SPEAKER_00: All right, everybody, it's a big show on a Tuesday. First up, we're going to talk about Twitter and Apple, having a little, uh, Donnie Brooke, let's call it, and we're going to deep dive into the duopoly, uh, that Google and Apple have in the app stores. And, uh, one of the co-founders of Android became a reply guy. And, uh, let's talk about the history of the app stores, even a little Steve jobs clip from the archives.

SPEAKER_04: That is just a fun watch. We're also going to talk about in this age of layoffs and riffs and ways to get rid of employees that you just couldn't stop hiring less than a year ago. We're going to talk about Google's headcount, the insane efficiency that is YouTube in terms of revenue per employee and Snapchat sending employees back to the office for four days a week, starting next year.

SPEAKER_07: The old gentleman's riff. And then, uh, a little crypto craziness, talk block buys, bankruptcy, and we

SPEAKER_00: pour one out for 11 and the end of crypto bottle service. It's going to be a great show.

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SPEAKER_00: All right, everybody. Welcome to this week in startups. It's Tuesday. How are you doing, Molly? It's Tuesday. It's Tuesday? It's Tuesday. It is just Tuesday. I know.

SPEAKER_19: It feels like second Thursdays. We're like living every day twice here.

SPEAKER_00: It feels like second, it feels like we're doing like the fifth show of the week, sixth show of the week, because the news just does not stop.

SPEAKER_13: Uh, and, uh, well, just starting out today, I don't know if you saw, there was a little back and forth between, um, my pal, Elon and, uh, Apple, just over, uh, Apple's advertising on Twitter, uh, and, uh, the app store. And I had, uh, tweeted back and forth about this on the Twitter. Uh, Elon said, Apple is, uh, has also threatened to withhold Twitter from its app store, but they won't tell us why, yada, yada. And I just tweeted, Hey, I wonder what I missed, uh, and put a little Tim, because we were on the pod yesterday and Elon responded to me and said, uh, something to the effect of, uh, a revolution against censorship in America. So, yeah, there's a, a back and forth, uh, about the app store rules and who gets into the app store. You know, we talked about this before putting aside, you know, Elon's my friend and he bought Twitter. I do think that this is like going to become one of the issues of our time is this duopoly, uh, in the app store. And I, I think that Apple, um, this predates Elon buying Twitter, but I have been saying for a couple of years now, Apple should allow you to have alternate app stores.

SPEAKER_27: If you press a button, like in your settings, like I take ownership of my phone, because there is something to be said for the role of the app store, uh, in, you know, vetting apps and making it a delightful experience. Like with your, my kids, I don't know about how you feel about it. I like the fact that the app store is, you know, doing some sort of vetting process, because I don't want them to load spyware or something like that. And when I'm on an Android phone, you get a lot of spyware and weird apps and that kind of stuff, but I also would like to be able to load apps on my phone in the same way I do on my desktop, which is I can go through the Apple app store or Windows has an app store, or you can just load stuff directly if you want to assume that risk. And there is some risk to it, right?

SPEAKER_13: But the interesting thing that happened in this tweet storm was guess who showed up rich minor showed up, uh, who for people don't know is one of the co-founders of Android.

SPEAKER_31: Yep.

SPEAKER_32: And said, yeah, it's not so simple. Yeah. Had there been multiple app stores on Android and iOS, it would have been a major point of friction for app distribution and adoption. You would never have had apps or smartphones for that matter grow so quickly and app developers would not have been so successful. What was your take on that? Uh, I mean, I think that's true. And also we have a duopoly in phones that's bad for consumers. Like, and that's not new, you know, the hardest, the only thing that's hard for me about this conversation is the idea that we're just discovering that at least one person in that Twitter thread is just discovering this now. Yeah. Um, because this is obviously a long standing and ongoing issue. Amazon has been fighting with Apple about the 30% take on in-app purchases. Epic, of course, sued Apple over this. It's been a point of contention for, um, I think Spotify had a lot to say for a lot of years, uh, Apple and Netflix take and it's and Netflix and all of that. And so I think like, yeah, we're in a situation where both of these things are true. Actually, that smartphones were brand new, that app stores were a reliable discovery and delivery mechanism and that Apple's rules in particular protected consumers and also let developers make a crap ton of money.

SPEAKER_04: Like we all remember that particular moment in time in the Bay Area where everybody that you talked to was an app developer. Like every Uber driver, every waiter, it was like how, when you're in LA, everybody's an aspiring actor and writing a screenplay.

SPEAKER_32: Yeah. But in the Bay Area, everybody was writing an iOS app because you could make a lot of money.

SPEAKER_27: Yeah.

SPEAKER_39: That way. And you know, this was like, it's a double edged sword.

SPEAKER_27: And I think it's instructive and oh, and to confirm your point there, you know, here's Spotify's policy for a long time. Uh, you know, Spotify has just said, listen, you're not going to use, you can make that three times bigger maybe. Um, uh, if you currently pay for premium with Apple's in app payment system, it's easy to switch to subscribe, uh, direct with us. So they discontinued this and they're just telling people, hey, cancel, don't go through the store, come to the website, sign up and then just log in with your credentials. Yeah, this creates unnecessary friction. It does.

SPEAKER_41: I understand why. You still can't buy, you cannot buy a Kindle book on the Amazon app on iOS.

Jason Calacanis: You still can't. You have to go. You still can't because they were like, no, we're not giving away that 30%.

SPEAKER_44: Yeah. And so they audible, somehow they came to some agreement and now audible, you can order an audio book inside the audible app.

David Friedberg: So that changed. With the credit.

SPEAKER_04: Because you do the credit system that you've already paid for somewhere else, either through your subscription.

SPEAKER_51: Thank you for explaining that to me.

SPEAKER_04: The credit thing is how they get around it.

SPEAKER_54: Oh, so you bought. I mean, there's ways around, but to the point, to our point, like, there are ways around Apple's 30% fee.

SPEAKER_32: You just tell people you have to sign up and pay on the web. Right. Which is kind of lame. You don't have to pay it. Sure. It's lame. You don't have to pay it. I mean, this is such a weird, again, this is such a weird feeling because I think it's like a bad faith jihad on the one side.

Jason Calacanis: And on the other side, the duopoly is bad for consumers and like has been for a really long time.

SPEAKER_27: Yeah, I mean, there is the also the issue of should the app store be deciding what let's just widen the discussion here. So I don't get aggregated. But if you're a publishing platform, medium blogger, Twitter, any other publishing platform where people are publishing their words, does the app store need to get involved in policing? What gets published on those? And that is a big question.

SPEAKER_41: I think. Yeah. And so it's always been the question.

SPEAKER_60: I mean, it's, you know, and, and nobody, it's always been the question. Everything is content.

SPEAKER_32: And the people, the reason that people, you know, I mean, Apple is very puritanical, like very, I mean, if you know about the weird media world that we live in, in some ways it's because of Apple. And there were somebody was saying the other day, they think Steve jobs personally wrote the rules about nudity. And the app store, like there won't ever be any, you know, he did say that.

SPEAKER_62: Yeah.

SPEAKER_31: And it was never a monopoly before.

SPEAKER_32: Like now Apple is to the point in market share where it's not a monopoly technically to do. Um, it is, we live in a duopoly and it's, but when you say duopoly, it's essentially a monopoly, right?

SPEAKER_64: Two people controlling something, one person controlling it. It's too few. It's terrible.

SPEAKER_32: We have, it's too few. We have the same thing with like broadband. We have the same thing with health insurance. We have the same thing with, you know, it's, it's all like, it's all of a, of an anti-competitive piece. No question. And the kind I have been ranting about for like a decade.

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SPEAKER_13: Getmayfair.com slash twist. Yeah. And so I think rich makes a really good point here. And just continuing on.

SPEAKER_27: And I, you know, agree that the app stories did help because as I responded back to him, listen. Yeah.

SPEAKER_44: People forget how fragmented things were in the early days of apps. You had to do a deal with carriers, headset man, uh, handset manufacturers. And so you would have to get HTC Nokia to put your app on their phone or Verizon or both. It was a mishmash of agreements you had to do. And it was essentially like a triopoly. I made that word up. I, I don't know that that's exactly a word, but the carriers Verizon, AT&T. And usually there was like one third one that made up a significant portion of, you know, like T-Mobile. I think it kind of switched to his number three, but you had to get their permission. People forget this, but that's how you, you had to go to each of them. Uh, so my friend Gordon Gould had created a company called Yupa, which was kind of like the original Twitter.

SPEAKER_27: It was like an SMS, you know, group chat kind of situation. They had to do deals, uh, and they had to pay to get coverage. So the way it worked was you had to go give AT&T and Verizon money upfront to allow people to have the app or you paid per install. So that would be instructive to play the clip of Steve Jobs announcing the app store. People forget. Yeah. You know, Steve announced this and he had to sell it. Even Steve Jobs had to sing for his supper. He had to sell developers on doing this. Uh, and so thanks to the exceptional producers here, hardworking and innovative as they are on the screen startups for pulling this clip.

SPEAKER_73: The app store is going to be the exclusive way to distribute iPhone applications directly to every iPhone user. Now developers are going to ask, well, this is great, but what's the deal, right? What's the business deal? We think we've got a great business deal for our developers. First of all, the developer picks the price. Pick whatever price you want to sell your app at. When we sell the app through the app store, the developer gets 70% of the revenues right off the top. We keep 30 to pay for running the app store. There are no credit card fees for the developer. We take care of all that. There are no hosting fees for us hosting the app. We take care of all that. There's no marketing fees. The developer gets 70% of the revenues, and it's paid monthly. This is the best deal going to distribute applications to mobile platforms. Now, we talk about the 70-30 revenue split, but the developer gets to pick the price. And you know what price a lot of developers are going to pick? Free, right? So when a developer wants to distribute their app for free, there is no charge for free apps at all. There's no charge to the user, and there's no charge to the developer. We're going to pay for everything to get those apps out there for free. The developer and us have the same exact interest, which is to get as many apps out in front of as many iPhone users as possible.

SPEAKER_44: All right, Molly, what sticks out to you in this 14-year-old video, 2008?

SPEAKER_80: This is from 2008. God.

SPEAKER_60: I miss Steve. This is like how I grew up in the tech industry is watching Steve Jobs. I mean, literally like one of the first, my first job in tech media was with a magazine that covered Apple.

SPEAKER_32: And one of my first assignments was an Apple keynote where Steve Jobs unveiled the like, knew the iMacs with color, like the Bondi blue one and the iMac TV.

SPEAKER_04: Yeah, I cannot get over then and now like developers clapping at like, why would there ever be a charge on a free app?

SPEAKER_85: They're just like, wait, I have app that I made for free and distributed or your store to make your platform better. You won't charge me to do that. Thank you. Like that cult is as strong as ever.

SPEAKER_02: It's amazing.

SPEAKER_13: And you know, that is in reaction to the fact, as I mentioned before, we played the clip that you had to pay to get car carriers. Right.

SPEAKER_44: Put your app on. So there were these gatekeepers. So we went from gatekeepers who are charging even for a free app to come out. Then we moved to a duopoly that did make things better. There was standardization. There was marketing, as he points out, you get to be in there. You get to, you know, people can find you. There's no hosting fees. He pointed that out. They used to charge you to host your app. I mean, it was a freaking great deal.

SPEAKER_32: Just like the 99 cent song download, like it was the best deal going a hundred percent 14 years ago. And it doesn't meet right. It's sort of like, just cause it was a great deal. That doesn't mean it's a great deal now, especially when there are far fewer options.

SPEAKER_04: I mean, you remember like five minutes after this windows phone came out, we thought there might actually be another platform. Blackberry still existed. It was not a duopoly that there was competition. Yes. And now there is not like the entire history of American capitalism as we experience it right now is anti competition. Yeah.

SPEAKER_33: And this is where, you know, I think Lena Khan can be, um, you know, since she does have strong feelings about future competition. We talked about this on the show. She wants to preserve future competition. Want to preserve future competition in the world.

SPEAKER_44: You know, I was trying to think of where I see the most anti-competitive behavior. For me, it's app stores number one. And then I felt like some of these house brands, um, you know, that Amazon was doing was kind of felt icky to me the way they were doing it because they had people's information data and they could, you know, then do that. And even the social networks, I think, you know, owning people's data or graphs and not having an ad free version available where you could pay to opt out of advertising. Some of these things felt like sort of, and a Google search, putting ads above and organic stuff above search, which Google has faced headwinds in Europe about. So I feel like it's a small subset of things, but they're very hard to go after Google, very hard to go after Apple. It's easier to go after like acquisitions like Lena Khan has done the other thing I'll point out.

SPEAKER_32: But because within the confines of existing, um, monopoly law, like Apple's not its behavior might be anti-competitive, but it's not illegal because it's not an illegal monopoly. And so this is where like, there's some stuff that Lena Khan may or may not be able to do. And I hate like making it all about this one human, uh, you know, like you should go after this instead of this and whatever. There is still the confines of the law and existing regulation.

SPEAKER_04: And what really needs to happen actually is that Amy Klobuchar, Klobuchar bill that sort of has been languishing, but might actually get pushed through in the next legislative session, which would actually, because we have to.

SPEAKER_32: We have to like, if we don't figure out how to define antitrust to include a situation where there's a duopoly and both players engage in anti-competitive behavior. Cause right now the law doesn't cover that.

SPEAKER_31: It just flat out. Doesn't.

SPEAKER_44: I think you just made an excellent point that I was sort of about to, to punch up, which is why don't we just change monopoly law to duopoly. And we say, if any two parties have the majority of a space, that is something that should be treated as acute. Uh, that should be something that's treated the same as a monopoly or close to it. And so if you're in a duopoly windows, Mac, Android, uh, and, um, iOS, Facebook's collection of social media assets and tick tock.

SPEAKER_13: Maybe if you put those two together, is it a duopoly? I'd have to look at the numbers, uh, cause you have so many other social networks.

SPEAKER_32: Sorry, AWS in, oh, sorry. You were on social networks. I was looking up the Amy Clemash are bill.

SPEAKER_103: Well, no AWS plus Google cloud plus Azure. Yeah.

SPEAKER_04: I wonder if Google's like the far third, I think AWS and Azure are considered effectively a duopoly. And then Google sort of a percentage basis.

SPEAKER_27: I wonder what percentage of cloud hosting they are. I think actually they're probably combined less than 60, 70%. So it's probably or if you put the two together, do they equal 80%, 85%, let's say. If you put the top two players together, do they hit 85%.

SPEAKER_13: If you have any one player, are they more than 75%. That's where I would put it as like, this is having an impact. If you look at search, Google clearly has over 75% in almost every market. And if you look at cloud computing, it probably doesn't equal 85%. If you look at handset manufacturers, it definitely is 90%, 95%, maybe 95% Android plus, uh, iOS. A couple of other notes about this, uh, presentation.

SPEAKER_00: How charming is it that it looks like it's being done in the Marriott? And there's like 50 people in the audience. It's like a row.

SPEAKER_114: It's like 10 people. And Steve is like, and it's a one camera shoot. I don't know if you noticed that, but like, Oh yeah. They're like moving the camera. Follow Steve. And they're like, Steve, no, stay behind the podium. He's like, F that. I'm not staying behind the podium. I'm going to wander.

SPEAKER_04: That was, that was the age of like big, fancy presentations. It must've just been like kind of a small developer thing. I think this is kind of when. I think this is pre WWDC. Maybe. Yeah. The big consumer shows. Yes. Right. Announced that. Cause the iPhone had been announced the prior year.

SPEAKER_119: So that developer community, like barely even existed then. It probably was 50 people. Yeah. Developing for iOS. That's crazy.

SPEAKER_121: Actually just got a note from our exceptional producers, uh, AWS, Azure, and Google Cloud are

David Friedberg: 66% of the cloud computer market together. Oh, all three together. Okay. All three together. Yeah.

SPEAKER_124: See, I think it's pretty. There's Oracle.

David Friedberg: Yeah. There's still is some. Yeah. There's a long tail of one, two, 3% players. I think. Yeah. Um, but you know, it could become, and so it's something to monitor, right?

SPEAKER_60: And there's, there's probably things like yes to duopoly. 100%. Every time. I mean, the duopoly is it's a stranglehold.

SPEAKER_32: There's no doubt about it, but there are also potentially regulations.

SPEAKER_04: And new laws that could be introduced that actually impact behavior as opposed to market size. Right.

SPEAKER_32: And that's the question is like, is your behavior anti-competitive and harmful? Yes. Potentially regardless of your market share, or even if your market share, I think Apple, you know, in the U S is like 56%, we decided, but it still should.

SPEAKER_08: I just cannot help but find it ironic that for years and years and years and years and years, journalists have been saying this and privacy advocates and, you know, like, sorry, but, uh, Elizabeth Warren.

SPEAKER_127: And all of a sudden, all of a sudden, some folks in the tech industry care. About this. Yeah. About this. I mean, it definitely is.

SPEAKER_132: And I'm like, Hmm.

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SPEAKER_00: The issue is becoming for venture capitalists. I think an issue as well for investors, because it does feel like the app store now is a blocker for startups specifically. Don't forget, though, you know, Tumblr got removed at some point from the app store.

SPEAKER_13: Uh, in 2018, I think they had some, uh, CSAM issues, uh, to use the acronym. You can look it up yourself. Um, and, uh, yeah.

SPEAKER_24: Yeah, I don't want to say the actual words here.

SPEAKER_104: Um, but they, and so the app store is like a backstop against companies not doing their

SPEAKER_27: own policing, or at least apples is, uh, where they will, because I think they also took down parlor at some point. Uh, the, you know, um, right wing maga kind of platform. And so this is where it's going to get super interesting at what part of the stack are you immune or it's not your responsibility. It's, you know, the other person's responsibility. I think Google probably takes a lighter hand with us. And Steve jobs, his legacy was always to take a, a more firm hand. Absolutely.

SPEAKER_04: I mean, they were the original content moderators, like in many, many ways. Apple is the original content moderators. They were like, we will control and it is their legacy of control.

SPEAKER_32: They're like, we will control every single aspect of your experience here.

SPEAKER_82: And you will love it. You will love it. Um, and for a life, I think. Yeah.

SPEAKER_121: They Google removed parlor following the January six capital attacks. Um, that was, yeah. Apple did.

SPEAKER_148: Did they? I think so.

SPEAKER_121: Yeah.

SPEAKER_96: I think they got booted everywhere.

SPEAKER_44: And so this is like, I think gonna be one of the discussions as well. There's.

SPEAKER_149: They did.

SPEAKER_44: Yeah. Yeah, they did.

SPEAKER_13: Um, and so this is, I think gonna become one of the, there's, there's parallel issues here. One is like the Vig is 30% too much much. Two is consumer choice. Is this reducing community choice?

SPEAKER_27: And then three is, hey, like, are you policing your platform enough for our tastes? And then this is gonna require, I think, given the political environment we're in, I think we're gonna have to have more transparency. Of exactly why, you know, a social platform is banning people or not banning people. And then the app platforms being more transparent. Here's why we're blocking this, uh, you know, social platform or publishing platform. And then those two things are gonna, I mean, we're just gonna have to have a little more disclosure of why people are doing what they're doing.

SPEAKER_00: And then, um, you know, at least consumers can understand like, okay, Tumblr allows adult content. Uh, you know, the app store bans it, but Google play allows it, or, you know, it's allowed in certain app stores or not. Just a little more transparency would be good here. And then appeals process as well. Uh, I think that exists, doesn't it?

SPEAKER_32: Apple also, we should know that apple did under some of this pressure last year change. It's cut to 15% for developers who make less than a million dollars in annual sales per year.

SPEAKER_154: Yeah.

SPEAKER_153: I think you have to apply for that. Yeah.

SPEAKER_155: Um, perhaps.

David Friedberg: Yeah.

SPEAKER_155: I mean, they said that would be the vast majority of iOS app developers.

SPEAKER_60: Yeah.

SPEAKER_04: Also the app store makes craft tons of money. Like look, there's stuff, there's stuff that I've been complaining about apple doing for almost 20 years, right? Like the thing where they charge you for dongles and they use the proprietary standards.

SPEAKER_60: And that, I mean, it's very interesting. I don't know.

SPEAKER_04: It, it, it's like, yeah, everything is fine when you're tiny and everybody loves you. Yeah. Scale is what, you know, makes it the problem. Yeah.

SPEAKER_44: I mean, you, you, and I think the app stores have been opaque about their choices. I think the, if something is removed or not approved, it should be transparent. Like they should have just like Google is very transparent about when they get subpoenas. They have that like web page where you can go see, you know, Hey, here's who's asking for information on your user account and stuff like that. Google. Google.

SPEAKER_33: Just so we read the policy here. All apps on Google play that feature user generated content UGC are required to implement robust moderation practices that prohibit objectionable content provide an in-app system for reporting objectionable UGC.

SPEAKER_44: So that's interesting in app.

SPEAKER_162: It has to be take actions against the UGC where appropriate and remove or block abusive users who violate the app's terms of service.

SPEAKER_00: Terms of use under a user policy. So that's not Google's terms of service, but they're saying you have to have a policy for abusive users and you have to, I guess, execute on it.

SPEAKER_13: And I guess people have to understand that. Um, yeah, kind of interesting that we're now, um, hitting this moment in time. I think where this is going to become a major issue.

SPEAKER_08: It's been interesting to see who, um, has skated under the enforcement radar, right?

SPEAKER_32: Like you look at all the times that Sundar and Mark Zuckerberg were called before Congress and it's, it's because their, um, their bad behavior was less welcomed by consumers.

SPEAKER_04: Right?

SPEAKER_32: Like Apple has benefited for a decade of kind of like big tech backlash from having everybody love them.

SPEAKER_04: And Microsoft, I think has benefited from being really boring, even though both of them are engaged in very similar behaviors. And Apple is building up an unbelievable data moat.

SPEAKER_32: Like you look at, if you look at data as an, as an, an antitrust issue and it is Apple has an incredible data moat that nobody's really talking about. And so it's, I think it's actually going to be really interesting to see if Apple is vulnerable at this moment of kind of realization of, of all the various ways that we're being controlled or that these, these companies control our interactions. Yeah.

SPEAKER_121: Yeah. I, I just love the idea. Right?

SPEAKER_44: It's a very simple solution that I think sometimes there are very simple solutions to this that the justice department, the FTC regulators could just fall back on for consumer choice. And I think these are in the best interest also of the people who have duopolies or monopolies. I've given two very specific examples, uh, over the years that still have not been implemented.

SPEAKER_27: If I own an iPhone or an Android, an Android, you can do this pretty easily. Uh, having to jailbreak it is lame. Right? Like that sucks. Uh, you're, you're, you're constantly then having to wipe your phone, reload it. Uh, you're, you're all of a sudden like. You're driving a 1970 Mustang where you have to change the carburetor and spark plugs yourself. Like, you know, now it's like your hobby, right? It's going to be a hundred hours a year of this nonsense. So why not just have a button inside your settings that say, I, uh, would like to sideload apps. I would like to load apps. And I understand that this breaks my warranty for the software. I don't get to get tech support or whatever. And if I click that button, I'm just assuming some amount of risk. Apple could very easily implement this.

SPEAKER_00: So if I want to load the epic games, uh, or, you know, Spotify directly or Kindle directly and, and work with them directly and just go to, you know, Spotify.com slash iPhone. And it allows me to download the apps directly from them. And it might have features that Apple doesn't agree with. Let's say, uh, adult content. Right. Or more risque. Right. Which is my right. Like if I want to have Tumblr and Tumblr's got some, you know, stuff on it, or OnlyFans wants to have an app. I don't know if OnlyFans has an app. That's a good question. Uh, or I want to do gambling, right?

SPEAKER_13: I want to load casinos or I want to load some wallet that, you know, is a crypto wallet or a gambling app. I should just have the right to do it.

SPEAKER_27: The Apple nanny state. Exactly.

SPEAKER_173: Just like, let me.

SPEAKER_13: Yeah. Let me. And then for Facebook, you know, just having a, I'll pay you $8 a month, $12 a month, whatever it is. Do not track any of my information. Do not save any of my data. The end, uh, you know, these would be common sense solutions. And I think that's where politicians, if they're listening, could really actually, um, settle this with duopolies or monopolies.

SPEAKER_08: I also, honestly, I am excited about a possibility where the market solution for this is the mobile web. Remember when the mobile web. Yes. Was going to be how you accessed everything.

SPEAKER_32: And then everybody was like, well, I can get a lot more data from you if I make you download my app. Yeah. And Apple was like, I can make a lot more money. Yes. If everybody downloads apps and buy stuff within the app. Like. Yeah. Literally we had a, a decentralized.

SPEAKER_182: Yeah. Censorship resistant solution for this. Yes. And it was the fricking browser. Yes.

David Friedberg: And some reason ruined everything. You know, apps are delightful and faster and snappier than the mobile web, I guess. And so, you know, only because that's just developer attention, right?

SPEAKER_181: Like it doesn't have to be that way. It's because they build for app first. Yeah, exactly. Build for the mobile web and then just, and keep all your money. And let me, you know, I'm just saying, well, I was all for it. HTML five. Let's go.

SPEAKER_191: Uh, speaking up, uh, Google.

SPEAKER_13: Uh, somebody tweeted, um, the number of employees per department. Uh, on, um, yeah, from, I think it was in the information. I don't know where they got the data from if it's available and if Google discloses it, but I was just shocked in this chart at the small number of people who work inside of YouTube. Now these numbers here, if you look at the chart show each division.

SPEAKER_170: So you have like nest and you have YouTube, you got Android, you got search and assistant. That's kind of bundled together. And the number, the head count basically for each of those divisions.

SPEAKER_27: Now I'm also told that these numbers, like there might be some centralization of like some YouTube functions might be in the cloud portion of these numbers. Right. Right. Um, yeah.

SPEAKER_32: There's probably some economies of scale that happen. Like the data platform. Multi brand. Right.

SPEAKER_31: Like the data. So like YouTube might not like I'm sure sales and partnerships that covers it all.

SPEAKER_32: That's not just like one part.

SPEAKER_33: This the YouTube sales and partnership numbers and the cloud computing numbers are probably listed under cloud and sales and partnerships, which are the biggest numbers here on the chart.

SPEAKER_13: 50,000 plus people in cloud 30,000 people in sales and partnership, but then only 6,000 people in YouTube. Anyway, if we were to even, you know, double that number, you know, it's still super impressive. Uh, when you look at it and I think we're having this moment in time where people are saying, well, how many people do you actually need to run these divisions and the bloat in tech? And, uh, I guess a bunch of hedge funds saying, Hey, maybe get a little bit smaller and be more profitable in the down market. But I, I just thought YouTube was the standout here for me on the chart. You know, they have 30 billion in revenue in 2022 with around 7,500 direct employees. Um, it's 4 million per employee. If you were to double it, it, if they had other employees, it still be 2 million per. Um, but that reminds me of really the goat in all of this.

SPEAKER_198: Craigslist had over 1 billion in revenue in 2019 with 50 employees.

SPEAKER_00: So if y'all are looking at how efficiently can a tech company be run.

SPEAKER_27: Craigslist is actually the one that people forget about. Now, of course, Craigslist looks the exact same as it did 25 years ago. They have stayed to not.

SPEAKER_104: Nope. It's comical.

SPEAKER_48: Has not changed it.

SPEAKER_127: I don't think does Craigslist have an app? I don't even think they have an app. They're just like, yeah, it's the web guys.

SPEAKER_206: We're just using the mobile web. I love it.

SPEAKER_33: If those numbers are holding and listen, Craigslist could have more revenue now, because it's three years later, it could be 2 billion.

SPEAKER_13: It could be 1.5 billion and they could have double the number of employees. But anyway, if we just take the two numbers we do have and triangulate it, and I've heard these are directionally correct. It's 20 million per employee.

SPEAKER_27: I mean, my Lord, the efficiency of this website is just unbelievable.

SPEAKER_108: All right, everybody, I wanted to take a moment to thank our friends at Microsoft. Today, we have Lahini Aranachalam with us. She's a senior director of platform and growth at Microsoft. She actually created the Microsoft for Startups Founders Hub. Welcome to the show.

SPEAKER_213: Thanks, Jason. Thanks for having me.

SPEAKER_214: Tell us a little bit about the Founders Hub. Why did you create it?

SPEAKER_216: Yeah, so we built Founders Hub based on the feedback from hundreds of founders. We spoke to founders at all stages of their journey. So ones that were just starting out with an idea, to those that had actually built successful companies, just to better understand what their challenges and pain points were as they were building their businesses. And we found three challenges that kind of rang true regardless of where they were in their journey. The first one was that founders need access to coaching and advice to get to that next milestone. The next is that they need to accelerate the time it takes to actually build an MVP or their second product or their next set of features. And of course, founders need capital to actually keep them afloat as they continue to build their companies. And so Microsoft for Startups Founders Hub is a digital platform built to help founders with these challenges.

SPEAKER_108: Thanks so much, Lahini. If you would like to check it out, go to the Microsoft for Startups Founders Hub and they have no fundraising requirements. Open to anybody.

SPEAKER_66: If you're a founder, they want to, they want to support you. It takes five minutes to apply and startups can get up to six figures of benefits instantly. Sign up for the Microsoft for Startups Founders Hub today at aka.ms slash This Week in Startups.

SPEAKER_60: What's interesting about this is that this started, the information story started as a piece about Google

SPEAKER_32: dramatically increasing its headcount between 2019 and 2022. And though that chart comparison, I don't know if we can pull that up, but it's pretty astonishing actually and shows how much Google has been plowing into cloud. Like that bar goes from, I'm looking at the information story right now, like 25,000 employees in 2019 to 52,000 employees by 2022, which makes you wonder if the like revenue, speaking of revenue per employee. Yeah. Has been commensurate. Like they've, they've plowed money and they're trying to catch up with Azure and AWS. Yes. Um, but it does make you wonder if like people alone was the right thing to throw at this. I don't know. Who knows?

SPEAKER_198: There's still gotta be this at third. We, we, we have a limited amount of information, uh, in terms of how these are broken up, but the overall, overall trend has been.

SPEAKER_33: Take people off the market.

SPEAKER_224: Craigslist does have an app. Sorry. Yeah.

SPEAKER_13: I had no idea. I know they spent years stopping people from, they they've had a really, um, aggressive, uh, approach, which I, I don't think is unwarranted by the way, of not letting people scrape their data. A lot of startups I know will pitch me on. Like we made an app. We, we scraped this data from here and I'm like, you're gonna get a letter from Craig Newmark. Like I wouldn't do that. Like the second your app becomes popular, you have to respect their terms of service and their data. They don't want it shared. You don't have the right to share it. Uh, and then they, there were many people who created Craigslist apps, you know, to kind of scrape it or wrap it in some ways. This chart of alphabet and meta and the total employee counts are just extraordinary, obviously. And, uh, Google has Google still has not announced a riff, but they have announced performance reviews. Yeah. And Facebook did say they're gonna get rid of 10,000 people. So I think these lines will go sideways. If you're looking at them, they're just up and to the right.

SPEAKER_27: Incredible amount of hiring. I wonder if the right thing to do is ignore wall street, let your stock crash and just take all this talent off the market.

SPEAKER_231: I mean, if you're Google and ignore, uh, to the extent you can,

SPEAKER_27: you know, with your, your, your, um, yeah, Google said,

SPEAKER_187: they're gonna slow hiring. I wonder if that is the move is to just ignore anybody giving you advice and just keep spending. The thing is crazy.

SPEAKER_119: There was a, there was a really good piece actually that I saw not that long ago. That was basically like, you know, layoffs are this old, our old guard mistake.

SPEAKER_32: It was like, everybody always does this. Yeah. It was in Bloomberg. Um, and it was like, everyone always does this when there's a downturn. Yeah. You, you lay off to save money. But the thing is that in a downturn, I have been having this exact conversation with a friend of mine. Who's like a big wig, you know, at a company under a lot of pressure to do a lot of layoffs.

SPEAKER_08: You know, and she's like, yeah, but we need to build on. We need a new product layer in order to take us into the future. Right. And now is the time to do it.

SPEAKER_04: But if we lay everybody off, we are literally not going to have the human capital to be able to do it. So in order. So, and then when we come out of this, we're going to have to hire and restaff. We will have lost institutional knowledge. Hiring is super expensive. Severance is super expensive.

SPEAKER_32: And so you put yourself in this like weird flywheel of assuming that you must have overhired. And that was a mistake, but you're definitely right to lay off. Now that's not a mistake. And it's like, well, wait a second.

SPEAKER_02: Maybe both of these things are some version of a mistake.

SPEAKER_13: Yeah. Overhiring. Uh, and you know, as I tweeted the other day, I think this is the. We are now in the end of excess and entitlement and ending and going into austerity. Um, and exceptionalism like the, the pressure is now going to be on everybody to perform in a down market. And when I said this, you know, I was very clear.

SPEAKER_27: I was talking about VCs management teams, uh, and founders. Of course, people are saying like, well, what about the employees? You're you hate the employees. I was actually saying the opposite. Uh, I think if an employee, I don't know how many times I have to say this to how many people. If an employee gets free lunch, who gave them the free lunch? If the employee gets, you know, I don't know unlimited vacation or whatever. This was something that was created by Google copied by everybody. It became the management standard and maybe people went too far with it, you know, and maybe it did create entitlement and the employee class. But this started with VCs, the most entitled group of people in the world, and then founders also super entitled, uh, and management teams also super entitled.

SPEAKER_153: The entitlement came top down, not bottom up.

SPEAKER_187: Employees would have brown bagged it like we all did 20 years ago. Nobody asked for Neiman ranch stay steaks. Google provided them. I remember this because I went to Google one time and they were like Neiman ranch steak. And I was like, did I just have that at like a five star Michelin restaurant or a two star Michelin restaurant? Like you have Neiman ranch steaks at Google. It's not the employee's fault.

SPEAKER_00: This goes, this is straight on the heads of management. And now, you know, it's the painful process of reversing some of this snap told staff with 90 days notice, uh, assume default in person.

SPEAKER_23: I don't know if you saw that headline. I didn't think that's going to 80% of the time.

SPEAKER_247: Not great. Not great. Like, how is that going to go for Evan Spiegel?

SPEAKER_60: You know, it's I'm, I'm doing a, uh, an event with the Aspen Institute about work, future of work stuff.

SPEAKER_82: Fancy. Stunning. Stunning. It was pretty student.

SPEAKER_255: I have to admit.

SPEAKER_82: Finally.

SPEAKER_256: It's not in Aspen or anything, but you know, it's.

SPEAKER_255: Oh, stunning. Yeah.

SPEAKER_134: Oh, stunning Molly. Wait a second. Have you been to the Aspen Institute and stayed at those apartments on their campus? No, I never have. Oh, I got invited there one year. That's why I'm making friends out here. That's why I'm out here making friends. Oh man. The Aspen Institute.

SPEAKER_00: That's how I live in. I got, you know, who's part of that? The guy who wrote, who's the, the guy who hates tech, who wrote Winners Take It All? Anand. Anand.

SPEAKER_258: Anand. Garadar. Garadar. Garadar.

SPEAKER_259: Garadar.

Jason Calacanis: Garadar. Garadar. Garadar. I feel terrible about this.

SPEAKER_40: I know. I always say it wrong and I always skip an entire syllable. I'll just say Anand right now. Yes.

SPEAKER_157: And apologize for, I need to practice. I like his writing a lot. He just wrote that, the whole book about, uh, finding common ground.

SPEAKER_261: Oh yeah. I gotta read that. Oh yeah. Um, but anyway, my favorite part of his book was, he's like, yeah, I was like, you know, Aspen Institute in the summer and I was hanging out. I made friends with all these celebrities. I was hanging out with, uh, uh, this woman from the L word.

SPEAKER_27: We were s everybody staying in these like beautifully designed apartments on campus. They're feeding you. Gorgeous. You're walking through the Aspen woods, man. You gotta get in on that. Fingers crossed. Aspen Institute. Fingers crossed. That's why I'm like. That's good living. Aspen Institute. Good living. Starting small. And then next up. But anyway, the point of that is that the thing is about, uh, work, making the economy work for everybody. The future of work, you know, was this whole conversation too, about productivity and

SPEAKER_119: care. Uh, this woman, uh, this woman from the L word.

SPEAKER_04: We were s everybody staying in these like beautifully designed apartments on campus. They're feeding you. Gorgeous. You're walking through the Aspen woods, man. This whole conversation too, about productivity and care work and like flexibility and older workers and all the things that kind of contribute to people leaving the workforce or not working very hard. And it was really funny. Cause it was like, oh yeah, it turns out all the stuff that happened in the pandemic in some cases makes work more accessible for more people. Right? Like you get help, financial help for finding care. You get flexibility, which like 70 or 80% of workers want some flexibility. Right? To work from home. You get a hundred percent. Want it. Yeah. I mean, who doesn't want flexibility. Yeah. But also like the Harvard business review was like, yeah, no productivity went way up when people worked from home.

SPEAKER_268: Way up. Well, they couldn't go out at night because of cover. Remember that you weren't allowed to go out and go to a restaurant. Sure. You didn't commute.

SPEAKER_32: You worked more hours. Yeah. People worked more hours. I mean, yes, there was nothing else to do. And so it'll be interesting to see how that normalizes, but now they're starting to be like, huh, when we brought some people back to the office and put them back in that open

SPEAKER_04: floor plan that doesn't work for everybody, anybody, then their productivity went down. So now you see these companies that are attempting to kind of blunt force reverse all of the trends of the past three years in ways that are very likely to lead to employees being like burned out and or less productive or being like, yeah, I don't want to go like you're, I had everything I needed to kick ass at my job. Yeah. And now you're trying to take that all the way and also tell me to work harder. And it's, people are like, yeah, I don't, I'm not sure.

David Friedberg: I'll tell you what's happening here. Not sure. I don't think that's entitlement.

SPEAKER_00: I'll tell you what's happening. He wants to do another riff. He wants to do a loyalty test. He wants to go hardcore.

SPEAKER_153: And so he's like, okay, you know what, we're losing the stock market doesn't believe in my leadership anymore. Maybe I'm sitting core side of too many warriors games.

SPEAKER_00: I'm not just saying, you know, I'm not even having fun.

SPEAKER_272: Not even like, yeah, I mean, he is a, yeah, restrained guy has fun on the inside. He screams inside his heart.

SPEAKER_27: Exactly. But here's the thing. He has gotten his ass kicked by the stock market stock market believes he's not. He's asleep at the wheel. They believe he's lost his edge. They don't want to buy his stock. When your stock gets pummeled to this level. At some point, and this is the back channel, I'm going to give you the, the secret back channel with CEOs, board members of these companies, et cetera.

SPEAKER_276: Secret back channel is that now the leadership, the CEOs, I'm going to talk about the CEO class,

SPEAKER_00: like Evan Spiegel, they are realizing if they, uh, get everybody back to work and they lay off people who in some cases, maybe they don't like working with to begin with, uh, the more they do that, the more their personal net worth goes up.

SPEAKER_153: So that's how crazy things have changed for CEOs. They were rewarded last year for hiring people and going for growth. This year they're being rewarded for laying off people, demanding people come back to

SPEAKER_44: the office and showing profits. And so, you know, it's, it is the biggest swing I've ever seen in, in the history of tech in terms of operating philosophies. But he's just doing this, uh, because if his stock was going up right now, uh, he would

SPEAKER_27: not be doing this, but he's got to try something just like Zuckerberg finally bent the knee and was like, I'll cut 10,000 people. Fine. I'll bend the knee. That's what the stock market wants. We'll see if Google bends the knee, but you know, there's, uh, ultimately it's like that Bob Dylan song. You got to serve somebody. These CEOs are now realizing like they can't have their stock be on the floor.

SPEAKER_170: It's going to affect their personal net worth and affect morale, uh, and it's going to affect their ability to have cash to invest in products.

SPEAKER_278: So yeah, that's why he's doing it. Sucks to be the people, um, just like it always does.

SPEAKER_261: Well, I mean, we, we, uh, I think probably the rest of the world, like people, I, this is what I love on, uh, certain social networks when these things happen, people are like,

SPEAKER_283: Oh my God. You know, people who are truck drivers or, you know, work in retail or on a farm or in

SPEAKER_00: a factory are like, Oh, you have to go back to an office four days a week and eat free food. I'm sorry. You know, this is like the, this is the cultural battle of our time. Important to recognize two things.

SPEAKER_44: The CEO has created this entitlement. The CEO has created this culture. Full stop.

SPEAKER_00: Number two, if their stock prices weren't collapsed, they wouldn't be doing this. They wouldn't change the thing. Yeah. They wouldn't change the thing. I have now come to the conclusion that there are three groups of people, Molly, and I have the actual numbers.

SPEAKER_23: I have done the analysis. There are three group of p groups of people.

SPEAKER_44: There are people who work harder and better and are more productive from home. There are people who are more productive. There are people who are equally productive. And there are people who are less productive.

SPEAKER_20: It turns out Molly based on my deep analysis and research. Everyone is the same. Correct. Yes. This is breaking news. Not everybody's the same.

SPEAKER_272: And I actually did the statistics and the numbers came out irrefutable and perfectly round. First time in history. Amazing. 20% of people are more effective working from home. Yeah. 20% of people are equally, equally productive at home as in an office.

SPEAKER_153: And exactly down to two decimal points.

SPEAKER_00: 60.00% in my very astute analysis and detail are less productive from home. 60%? 60% are less productive from home.

SPEAKER_287: Now, I know it's hard to believe because you're part of the top 20%. You're part of the top 20%.

SPEAKER_268: So you can't imagine. I'm just, no, I'm just saying Harvard Business Review came up with exactly the opposite numbers.

SPEAKER_92: So during the pandemic.

SPEAKER_44: Now it's, now that people can go out in YOLO and go out at night, there is a full 60.000001%.

SPEAKER_33: It's a little, you know, it's about five zeros. You start to see the differences.

SPEAKER_00: Those people are the ones, the 60%. And now listen, in your company, it might be 40, but, uh, you can, I'm just looking at it. In my analysis, those are the people ruining it for everybody else. Those 60% were quiet quitting or over were over employed and working two jobs or doing side hustles or effing around. So they find out those are the people who are screwing it up for everybody.

SPEAKER_27: So you have two choices. You know, we have, but two choices, one, you need to get those people out of the company. So the other 40% become 100 as a manager, or you're going to do the gentleman's riff like Evan Spiegel is doing and doing default together. That's it. That's where we've come to remote work. Don't scale. Don't scale.

SPEAKER_170: It's too hard to scale. That's I think what people are learning.

SPEAKER_60: So you think 60% of people were definitely working nonstop, eight hours a day, just killing it. Eight hours. 10 hours. Oh, no, I don't think that.

SPEAKER_294: I don't think that. I think I'm just saying. I don't think anything changed.

SPEAKER_119: I don't think, I mean, eight hour, you know, half day. Okay.

SPEAKER_04: There is plenty of evidence to show that even at an eight hour workday, if it say somebody's in the office from nine to six, that they only work four to six hours. Like every organization has hitters and sit and sitters. So maybe 60% of people were sitters wherever they're sitting, whether it's on the couch or

SPEAKER_32: in the office, but also it's that 60% kind of number is maybe where people think that you don't like the workers so much. Yeah.

SPEAKER_306: I'm just saying.

SPEAKER_32: I'm just saying. Just saying.

SPEAKER_04: Headers and sitters. It is a complicated. That's every, that's the world we live in the power law. Like the reason I am drawn to the power law as a principle of investing is because the power law plays out in life. Constantly. Constantly. Like constantly. Not everybody is equally skilled, has an equal work ethic, has an, you know, like there

SPEAKER_08: are always, there are outliers in every scenario that you're going to encounter. And that includes work.

SPEAKER_309: So, you know, when we look at the Pareto principle, give people like assign their worth based on

SPEAKER_09: their work ethic. I think they're still probably all equally fine.

SPEAKER_23: Well, here's, here's what we're getting to in management.

SPEAKER_313: In an age of excess, AKA low interest, money flowing. Mm hmm.

SPEAKER_153: Uh, people just look at the top line number. Things are going in the same direction. We're not going to worry too much about this. Um, cause everything's headed in the right direction. The money's flowing. Stock's going up.

SPEAKER_00: Nobody cares in a down market. Everybody does a little self examination. Mm hmm. And everybody should just remember the 80, 20 rule, the power law rule, Pareto principle in terms of efficiency. Yeah. I, I agree. 20% of people doing 80% of the work. So what happens in, always. So what happens in a down market is people look at and go, okay, you know what? Uh, Pareto, uh, Pareto, Pareto principle is true. Great. Let's find out who the 80%, if 80, if 20% are doing 80, or who's the 80 doing 20?

SPEAKER_44: Mm hmm. Let's fire them. Or let's, if we're not courageous enough to do the riff, let's force them to come back to the office because 57% of people said they would quit their jobs, according to a recent job. If they were forced to come back to the office.

David Friedberg: Yeah. It was a flat job survey.

SPEAKER_04: That's what's happening here. I think that's happening. And I think that's the bro, that's the wrong call. Like if you're going to get rid of people, just get rid of them. And I understand the, the look, I get it. Like I was having a conversation with a friend of mine who's a startup CEO. And she was like, I'm kind of fricking stoked that we can finally tell people like, Hey, actually, I need you to go ahead and do your job. Like, I need you to not talk about, you know, she was like, I'm thrilled that there is a downturn so that I can now. And I was like, I get it. Like it's because there are hitters and sitters. And then there are people who talk about their feelings all the time at work.

SPEAKER_32: And you're like, you know what? It's work. I don't want to, I'm a gen Xer. Like, I don't want to talk about your feelings. Just do your work. All of that is true.

SPEAKER_04: But then trying to do a riff by getting people to come back to the office means you're going to lose some of your 20 percenters because they have been kicking ass at home and they are mad that you are telling them that they're not. And so to me, it's like, you know what? Suck it up and lay them off, Evan, and have fun at the basketball game.

SPEAKER_00: Well, I bet you what he, what they're doing is always in these situations. There is a little, you know, of course, if you happen to be a hitter and you need additional flexibility, right? You know, uh, as Elon says, like, yeah, if your manager takes responsibility for you being a hitter and they put their, you know, uh, name on the line so you can work from home.

SPEAKER_13: Sure. But it's on the manager then to say, okay, I'll make sure this person is in fact a hitter. Um, but yeah, this is, uh, it's a new era and founders are just not going to be given the ability to run buck wild in terms of spending. They're going to be held accountable. Even the billionaire ones, you know, the billionaire class that ruled, uh, in this, you know, age of excess are now being held accountable. And like, Evan Spiegel's net worth is down. What if he's a hundred percent of his networks in that company, 99%.

SPEAKER_170: And if that company is down 80%, can you imagine you went from like being worth 10 billion and now you're worth 500 million?

SPEAKER_324: You're like, whoa, whoa, what happened?

SPEAKER_272: What happened? You know, like the guy from Peloton was, I mean, what was, what was the original?

SPEAKER_27: What was it? John? John Foley. John Foley. John Foley. John Foley was probably worth like $10 billion. And now he's worth like a hundred million dollars. Like I know, like for anybody who's not worth a hundred million dollars, this is like a holy cow, like a hundred million dollars is incredible. Sure. But man, you might've, you might've taken out 500 million in margin loans on your 10 billion and thought I'm good. 5% of my margin loans. So, um, Peter note about one of our notice.

SPEAKER_329: Now he's selling rugs. Brutal. He's a rug salesman.

SPEAKER_54: Oh my God. He's a rug salesman. You people are savages. Just cold as ice. Cold as ice. And now he's a rug salesman. Yeah, I mean, listen, change is hard. Like changes here and change is hard.

Chamath Palihapitiya: I'll tell you what's gonna happen. These stocks are gonna pop. Nobody likes it.

SPEAKER_153: J trading this through the holidays, because I think now like everybody has given up that there's any way out of this mess. Yeah.

SPEAKER_54: We're in complete capitulation right now. We need to be honestly, the sooner, the better sell your apple. What was it? Was it Bucco capital who was tweeting that? He was like, stop trying to pretend that this is all of sell it. Sell it. Yeah. Sell your apple. So I could buy it. I'd like to increase my apple position.

SPEAKER_82: Jay Powell. Jay Powell. Wow. He will not be stopped until you roll over and show that white belly.

SPEAKER_134: I'm not selling it. No, I'm not selling my apple. I'm not selling my Amazon. No, I'm doubling down. I'm not selling anything. You don't lose.

SPEAKER_27: Cause you haven't lost anything until you sell. Exactly. Exactly. Uh, the comeback's coming. Uh, speaking of a comeback, that's not coming. Speaking of pure capitulation. Oof. All right. Molly. I tried to understand this in our group chat. Um, I know block fi file for bankruptcy. I know Sam Bankman fraud. I mean, freed. Um, good one. Did you make that up?

SPEAKER_261: Amazing. I stole it. I like all good things. It's like a Twitter. Some reply guy. I'm all about the reply guys. I I've decided I'm going to become a reply guy on Twitter. I'm no longer going to do my own primary tweets. I'm just going to reply dropping replies in.

SPEAKER_170: I'm doing to be a reply guy. Um, but some reply guy dropped the Sam Bankman fraud. That's funny. Okay.

SPEAKER_247: So, okay. Explain to me this.

SPEAKER_82: Cause I mean, I'm going to try, I'm going to try to explain it. What I'm going to do first is read the tweet that I, uh, have been referring to the, as the Arubaros tweet. Okay. Arubaros, of course the snake that eats its own head. So tweets, a code.

SPEAKER_347: I was looking that up that you were talking.

SPEAKER_82: It's a really cool tattoo. It's not a good way to run a business.

SPEAKER_08: So BlockFi is a creditor to FTX that lent to Alameda that lent to emergent, which is a shell company owned by SBF that bought Robin hood shares that were pledged as collateral to guarantee to block by the loan to FTX that was used to bail out block by itself.

SPEAKER_187: Cricket. I need an aspirin. Cricket. Cricket. You got to keep that break in, in the show. All right, hold on. I do.

SPEAKER_354: All right. So I know there is. BlockFi has declared bankruptcy because apparently none of that snake. Head eating situation worked out.

SPEAKER_00: I just want to. Okay. I, wait, you need to keep that tweet up for one more second here.

SPEAKER_153: Just so I can explain how confused. BlockFi is a creditor to FTX. They have a claim against FTX, which has also gone bankrupt. So these are two bankrupt companies. Yep. BlockFi is saying they're a creditor to FTX. FTX lent to Alameda, their sister company, which was a trading firm. Right. That lent to emergent, which was a shell company. Alameda lent to emergent, which was a shell company.

SPEAKER_357: Okay.

SPEAKER_153: Alameda lent to emergent. Emergent is a shell company owned by SPF. Ah. So FBF owns both of these entities, including the, all three of these entities. All three. Including the shell. SPF bought Robinhood shares. I remember that the shares went up. Thank you. He bought like 70% of Robinhood. Mm-hmm. And those were pledged. Those Robinhood shares that SPF bought were pledged as collateral to guarantee BlockFi a loan to FTX.

SPEAKER_260: So FTX used that loan to bail out BlockFi. Holy crap. Okay.

SPEAKER_04: So BlockFi got a loan loaned my BlockFi loaned money to FTX. And then FTX was like, no problem. We're totally good for this. We put these Robinhood shares up as collateral, which a, or one, pledging shares as collateral is a dangerous game because turns out the stock market goes both up and down, but okay.

SPEAKER_359: And then FTX got this loan from BlockFi and then turned around and used the loan from BlockFi to bail out BlockFi. Okay.

SPEAKER_155: All right. Cool. Cool. Sounds good. So anyway, BlockFi went bankrupt. Not surprisingly.

SPEAKER_260: Um, well, you know, congratulations and is now suing, by the way, Sam Bankman free.

SPEAKER_32: That was the headline that started, that started this whole led to this tweet, which is the headline is that BlockFi just filed for bankruptcy on Monday and is now suing Sam Bankman free

SPEAKER_08: for unpaid collateral. The collateral. The collateral, of course, being the Robinhood shares. Apparently.

SPEAKER_03: Terrell Luna. Apparently. 3AC, Voyager Celsius, FTX, and BlockFi.

SPEAKER_153: All of these are insolvent and or bankrupt today. All of those a year or two ago were the biggest geniuses in the world.

SPEAKER_366: Yeah.

SPEAKER_153: Um, I just want to point out like you have to wonder where the money is in this. So where did the money go?

SPEAKER_27: Now, some of the money never existed because people were saying this money exists in this company, this company, this company, and this company when it was in fact one instance of money. And some of the money was here is a billion tokens that we value at a dollar each. So there's a billion dollars over here, but only that valuation was based on $10 million in tokens that had been bought. So 990 million of that actually never existed in the world. So there's multiple. Amounts of money that either were stolen. Counted twice or never existed to begin with because they were paper.

SPEAKER_153: Well, I just want to pause for a second. Say, though, there was some money. There were bag holders, consumers, you know, investors who actually put cash into these things, venture firms, all number of people bought into this group delusion that these tulips were worth something that they were never worth. There was no core value in the majority of this, the overwhelming majority of it. But I do know where some of the money went. Do tell. Bottle service in Miami.

SPEAKER_134: Because I was in Miami and I was watching some of these crypto kids. I went out with sacks like at the tail end of the.

SPEAKER_27: Remember that moment where we got the vaccines and then like the next 60 days. Everybody's like, I got the vaccine. Crazy. There's COVID can't transmit. I'm a blocker. I can't ever get COVID because I've had double vaxxed. So Sacks and I go pop some bottles. We're hanging out, having a good time. And all these people coming up to me, giving me glasses of champagne at this hot club in Miami. And I, what do you do? I'm in NFTs. I got a Dow. I got, I got a token offering. I'm a crypto investor, da da da. ICO, IPO, blah, blah, blah. I got a marketplace. I got in early on Bitcoin. All of this money, I believe, can be found in the pockets of club promoters and bottle service. I, I, I don't mean to be a sexist here, but waitresses, because I don't, I don't think I've ever seen a bottle service waiter, um, bottle service servers.

SPEAKER_376: I mean, I think they got the money.

SPEAKER_09: Hardly any women in this industry. So I think we can assume that they were sending out the, the female servers. Yeah.

SPEAKER_181: I mean, literally one of the quotes in this article about how Miami nightclubs are now feeling the pain.

SPEAKER_04: They're literally in the cottage industry collapse.

SPEAKER_82: Wah wah. Miami nightclubs are hurting. Sorry.

SPEAKER_32: Because they became flooded with people who made all this money off of crypto. There were all these quotes that were just like, yeah, it was all these young men. Uh, here we go. Quote 95% men young with kind of a nerdy style. You wouldn't be able to tell. They had a lot of money if they were just walking around is, uh, that's according to the former director of Groot hospitality, Andrea Verma Caddy, Bimmer Caddy, which operates clubs like live story and Swan. So basically all these young guys roll in with all their crypto money.

SPEAKER_04: There was another incredible quote that was like, rich people don't usually show you their wallets, their literal wallet. She was like, but I've seen more crypto wallets over the last two years than I ever would have.

SPEAKER_387: People would just be like, check out my crypto wallet to bring me some Dom.

SPEAKER_00: Um, there's a club called 11 that's spelled E one one E V E N. Uh, I think I've never been to it.

SPEAKER_20: I have been, uh, threatened to be dragged there many times. Every time I go to Miami, people come to 11, come to 11. I'm like, I, I'm, let me explain to you.

SPEAKER_00: I'm 52 as of yesterday, 50. 50. I just say 50 and then nobody's hearing us too. Um, that's my new process. 50. I like it. I like it.

SPEAKER_153: Anyway, there's nothing that's happening at the club at three, four or 5 AM. That is more interesting to me than sleep. Yes. Full stop. Yeah.

SPEAKER_389: It's such a good place to be at in life.

SPEAKER_104: Listen, I have been to the greatest clubs at the peak of many bubbles, you know, like

SPEAKER_27: at the end of the millennium, you know, century, whatever.

SPEAKER_44: And I was at our Basel last year during all this craziness. And I was talking to Mike Beeple, you know, Beeple, the NFT artist.

SPEAKER_153: Oh yeah. You are a real artist. I already forgot all about Beeple, but yeah.

SPEAKER_00: Beeple's a real artist who makes stunningly beautiful art that people put into NFTs. But he also makes beautiful boxes with the art in it.

SPEAKER_153: Like I've seen these things that are gorgeous. I would buy a Beeple and put it on my wall.

SPEAKER_00: I'm not an art guy, but I would consider buying a Beeple artist. And he said, Hey, well, what's your take? Jake Allen, big fan, blah, blah, blah. I said, anybody wants to buy any NFT with you, sell everything you got. One of a thousand, one of 10,000, one of a million. Just sell everything as fast as possible.

SPEAKER_20: Trees don't grow to the moon. This thing's going to be over soon. Sell everything. This was December of 2021.

SPEAKER_00: Mm-hmm. And he said, really? Hold on a second. He brought over somebody who works with me. Can you say that one more time to him? And I guess, you know, they were, you know, maybe being, um, I don't want to say precious,

SPEAKER_27: but they were being judicious about selling stuff, you know, and holding stuff, like specifically NFTs. I said, sell it all. Get it out the door. Get cash. Build up the cash reserves. You're an artist. You can always make more art. You got to Warhol this shit. Now. Yeah. If they want a Campbell soup, make a hundred, make a thousand. Until they stop wanting Marilyn Monroe, you're making them. Get them out the door and get that cash. Full stop. Anyway, according to the Financial Times, 11 started accepting cryptocurrency payments.

SPEAKER_276: Yeah. And they processed 6 million transactions last year.

SPEAKER_27: I hope they sold that crypto on the way. Immediately. As soon as it came in, they just processed it for cash. Um, now they say in the past three months, they've only processed, uh, less than 10,000.

SPEAKER_394: Down 99%.

SPEAKER_08: Uh, like crypto guys are gone. That money is gone. Hopefully they stack to cash those nightclubs.

SPEAKER_00: Wait till we see the autopsies on these dead corcuses. Well, you know, like when they cut the shark open and they find a license plate in it. Like when they cut these things open, man, there is going to be some gnarly stuff in the belly of these defunct dead crypto companies. Yeah. Oh yeah. Yeah. My favorite so far.

SPEAKER_79: Is FTX is bar tab. I don't know if you saw that.

SPEAKER_397: This is the greatest thing you've ever heard in my entire life.

SPEAKER_04: It turns out that FTX, which is the story gift that never stops giving. Do we have our guys coming on tomorrow? We have the round table tomorrow?

SPEAKER_155: No. Next Thursday.

SPEAKER_400: Next week. But we can next week. Call them if you want an emergency. No, let's, let's let it build up. I can't talk about crypto every day of my life. It's just exactly. We can like, I sound like a get off my lawn guy.

SPEAKER_60: But the way the FTX story just keeps giving is unbelievable.

SPEAKER_04: And the latest nugget is just a teeny little nugget. It turns out that FTX does have a big outstanding debt, a $50,000 debt, which relatively speaking, not that much, but they, um, it is owed to a Bahama based Margaritaville.

SPEAKER_403: Oh, 50,000.

SPEAKER_118: So wait, you're telling me. That it just kind of is on brand. These guys who are on speed. These babies, right? They're on speed.

SPEAKER_153: Pina coladas and burgers. They're in a poly cube. I mean, if you're on speed playing gay, playing League of Legends, you're not going to drink like some Japanese whiskey.

SPEAKER_20: You're not drinking wine, you know, from Italy. It's not. You're not. No, you're drinking pina coladas.

SPEAKER_283: You're drinking a strawberry. What do they call a strawberry colada?

SPEAKER_27: Like, these are the people who order sugar drinks. They're ordering strawberry daiquiris. It's no offense, Molly, but the poly cube is going to play some League of Legends. They're going to get hopped up on some speed patches that their doctors gave them. They're going to smash strawberry margaritas, daiquiris until their brains are frozen. And then they're going back and they're going to trade some crypto at 2 AM. Yeah. 50 dimes in 50 dimes. What is it?

SPEAKER_280: What is it?

SPEAKER_272: What is it? Daiquiri cost in the Bahamas? This was six hours.

SPEAKER_31: This was in the bankruptcy filings. Margarita. I'm going to say is probably low on the list of creditors. I'm sorry.

SPEAKER_00: Um, you, you know, uh, John McDougal from, uh, FTX formally, you know, John McDougal.

SPEAKER_44: No, from FTX. Oh, here he is. By the way, this is a video they caught of him last week. He can't afford to go to the club anymore, but he met a girl at the basketball game.

SPEAKER_414: That's John McDougal.

SPEAKER_417: I love this video so much. This video is the greatest thing ever. It's like this, you know, stunning blonde.

SPEAKER_60: She's gorgeous. If you have, if you are not watching this video, first of all, you should be because we look amazing.

SPEAKER_82: It's so great. Uh, no, but because this young man at a basketball game is trying to impress this gorgeous young woman with what appears to be his Costco gold card.

SPEAKER_48: She's impressed. It's a gold card. She's like, oh, what? He's in an afternoon game basketball game.

SPEAKER_27: He's like, listen, me and you after the game, we hit Costco. We get the, you know, uh, 12, the, the 24 pack of croissants. I'll also get, uh, they have some really great, uh, mozzarella and I'll make us some, uh, croissant pizzas. Come back to my place. We'll hit Costco. Classy. We'll, we'll split the, you know, we'll get the croissants. We cut them in half. We put them in Ziploc bags. You freeze them. Half of them. And then the other half you eat, but you got them as backups. This is a thing.

SPEAKER_00: Yeah. This is where we're at. This is where we're at. This is where we're at folks in the cycle. Guys are trying to impress.

Chamath Palihapitiya: Chicks. With Costco cars. That's the point in the cycle. By the way, that's not an FTX guy. It's not an FTX guy. I made that up. It's not an FTX guy, by the way.

SPEAKER_04: It's not an FTX guy. But yes, we've moved from showing off the Bitcoin wallet. This is how, you know, we're getting back to fundamentals because a bit, because your crypto

SPEAKER_82: wallet is meaningless, but your Costco gold card, that's good to value.

SPEAKER_433: All right, everybody. That's the show for today. That's it. That's a lot of show. It's a lot of show. What time is it?

SPEAKER_435: Is it a 12? Okay, it's 12.

SPEAKER_437: All right, everybody. We'll see you next time. Bye. Bye. Bye. Bye.