc Lore:
No. Because just like a university endowment or something, the expected returns, the way it was invested and it would be invested in a very diverse way, might be 7% a year, but you’d only spend 5%, so you’d have sort of a 2% cushion. That 2% kind of stays there and grows each year for a rainy day when the returns are negative 7%, you’ve got the 2% each year that you were over 5 that you saved up to cover. It’s like balances out. That’s basically the way any endowment works, like university endowments would have the same issue. You have to make sure it’s a diverse investment portfolio and you want to have assets that are uncorrelated, so if some go down in a really bad situation, others do well in a bad situation, bad economy, for example. So yeah, that’s part of the investment management piece of it.
Preet Bharara:
I think I know the answer to this more on municipal government. Do you commit to the city having non-partisan elections?
Marc Lore:
Yeah. Do you mean for the community foundation?
Preet Bharara:
No. I mean, for the mayor of the city. I mean, there are some cities like New York city, there’s the Democratic Party, the Republican Party, and a variety of other parties as well. But some places, it’s a non-partisan election. You don’t run on a party line. It’s just, you just run and whoever gets the most votes becomes the leader of the city. Have you given thought to how that should be conducted?
Marc Lore:
We haven’t at all. I mean, that’s an area that we haven’t really talked about at all. I mean, I-
Preet Bharara:
I’m going to advocate for non-partisan elections and ranked choice voting. So when you’re committed to talk about those kinds of things. I think the partisan politics in urban areas where so much is about just competence and execution and cleaning the snow and getting the buses to operate and all of that should be non-ideological, nonpartisan. So I come in that thought to you.
Marc Lore:
Yeah. Makes a lot of sense to me.
Preet Bharara:
What’s the argument you’re going to make to governors of states and state legislators as to why they want to be helpful and facilitate the establishment of a new city in their state?
Marc Lore:
I think because if this works the way we think it can, it could set a new model for society that can make America better. That there’s so much all the cities that we already have can learn from. And even if this didn’t work, there would still be a ton to learn. In the best case scenario, there’s an incredible amount of pride for the state to say that the city is a city where it sets a new standard for urban living, offering a higher quality of life, more sustainable, more equitable. I think it’s just a source of pride, and would go down in history as being a, I don’t know, a place for people, cities, countries to learn from.
Marc Lore:
There’s an incredible amount of pride, I would think, to have that happen at the time that a governor is a governor. I mean, I certainly would want that to happen on my watch if I were there, because if it doesn’t work, there’s still so much to learn. I don’t think there’s really a scenario with this, it’s not good for America longterm. I think there needs to be more people just taking shots, innovating, taking risk, and trying to make the country better.
Preet Bharara:
I need to go very quick lightning round, because I know you got to go. Favorite city other than Telosa.
Marc Lore:
Outside of the country or inside?
Preet Bharara:
Inside the country.
Marc Lore:
I’m going to have to say New York city.
Preet Bharara:
Well, that was an easy one. You recently bought, or are going to have majority stake in the professional basketball team, the Minnesota Timberwolves. What is more likely, the success of Telosa, or the Timberwolves having a successful season?
Marc Lore:
Timberwolves are looking good. We have a really good, young team. I’m excited about the season in the future, for sure.
Preet Bharara:
How many hours of sleep do you get? Because I don’t understand how you do all these enterprises in 24 hours.
Marc Lore:
I actually sleep pretty well. I just do a lot of thinking while I’m sleeping. So I’m multitasking.
Preet Bharara:
While you’re sleeping?
Marc Lore:
I wake up with ideas all the time. I get a good eight hours in every night.
Preet Bharara:
You do?
Marc Lore:
It’s important to get eight hours because it allows you to go nonstop for 16 hours every day. I think that’s the… If you can get five hours and then you’re… if you got, I guess, an extra three hours, but you’re just not nearly as effective. So I’ve always found better to get a full 8 hours and then just go nonstop for 16.
Preet Bharara:
I didn’t know that about… I assumed you slept three hours a night. Marc Lore, my friend of 40 plus years, congratulations on all your success. I wish you well with this new project that is very challenging, and I hope to keep talking to you about it. Thanks again.
Marc Lore:
Thanks, Preet.
Preet Bharara:
I want to end the show this week to highlight an email we got a few days ago from an avid listener. As you know, this past Tuesday was election day. It wasn’t a presidential election or even a midterm election, but there were a lot of important local leaders on the ballot, and I was glad to see so many people at the polls in my home state. I voted. I hope you voted too. I know for a lot of folks, people in Virginia, perhaps in New Jersey, that race hasn’t been called yet, the governor’s race, it was not a great day. A friend of mine in Suffolk County, the DA, also lost his race. But I want to tell you more about this email.
Preet Bharara:
Turn out is important in any election. And it’s hard for people when we don’t have the day off. People have work and school and commitments. That’s why Lisa K. Solomon who wrote the email, an educator and designer in residence at Stanford University wrote in to tell us about the #allvotenoplayinitiative. She wrote to us, ‘We don’t get a lot of good news stories these days. So I wanted to share something very special that’s quietly taking place across college campuses this election day called #allvotenoplayday. In some ways, although no play is a mixture of your recent episode with Ken Burns talking about his new Muhammad Ali documentary, your conversation with Bino Venkataraman and trying to prevent the negative scenario that Dr. Fiona Hill was talking about in your most recent episode.’
Preet Bharara:
Well, first of all, Lisa, you’re clearly paying attention to the show. Thanks for tuning in every week. She wrote further, ‘All vote, no play is the brain child of former Stanford basketball player and coach, Eric Reveno, who in 2020 socialized the idea that election day should be a day off from practice and play, and a day on for civic engagement. Over 1,100 coaches signed a petition for 2020, and it was so popular the NCAA created legislation to make it an annual mandate.’ That means that every year on election day, students will turn their focus to their communities and work towards becoming more engaged and passionate citizens. That’s pretty freaking cool.
Preet Bharara:
Lisa told us about the coaches dedicated to engaging their students in civic education, and in many cases, the students inspired to take the lead, like sophomore, Ryan Belk, tight end for the Yale Bulldogs. He hosted bulldog ballot breakfast, Lisa wrote, where his teammates will watch citizen university CEO, Eric Lewis, brilliant Ted talk on the joy of voting, and will host a votes giving to talk about the personal side of voting. Ryan is also a survivor of the Marjory Stoneman Douglas School shooting, and is trying to ignite and amplify the voices of the next generation. It’s incredible to see bipartisan initiatives like this gain momentum and attention in this country. Civic engagement is something I care very deeply about, and I hope you do too, and hopefully, that’s one of the reasons you listen to the show. Our democracy depends on it.
Preet Bharara:
Check out their mission and work at allvotenoplay.org. There, you can find guides and resources for what they call civic drills. Whether you have 10 minutes or 3 hours to spend on civic education, you can make it count. I want to thank Lisa K. Solomon for sharing this great initiative with us so that I could share it with all of you. If you have any stories of inspiration that you’d like to share, I’d love to hear them. Send them to us at [email protected], that’s [email protected].
Preet Bharara:
Well, that’s it for this episode of Stay Tuned. Thanks again to my guest, Marc Lore. If you like what we do, rate and review the show on Apple Podcasts or wherever you listen. Every positive review helps new listeners find the show. Send me your questions about news, politics, and justice. Tweet them to me at Preet Bharara with the #askpreet. Or you can call and leave me a message at 669-247-7338, that’s 669-24-Preet. Or you can send an email to [email protected]. Stay Tuned is presented by CAFE and the Vox Media Podcast Network. The executive producer is Tamara Sepper. The technical director is David Tatasciore. The senior producers are Adam Waller and Matthew Billy. The CAFE team is David Kurlander, Sam Ozer-Staton, Noa Azulai, Nat Weiner, Jake Kaplan, Chris Boylan, Sean Walsh, Chelsea Simmons and Namita Shah. Our music is by Andrew Dos. I’m your host, Preet Bharara. Stay tuned.
