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SPEAKER_02: Friday. It's This Week in Startups. And Alex Wilhelm is with us. He's the editor-in-chief of Tech Crunch Plus. Go sign up and subscribe for that. And, uh, Alex has been on the show dozens of times and. Yes, sir. He knows tech and you're like, like a classic journalist. You don't get involved in, uh, too many, uh, you know, superfluous, social, whatever, you know, cultural issues. Uh, you like to talk about the business and the tech. Yeah. To a degree. I, I do think I'm,

SPEAKER_04: I'm recently castigated because I, I, uh, I popped off a little bit during Silicon Valley bank and,

SPEAKER_07: uh, do you ever just hit the zeitgeist at the wrong time with the wrong people in the wrong way? I took, yeah, yeah. Rhetorical for both of us, but like, I, I got more flack in like 30 minutes

SPEAKER_08: about my SVB take than I had gotten in two years. And I was like, oh, this is why I mostly talk to my

SPEAKER_12: friends. Right. Yeah. No, it's what was your take on the SVB situation? Okay. Don't, don't,

SPEAKER_08: I've already been, I paid penance for this. So don't shout at me, but I was like, no bail out the rich before the FDIC announced that they were going to make the deposit. But what I didn't realize was how downstream the effects were going to go, et cetera, et cetera. So I learned, but people took it

SPEAKER_07: as like, oh, the media hates us. You know, they're all communists. And I was like, I'm sorry. I, I

SPEAKER_19: apologize for my seven word tweet. Well, I mean, this was a subtle, um, issue because I agree with the

SPEAKER_22: sentiment of don't bail out the rich, uh, people who are placing bets. I don't feel like United Airlines management should get bailed out or I should get bailed out as a venture capitalist. I I'm generally anti bailout. Um, but yeah, when you look past, and I didn't know the extent that

SPEAKER_01: Silicon Valley bank was used by my kid's school, the public school in my district is a Silicon Valley bank customer and they were not going to be able to pay the teachers. Right. This was not, you know, the name of the bank played big into this. And then the good news is the, yeah, the management and the equity shareholders, not the good news, the fair news. Yes. Equitable news was that they did not get bailed out. And all we did was enforce FDIC, but I too, you know, I took the opposite side of it, which was like, holy cow. What I'm seeing from the inside as a venture capitalist now, who does random acts of journalism, as opposed to a journalist who covered venture capital. Yeah. I watched the bank run for Silicon Valley bank occur in my feed, email, phone calls. And at

SPEAKER_30: the same time, people were moving it to Silicon Silicon Valley bank to, um, first republic. I was

SPEAKER_22: about to say, yeah, first republic people were moving out of first republic and putting it into bank of America or JP Morgan. And I'm like, wait a second bank runs can cause other bank runs. And then

SPEAKER_33: I was like, wait, I think there's a word for this. I think there's a word for this. It might start

SPEAKER_20: with a C O contagion. Yeah. Contagion. Yeah. Well, okay. Look, if we're going to bring up first republic before we get into this earning stuff, uh, did you see what happened to their stock today?

SPEAKER_36: First republic demolished another 30% or something. I mean, 30 or 40. Yeah. Yeah. Okay. Good.

SPEAKER_08: That was my question because my, my view is that this goose is cooked, but I wanted to make sure I

SPEAKER_38: wasn't being too pessimistic or negative. You know, it's, it's down 40%. It's, it's got a market cap now of 685

SPEAKER_40: million dollars, 52 week high was 171 and it's trading at $3 and 67 cents. So, you know, like Silicon Valley bank, an incredible brand with incredible people who work there. Yeah. And this like really custom banking where you can get somebody on the phone as opposed to cookie cutter banking at the big four or five, it really does serve a place in the world. Uh, and not just for rich people, this mom and bank mom, mom and pop stores, main street stores. They, they get to have a banker and they get to get a line of credit, all this stuff. So we got a serious problem. And I, I hope somebody buys this asset and maintains it. I mean, imagine if, I don't know, what's a big tech

SPEAKER_43: company that wants to be in banking. Oh, Apple. Yeah. I was about to say Google wallet, Apple

SPEAKER_46: wallet. Number one. Yeah. Yeah. I, you know, Microsoft, not so much now that I think about it,

SPEAKER_12: but Google for sure, for sure. Yeah. Amazon probably would take a swing. So

SPEAKER_52: if we're spitballing here and Amazon first Republic takeover,

SPEAKER_13: it would cost them what? Like 12 minutes of revenue. Look, I mean, first Republic is now worth like two buzz feeds. That's bad. Your bank should never be worth a low multiple of buzzfeed stock, right?

SPEAKER_52: Like, I mean, it's been a while since you and I have caught up, but I mean, the buzzfeed situation

SPEAKER_40: is bonkers. Uh, they were making two to $300 million a year. And I think their stock was trading

SPEAKER_62: at less than their revenue. Oh yeah. Their revenue multiple went below one. All right. If I recall correctly. And, uh, by the way, did you know that lift's revenue multiple is also below one now?

SPEAKER_13: I did not know that. I just saw that. I think 0.9 last time I checked or something like that. I think Uber is 1.8, but like those businesses have also been repriced pretty extensively. Yeah.

SPEAKER_65: It's you, if you refuse to show profits, uh, and in, you know, you just go for the growth number,

David Friedberg: which was rewarded in the ZERP in the zero interest rate market, it was rewarded. Um,

SPEAKER_40: I can tell you, Dara's having a hell of a time turning around a battleship and saying, oh, we're supposed to go in the other direction. It's like battleship.

SPEAKER_22: Aircraft carriers do not turn. They're, they're not like a speed boats. It takes a little time to turn

SPEAKER_13: them around. I'm just in awe that Uber isn't more profitable. And I, and I know it's a complex business with a lot of tech that goes into it. There's insurance questions and markets and support.

SPEAKER_07: And there's lots of things, but like when I use Uber eats, I am paying markup fees, delivery fee, and tipping. I am paying like three X what the food costs. And you think it would just rain money

SPEAKER_62: down from the sky, right? Well, it turns out human beings in America doing service jobs

SPEAKER_22: went from a $78 minimum wage to a, you know, to a $15 minimum wage in some cities. And then in order

SPEAKER_71: to compete for them, you kind of got to hit 25 to 35 bucks. Um, or Americans are just not going to do

SPEAKER_02: those jobs. You, you close the borders. We have no immigration at 9 million job opening. So as weird as this whole economy is, uh, but you know, the good news is I think if you look at Facebook doing the layoffs, getting rid of management redundancies, there is a path to have your stock

SPEAKER_01: recover. And my understanding, um, is that Uber is taking all that very seriously. And I think you're going to see the free free cash flow. I think they are reporting in the first week of May, like, so that maybe next. That feels right. Yeah. They're, they're gonna, I think they're gonna surprise some people. People are, cause what I always knew having been an early investor unless I don't have inside information now. Yeah. Was nobody would change their behavior. Maybe like the bottom one or 2% if you raise the price of a ride by a dollar. Right. And nobody changes their behavior. So I think now that they're, I don't wanna say a monopoly, but a duopoly with DoorDash and a, you know, almost a monopoly with Lyft suffering. Uh, I think they can, they're gonna start printing

SPEAKER_80: money. I mean, that's my hope. I'm still a large shareholder. Yeah, no, I mean, look,

SPEAKER_20: as someone who has depended on Uber and Lyft for, it's been so long now. I was in college when Uber rolled out in Chicago and I actually got to go to their like Chicago launch party when they were just

SPEAKER_07: black cars. Like that's my, my history with the company. Uh, I have given them so much money over the years. Yeah. I would like them to persist because I still depend on them, you know? So I'm

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SPEAKER_07: On the cost front though, that's going to kind of bring us into earnings because I feel like everyone's trying to show off operating leverage these days, which is such a weird thing to discuss because two years ago, you and I were talking about literally anything else, right? What are your new

SPEAKER_40: initiatives? Tell me about yourself driving unit. What about V tolls? What can you add to this party in this mix? And now it's like, what can we take away? How can we get? And, you know, people were

David Friedberg: hiring and buying office space two years ahead of plan. And that's what I think their best practice was. So if you're a Facebook, Microsoft, Uber, whoever, Twitter, you're like, okay, what am I going to

SPEAKER_30: need? Imagine saying today, what do how many people and how much office space do I need in 2025? Let's buy it now. I mean, just incredible. We'll just grow into it. It's hilarious.

SPEAKER_07: I feel like you, you can't have more of a flip on that. I mean, when I was at crunch base, we were expanding and we were in like one floor of our building, then two floors of our building. And then it was like two and a half floors of our building. And we were counting down until someone else left the other half of our floors. We can move that company is now in fully remote. And that office space is either empty or occupied, I think by someone else.

SPEAKER_02: It's pretty wild. I was in San Francisco on Monday, I had our accelerator come back in person for the first and the last weeks, is a really great feeling. And then this founder university program, which kind of comes before an accelerator, where we put 25k into companies that are just like, haven't even incorporated yet. I had 100 of them. And I was at Fenwick's office for one and Wilson Cincinnati's for the other. They're nice enough to host us and put out a nice spread. And walking

David Friedberg: between the two, if I die to Embarcadero, I mean, Alex, compared to what we saw just three years ago, it was like being in a dystopian sci-fi film where you're like, oh, I am the last person. It was like a Twilight Zone episode. Like remember the Twilight Zone, my favorite Twilight Zone episode is the one where, uh, uh, time, I think it's called where the guy is in the library and he wants to read books. He's got really thick Coke bottle glasses. Uh huh. And, uh, he goes into the, a vault, uh, with like

SPEAKER_02: all the great old books. Uh huh. And the vault closes and he gets locked in for 24 hours.

SPEAKER_71: And when he comes out. This is a, this sounds great. Keep going. This is amazing. I'm not going to say anything after this. Okay. Because that happens in the first 30 seconds. When he gets out of the locker, because it's a time 24 hour locker, he has been reading books all night. It's his dream is to just not have to talk to people in the library, but just actually read the books. He comes out and the world's changed. I'll just leave it at that.

SPEAKER_108: Oh, okay. I can guess, but yeah, don't threaten me with a good time.

SPEAKER_109: Put me in a vault 24 hours with just books. Dude, that sounds amazing.

SPEAKER_111: It's that's what's just so great about this episode. I cannot wait to talk to you about

SPEAKER_02: this, uh, episode and yeah, for folks asking about Uber May 2nd, but it's, um, your, that office

SPEAKER_22: is not being counted in the 30% of offices in San Francisco that are vacant. Yeah. So now you sort of put in the shadow vacancies, it's probably 40, it might be 50%. I mean, I don't know how they ever

SPEAKER_13: recover a rebuttal to this because, uh, I have a big soft spot in my heart for San Francisco lived

SPEAKER_07: there for eight, nine years. Amazing city. Amazing city. I'm a west coast boy. Originally, this is in my DNA and, uh, because both my sisters went to Stanford, I've been bopping around the Bay area since I was like eight and I just love it. People, I think forget that SF is and always has been a boom town and it will boom again and then it will bust again. And we are currently in the trough of, of pain and I fully respect that there's work to be done. Let's not get into politics on that, but like, yeah, I think SF will once again have its moment. It wasn't cool 10 years ago or 15 now, 15. Um, and I'm sure in 10, it'll be cool again. So I, I, I do think it's a boom bus cycle.

David Friedberg: I did see it.com web to now. It does go through these things. It's not the first time that it got

SPEAKER_02: hollowed out, but you know, it got built up too. And so it got built up and then hollowed out. And then the work, the remote work thing combined with the safety issues, uh, and again, not to get political, putting it all aside. You used to be able to sell somebody who was, you know, had a family, who's a CFO, let's say, uh, you want to be the CFO of Uber, Airbnb. Oh, you want to be the senior CTO. You

SPEAKER_22: got a family. Oh, great. Bring your family to San Francisco. Let me show you Dolores Park. Let me show you, uh, the, let me show you pack heights. Let me take it to Presidio. I mean, it's gorgeous. Let me take

SPEAKER_40: it to Tahoe. We'll go to wine country and you could sell it. Yeah. And it's a hard sell now. And you had to sell it against, Hey, it's expensive, but it's, it's delightful. I mean, when, when San Francisco is

SPEAKER_22: on, it's on, it's, oh, it's just stunning and beautiful to be able to go to Tahoe for the

SPEAKER_02: weekend and ski or to go to Napa for the weekend and drink wine and, and, and, or to go south to Santa Cruz and surf. I mean, it is extraordinary, which is what makes it heartbreaking. Um, I'm, I'm

SPEAKER_31: really rooting for it to turn around. Yeah. Buzzfeed 55 cents. Yeah. What's the market cap? I mean,

SPEAKER_133: I, I, I'm, I'm almost shocked to say it out loud. 76 million. Oh, I'm, I'm so sorry. Uh,

SPEAKER_134: first of all, it is eight X the Buzzfeed market cap. My mistake. I mean, it's, it literally reminds

SPEAKER_40: me of the dot com era where cash on cash on the books became greater than, yeah, the, the valuation. So you could basically fire everybody, turn the website off and make a profit. Yes. Now there are control issues because I, my understanding is, uh, Jonah Peretti controls, I think some

SPEAKER_02: amount of Buzzfeed and, but well, how is the news in the media business with the Buzzfeed

SPEAKER_20: news shutting down? Cause that was a pretty elite group. Was it not super elite? In fact, I actually used to pay Buzzfeed news. They had some sort of like, give us $5 a month. You don't get anything for it, but you can give us money. And I always said, sure, I'll support the team. Um,

SPEAKER_07: to me, it had already been sufficiently desiccated by layoffs and exits that when they finally stomped on the last bit of it. Um, it wasn't the biggest shock. I think it was kind of sad to see the end of an era because the hope was there's a company does all this silly stuff. It makes money and you

SPEAKER_138: spend it on news. Huzzah. What a cool model. Isn't that great? And it turns out it, it wasn't, um, Buzzfeed though, I, I don't have a lot of emotional, uh, connection to the, the non news side of it, but I, I will say that it feels like a relic from a different era.

David Friedberg: It does. It feels like Yahoo. Suddenly it feels like not, not even Huffington post or, you know, AOL or something. It's kind of.

SPEAKER_140: Given that I currently work for some combination of those of AOL fused into Yahoo. I take that

David Friedberg: personally, but well, I mean, the thing I will say, you know, I'm friends with Jim Lanzone. It is incredible Yahoo staying power. So Yahoo finance, Yahoo sports, like some of these services and they

SPEAKER_02: actually redid mail are pretty fantastic. So I would actually take the Yahoo back, but I leave the,

SPEAKER_143: uh, the AOL and the, uh, you know, some of those other assets that just feel like they're, they're

SPEAKER_124: just on cruise control, whatever. So while we're on the podcast and we both have to behave, um, tell me about Jim Lanzone because I've, I've slacked with him once. That's all I got.

SPEAKER_43: You know, Jim ran CNET, um, and he is a great steward of brands and he can manage the two,

SPEAKER_02: um, you know, when you run a, a, a publishing brand, a house of brands, if you will, like condi nest or, or like Yahoo today with tech crunch and other assets. Um, I think they still own gadget, my old brand. Um, you know, you have to be able to balance what the advertising and corporate folks want to do to destroy brands and compromise them and what the editorial group wants to do to make them excellent. And, you know, there are some people who can take that tension, extracting value from a brand, you know, making it hum, and then, you know, not destroying it.

SPEAKER_77: And, and what most people, what happens to most people who are in those positions

SPEAKER_40: is they're, they're just like shutting things down. They don't appreciate the fact that, you know, the in gadget reader is different than the tech crunch reader is different than the yahoo tech reader and the yahoo, you know, finance folks, even though finance overlaps with this is a different audience and the brands means something to those audiences. Yes. He understands that the brands means something to the audience and it's okay if they overlap, you know, like what the overlap between gadget and tech crunch is always going to be 20%. Sure. And what somebody running the

SPEAKER_22: Huffington post might do some mid-level manager wonk might be like, oh, and they did this. They took joystick this incredible video game site that we had created. And they're like, we'll make it huffing to

SPEAKER_02: post gaming and it'll just be huff post slash gaming. And it's like, oh my God, that's death to the serious gamers who have been with this brand for two decades. And I think Jim Lenzone understands

SPEAKER_137: brands and how to be a good steward of brands for the people who love them and the advertisers who love

SPEAKER_40: them, but it's consolidation is how typical MBAs minds work and they think efficiency and consolidation

SPEAKER_01: and who can we fire and what can we cut? And it would be like saying, you know what? You're directing this Marvel movie. You might as well throw Grogu in there because he's popular

SPEAKER_40: and you're like, I'm sorry, what? Yeah. Yeah. Yeah. Grogu, you know, from Mandalorania. He'd be great.

SPEAKER_157: Why don't we make him one of the X-Men? I knew that was a Star Wars reference. I wasn't sure

SPEAKER_40: what it was referring to. It's like, I'm going to make Yoda part of the X-Men and you're like,

SPEAKER_08: thank you. What? Okay. But there's some great crossovers in comic, comic book history. So like,

SPEAKER_40: you know, great. That's great for a one-off gimmick thing over the summer when we're kids, it's not good for the long-term, you know, health of the brand. So it's gotta be careful. Yeah.

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SPEAKER_34: Earnings. Great to catch up. Yeah, I've missed you. Let's talk earnings. So we're going to start with Google. And I just want to say that Google Cloud,

SPEAKER_07: after many years of losing money, demonstrated operating profit in the last quarter, ring the buzzer, give them 10 points. That's fantastic. I'm sure that Ruth Porat, the CFO over there has been looking through the numbers to make that all work out. I presume there was probably some trimming here and there. Uh, but what really took my, my mind here when I read this earnings report was that

SPEAKER_04: revenue was actually up just 3% year over year. Yeah. And that's a really small number and it's very

SPEAKER_137: close to zero. It's, which is stunning. Um, if you think about this collection of stocks,

SPEAKER_22: could we really call them like high growth stocks anymore? You know, when you, when you get to single

SPEAKER_02: digits, they're not high growth stocks, but what is great is that in an advertising recession, down market, there's some profits, right? Cause Facebook hit some down quarters, uh, and, uh,

SPEAKER_176: meta, Facebook, I'm gonna still call. Everyone knows what you mean. Yeah. And so I do think the

SPEAKER_02: fact that they cut those 12,000 employees, um, and they told everybody, Hey, a little bit back to

SPEAKER_01: the office, a little more focus. It's not enough. They haven't gone full Zuckerberg, but Sundar doesn't have that ability. Cause he's not the founder and he's got a, he's a consensus builder. And so I think the, the, the act of them getting their act together and cutting costs and getting earnings up, you know, a non-founder has a harder time with that because they just can't come in and say, here's what we're doing. Yeah. They have to build consensus amongst leaders of groups. You saw Susan Wojiecki left YouTube, you got the deep mind people. Um, you know, it's all these different fiefdoms,

SPEAKER_02: little kingdoms. And so it's just gonna be hard for them to make change. I don't think they're gonna fall

SPEAKER_01: as far behind on the AI stuff as people think. I think they're just more thoughtful about releasing stuff because they're Google, because they have antitrust issues because they have a monopoly. So they just gotta be careful, you know, scaring people. That's my understanding is like, they, they just don't wanna scare people at how good this stuff is. But now that cat's out of the bag and Microsoft's going for it, you'll see more coming out and it is important for them. If they're gonna be third to Azure and AWS, um, to make it a sustainable business, I think that's, we talked about this early on the top of the show and just everybody's trying to make these businesses sustainable. Yeah. And they got too many employees at these companies. So I would expect them to cut more people to hit the numbers and get this to be a growth story and get the stock to move.

SPEAKER_20: So 190,000 employees, I think that number was inclusive of employees they've cut, right?

SPEAKER_07: So you're coming up on, on 200,000 employees and you want to streamline operations and make things move faster. Is that a thing you can do? Is that like, is there a corporate story where a company that's, that's this rich and then that large and human kind of capital has managed to actually become more agile because poor companies can just cut tons of stuff because they're out of

SPEAKER_04: money. Google is still incredibly wealthy. And so I wonder if there's like a, a natural, uh, that inertia to just being that rich and that makes it harder to actually make the hard choices

SPEAKER_71: to get faster. When you're sitting on ungodly amounts of billions of dollars, tens of billions,

SPEAKER_40: or in Apple's cases, hundreds of billions of dollars. It's kind of hard. And when Sundar's taken down whatever, tens of millions of dollars in stock, hundreds of millions of dollars. Yeah, it's, it's a hard message to say, we need to get rid of this entire group. We need to lay these people off. And did you see the tick tock reaction when Google made these? I mean, just every person who six months ago was making, here's my day at the Google office in New York, and I'm getting a matcha latte with soy. And then I went and I got a back rub and then I did yoga and then I did some

SPEAKER_22: email and then I went home. And you're like, I, I think you do more non work than work. Yes, but okay, sure. Maybe I'm just an old gen Xer who like to grind. Um, so yeah, there is communication

SPEAKER_137: issues. I'll be honest. They did none of these companies because of their cash positions. It's a really interesting point. You kind of alluded to there. None of them had to make any of these

SPEAKER_22: cuts. So then you say, Hey, why are they making the cuts? These are sacrificial cuts. These are motivational cuts. These are entitlement cuts. Great irony of irony. Google created entitlement culture. They were like, let us do your laundry. There's a coffee bar on your floor. And guess what? There's gonna be a coffee bar on the other side of the floor. So you can walk half as far. And yeah, we upgraded the beans to blue bottle because Facebook has fills. I mean, entitlement culture

SPEAKER_01: was bonkers at the peak. We lived adherence in the bay area. You lived it, you saw it.

SPEAKER_192: It was nuts. It was great. It was awesome. Until all the deal went away until well, and I think

SPEAKER_01: people and I don't blame employees for when somebody says, we'll do your dry cleaning for saying, okay, I mean, just to say, okay, when somebody offers you something is nothing wrong with that. But I think they want to scare employees into performance, perhaps back to the office eventually. And it is a power play. I think it is as much about getting people to perform as it is about getting the bottom line. So removing M&Ms or whatever sacrificial services go away, massages, whatever, that's good. Getting some costs out is good, but I think it's really just to motivate people to work harder and to maybe take back power because the power dynamic was flipped.

SPEAKER_07: Power dynamic was flipped, but I don't think it actually ended up landing in the hands of like the individual Googler. I think it ended up just so diffuse through the middle of management setup that the company didn't realize how sticky it became to make decisions and do things. And that it's reasonable. If you have a ton of money and you have a big problem space and your competitors are rich, you do a lot of stuff, you know, I mean, Microsoft makes hardware still, you know, and, uh, and Google tried Stadia and Amazon, they had a halo brand. They just shut down. That was like wearables. Microsoft tried a wearable too. So these companies are always going to kind of, I think expand outwards and there might be periods when they just rapidly contract to fix that. But I don't think it stems the long-term problem, which is how do you run a business that's this big,

SPEAKER_04: this rich and this essentially almost its own nation state without there just being inherent bloat?

SPEAKER_43: There's going to be bloat. Yeah. There's always going to be bloat. Um, I think it really is when

SPEAKER_02: the founders say, Hey, we're going to ship this cadence. I'm building smaller groups who are building these elite projects. And you'll see it once in a while where they take a couple people out of the building and they're like, this is the war room. This is the group that's going to do barred. And you know, they, they've made some, uh, combinations of Google brain and deep mind start seeing people move to different buildings, uh, and being on like SWAT teams and Hey, we're going

David Friedberg: to release this product in 30 days. It can be done. Yeah. Um, but you know, there was a lot of

SPEAKER_02: distraction that I was, and I'm, I don't know if you were on the episode where we talked about it,

David Friedberg: but I was like, people are doing, uh, petitions at apple. I'm like,

SPEAKER_43: can you imagine Steve jobs coming to work one day and people were like, oh, uh, uh, Mr. Jobs, there's a petition on your desk from 800 employees. He'd be like, oh, okay, great. Um, can I see that list? And then he's like, yeah, um, hold on a second. And he just looks down the list. He takes three names off of it. I'll bring these three people to my office. And then the other 997, I just take this to HR and, um, just fire them all and turn off their badges.

SPEAKER_07: But that's not just the founder dynamic. That's also the fact that if you have a very firm perspective on where you think things are going, you don't have to listen as much to other people. But if you are, as you noted, a consensus person with founders over their shoulder, and you don't have anything like a control controlling stake at the company, like I'm sure,

SPEAKER_61: I'm sure Sundar is very wealthy and shout out to him. Well done. But like, I don't think he owns more

SPEAKER_71: than what a point to the company. Oh, much less. Yeah. Yeah. He doesn't have founder 30, like you're saying, he's got the founders in the border of his shoulder, and then he's got to try

SPEAKER_01: to keep really talented people in the game. Uh, but it's a profitable company. It's an ad based company still largely. So clouds de minimis when compared to the ad business, it's moving up.

SPEAKER_07: Yeah, moving up. I mean, seven and a half billion in the first quarter up 28% year over year. It's now bigger than YouTube's ad business. And the only thing bigger than it is search. Now you're right. Compared to the aggregate revenue portion, it's, you know, 12%, whatever, but like, it's, it's the only growth thing there. And as we're going to see from Microsoft in just a second, like that remains the story that the cloud is really pulling these majors forward, like,

SPEAKER_13: you know, 3% growth at Google, 7% of Microsoft. But what was the biggest and fastest growing thing? It was Azure, their public cloud. So it's the same story with Microsoft. Although it does feel like

SPEAKER_07: there's a little bit more operational discipline, I would say in Redmond than Mountain View, just because they've been already through the founders are gone. New CEOs come in. Yeah. And then they've already gone to the next stage of that, which is okay. I didn't go as we planned. So now we need to find the next essentially tech person to lead the thing. Satya in that case.

SPEAKER_02: Yeah. And there is a vibe going through Silicon Valley, um, after Twitter reduced their headcount by 80% or so. Um, that was extreme, but that sort of got Zuckerberg on board with,

David Friedberg: okay. I could go with 10% less. I could go with 20% less. And so now between Elon's 80%,

SPEAKER_43: you know, and Google six and Zuckerberg's 15, there, there is some consensus of we can do more

David Friedberg: with less and how much less with AI is going to be a big question because, uh, meeting developers developers who now, uh, are going faster. I was on a website and I w I've been playing with the plugins. I don't know how much you're doing chat GPT for, but I've been playing with the plugins and I'm like, Hmm, this does feel like the bottom 30% of what I do 30% of what I do could be automated in the next six months. Now that doesn't mean I lose my job. It means I get back 30% of my time and I can deploy it somewhere else. So either way, there's a massive efficiency coming to America, to the world. And I

SPEAKER_43: think that is going to change the percentages, the single digit percentages we see here, those things could double through the combination of attrition of cost and efficiency of who remains. This is a

SPEAKER_220: double win that I think is on the horizon. And I think this is what works us out of this recession.

SPEAKER_20: So I, I like nearly all of that, but I want to clarify a point on the, on the use of, of chat GPT, because one thing I think a lot about is GitHub co-pilot, which is the thing that helps you write

SPEAKER_138: code. And what I'm trying to figure out is, are we getting to the point where self-driving cars are

SPEAKER_07: today in terms of co-pilot? Because my, my Subaru can stay in the lane. It can tell me when it's loaded. It can't do intra city stuff. Okay. Fair enough. But it's still really great. So is, is co-pilot for GitHub going to be like my car, or is it going to be like self-driving autonomous vehicles pretty soon and actually be able to do whole things for me or just assist? And if it's the, if it's the whole thing, then I mean, fire half the staff, but if it's just the help, then you're right.

SPEAKER_13: 30% back. Everyone's more efficient, but it's not like a sea change. It's more of a acceleration.

SPEAKER_02: Yeah. So I think your analogy is correct. Um, we're at level two self-driving where you kind of take two functions away. So I adaptive cruise control at seven car lengths, three car lengths, like even my backup, uh, ice engine suburban that I have in case my Tesla's are, you know, uh,

David Friedberg: something hits the fan and I need to get out of Dodge with gas. Cause a zombie apocalypse. Um, sure. Uh, that has, uh, it doesn't have lane control, but it does have adaptive cruise control, right? And then you have on your Subaru, both. So highway you're good, you know, like the chance, chance of getting an accident on a highway. If everybody had that is pretty low. Um, and does give

SPEAKER_02: you back. It's just less arduous to drive, right? That's what I find is I'm less exhausted.

SPEAKER_22: After a two or three hour drive to Tahome. Uh, I do think your analogy is correct, except on the low end tasks, he does a hundred percent. So I'm trying to think of the right analogy,

SPEAKER_02: highway driving versus city driving. Sure. Um, but there's a lot of like, um, items of research that we do as journalists or, you know, I, I was doing, um, um, a research of LPs. Cause I'm having my angel summit up in Napa and I want, I was like, you know, I'm gonna invite some of the big

SPEAKER_31: endowments or whatever, see if anybody wants to come. And, you know, I asked it for the large

SPEAKER_219: endowments. Then I put it in a table. Then I said, sort it. And I was like, this is something

SPEAKER_02: I'd pay somebody 35 bucks an hour to do. I might use cross space for, so I'm paying a subscription and it's just kind of doing it. And then I, um, playing with the, the playground on open API. And I'm like, okay, give me the people at the Ford Foundation. I want the Twitter handles. And then I'm like, you know what I really want to do is I want to follow them on Twitter. And then I want to follow them on LinkedIn. I want to like a post or I want to DM them or in mail them. Now I can't do those last two or three things. And that would be the left-hand

SPEAKER_71: turn into an intersection. Right. But I had 17 developers show me, they did it in an hour. When I said, this is the next piece I need to do. They're like, I wrote the code for you already. It's like, it took me an hour. So I, this weekend, I'm going to start playing with some of the dev,

SPEAKER_01: you know, sandboxes. And I haven't done development since basic and Pascal and

SPEAKER_02: you know, the nineties. And so I, you know, I, I do think it's going to go faster than self-driving is my long answer to your short question.

SPEAKER_20: I really hope you're right. But here's the, the problem that I see when I look at all the

SPEAKER_07: stuff Microsoft is doing, they are doing copilot for X. They're building AI into exchange or into dynamic CRM or whatever. I don't cool. Thanks. That's great. Thank you. But what I want is a new separate program that is at the OS level that can interact with everything for me and that I can give increasingly complex commands to, I want it to, I want it to say, go to my email, pull 10 names, drop those into a Google sheet, send that to Bob. And then I want you to grab me 10 stock prices, print them out or whatever. You know, I, I just, I want, I want Siri, but amazing. And I wanted to have these, these functions that, that are now possible things to LLMs. And my vibe is if LLMs can write code as they pretty much can. Yeah. And if they can take complex, um, spoken assignments and figure out what to say next, why can't they write code and figure out what to do and say next in a way that we couldn't before, and then let them just do a lot. And so if, if this is a, it's,

SPEAKER_34: everyone is Friday. I'm very tired. So like, that wasn't the best explanation of what I'm

SPEAKER_40: trying to say. No, no, I think it's a great one. Actually, you're describing a workflow and then you're describing, you don't want to have to stitch the workflow together and make sure it works.

SPEAKER_22: You want to tell an AI what the workflow is and haven't done. And, uh, I am using plugins right

David Friedberg: now. I was able to get on plugins this week. Uh, somebody at, uh, at, uh, open AI was nice

SPEAKER_43: enough to push me up the list. And I started using Expedia and kayaks. And I have a trip next week

David Friedberg: where I'm going down to Laguna and I'm speaking about, uh, AI in the hospitality space of all things.

SPEAKER_22: And it turns out like a lot of the first things are hospitality things, open table, kayak Expedia. And I'm like, okay. So I started asking them, can you please, um, tell me what are the closest airports to Laguna? Right. Cause I know I can go to long beach, et cetera, and then give me a list

SPEAKER_43: of flights, sort them by, um, length of flight and then distance to Laguna. And it couldn't get that

SPEAKER_02: second piece, but I got the first piece and I was like, okay, it's almost there. And then the next piece I would normally do if I was going to be there for a week was tell me the top rest rated restaurants on Yelp and then search the web and look for eater, uh, listings of the hot new restaurants. Give me a list of those. Um, and tell me what the top three dishes at each place are and put them on a map. Yeah, it's going to be able to do that by the end of the year.

SPEAKER_07: And then when I, when I can do that with voice, that's going to be, that's that, that's the thing, because then I can be typing and also talking and I can get two things done at once. Um, but back

SPEAKER_13: to what about the hospitality section and sector in AI, my first thought was that's ridiculous. My second thought was where are labor costs, the highest percentage of cogs, probably hospitality. Yeah. So of course, I'm going to go first. Yeah. So I mean,

SPEAKER_02: that makes a lot of sense here. She just, yeah, a lot of, a lot of that stuff is going to, we're going to see what we saw during COVID. I think, um, with, I don't know if you had this experience where a restaurant that had the, you know, couldn't get waiters and you're like, uh,

SPEAKER_22: yeah, two for lunch. We don't have a reservation. And they're like, yeah, it's going to be half an hour. And you're like, but there's a third of the tables are open and they go, um, yeah, we don't have enough servers or back, back of house staff to cook the food. So if we seat you,

SPEAKER_43: we're still not going to be able to serve you. And you're like, can I sit at the table and in an hour? Okay. And you're just like, this is a very weird moment. And then they put toast or one of

SPEAKER_02: those systems in where they get rid of waiters. You order it yourself, you pay for it yourself. And they took two thirds of the, they just have runners now. Right. And yeah, pretty much.

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SPEAKER_07: I'm going to drag myself by the scruff of the neck back to the earnings thing and just say a couple of quick things. Azure growth, 26% in the next quarter. So pretty good looking ahead. And Microsoft

SPEAKER_138: is already attributing 1% of Azure's growth, which is their public cloud to AI in the next quarter.

SPEAKER_07: And Jamin Ball, who used to be at Redpoint and is now at Altimeter, I think. Anyways, he does a lot of really great analysis on, on, uh, tech stocks. And he said, I think that that 1% works out to like 450 million in revenue for Azure AI already as a run rate. Yeah. Yeah. So that, that's, that's actual real, you know, nine figure dollars that, that, uh, I think matters a lot. And then elsewhere, Microsoft, I'm not going to go through this all like LinkedIn and so forth, but windows, not so good. Everything else, medium, good company made, uh, it's Q3 net income,

SPEAKER_20: uh, fiscal Q3 calendar Q1, Jason, uh, 18.3 billion dollars. That's cash in the bank. We got it.

SPEAKER_02: We secured the bag. I mean, they could buy, you know, it's a billion and a half a week.

SPEAKER_276: It's 200 million dollars a day. It's amazing. I'm so poor and I'm not, it's a money printing machine.

SPEAKER_01: It's a money printing machine. Yeah. And, and they did layoffs too. And they're, um, get, you know, uh, getting people back to the office. And I, I do think that cloud is going to see significant gains because of AI. Cause every company I'm working with to spend, um, a thousand dollars extra. So you have $150,000 developer. Sure. And you spend a thousand dollars on AI credits for that developer to be faster. So you spend 8% of their salary or something, but you make them twice as fast or 50% as fast. Like this is a pretty good bargain. It's like paying for Grammarly for a writer, you know, and you're like, okay, Grammarly is 10 bucks a month. And you're gonna not make as many spelling errors. I don't need to get a proofer for you. Great. Um, so it's, I think we're,

SPEAKER_13: Oh, yeah. I just, I just had an idea. Jason. Yeah. So you're describing essentially the, the ability for software to increase human productivity, and then you're looking at the

SPEAKER_07: cost of, of humans and then kind of working that back to the efficiency of software and how it's a good deal. Yeah. This actually means that we could essentially tie the price of software to the cost of human

SPEAKER_13: labor. And as humans get more expensive, it becomes effectively more valuable. Ergo, you can charge more for it. So what we should do is raise the minimum wage to a hundred dollars an hour. And then every tech company will be worth $40 trillion. I figured it out.

SPEAKER_43: It is, uh, this is going to be the natural tension that occurs. Uh, we're going to see the,

SPEAKER_02: the concept of a 10 X developer is changing that developer who, you know, was super girl or Superman,

SPEAKER_22: and they could fly. And the other superheroes were like Batman or the flash. They can't exactly fly,

SPEAKER_30: but they can do some cool stuff. Yeah. And it's like, okay, guess what? Everybody in the justice league cannot fly. And you're like, Hmm, okay. That changes the dynamic. Well, people who were,

SPEAKER_22: you know, a two X developer, not a 10 X developer, they're going to become seven X developers. And the seven X is

David Friedberg: going to become a 10, you're just going to have a lot more really fast developers, which means software is going to move at a faster pace and it's all going to be deflationary. So software will get cheaper.

SPEAKER_01: Um, and talent will get cheaper. You could already see on the websites like Fiverr and stuff like that,

SPEAKER_22: that people who scrape things like crunch base or pitch book or LinkedIn, those jobs of like, Hey, I can find you leads for a dollar or now I can find you 10 leads for a dollar. I can find you a lead for a penny. I can, I can do a scraping job I can do. And that's all because of AI and scripting.

SPEAKER_02: So it's just going to be continued deflationary impact until, uh, I think there'll be a choice of either redeploying that those people's times. Yeah. Uh, or, uh, you know, reducing headcount and

SPEAKER_01: reducing costs. And so you you'll see a bit of both, uh, looking at meta, I think that's, uh, so anyway, Microsoft crushed it again. Uh, incredible job. Um, can I, can I do my meta

SPEAKER_08: segue? Cause I was thinking, what happened when you were finishing your sentence? I was gonna do something like, uh, you know what else is not driving efficiency, the metaverse. Hey, oh, hey, sorry. Well, uh, you gotta give him credit. He's like, I don't wanna get disrupted.

SPEAKER_22: So I'm gonna do a crypto project. And then he's like, uh, the world really doesn't want me to

SPEAKER_02: control crypto after I screwed up elections and dozens of countries and created, you know, uh, uh, you know, um, uh, all kinds of psychological issues in young children and eating disorders.

SPEAKER_22: So he, he pivots off of crypto. Remember that crypto project we're gonna do

SPEAKER_01: Libra, whatever it was gonna be. Uh, then he, he hasn't pivoted off of Oculus and metaverse, but he certainly has not talked about it. And he talked about AI a lot more in these earnings calls. So he wants to win. I bought the stock at $94 the Monday after he said he was gonna cut 10,000 people. It's the best trade I've made in a while. Um, and his stock continues to go higher because they had negative revenue growth for three quarters. This made people believe that this was okay. You're AOL, right? This is the, the start of the slide down here. You hit a peak and now we're going on the other side of the hill. Uh, but he cut head count significantly. I know there were 4,000 more layoffs recently, 11,000 were in 2022, but now the other part of the financial playbook alphabet, Google said, they're gonna buy back 70 billion. He says he's gonna buy back 9 billion. Uh, and so all of that put together, I think has

David Friedberg: led people to believe that he wants to win and he is nimble. So you look at Google, not nimble, Microsoft, super nimble, Zuckerberg, most nimble. And so if you're gonna place a bet, you're gonna place a bet on Microsoft and Zuckerberg right now, and you're gonna move your money out of Google into those two companies.

SPEAKER_07: And if you don't agree with that, you can send an email to Jason's email address and not mine. Um, but to, to kind of carry on your point, uh, they did post revenue growth 3% in the first quarter, obviously to your point, not a growth stock, but if you go from negative growth to positive growth, it's literally day, sorry, night to day. Like it's like the sun comes out. There's a future in front of you. Cash flows might expand, especially if you're laying off people. My, my, my beef though, with the company's results is, is all that's great. And the company had net income of 5.7 billion. That's a lot of money. Congratulations. Uh, they're, they're spending on the metaverse stuff is still incredibly high. I forget the exact number, but I think the operating loss on reality

SPEAKER_138: labs was just around 4 billion in the quarter. Unbelievable. That's huge. You're they're not

SPEAKER_216: being nimble of getting away from that. I think it's going to be hard to slow it down. And I think

SPEAKER_43: he still believes Apple is going to release their headset the end of the year, which we keep hearing and that he needs to be part of that. And so while AI is clearly going to change everything, he still believes and Apple still believes that AR is going to change everything. So is it possible for us to have two platform shifts at the same time? Of course it is. We had

David Friedberg: cloud computing and mobile happen at the same time. So it's not like awesome. Yeah. Cause you combine

SPEAKER_40: the two your, your photos were suddenly on went from being on micro SD cards and offloading and external hard drives to all of a sudden mobile me becomes iCloud and it works and Google photos works, right? They bought Picasso, whatever. And now we had something on our mobile phones. That was a huge problem and arduous and everybody's going to best buy to get memory cards and memory card readers.

David Friedberg: And now all of those are collecting dust because it's all abstracted to the cloud via mobile. Well, now you put AI and AR together. Well, who knows what the, how those two come together, but the mind does start to think about really interesting applications. Yeah. And I'll just say this.

SPEAKER_138: I'm a, I'm a long-term VR bull. I'm a short-term VR bear because I just bought a new gaming PC the other month. Um, and I did not buy fancy nerd goggles for it. And I'm just, I'm waiting for the reason to do it and I'm going to do it. I have a, I have a sim racing setup. Like, you know, I, I didn't have

SPEAKER_07: a child until recently, so I had a lot more free money. Yeah. Uh, but I, I, you know, I, I'm going to do it and I just, I just don't know yet. So to me, like they're there, it almost feels like they're like the iPad. It's like the pre iPad smartphone when they're taking an old OS idea, putting it in the wrong form factor. It's not quite there yet, but something's going to break the logjam and maybe this is the right long-term bet, but at 4 billion a quarter, that's a hard thing. It's a hard call

SPEAKER_321: option to keep paying the, the rate on, you know, every single Thanksgiving and Christmas,

SPEAKER_02: somebody's going to bring the new Oculus. I'm going to try it. I'm going to do it. The try. Oh my. And goodbye. I'm going to put it on and go, wow, they made great progress. And then I'm going to hand it back to whoever brought it and be like, thanks. And I, I did it again, this Thanksgiving, I played a game that was like a breakout game. I played a star Wars game. I got about 30 minutes of, uh, time twice. And I was like, that's enough for me. Uh, I want to play age of empires or like a real-time strategy game,

David Friedberg: like starcraft two. Those are more appealing to me, uh, than these, you know, VR games as impressive

SPEAKER_02: as the technology is, but I, I, do you think there's a, uh, a material difference between VR and AR in this regard? Because I am a VR, I am VR not interested and I'm AR fascinated.

SPEAKER_20: So I remember the first time I put on, maybe actually the only time I wore Microsoft's HoloLens product. Yeah.

SPEAKER_07: This was years and years and years ago, probably, oh gosh, forever ago. And they were still in like the development form. They're like, you know, big wires coming out of them. And I got to play with an AR kind of like Roblox type game or sorry, uh, Minecraft type game in the, in the real world, mind blowing. And so going back to our AI idea about combining workflows together and having more speech built into these products and so forth, you're still going to want to have the ability to have written text appear to you. Yeah. And so there may be some sort of ability to take AR and AI and make them into something that's quite interesting in a unified sense, but I don't actually think that's a gaming context. I think that's a, that's a work slash life context, not an entertainment context. I agree. And that's exciting to me. So yeah, I can, I can see that.

SPEAKER_01: It's like a guide, you know, you're like, Hey Siri. And then all of a sudden this person pops up and you're like, can you get me the legal assistant? And the legal assistant pops up.

SPEAKER_22: And now you have like Princess Leia being projected from R2D2 in your field division. And you're like,

SPEAKER_01: Hey, I need to do a non-disclosure agreement for with this person. I want it to last, uh, you know, a year and then in what jurisdiction do you reside? You know, like California, what jurisdiction do they reside? I'm like London. They're like, oh, okay, well, you're going to need to file one in London. Uh, because you know, it doesn't apply the California law to there. And, uh, you know, you need to answer these six questions. Would you like to answer them now? And the, uh, it's like, oh, I actually have four of those answers for you. Boom. Like that. This is a compelling future. Um, and you, the, the minority report or blade runner where he's like, move five to the left, zoom in here, go there. And he's talking to the computer, like analyzing a picture. That's the stuff that's going to get super interesting, I think. And the workflow you described being super frustrating for you, uh, make, you know, get me these, uh, earnings reports, send it in an email, put it into a Google sheet. You combine that with AR and it's happening on

SPEAKER_02: a desktop over here. And you mentioned I'm working over here. So, Hey, I'm doing a podcast. I'm talking to Jake Al and I'm like, I asked you a question. Hey, what was BlackBerry's earning decline? You're like, hold on a second. Can I get BlackBerry's earning decline in a chart, uh, from the peak to the trial? And it's like, it comes up on the screen now coming right up. This stuff is going to be incredible. Uh, congratulations to Zuckerberg. Um, he's staying

David Friedberg: remote too. That's another interesting sort of rub to it. Um, and it seems like he will keep

SPEAKER_43: cutting people, uh, until morale morale and performance continues. So the beatings will continue

SPEAKER_171: until morale improves. I, I, I use that in a headline, but I, I flipped it. I said, um,

SPEAKER_07: the layoffs will continue until investor morale improves. And it seems to have finally worked out because Facebook of all of these companies we're talking about today had the best post earnings, uh, share price appreciation. People were very excited about what they were doing because they returned to growth. They cut a lot of people and they said the magic word, which is AI a million times on the earnings call and investors lost their and they were so happy. This is where AI would come in

SPEAKER_02: helpful. Hey, AI, can you tell me for each of these earnings calls, how many times AI was mentioned? And we could just chart that. And we just tried it over time for the last four quarters and say, uh, I loved a friend of the pod, Brad Gerstner's tweet. I think, I guess he went to a mid journey.

David Friedberg: Uh, and I heard there's a discord, my, my, my kids were, uh, uh, uh, my wife were on the, at dinner in a discord doing mid journey, making Jedi bulldogs. And, uh, here's what Brad made. He made Zuckerberg looking like he was, uh, on the juice, on steroids, taking PEs, uh, PEDs. He

SPEAKER_341: looks like Westbrook. He looks like Westbrook taking PEDs either, but no, he looks like Superman,

SPEAKER_07: not wearing a blue, a blue, uh, speedo. Um, it's a bit much, it's a bit much, but what I like about

SPEAKER_13: that, that particular thing is it captured the, the core elements of Zuckerberg's face, but it actually aged him a bit. And he looked, he looked there more like he was like 45. Um, I don't know how old he is today, but he looked older there. Uh, and I don't think it,

SPEAKER_349: it didn't look bad on them. No, maybe that's, maybe that's predictive AI via mid journey.

SPEAKER_02: This is what I'm witnessing with all my friends. I, I hit 52 years ago. All of my friends who are in their fifties now are like, you know what? I'll be dead soon. I might as well have the best body of

SPEAKER_22: my entire life in my fifties. And they're like, you can do it, Jake. All you have to do is work out four times a week and eat chicken without the skin on it. And, uh, you too can have the best

David Friedberg: body and look like, uh, you know, Jeff Bezos or, uh, AI Zuckerberg. So you just have to sacrifice

SPEAKER_61: food and lift heavy things. Yeah. Sure. So I'll lift heavy things. I'll do cardio, but like, since I gave up drinking, I'm going to eat candy, like, like the non-negotiable, like,

SPEAKER_07: like you're you, I will die with a kick.

SPEAKER_01: What do you got to go to? Are you a chocolate, sour candy? Uh, your equal opportunity? What do you,

SPEAKER_12: what do you, what's your, there's three main candies of sub verticals? There's chocolate,

SPEAKER_07: there's fruit, and then there's sour. Yes. And to me, each has such a high peak to it that you must

SPEAKER_359: visit all three mountains on a regular basis. Very cool. Wow. Look at that. So you, you like to climb

SPEAKER_08: multiple summits. Uh, sometimes on the same night while consuming some, uh, California based vaping

SPEAKER_02: products and, uh, you can just absolutely, uh, herbs will, uh, enhance the flavor. I can confirm,

SPEAKER_124: uh, from a friend. Yeah. Anyways, uh, Amazon. Yes. Hey, speaking about green things, Amazon makes a lot of money. Um, AWS is doing well, but actually had lower, I think it was operating income than last

David Friedberg: year. Did that worry you Jason? Huh? You know, I'm a shareholder, uh, in Amazon. I believe in Amazon. I believe they're not fit. I think they need to keep laying people off, um, Amazon web services. Growth is slowing. Uh, and I, I know what's happening here. I am not

SPEAKER_43: concerned about the slowdown in, um, cloud computing. We talked earlier about people who were signing leases for two years from now, hiring people from two years. So now the same thing

SPEAKER_40: happened in cloud. People were provisioning and they were basically like somebody who didn't have to keep track of what's in their pantry, just filling the pantry. So they were, you know, developers were putting up instances, never turning them off. And they just were not, um, you know, managing

SPEAKER_02: the pantry, uh, as tightly as they should. Now, when you saw the layoffs happen last year and you saw the contraction, the contraction in the economy, everybody said, what is our spend? Now I was, I'm not gonna space, say specific names, but we had like a couple of different email products we were

SPEAKER_22: using. They were costing thousands of dollars a month. And we had a bunch of mailing lists and we were getting charged based on the size of the mailing list. And I'm like, we haven't emailed this

SPEAKER_01: list in a year. And I said, um, do we, can you put that list for founder university, uh, for our angel, uh, summit or our angel, uh, university? Can you just put those on a sub stack? Cause sub stack's free.

SPEAKER_71: Well, actually I put them on review before Twitter got rid of review, Uh, RIP review. RIP review. And so, but I was like, wait a second, sub stack is free. I, I, I sent

SPEAKER_01: this list once a year, maybe twice. I don't need to pay a monthly fee for this. And so boom, all of a sudden, $40,000 less in email fees across two companies. Uh, can you talk about hundreds of

SPEAKER_374: thousands of emails now? Yeah, no, I'm just saying that's, that's, that's a material savings, material

SPEAKER_01: savings. That's a small car. Yeah. It's half of a salary of somebody, right? There you go. Uh, and so I think that's, what's happening is everybody looked at their Amazon, uh, bills. And when your revenue is going up, top line's going up, you're like, whatever, who cares? This is like not that much money, but when you have to get rid of two people in your department, you're like, you know what, uh, do we have stuff we can move from the live storage to the glacial storage that bright doesn't need to be as fast. Oh, we had these instances running. Oh, we have this many CDNs. We don't need that much, or let's renegotiate. And so the great renegotiation has occurred. That's what I think the slowdown is. It's not usage or utilization. People are using the cloud more than ever. It's just people are negotiating harder with their cloud providers and they're tidying up. And that's why you're seeing this belt tightening, which means people aren't being wasteful, which means I actually think these businesses are stronger than the

SPEAKER_20: percentage growth decline is showing. Uh, hard to agree with all of that. Also, we're lapping some pretty impressive results from a year ago, which were predicated on not the same belt

SPEAKER_13: tightening. So the fact that we're still seeing double digit growth across all three major cloud

SPEAKER_07: providers is very impressive. The only caveat to what you said is that in Amazon's earnings call, I was going back through it, uh, today writing about this exact issue actually. And they said that they were running growth in April for AWS was running 500 bips below Q1, which means five percentage points. If you don't do bips out there, uh, 16 minus five is 11. 11 is very close to nine. And nine's a single digit growth grade. Um, and that, that doesn't change our thesis about cloud, but for Amazon in particular, given that their e-commerce business is unprofitable internationally and occasionally unprofitable in North America, they can't really afford to have their main growth engine and profit source slip of gear. And so I agree with you. I think that growth return is a couple

SPEAKER_382: of quarters out. It could get a little rough for some of these companies too. We just mentioned

SPEAKER_02: that Azure has the open AI chat GPT, the, the, the sexy new product, uh, the new cars on the lot, they got the new Prius, they got the Tesla model Y, whatever the hottest car of the moment is. And so, yeah, you could see people saying, you know, I'll, I'll use Azure for this. Uh, and then Google cloud is, uh, just a third, but you know, you, you do have competition in the space. I do like their advertising business. I think that's like sure. Drop to the bottom line that's growing double digit percentages. And then Uber added that door dash has an advertising business. You're starting to see these advertising businesses in places where you didn't expect them. And when you've got a marketplace like Uber does, or Amazon does with third party sellers, and then you, or door dash does with restaurants. And then you say to the folks who are in your marketplace, would you like to come up ahead of your competitors? Uh, would you like to, what pages would you like to be shown as a, you know, what are the double dash on door dash? You get to do a second thing. It's like, Hey, can we show your ad after somebody orders from this restaurant? Do you want to show your boba or your, you know, liquor, you know, restaurant? And it's like, yeah, I think I would pay for that. Sure. I would need more business. These businesses. I was in a, an Uber and I was just thinking, they know I'm wearing an Uber black. Okay, great. There's a signal. They know my zip code.

SPEAKER_22: They know my address. What are the chances they know the value of my home? Oh, 98%. Yeah. And what are the chances they know the cost of my hotel? Okay. Uh, the hotel I was staying at, uh, you know, in Japan, uh, is, you know, I was staying at the park Hyatt. It's not cheap.

SPEAKER_02: It's like a thousand dollars a night. That's the, uh, one from, uh, what do you call it? Um, Uh, not white Lotus. The other one lost in translation. There you go. Yeah. So I'm at the,

SPEAKER_01: that hotel. Uh, there was 800 a night during the marathon, but they know in Japan, I'm staying at this, you know, five-star hotel, four-star hotel. I mean, what's that worth to an advertiser? Uh, to know, Hey, would you like the people who stay at the top hotels in the world? This person's been to Japan, Austin, Miami, and LA in the last year, and their hotels cost 800 or $600 on average. They're four or five stars. This person is staying at holiday. And so it was J Cal during the weblogs, Inc era. Me and Brian Alvey were splitting a room at $150 a night hotel. I'm not kidding. We would get the bed. I've been there. We'd be, we'd sit there and we'd work until 2 AM and then sleep a couple

David Friedberg: hours and have breakfast together. Um, and, uh, you know, that advertising information is extraordinary. Do you want the person who bought, I just bought a $300, not 300, 200 and some odd dollar waffle

SPEAKER_400: machine for my daughter. Got this incredible heart. That's it. What's it called? Uh, it is the,

SPEAKER_147: what's the name? Uh, God, um, I'll tell you in one second. Um, okay. Cause I got the best waffle

SPEAKER_43: machine. Uh, just to flex a little bit. Yeah, please. Uh, Tyler Florence, the chef, uh, from the

David Friedberg: Food Network just sent me the one to get. So I get it. And so it's that brand I love. Anyway, I'll send it to you after the show, but it's like a four, you can make four, four, five waffles at a time. Cause I got three daughters and I had the single one and I'm literally like making one waffle at a time. And like these three, like baby tigers are going to rip each other to shreds over one waffle every seven minutes. This one makes four, every four minutes. And so pretty different, different ball game. Um, so I love that, but the advertising point is very good. And I'll tell you why, because

SPEAKER_07: when you think about, um, Instacart, people think about a delivery business kind of, but they also make software for grocers. That's another thing. They also have a simply amazing amount of inventory for advertising, because when I'm going to buy a thing, most of the time, I don't care if I'm buying Oreos or chips. Ahoy to pick up the first example that came to mind, but they have a lot of

SPEAKER_138: advertising space there and they're using it. And another company swiftly, I've known the founder

SPEAKER_07: of that forever. Um, also working in the grocery space, explain to me how much CPG brands are willing to pay for like last touch advertising, if they can change a sale on the ground. And so there's a ton of space here. I just think it's interesting that we're talking about these major tech companies, adding comes like who, who would have thought that like the apex point of a tech company when they reach real scale is they can finally sell ads. But that does seem to be the

SPEAKER_354: case. I mean, Apple and Microsoft. And then we, by the way, it's the Breville Smart Waffle Maker Pro.

David Friedberg: This is the only waffle maker that had an LE, you know, LCD screen and like settings at this level

SPEAKER_02: of granularity of Christmas. I, uh, it's absurd how good this thing is. Uh, and it's, yeah, it is

SPEAKER_415: for the brand for me. Oh, I found it. Yeah. Oh my gosh. B-R-E-V-I-L-L-E. Now they got a kid.

SPEAKER_22: The Smart Waffle Pro four slice. Yeah. It's no joke. I mean, you could save 50 bucks if you want to get the two, one, maybe a family of three could get by with that. I had to go industrial.

David Friedberg: These kids are killing me. Uh, I needed four waffles at a time. One for me, one for each of the

SPEAKER_34: kids. People who are watching this are not watching this on, on video. You can't see this, but like, it's literally has a feature called waffle IQ, intelligent automation dials in your cooking time

SPEAKER_421: perfectly to suit the waffle style, including Belgium, classic chocolate and buttermilk. Like,

SPEAKER_422: oh my God, I love that. I'm that idiot. And I probably saw it on an ad, uh, where it was trying

David Friedberg: to upsell me on the $39 one that I saw on wire cutter that I was like, that's good enough. And it was good enough for two years. Now that you have the twins, uh, it's no longer good enough.

SPEAKER_61: They're not. Jason, once you're over 28, good enough is no longer. Yeah. An, an okay thing is,

SPEAKER_34: is my vibe. Yeah. Um, let's talk about snap before we go, just really quick. Yeah. Uh, so snap, uh,

SPEAKER_07: had, have you noticed how snap only has two responses to earnings, which is up 20% or down 20%.

SPEAKER_13: Like why is the stock so swingy? It's, it's just, I want to give them a hug almost. Cause they just get

SPEAKER_287: wrecked so much advertising. The advertising business is finicky. Um, advertisers, uh, you know,

David Friedberg: during a down market will pull back. They will pause ad campaigns. They'll push them back. And I think, you know, performance based advertising, like Google search, or like we just talked about

SPEAKER_40: Amazon's, uh, you know, marketplace stuff, these things are very close to the purchase decision. The closer you can get to the purchase decision, the more scientific it is, right? So, okay. The waffle maker costs $279. I can pay $8. Every time somebody clicks on it. Now, if that waffle

David Friedberg: thing is on the New York times, it's like, okay, yeah, you, this person looks at recipes. Maybe I can pay $0.80 per person. And I got to hope that one out of 10 actually, you know, clicks. And that's how I get to my eight, you know, clicks past, you know, they're not looking loose. And so this is why Google has always, you know, with intent and being closer to the sale and Amazon, obviously even closer to the sale. Uh, Uber might be very close to sell. Hey, I'm going to the Warriors game. Where are you going to go out for drinks after? Right? Right. So this is, um, I think

SPEAKER_02: the, the core issue of that snap Twitter, um, Instagram, you know, certain ad networks are going to YouTube are not close to a transaction. So they're getting brand advertising, brand advertising, uh, half the time it works, half it doesn't. Nobody knows which half works. That's the classic statement. And so it's just a little less predictable and dare I say essential as

SPEAKER_13: performance-based advertising is the right word. I mean, I think essential is the right way to frame it, because when you have a reduction in spend across the economy, when things slow down,

SPEAKER_138: you, you cut the non-essential things first and brand advertising is the first thing to go. Um, I don't think it's a, it's a shock or a surprise that we've seen so many media layoffs in the middle of a slow down in advertising spending. And generally, especially on the brand

SPEAKER_07: side, I mean, a lot of this money just evaporated out of the economy. Um, snaps revenue dropped under

SPEAKER_138: a billion down 7% year over year. And then the numbers just get brutal. It had a worse operating loss, a worse net loss. Uh, it did have more operating cash flow, but man, just, it's hard to find a lot that was exciting about this. And they got some really tough questions on the, um,

SPEAKER_22: on the earnings call and okay. Yeah. One of them was particularly rude. I saw it trending and I didn't actually listen to it. I don't know if we have, we do have it queued up here. Yeah. Did you hear

SPEAKER_38: this? I did. I haven't heard it. So I'll hear it live for the first time. Let's play. Our next

SPEAKER_432: question is from Rich Greenfield with Lightshed Partners. Hi, uh, thanks for taking the question.

SPEAKER_434: I got a couple, um, you know, I guess given the infrastructure and creator investments that feel pretty vital to reversing the pressure you've seen on engagement and advertising, I guess the question is sort of, why aren't you scaling back your AR investments? You know, you talked about offsite partnerships and I saw last week, things like AR Coke machines or vending machines, like it, why not scale back AR investments until you're in a better financial position? You know, obviously it feels like Meta has got the luxury of sort of walking and chewing gum. When I look at like their metaverse investment, I'm not sure you have that luxury. So how do you think about how do you balance sort of what you need to reaccelerate your core business versus sort of investing in the future? And then two, you know, I guess you just sort of hype, you know, a big picture question, Evan, of just obviously you've got what now is going to be another quarter of revenue declines, at least based on your internal forecast in Q2. Um, what gives you confidence that you can return to robust growth? Cause I think obviously the big challenge here is

SPEAKER_439: investor confidence, um, in you and the team. Yeah, that's a little rough walk and chew gum at the

SPEAKER_138: same time, but, but fair, do you think? Oh, absolutely fair. I mean, the reason why Meta can have its stock go up 15% and after it's reports earnings and the fact that it lost 4 billion on Metaverse at the same time is because its core business, uh, it's gold tons and tons of gold. It's

SPEAKER_81: just, it prints bricks of money. Yeah. And I'm, I just pulled up snaps earnings. I had all the numbers.

SPEAKER_138: I mean, their net loss in Q1 23 was 329 million and their revenue was 989 million. When you're

SPEAKER_07: running like a negative 30% net margin on a gap basis, you have fewer options. You have a less

SPEAKER_138: robust, you know, amount of maneuverability room. Yeah. That question came, uh, from

SPEAKER_287: which Greenfield I know him. Yes. He's a particularly sharp elbowed. Um, he's a bit of a

SPEAKER_34: provocateur. Yeah. Well, okay. So here's, here's the thing. I don't think that question was actually rude because I, I, I think it's the, it's the venue that made it seem so rude because most people

SPEAKER_13: get on the call and they go, J Cal, um, amazing quarter. You guys are the best. Thank you for

SPEAKER_450: taking the question. Just a small point. Can I clarify? Of course. Uh, are you seeing, uh, channel

SPEAKER_451: flow with the sales? Thank you so much. What an intelligent question. Oh, thank you so much for the

SPEAKER_137: question. A bull answer and then nothing happens. Ah, yes. Ah, yes. I just, uh, passed gas and it

SPEAKER_01: smells like roses. Um, yes, exactly. Uh, yeah. So he asked the question. I mean, basically he said out loud what everybody's thinking, which is come on. You, you, your business is, uh, struggling here. Get focused. You gotta get focused. Um, and he said he's going back to the, he was the one who said, hey, we're going back to the office. Um, uh, four days a week or whatever. We, we don't have the luxury of

SPEAKER_210: that. So I, he's an enigma to me. Um, I've never, I've never spoken to him. I don't know him at all.

SPEAKER_138: I do like stuff about snap. I do like that. They stayed independent, that they had a very different take on social, that they managed to capture new demographics that they've done, uh, investments into original content and, and creator, uh, stuff earlier on. Um, I wore snap spectacles. I thought they were awesome. They're killer at brand. Uh, but ultimately they're a small social network in a world of, of much bigger companies that have better ad. Um, yeah, I don't know, leave rich. Like this is the Twitter problem all over again. So yeah. I mean, you, are you essential

David Friedberg: or not? And in a down market, people are going to just cut, you know, uh, and simplify. Maybe we'll just focus on the two or three things that are working and we won't be as experimental with our ad budgets. And so if you were experimental on snap or Twitter or tick tock, you might cut that and just focus on your Amazon, you know, ads and your, and your Google ads and your Facebook ads, right? So you can only focus on so many things back to the, you know, walking and chewing gum. Yeah. I think that's part of the issue here. Uh, they do have an impressive number of people using the service. I mean, it's 350 million people or something like that people are addicted to the service. Uh, and it's an audience that is valuable. It's young people. So it's valuable to brand, uh, advertisers, but in a down market, advertising gets walloped and they are gonna keep, uh, they're

SPEAKER_02: gonna need to, to keep cutting costs and to show some, uh, profits here and, and show growth. So

SPEAKER_20: I know we have to go for, we're over time, but just before, before I bounce, um, and go back into baby land, uh, this is a question about social media, but what's your, what's your vibe on people that want to ban or not ban tech talk from the United States? Uh, so it is crazy that the United

David Friedberg: States would not demand, uh, reciprocity, uh, with China. Yeah. It is also crazy to think that the Chinese government would treat Americans differently than they treat their own citizens. Their own citizens are tracked, uh, in apps. They're tracked with facial recognition, uh, and they have a social score. And if people don't pay their debts, um, they are scarlet lettered inside these apps. If people don't, uh, if people smoke on a train or, or eat food on it, they will, can have their social scores Allah black mirror, uh, that famous episode where you're waiting each other. So, uh, we would have to be completely naive to think that the Chinese government, the CCP, would not use this as a weapon against Americans. The obvious answer, and this has nothing to do with your politics. You just need to look at what Huawei or any country would do or swap out China for Russia or Iran or North Korea. If they owned this app and they had this amount of access to Americans,

SPEAKER_01: you'd be like, well, I'm not giving Putin access to this many Americans, period, full stop. So it has to be divested. And the investors who are in that company want to return. This is the greatest IPO of the next couple of years. Um, so if the board wants to return, the investors want to return and it's not

SPEAKER_08: going public. Why? Well, I, I know why it's not being divested. Well, one, I, I agree with all that, by the way, we're on the exact same page. I was just curious if we were in alignment here, but the reason why it won't go, it won't be divested is that the last thing that I read about

SPEAKER_20: this was that the Chinese government doesn't want to appear to be forced to do that. Got it. So they want to save face.

SPEAKER_07: Yes. But also it kind of makes a point that this thing is not controlled by China, but yet it can't be divested and go public because Chinese government says no. So we're on the same page here. I mean, it basically proves the point as you described it.

SPEAKER_22: Yeah. Yeah. Investors want to go public. Investors want there to be a float and free

SPEAKER_01: trading of the shares, which would then, if it was a freely traded company, it would not be owned by CCP anymore. And there's a person from the CCP on the board and they have said, no, why would they say no? It's an asset. It's an asset. It's obvious. Now, if you wanted to, if you want to be Taylor Lorenz and you want to be like, well, TikTok, the creators need to make money. And we're not thinking about that when we have no proof, that's just complete naivete. I like, I like Taylor, but I

SPEAKER_159: need to disagree with her on this. Yeah. Yeah. I mean, it's just, it's literal, complete naivete.

SPEAKER_01: Um, you, you all, I mean, it'd be like for people be like, oh, wow, no, I met this Russian spy and they didn't spy on me and they didn't compromise me. And it's like, how do you know that they could have like swapped out your SIM card when you were at the bathroom, like you're dating a Russian KGB

SPEAKER_20: agent. Like, yeah. The, the, the thing that I would say is that I don't like, there's a certain vibe amongst certain people in tech. And this is actually across every possible group in, in,

SPEAKER_138: in the, in the industry and even the media covers tech in which there's this like, uh, almost like a point of pride that we're all like outside in the dark, smoking cigarettes and well, we're always being tracked by American apps too. Who cares? That's weird. And, and to, to me, the answer is no, we can fight surveillance capitalism at home. And we can also point out that there's a greater national security risk when it involves a hostile foreign power that is trying to exterminate,

SPEAKER_13: um, a part of this population. So yeah, we're on the same page, but we should probably stop

SPEAKER_01: talking because I think. Yes. I mean, I, your, your analogy is exactly right. Yeah. Um, I, I think we could be absolutely, um, we could be absolutely, um, against what's happening to the Uyghurs in China while also looking at the American prison system saying, Hey, we got too many people in prison

David Friedberg: and the death penalty is not a deployed fairly here, but these are two different things.

SPEAKER_43: Yes. Genocide and, you know, our incarceration system being flawed. These are two, uh, both can

David Friedberg: be solved and addressed and they could be different magnitudes of risk and, or, uh, wrong in the world. All right. Alex Wilhelm, uh, you can follow him on the Twitter and, uh, go subscribe to TechCrunch, uh, plus, you know, get that in there support, uh, uh, great independent editorial. And on Twitter, he is part of the first name club, Pat Alex. Yes. Thank you. And my brother, Jason, thanks for

SPEAKER_13: having me on as always. And, uh, a real treat. And, uh, I'll just say this, uh, may summer come quickly. Maybe we all go surfing and let's all get a nap because we need it. Yeah, exactly.

SPEAKER_487: Everybody get a good nap and see you next time, everybody. Bye-bye.