SPEAKER_00: hey everybody hey everybody happy monday got an all new show for you today how's your weekend moment

Jason Calacanis: it's good right happy uh easter and passover everybody was a nice holiday weekend full of uh fun and flowers and evidently it's snowing in a lot of states so sorry everyone sorry but spring here we're excited to be back and it's spring here uh and actually we're starting off with we're being true to our startup dna here we're gonna actually start off by going over some fascinating numbers from pitch books q1 venture monitor report tldr fundraising is high but exits are down big time a lot of conflicting data we're going to sort it all out and try to

SPEAKER_07: make sense of it both for capital allocators but most importantly for founders out there who are

SPEAKER_01: wondering what their next funding round is going to be like and then we talk a little bit about chris sacca and cnn's new ceo both announcing a twitter break are you burnt out on twitter what's

SPEAKER_09: going on uh with the twitter ecosystem yeah did we did elon musk make us all wake up and realize

SPEAKER_11: that twitter kind of sucks now maybe maybe again make twitter great again and then we're going to

Jason Calacanis: talk about uh de-platforming and the financial incentives that can cause people to get more extreme and also how those financial incentives can drive them to the end of the road we're going to

SPEAKER_16: touch on alex jones info wars filing for bankruptcy thank god i about time the worst person on the

SPEAKER_19: planet it's like alex jones okay uh and we always love to again back to our roots it's in the name

SPEAKER_22: we're going to do our startup of the day it's a new social app that's going absolutely bonkers uh they're in the middle of i think a giant negotiation for a giant funding round based on what i've seen in the app and certain people being inside the app i think you're going to see a big funding announcement any day now from be real b-e-r-e-a-l it's really fresh take on uh social

SPEAKER_25: and photo sharing it's going to be a great show stick with us this week in startups is brought to

SPEAKER_27: you by notion notion is one place for notes docs projects and everyday work that goes way beyond a wiki go to notion dot so and use promo code twist to get 250 off an annual team plan microsoft for startups founders hub for the challenges you face as a startup founder microsoft for startups founders hub is here to help the platform provides founders with free resources like azure credits development tools like github mentorship resources productivity software training and so much more the program is open to all and takes five minutes to apply with no funding required learn more and sign up at aka.ms slash this weekend startups and wealthfront wealthfront makes it easy to invest and easy to grow your savings with a diversified portfolio that balances your other riskier bets to start building your wealth and get your first five thousand dollars managed for free go to wealthfront.com twist hey everybody

David Friedberg: it's monday lots of news to go over and uh pitch book and the nvca that's the national venture capital association have released their venture monitor for q1 of 2022 results pretty interesting um perhaps even

Jason Calacanis: staggering molly you want to run us through the numbers perhaps even staggering yes this raises this great goes back to my question from one of our early vc sunday schools did i get into this business at a terrible time um i'm going to choose to believe it's an interesting time the major takeaways in super plain english before we get into number numbers are the following the value that venture capitalists saw from exits meaning ipos or acquisitions was down over 80 80 from q4 to q1 that may go into staggering

SPEAKER_32: territory the total amount of capital invested in deals over 100 million dollars which pitch book calls mega deals which have been like on the rise over the past several years was down about 37 percent so that you know the the headline from these numbers is that it seems like these massive deals have slowed down and the window to go public has closed very quickly however and this is good news for us it seems like seed and early stage financings didn't dip as much as these later stage mega rounds okay so

SPEAKER_36: a couple of notes here fortunes are made in the down market they're collected in the up market so we were

SPEAKER_39: through a tech super cycle of approximately 12 13 years right since the financial crisis that happened 2007 2008 uh we've been on this steady uptick and it's been pretty amazing obviously everything got repriced in the fourth quarter of last year and there have been little pullbacks over this last super cycle the most notable one being covet uh that crazy dip in the was that q2 end of q1 beginning of q2 of 2020

SPEAKER_36: and now we're seeing this repricing of stocks going back to the average price to sales price earnings ratios so also in all of this you did have a lot of ipos you had a lot of backed up ipos uh starting with the uber and the airbnb ipos and once those got out the door and we work was another big question mark amongst those the market then said okay we got the big ones out of the way now let's work down the list okay we got to coinbase we got to lift we got to doordash and it you know just was a nice orderly uh putting of product out to the public markets and then you had spacks and then you had too many spacks

SPEAKER_40: and then you had maybe some companies that should have been staying private a little bit longer uh

SPEAKER_33: the pendulum maybe swung to having too many of those go public interesting who do you think should have

SPEAKER_22: stayed private longer well i mean uh if you look at any company who is doing deep tech um maybe jobe in

SPEAKER_40: the veto space desktop metal which we were um in those both spacked those i believe and they both went out early and should they have waited to year 10 11 12 maybe that's too long but is year 4 5 or 6 too early you know it's really company by company dependent but yes maybe too many things that were too speculative all of those ev companies the entire cohort yeah went too early we've talked about that over and over again yeah so the public markets need time to digest there's a little bit of turmoil there

SPEAKER_36: there's a lot of risk factors headwinds potentially uh and we've listed them before inflation ukraine and covid so as those things sort themselves out and the repricing occurred it means the ipo window

SPEAKER_40: is going to be closed for all but the most resilient anti-fragile strongest companies so that's what we're seeing in the public markets what that means is uh people may not be selling as much stuff or those things that do get sold will be acquisitions right not selling of shares to the public but right companies buying other companies of course there's headwinds there because now there's a lot of

SPEAKER_01: scrutiny so people like google or apple are probably reticent to be buying things that are above 100 million dollars just to not fire off any kind of um salvos from lina khan and the ftc so it's a unique moment in time there are headwinds in both of those exit areas uh but everybody raised a lot of money right

Jason Calacanis: i mean i would say that's the other thing is the great companies yeah there's still plenty of money so a little bit more in the numbers department q1 in 2022 saw 33.6 billion dollars in exit value from ipo spax acquisitions etc that was down 82.5 from q4 that was a really big drop however uh the total amount of capital invested in angel and seed deals in q1 was up four percent over q4 to five billion dollars the total number of deals went down about 14 and a half percent um and the total amount of capital invested in early stage deals in q1 was down 28 from q4 but despite all of that in q1 usbc funds raised a combined 73.8 billion dollars just in q1 and that is already more than half of 2021

SPEAKER_32: total of 131.5 billion dollars so it's not a moribund industry it's more like the dynamics

Jason Calacanis: seem to be changing and maybe as we've been talking about like maybe it won't be like the housing market where there's a super hot bidding war and you have to like close you know your funding round on a company in a day and a half and it'll like return to some yeah that's already happened uh we see that

SPEAKER_51: you know the time to evaluate a company is moving closer to realistic as opposed to hey you have to

SPEAKER_36: put your money in you're not going to be able to do any diligence we're oversubscribed etc and then these crazy large rounds which people were doing at a pretty uh high clip putting 100 million in company's going to go public you know valuations are absurd therefore you really don't need to do as much diligence you just write the check and it'll all work itself out i think maybe a little more discipline is coming to the market and so people are just not going to suspend disbelief they're

SPEAKER_40: going to be a little more rigorous and that means if you're a founder you're going to just need to make

SPEAKER_39: sure you have as much runway as possible and your next round will be harder to close than your last two or three rounds in all likelihood on average um and you know that's probably healthy for everybody and if you did raise a mega round and your valuation was 50 or 75 or 100 times your revenue yeah you you might need to fill into that valuation and you may need to take your time doing it so some interesting changes here the the thing i've noticed about this industry is great companies can

SPEAKER_40: be born any year um and great investors just have a process they refine their process and you can adapt

SPEAKER_39: it to market conditions but i think it's important to have a really thoughtful process um for how you

SPEAKER_40: like to invest we have a very thoughtful one that we're we're even refining more so in a down market it's a great chance to um refine your process and think about what's working what's worked in the past and what still applies because sometimes what you did 10 years ago just doesn't apply now and

SPEAKER_01: other things they apply even more uh and that's the art of investing and cycles come cycles go i think you just got to keep investing through the cycles when you see it's a hot cycle you we passed

SPEAKER_39: on a lot of deals for evaluation and we took advantage of selling so the last couple years we were selling you know 10 or 20 percent of some winning positions we got pretty lucky to sell some of those pretty high we missed other ones you know it's not a perfect science but in a hot market taking some chips off the table locking in some wins always a good idea when the market's down i

SPEAKER_36: think like it is now or it's confusing really working with your startups figuring out which ones are the strongest doubling down on the strongest and maybe the ones that are in the middle of the pack maybe having some mentoring some you know heart to hearts about uh hey this could be headwinds

SPEAKER_39: would be more difficult for you and then for the people who are struggling you got to have a really

SPEAKER_36: sober discussion listen if you don't have if you can't clear market you've been racing money for six months you got three months of revenue you got three months of runway you're not going to get to break even in that amount of time okay it's time to think about layoffs it's time to think about shutting the company down and or selling it and having an orderly process right and there's no shame in that most startups are going to fail what happens during headwinds like this is the ones that are going to fail they'll fail like in groups a large amount of pruning at a time it's almost like you have a boom bust cycle in a lake imagine a lake that has too many fish and then there's not enough algae the big fish eat the smaller fish they steal their employees uh employees start leaving the small companies because they know there's only a certain amount of runway left and um the ecosystem kind of

SPEAKER_39: goes through uh a boom bus cycle classic boom bus cycle too many fish in the pond big fish eat the small fish now you got you know um less fish in the pond oh spring has sprung now there's you know

SPEAKER_40: a more vibrant thing more babies are made you get the idea startups need a central hub to store

SPEAKER_61: information and collaborate on work now more than ever that's because we're all living in this crazy remote world everybody wants to put all the information in one place and that one place is now notion documents projects all that stuff it kind of goes in the same place on what you could consider a wiki when we went fully remote in march of 2020 notion became our internal knowledge bank we even use it for external purposes you know like when we did this series on this week in startups called the startup checklist well we just put it at thisweekinstartups.com checklist and that is all hosted on notion on notion every team from engineering to sales can work together seamlessly and

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Jason Calacanis: 250 dollars off i wonder too actually yogesh one of our notice was uh making the point that there are a lot of new funds and in fact we see that in uh even in these fundraising numbers right that the usbc funds

SPEAKER_32: raised almost half of 2021's total in just one quarter what does a potential pullback mean for new fund managers if anything or does it just become harder to become a new fund manager overnight because maybe

SPEAKER_36: lps get more cautious that that's an interesting question so if you're a new fund manager uh you're going to deploy your money in a down market where you have more time to evaluate companies and it's more sober and everybody's focused on revenue so that's great you're not going into a market where you're an unknown quantity you're up against you know known quantity known quantities and people with track records so you're losing deals and you're getting not the pick of the litter you're you know you're drafting in the second round not in the first round that's the challenge of being a first time fund manager people don't know who you are maybe you have to pay a higher price to beat people well now

SPEAKER_39: you'll just be able to be more thoughtful and deploy your capital during a down market and even if there is a recession two quarters of negative growth in gdp is the official definition of that which is possible maybe perhaps even probable in some people's minds you just keep investing through it and here's what happens if you raised money in a down market as a company uh you might be able to deploy

SPEAKER_36: it when there's less competition for employees or marketing dollars but there's a peculiar thing happening here molly the economy has like sections of it that are doing really bad and that are concerning and then another section that's still crushing it yep tech is another section that's still crushing it yeah so you know until we see people stop buying their iphones or stop watching netflix and stop using tick tock you know advertisers stop wanting to go to the internet first for you know marketing like i'm not sure companies stop wanting to be more efficient with saas software i'm not sure we're going to see dramatically less competition um and uh the other thing with raising funds is there's so much money on the sideline looking for alpha exactly to beat the average return well what do you think happens there okay i'm looking at the stock market okay the prices came down but they're still high they're on the higher end of normal so maybe i should put some money into venture and try to find the next you know coinbase or airbnb rather than buying

SPEAKER_73: coinbase and airbnb maybe i should bet earlier really true because what we have been seeing is

SPEAKER_75: that there is so much money and i think that's why you've seen such an increase in alternative

Jason Calacanis: investment vehicles and money just sort of like looking for a home because there's a lot of it and although the stock market was going up and up and up it's sort of they were still this like chasing bigger returns and if we find ourselves in a position where the stock market kind of plateaus or there is a you know sort of continued correction i could imagine that people will be like okay well this is a great time to pursue these riskier investments and then on top of that just in the like macro economic universe i saw a poll today that of course i can't remember because it just like went by really fast on the internet but that essentially said there's like a 35 chance of a recession most likely because we're sort of imagining like we always tend to do that that the economic moment that we're in right now is going to be the economic moment that we're in a year from now and in fact there are all these huge externalities not least of which are covid and supply chain problems and should supply chain problems ease then a lot of the economic factors we're seeing now that seem to be like leading us down the road toward a recession might go away like

SPEAKER_22: we honestly don't know for sure and you know uh we might have like one of these recessions where there's still jobs available yep and it's short you know it's just two quarters and

SPEAKER_36: so you know it's yeah you you kind of find out when you're in a recession afterwards like you don't

SPEAKER_22: even know until the time after right um and again you know the spikiness of this inflation issue

SPEAKER_36: and people's ability to withstand it i know this sounds crazy but you know they were talking today on cnbc about oh yeah some places are you know going to have higher bills for air conditioning higher bills for gas and heating uh higher bills for driving your car all of these things it sounds crazy um can be mitigated by consumers on the margins so if your if your gas costs 10 percent more you could travel 10 percent less i know this sounds silly if your gas is 10 percent more and you drive 85 miles an

David Friedberg: hour uh you could drive at 65 or 70 miles an hour and reduce your increase your gas efficiency by 10

SPEAKER_83: percent you could buy an electric car i feel like you might mean me well yes if you're got a bunch of daughters running around your house and they have the doors open and the air conditioner at the same time well you know you get the idea but no i mean it's totally

SPEAKER_86: true and no ways to mitigate and humans do find them totally against raising prices of the reason

Jason Calacanis: that we've had supply chain issues is not just the literal supply chains it's that americans just kept buying a mountain of crap during the pandemic because they were bored and i mean so like that no politician will ever come along and say you know what you could do is like buy less and travel less and do you know need less to keep up with the kardashians you could just live your life and enough is as good as a beast because that's like the apparently the worst political message you could ever send but that is also 100 true it's supply and demand on the emotion side

SPEAKER_36: as about one example um i wanted to get like an suv capable of like you know before the cyber truck really you know eating up the snow in tahoe and i you know i was like i'll just go buy this new defender or maybe i'll buy a wrangler they just weren't available for the last two years and they wanted 15k of a sticker and i was like you know what i'm going to go with my model y my model x and put snow tires on them so i took a much cheaper choice was very happy with that choice and now i'm sitting with sometimes i'm like you know what i'll wait another year or two i can get another year or two out of this car until the cyber truck comes so i'm literally like and here you go substitute

Jason Calacanis: producers is on fire today by the way if you're not watching the video they also it was goldman sachs they went and found that poll immediately the 35 one so yeah this substitute goods yeah microeconomics

SPEAKER_39: two goods are substitutes if the product could be used for the same purpose by the consumers this that is a consumer perceives both goods as similar or comparable so that having more of one good

SPEAKER_36: causes the consumer desire less of the other good so you can uh have your desire filled another way we saw this you know people um during the last recession i remember this very acutely uh during

David Friedberg: the 2008 they were talking about how europe was suffering so greatly after the great recession and i was like why is europe getting hit so hard it's like americans are looking at the you know it's not

SPEAKER_36: cheap to go to europe in the summer and a lot of americans do that or they try to do it once every 10 years and it's 25 000 to bring a family over there 50 000 you know five or six people plane tickets hotels trains food yeah it's a big ticket item so let's just say some middle class families like

David Friedberg: this is their yolo trip and they've allocated four or five thousand dollars per person to go to europe right that's what it costs two thousand dollars for a coach ticket in the summer and so they got twenty five thousand dollars then they're like hey you know what we can go to the grand canyon

SPEAKER_36: we can drive we can rent a winnebago for 10. mm-hmm bank to 15. yeah not spend the 15. let's do that and you had a lot of staycations occur uh during that time period and people had just a good time

SPEAKER_95: so i think that's what we're going to see a little bit of this like creative adaptation

SPEAKER_00: and it's not like we don't have jobs here so what that does is and salaries have gone up real salaries have gone up big time i mean inflation has too and it's eaten up a lot of it but still like

SPEAKER_40: yeah i mean so this it's not like the economy is um like it's it's not like it's a fait accompli

SPEAKER_39: yeah that we have to have this happen uh humans adapt and the fact that people we're in americans complaining about these supply chain issues but we're not changing consumption it just tells you something like if people are complaining about their gas bill but they're not driving less or driving the speed limit or they're not buying high gas mileage cars it's like you're not buying high gas mileage cars you're still buying trucks so obviously you're not doing that bad if you if you've got the audacity to buy a 20 mile per gallon car when 50 mile per gallon cars are 55 are available for the same price or less totally which you're which is what europeans do they buy the you know so i think that's what that from what i understand you can't buy an ev now so because of all those gas

David Friedberg: problems seven dollar gas in california the ev sales are going bonkers apparently that's true yeah

Jason Calacanis: used ones used ones i know i had i just had a coffee with someone i was like yeah just get a like a kia nero or a hyundai kona and she was like you're adorable have you looked for one of those lately and i was like no luckily for me i locked in my ev a couple months ago because yeah you cannot get

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SPEAKER_36: right when you get to a certain point you've lived through these super cycles yeah you kind of are at peace with them because it's not like i'm going to stop angel investing in companies i invested in uber right at the bottom of the market i invested in you know calm at the bottom of the market yum yum yeah and just keep investing in great companies and the earlier you are the less it matters

SPEAKER_40: because at the inception point like a 10-person company uh with 2 million in the bank like does it matter what's going on in the stock market no it matters what their five customers think of their

David Friedberg: product they just have to focus on their customers so block everything out if you're an early stage founder and if you're early stage investor you can look for value right look for value i think that's

SPEAKER_39: one of the things i'm going to do over the next year or two not to tip our cards too much but in our

SPEAKER_40: internal meetings our team has been looking at our existing portfolio and is anybody in our existing portfolio tripling their revenue year over year if they are why aren't we investing more money in a company we already know yeah if we know that company's good we trust that management team and now they're doing they're thinking about doing a series a or they did the series a they're thinking

SPEAKER_39: about doing a series b maybe we can sneak another million or two million dollars and own another five percent of the company or whatever it is two percent ten percent and just you know as we say uh or

SPEAKER_117: sax has said ride your winners i think what i love about strategy is that it's a zag right everybody's zigging to early stage everybody you see tiger taking these masks like because it is hard on a relative

Jason Calacanis: basis to make back enough money on a massive investment to get what your investors want and it's easier in some ways to do it early stage so everybody's zigging early stage and you're basically like let's zag to the middle to mid stage which and you know a version of growth which i think is is brilliant because so many startups are gonna all of a sudden i think come out of early stage and there's going to be a trough certainly i've been talking to climate tech investors about this how this how there's like a little bit of a trough between you can have a million dollars and you can have 50 million dollars and right in the middle is where there's like a little bit of a death zone

SPEAKER_36: yeah and so a great place to be zag over there well if you think about it like being taking a head coaching position in the nba you know if there's a team that's you know in the seventh or eighth seed

SPEAKER_22: um they got some draft picks they got cap space they got to the first uh you know they got to the playoffs for the first time it's like huh well there's an intriguing prospect like they did some

SPEAKER_36: things to get there they're not there yet they're not a championship team yet but maybe we coming in could help make them a championship team yeah so in that analogy i think looking at looking for companies that it's not a clear winner yet but they're showing signs of being a winner so let me explain what that means they doubled their revenue they added a couple of good executives but they need to add more executives and they need to triple their revenue okay uh tripling's gonna be

SPEAKER_22: really hard but if you're already doubling it's not that much more so okay and oh you got two good

SPEAKER_36: executives you need three more okay how'd you get the last two oh you worked your ass off to get them

David Friedberg: huh i wonder how we're gonna get the next three all right you're gonna have to work your ass off to

SPEAKER_22: convince people okay so we're gonna have to work harder and you're gonna need a little bit more resources to to work harder to and work smarter great could be a great investment so if long way

SPEAKER_36: of saying if you're out there and you went from 500k to a million in revenue this year and you other vcs are saying no we might say maybe yeah you know let's figure out you know if you have a way to do better than doubling your revenue you know you have you have a strategy that you think could work

SPEAKER_39: yeah sometimes it's just stopping doing something that's not working a lot of times i'll see a company with like they got four projects going on i just had this conversation over the weekend with

SPEAKER_83: a founder i love and they've got four business models they're pursuing and things are growing but none of them are you know it's kind of stalling a little bit and i was like if you could only do one

SPEAKER_40: thing i did the frank sleutman one thing what's the one thing and they were like this marketing channel and i was like you want to make a plan for taking all the budget of these three other things and then putting it in the one thing they're like we didn't think about that and i was like yeah i know that's why sleutman is you know snowflakes doing so good so i just yeah i did i pulled the

Jason Calacanis: slew i sluted them need to pull a slew i have a company i need to pull a slew with and i'm not even on a board or anything um this has been by the way a bonus episode of vc sunday school in some ways and also maybe cut that part out where we just invented a new strategy that's going to crush all

SPEAKER_39: those other here's the other thing too you know molly when you think about you're very competitive you know uh and that's great it's one of the reasons why i think it's working out so well with you here you have a little bit of that fire we don't have to beat everybody we need to um look at our process and then figure out how we can just be 20 better in five different things and then we're twice

SPEAKER_01: as good yeah and so you know the the new york knickerbockers two years ago got these um i'd love to have this company on the pod by the way if we can find back into it but there's a company that's incredibly expensive that puts cameras um in the practice facility and then they can work on

SPEAKER_39: your arc of your shot and your mechanics and get people to be better three-point shooters through this ai combination technology that analyzes your shot and like all the nicks like every single nick on the team got like between one and seven percent better at shooting threes which just meant collectively they just at some point they two years ago we had our big run and got to the fourth in the east they had just become like really dynamic at hitting threes and these were people who were not three point hitters so what they did was again talking about my like hasn't figured it out yet they just said what if the entire team got slightly better right and we just tried to make everybody better at threes that was their strategy so we're looking at companies okay they're shooting threes okay okay

SPEAKER_40: they're they're their growth is okay it's not great can we make okay good or maybe some okay and good people good and great you know just try to move the whole cohort over you see that with free throws

SPEAKER_01: as well some company some folks hire a three free throw specialist for the teams just to make them

Jason Calacanis: slightly better mm-hmm i love that i mean granted it is weird i wish i could go back in time and tell me that there would be a point where jason calacanis would tell me hey you don't have to beat everyone

SPEAKER_135: you just have to be 20 better than everyone because well i mean i didn't totally see that coming yeah

Jason Calacanis: but i'm like the gunner in the room where it's like no no i gotta kill everyone and jason's like no no no we just the way you win is to be more strategic and thoughtful like i'm just saying

SPEAKER_36: it's a minor role reversal at this level of what we're doing at this big of a team with this much deal flow like it's decade two of our investment organization it's going to be process a sustainable process yes that gives us some you know massive compounding advantage and we know what those compounding advantages could be one of them is this very podcast so can you keep compounding your advantage right and this podcast you know reaching more people and people saying hey we want to uh would like to work with molly and jason and then oh yeah you'd like to come on the pod with molly and jason this kind of is just but one of like maybe six or seven advantages we could you know keep

Jason Calacanis: improving right yeah by the way noah um basketball is the name of the company and i actually interviewed dr rachel marty pike she's the data scientist who like came up with this she would be you should have her come to all in oh because it's just super interesting and then it's applicable to so many

SPEAKER_22: things that you just said people should check out the uh all in summit website i redid the website

SPEAKER_99: that's all i'm saying that's all he's saying trading individual stocks can be fun but it's a wild ride so

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SPEAKER_147: he said which is like tweet less but maybe don't talk to people on the phone pick up the phone do

Jason Calacanis: reporting yeah so then today monday two developments one chris licht who is the incoming head of cnn he's the guy replacing uh jeff zucker and he was he he's the guy who sort of revived the cbs morning show and maybe also protected charlie rose for a while but whatever unrelated um chris licht is starting his job at cnn on may 2nd and announced that that will be his first day in the office at cnn and his last day on twitter saying quote twitter can be a great journalistic tool but it can also skew what's really important in the world i'm logging off and looking forward to working with the incredible team at cnn and also today chris sacca announced a twitter break as well saying if there was ever a time to take a break from the site whoo boy i'll miss a lot of some of a bunch of a handful of many of

SPEAKER_39: an assorted group of you he wrote i am i'm about to start mine because i'm gonna be um writing finishing the book this summer and you know i'm i'm getting ready for that for the spring and uh yeah i'll

SPEAKER_01: probably do my little curtail for three months or something like that where i just go into take it off my phones and only use it on the desktop and then i'll have the producers you know fire stuff off through buffer or whatever when we want to promote the show but yeah i i think a break is healthy it's an addiction um it's a real lean forward and if you're writers if you're doing journalism you can put a lot of your effort into twitter and then not into your podcast your book your fund your company so there's a time to dial it up time to dial it down if you're a nobody and you want to meet everybody and build a

SPEAKER_39: network by all means be on twitter for 10 hours a day we've seen all these new fund managers all these new ceos leverage it to become known etc and then there's a time where you actually have to do

SPEAKER_36: the job people criticize the fast ceo too much tweeting not enough on the company sure i mean i think if you go back on it and you know recapture one hour a day of twitter time great but maybe in the beginning the one hour of twitter time or like maybe spending an extra hour on twitter would have gotten him more employees would have gotten him more customers would have gotten him more venture so there's the perfect example like dom from fast or uh mac the vc like there are people who have used this to build a crazy network get a ton of attention and then there's people who already have too much attention like chris saka who has to deploy hundreds of millions of dollars into carbon and maybe there's not enough entrepreneurs or maybe there's he's he's wasting time uh on twitter that he could deploy

SPEAKER_39: meeting with his founders and helping them become more successful so or maybe it's just making you

Jason Calacanis: furious and ugly cry on a monday morning and you have to stop and ride the bike for a while because it's like also you know i mean i don't i think there's we're starting to confront these real questions about whether it is good for our health our discourse and our news and i'm really curious to see like i wish there was a way to measure what would happen to let's say cnn right if if everybody got off if every reporter got off of twitter would all the stories change because you do start to think that there is a truth that isn't there i think there's a lot of things that journalists find themselves shocked by because you live on twitter and you think oh everybody knows this here's an

SPEAKER_36: idea for twitter in the new york times create cnn.com or slash uh chatter or cnn.com slash chatter and tell everybody we're going to take it through a 30-day experiment we don't want anybody in our company spending any time on twitter because we're putting our content there we want you to spend your time on slash chatter and we're going to do this it's going to be a hundred day challenge nobody is allowed to tweet and we're going to do it for 100 days i'm going to see if anybody goes to this page

David Friedberg: to watch our chat or we're just going to reply to each other and putting up a message board there

SPEAKER_36: we're going to have the community there let's see what happens yeah and you know what i i think it could

SPEAKER_39: be quite compelling um it might be really compelling to see certain folks just chatting it up over there as opposed to on twitter so sure and then you know uh it would certainly be better for people's

SPEAKER_40: mental health i think the twitter bot solve problem getting solved i think it would make it 50 percent less arduous or annoying uh to be on twitter it's 90 of the hate i get or 90 of the you fat greek you

SPEAKER_01: balding bastard i'm like mom stop um thank you very much good one but also what no that happens

SPEAKER_168: well no people will come at me and it's always in that little bottom section you know the little bottom section like other stuff that might be a little crazy and i'm like yeah i want to view that yeah show me those and it's like you're all a click yeah no like that no if you get rid of the bots or

SPEAKER_83: we start moving people as we discussed last week to only my followers can reply right i think

SPEAKER_175: you will change forever um how it feels to be on the platform i think the communities are starting to

Jason Calacanis: be really impactful i'm noticing people wanting to because what people build on twitter is communities of people that they like to talk to right there's all kind there's a there's insert noun here twitter there's like epidemiologist twitter and there's law twitter and there's black twitter and there's lithium twitter i know this because i'm in a twitter community that's all about like lithium

SPEAKER_32: and and battery resources not the not the mental health treatment but the battery mineral oh the

Jason Calacanis: band that's a good that's a good of my era yeah totally um or was lithium no that was the name of the nirvana album oh that was the name of nirvana is there about them yeah i don't know probably i'm sure there is but anyway i'm definitely noticing that although twitter was late to the game and the idea of you know what like god help us facebook groups which went horribly wrong but twitter people are like oh i'm into this because it's an actually useful way to engage with content that you want with people that you know are smart by curating a specific community oh now now the notice are like what about sodium batteries i know i'm up on i'm into all the battery tech bring me your battery tech

SPEAKER_36: i it's really interesting to me to see the this week in startups community on twitter uh which has 691 members um you know when these and then the all in pockets when it's 3 000 now um when these communities start getting spammed that's when you know that they have value because the spammers are

SPEAKER_22: like okay well there's a place to get some action so all in podcasts got hit with foreign spam

Jason Calacanis: over the last two weeks but what do you mean by value i feel like the value actually is like the teeny little lithium and batteries minerals extraction community that doesn't have any spam

Chamath Palihapitiya: well you it there's an option it has enough traction that spammers are drawn to it so i put it on

SPEAKER_36: uh you have to be approved to be a member and then i turn that back off because it was like once one spammer finds out that there's a community that's open yeah boom boom boom boom they all go in and so we had both communities get spam um this being startups got spammed by somebody just trying to like do links to their like you know content farm or something and so i was like okay well that's easy to spam uh easy to fix you just give the nodi gang where you just give fans of the community and give them moderator access i i agree these things are going to become um really nice little

SPEAKER_39: communities um i like the idea of people being able to watch in on them but not participate uh or you can join them i like these like um get more rights over time so i think people should join them right it should be you have to read it for five days then you can post and it sends you a little note

SPEAKER_01: hey you're now allowed to post you've visited the community for three days you've read a bunch of tweets

SPEAKER_50: or something was that but wasn't there was that part of the deal with dig back in the day that you

Jason Calacanis: could build up like some karma i think and then you could get more the more points you got from upvoting or commenting or something then you could start to become uh am i making this up was there

SPEAKER_22: something i think people had tried those as like um batten down the hatches moments so if the site was

SPEAKER_36: getting too much spam they would just hit a button where only people who had been on the site for more than six months could post right so when you would get these like farms and stuff like that what i did on inside.com which is very much a beta product if you go to inside.com slash new maybe you can pull

David Friedberg: it up here for people who are watching this was the approach i took uh so if you go to inside.com

SPEAKER_22: slash new what we find is almost everybody who comes to a social news site uh which is like reddit

SPEAKER_36: hacker news dig what you'll see is the first thing they do is they start submitting press releases and so see this one says low quality score oh yeah source love it so we actually publicly put why it was rejected so we kind of trained folks and um then if you look at their there's a comment there

SPEAKER_39: and if you click that headline um you would go to the story and you could see the guy frank veto from bull capital did this and i just wrote him back so there's a comment there and i wrote to him hey listen we're not um doing press releases right now we may do a press release thing in the future now if you go back a page you'll see most people will just uh it keeps going down see self-promotional

SPEAKER_40: people come they try to use the site for self-promotion so scroll down a little bit more

SPEAKER_39: and so you can kind of shape people's um behavior by putting that self-promotional then they get a note hey it was self-promotional put something that's not about you and then what will happen is maybe one out of three will become incredible contributors to the site they're like oh okay i thought i could send my own stuff and then they realize like oh somebody else could submit my stuff so i can ask a friend to submit but i don't have to submit my own and you kind of just change the

SPEAKER_01: incentive and so i think that's active real names and active um sorting of new p moderation new people then what happens is if we accept them and we move them from new to the main site if you get to five

SPEAKER_36: accepted stories we're going to let you just post to the main site so you kind of kind of earn and if

David Friedberg: you just do that really well with the first cohort of people maybe you can set a tone i think but communities take active management that's what i've learned is like and there's no active management on twitter there's just yeah this is anonymous anonymous names just causes chaos yep agreed uh

SPEAKER_36: well speaking of ramifications um and i want to go to our startup of the day because i'm super excited about it but i think this alex jones story is really worth talking about and the reason i would

SPEAKER_22: like to talk about it is because i think it's really a great example of the law and uh policing of content both um working so alex jones for those of you who don't know and many of you might actually not know because he's been one of the folks who's been deplatformed i think rightfully so

SPEAKER_36: um because this person is horrific um he might be funny or entertaining at times obviously people are

David Friedberg: not all one thing but um this is from reuters in the fall of 2021 he was found liable for damages in a trio of lawsuits last year filed after he falsely claimed that the 2012 sandy hook school massacre was a hoax each of the plaintiffs turned down the settlement offer and court documents the so-called offer is a transparent and desperate attempt by alex jones to escape a public wrecking under oath with his deceitful profit-driven campaign against the plaintiffs the memory of the loved ones lost sandy hook

SPEAKER_93: and uh he was deleted off of youtube in 2018 now if you're a youtube there's no world in which you want alex jones doing conspiracy theories about parents losing their children's at sandy hook and calling it a false flag i mean this is not why you created the platform is it freedom of speech to do conspiracy

SPEAKER_36: theories i guess there's a way to do them where like what if this happened right um but you know youtube gets to make a decision about this and then the law gets to make a decision about this law takes a long time right but there are laws about what you can say and what you can't alex jones is suffering from that because saying these things causes massive emotional damage to these people and judges are

David Friedberg: finding that correct and uh he is going to be bankrupted but that might be a five to ten year process and not everybody can afford the fees to do it and then the platform also you know what was it four years before all these judgments came down or 2018 yeah so three four years before it came done they did the right thing by de-platforming him or at least the right thing for youtube and the business they want to run and not have advertisers near insane uh but alex jones has still been

SPEAKER_36: publishing on his website the web is still open he can still do his website if you want to google him find him so i don't know i just thought this was like a good example of both things can work with an extreme person and sometimes the law has to handle something and the platform maybe doesn't have

SPEAKER_39: uh the you know doesn't need to get involved right if i'm like i think nancy pelosi donald trump whoever's an idiot i would never vote for them like the law doesn't need to get involved from that

SPEAKER_37: right but there is speech does have legal issues that come out oh yeah absolutely and i think this

Jason Calacanis: is an example of the distinction that we've been trying to make between speech and reach right like you can go anywhere you want on the internet and say stuff you don't have an unfettered right to reach people with that stuff like either algorithmically and i think the key in that sentence there was when they talked about the profit driven um campaign right like he doesn't say this stuff because he thinks it i mean there may be a version where alex jones of the of reality where alex jones is so far gone that he believes all the weird alien that he says on the podcast all the time and thinks that democrats are aliens and they're eating babies and you know but what really happens is that algorithms promote this stuff and so it starts out like baby crazy and then it gets to full-on sandy hook conspiracy that is causing people real harm i mean parents who had children murdered in that shooting would be getting death threats and have stalkers showing up at their house and what and it was because of you know so i think this is like a really interesting example of where you one can take away the financial incentive with de-platforming like you're just not going to make money you don't have a you don't have the right to like reach whoever you want and have our algorithm promote this yeah and then the law can do its work which also takes time but yeah i mean it like i think what you just said about how communities take active yeah shaping is like that's really what this all is about like a community where nobody does anything and nobody ever intervenes and nobody stops the worst behavior gets turns horrible it's horrible and that is why by the way ironically you

SPEAKER_32: see people leaving twitter because they're like this is a cesspool of like misery outrage yeah you

SPEAKER_217: know an algorithmic promotion i get i i'll say uh i'll give soccer if he's gonna leave i say he will

SPEAKER_66: tweet again within i'll set the over under at 100 days take the over the under 100 days can he last

SPEAKER_221: when will his next tweet from his account be i'm gonna say under 100 days you're gonna say under okay

SPEAKER_22: you took the under yeah well there we have it's hard to it's hard to leave it's hard to give up um and uh to your point about how pernicious this problem is according to testimony by 2014 alex jones

SPEAKER_66: was making more than 20 million dollars a year in revenue yeah which means the more outrageous the stuff you say the more subscribers you get the more the algorithm picks you up the more attention you

SPEAKER_22: get and the more money since these platforms give the ability to monetize potentially and they might

SPEAKER_39: have uh not let him monetize um you know i know he was selling product right like he was selling

SPEAKER_00: supplements oh yeah there's still is there's merch there's a whole you know there's a whole

SPEAKER_36: there's all different ways to do it so it doesn't have to be the platform giving you advertising to do that is the point but the more crazy you are the more uh you know the worst predictions you make the more outlandish the predictions you make the more outlandish the nonsense you do with regards to

SPEAKER_39: conspiracy theories the more viewers you get the more monetization you can do so it became a playbook

Jason Calacanis: it is a total playbook that's such a great way to put it like that and that's a hundred percent why i think it's so important to focus on the technology that amplifies this speech and encourages this speech and the financial incentives that make the speech get so much worse yep yeah yeah i mean and

SPEAKER_22: these things could be um you know algorithm one you know let's call it the you know uh delightful

SPEAKER_36: algorithm you know you can pick your algorithms like you pick lenses is the eventuality for twitter and for facebook either through regulation or through opportunity because it'd be a better product or consumer demand yeah yeah let's say you know you start with a delightful one um and then you stumble upon um an alex jones tweet uh because somebody sent it to you and you're like wow i never saw this and it's like it says on alex jones's tweets you're using the delightful uh algorithm

SPEAKER_40: delightful algorithm um takes out people who have a history of doing conspiracy theorists or uh violent uh language or whatever as per you know this standard and if you would like to you can pick the chaos algorithm and the chaos algorithm right will show you the most chaotic insane joker like people in the world that's what i want i just want you know when you have and now you have yeah and it's just let me

SPEAKER_39: scroll left and right i can see the chaos i can see the delightful i could see the polarizing i could see the funny and you know the algorithms can rank funny the algorithms can rank retweetable heartwarming

SPEAKER_01: whatever and just let people start to understand their algorithms i think that's going to be what the next decade is about tell me why you're showing me this and let me change that algorithm i want control over what you're showing me right consumers understand it now isn't that amazing like consumers had no idea what was happening they had no idea what twitter was showing them or facebook yeah and now

SPEAKER_236: they're like i know you're with me right i don't want you to with me anymore and i know you're just

SPEAKER_37: doing it to make money yes there's no rhyme you are just doing it so that somebody will stay here long

Jason Calacanis: enough to click an ad right or on instagram society so that people would stay here long enough to click

SPEAKER_37: an ad congratulations uh or we want to increase our time on site at instagram our time in app and we know

SPEAKER_36: that you've been looking at all these thin people and you hit the inspiration tag you've obviously got an eating disorder well let's double click and triple click on that let's use that as our vector for keeping you on the site uh you uh let's feed your anxiety about your weight i'm not talking about myself

SPEAKER_175: here i mean i'm just eventually but i'm not i don't know eventually because eventually you'll you'll

Jason Calacanis: click an ad eventually we'll show you an ad for some pants like there's a pant that like has a butt

SPEAKER_16: lip i get i literally get ads for spanks pants great thanks instagram they're doing all women in

SPEAKER_198: their 40s that might be it might not be i think so too that actually stopped too because it's just like

Jason Calacanis: 40 that one stopped though because all i ever click on are the jewelry ads so that's all i get but yeah it's i i mean i completely agree i think we have to like and we just have to keep this is why at least i insist on this laser-like focus on the technology and the money because i think the speech conversation is such a distraction because the speech wouldn't have ever gotten so

SPEAKER_37: bad if it didn't if it wasn't so effective because of the algorithms all right let's do our startup of

SPEAKER_250: the day let's do it because ironically our startup of the day is trying to solve for some of these

SPEAKER_00: problems absolutely the start of the day today is be real and i've been using it molly producer rachel

SPEAKER_01: uh chief of staff presh are all fans of be real explain what it is and how it works and we'll pull up uh some screenshots and videos while molly explains it to everybody yeah it's a social media

Jason Calacanis: app that is i was calling it the wordlefication of social engagement once a day be real sends you a notification that's like hey what are you doing right now take a picture and you stop and you take a picture and it posts and this is an important thing for you to know for people who may have accidentally focused for example or posted a picture of like their bank account up on their on their computer screen it posts a photo from the front camera and the rear camera simultaneously because it just shows what you're doing in that exact moment and you can't what's so interesting about it is one it only happens once a day and it's really meant to be like what are you doing right now and then two you can't see any of your friends posts until you post so it doesn't have that sort of just like go and scroll up and down and feel bad about yourself um and you can only see other

SPEAKER_147: you can only see your friends you can only see your reels if you do one yes so it's participation

SPEAKER_40: gating i just made that up but you have to park you have to give to get yep exactly you have to give

Jason Calacanis: to get you can't just go there and browse and be like my friends are doing so many cooler things right because really all your friends are doing is exactly what you're doing which is like looking

SPEAKER_36: at their computer or working or maybe out on a walk the first time i did it yeah i was like okay let me go to the window i'll take a little selfie of myself i'll look in the camera put the trees behind me and i don't have to show this this absolutely mess of a bedroom i take the picture

SPEAKER_82: it's like oh no the main picture is the mess of a bedroom there's a picture of me i was like okay

SPEAKER_263: delete that one how do i delete this oops they really need to explain that to you but it's cool

SPEAKER_99: because you can tap like you can tap to make the front camera picture bigger oh and you can post it

Jason Calacanis: that way there's sort of like little things that you can but for whatever reason this is totally working i mean i know a new social network or a new thing comes along like pretty often but this one monthly active users on be real have grown 315 percent since the beginning of the year ranked fourth in downloads in the us the uk and france for q1 2022 these are circling this thing big time of

SPEAKER_32: course like currently there's no obvious mechanism for money making i'm sure that there will be ads

Jason Calacanis: at some point um or but right now it's just fine i think right now we're all into it because it's just

SPEAKER_00: a fun thing that takes no time it's super quick and easy uh and uh yeah delightful fun we're all

SPEAKER_01: positive no ads i think just having and not have ads is the key yeah because that screws up the whole incentive and then you can just make it so um maybe like filters or videos when they because they don't have it doesn't seem to have video yet but maybe they'll make video a premium feature or maybe you can have groups as a premium feature or you can have so many people in a group or you can be in so many groups or maybe there'll be a dating aspect to this you know where if you want to be part of the dating pool that you pay to dm people so you know like maybe like meet new people could be a tab on it yeah and if you're into meeting new people that's your thing you pay five

David Friedberg: bucks a month yeah part of that oh more you know wider pool of people in your area so but congratulations to the people who made it we invited the founder on but um i guess uh they're not doing press which

SPEAKER_273: means they're in the middle of closing around i can translate oh interesting when they say they're

SPEAKER_00: like really busy building their product that's what it is nobody's busy building their product too busy

SPEAKER_36: building a product to come on everyone's attention to their product and get more users for their product what's happening is they're deep in negotiations for a monster round so i bet they

David Friedberg: raise 20 million for 15 of the company you'll see a hundred million dollar round when something gets this kind of here's the thing it's very rare and social for something to hit a chord and this hit a

SPEAKER_36: chord yep 99 out of 100 do not or maybe it's more like 499 out of 100 500 do not yeah so this is like one in a thousand one in five hundred when it does happen the vcs are like oh product market fit

SPEAKER_37: has been met here's 20 million we're placing a bet it's interesting yeah it's like you got two beautiful cards in i guess it's true i mean it's like the last time this happened was clubhouse and

SPEAKER_22: look how much it raised so you're probably right if you were in the angel round uh and you paid a hundred million you're going to be up no matter what now if you pay the billion or the four billion you're not up on the four billion you might be sideways on the billion i mean if it did get sold

SPEAKER_20: it could be low billions i guess um we'll say i don't know try it before it gets ruined it's really

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SPEAKER_283: startup check out openscouting.com where anyone can refer a startup to our investment team here at launch even if you don't know the founder if you're the first to flag a company for us and we decide to invest you'll get 5k in cash or 10 of our carry hey everybody producer rachel here are you an early

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