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SPEAKER_03: All right, everybody. Welcome to This Week in Startups. I got a treat for you.

SPEAKER_05: You know, I've been doing the news program and somebody said, hey, why don't you have somebody come on and chop up the news with you? And I thought, you know what? Alex Wilhelm is the best person to do that.

SPEAKER_06: He's a senior editor at TechCrunch, and he is part of the first name club on Twitter at Alex. You can follow him right now.

SPEAKER_03: And he hosts their equity podcast, formerly blah, blah, blah, blah, blah, next web, TechCrunch, Mattermark, Crunchbase, whatever. He's been around the block, and he now lives in the Northeast, still in Providence or wherever.

SPEAKER_09: Yeah, yeah, I'm still in Providence. But when you start looking at my resume and going blah, blah, blah, it makes my 30-second birthday land a little harder than it did last week.

SPEAKER_11: So thank you for making me feel ancient.

SPEAKER_03: You're not ancient. I mean, you still got some energy. How's your energy level now in year two of this goddamn pandemic?

SPEAKER_14: You know, I'm actually doing okay. We've adapted to having a third dog who's actually racing around my office right now. Fantastic.

SPEAKER_15: Yeah, but dogs wake up at like five, and so I've been waking up at like five, and so I've learned how to just be kind of chronically exhausted, Jason.

SPEAKER_18: You know what? It's interesting you say that.

SPEAKER_19: We got a pandemic dog. We got another bulldog. So we have a 15-year-old bulldog fondue, and then we have a new one, Maximus, as in gladiator Max, and he's like nine months old now.

SPEAKER_06: And yeah, Max loves at 530 in the morning to walk in a circle and do the pee-pee dance, which is, if you don't wake up, I'm going to pee.

David Friedberg: And, you know, that is a great motivation to jump out of bed in Terra that you're about to be peed on.

SPEAKER_24: That's literally my life now.

SPEAKER_11: I'm just very lucky. My wife is studying for her boards right now, so she has to wake up really early and study before work. And so that means I can usually pass off the three dogs to her, but it didn't work this morning.

SPEAKER_26: And so at 5 a.m., there I was picking up dog crap in the backyard.

SPEAKER_28: Just a really great way to spend a morning, I got to say.

SPEAKER_29: I mean, it used to be so nice to go to an office and be an adult and live in a society. It was a really interesting society. Do you remember society?

SPEAKER_15: I remember a lot of public transit in San Francisco, waiting for buses that were full when it was raining, standing on the sidewalk, and then drinking bad coffee in an office when everyone had a cold.

SPEAKER_11: So, like, I dismiss your romanticism, and I love working from home, which I know we'll get to in a little bit.

SPEAKER_34: But it's interesting when you think about it.

SPEAKER_35: Like, was there anything that you enjoyed about going to the office?

SPEAKER_37: Oh, gosh, I love, I love working less. It was great. Like, because at the office, there's so much stuff that looks like work.

SPEAKER_39: Oh, so true. Yeah. Yeah. Right. Like a meeting or a walk and talk. Yeah.

SPEAKER_40: Or getting lunch with your colleagues, team building, all that stuff. Now, I just.

SPEAKER_06: 90 minute, the old 90 minute lunch with the 15 minute walk on either end. You get 2.25 hours out of the seven and a half hour day. Fantastic.

SPEAKER_15: Jason, I never worked for Google. That's not how my life was.

SPEAKER_29: Holy on the roof. All right. Listen, it is a crazy news week. Where to begin?

SPEAKER_06: There's so much that was interesting this week. I want to ask you. Yeah. What to you was the most interesting part of the week? Not the most important, but most interesting to you, Alex.

SPEAKER_14: The discrepancy in how Duolingo traded versus how Robin Hood traded, because if you had said

SPEAKER_15: the fintech company will perform less well than the edtech company, I would have been like every VC has lied to me if that's going to be true. And yet here we are. Edtech's looking great and fintech took kind of a hit. So I'm still digesting this kind of like post unicorn IPO liquidity. It's strange to me.

SPEAKER_47: Yeah. And so obviously I'm an interested party was an angel investor in Robin Hood.

SPEAKER_19: And they are trading today, thank you, uh, $36 and 11 cents.

SPEAKER_47: They went out at $38. I think they hit 40 at one point.

SPEAKER_06: Oh yeah. I'm looking at right now. 40.25 is the 52 week high. But some amount of this is I think due to the fact that they gave a third of the shares or something like that to their, uh, actual rabid user base in their direct IPO product.

SPEAKER_19: Do you think that had some sort of impact here or the summer? What do you, what do you think's going on here?

SPEAKER_26: I think there's a lot of things that went into this, but that's the most interesting one, because when Robin Hood announced they were going to open up IPO access for their users, people were stoked. Like, oh my gosh, we finally get to have kind of similar footing to these large, uh, large investing groups. But suddenly if you take away a big chunk of an early retail demand, you really change up the supply demand curve. And I think, you know, frankly, traders on platforms like Robin Hood probably were pretty

SPEAKER_15: active in trading IPOs in general. So if they have shares of the IPO price, it probably reduces the frenzy around first trades and makes it maybe harder to have an expensive pop. Now, you know, Jason, Bill Gurley is going to love this, you know, cause all of a sudden doesn't seem to whine about on Twitter.

SPEAKER_26: Yeah. But Robin Hood probably expected a little bit more after pricing at the bottom end of its range.

SPEAKER_19: There is does seem to see be a big disjoint be a big disconnect between what the press

SPEAKER_06: is reporting and what we as the investment community and when we have both represented here and to a certain extent, I represent both having been a journalist, there's this big

SPEAKER_05: gap between, oh, my God, the IPO pop and that being the definition of success. And then what we all experience as investors, which is I invest in the company where it's

SPEAKER_19: like, I think $30 million. So 30 million to 30 billion, don't take a genius to do the math, a little bit of dilution, you know, this is a 500 x or whatever, pretty great return, even with dilution, because I didn't continue investing in my pro rata because I didn't do that back then.

SPEAKER_60: Yeah, I mean, You could have bought like another two houses.

SPEAKER_64: Exactly. That's a that's a costly bit of financial conservancy, you know, it's one of the things

SPEAKER_63: about investing is you can learn from your mistakes.

SPEAKER_19: When I started, I was putting 2550 k checks into companies like this. And then just, you know, walking, I'll see in 10 years. Now, we just did. We had two companies in our portfolio that were raising at 300 600 million. We own 10% of the company, they're raising 30 million. So our pro rata is 10%, you know, ballpark of that 30 million. Sure. So we filled with our syndicate and our LPs with SPVs, special purpose vehicles, those $3 million bets to keep our 10% ownership in, you know, companies that were worth 300 and 600 million. We had five to 10% ownership. So we're actually maintaining ownership at those big numbers now. Um, so hopefully that pays off. But what do you think that disconnect is about where, you know, on CNBC, they're just like,

SPEAKER_06: oh my God, it didn't pop and it's like, well, aren't we supposed to price these things so they don't pop? Like what, what does it say that it does pop?

SPEAKER_15: Yeah. So I talked to a lot of CEOs on IPO days. So I've done just over the years, dozens of these calls with people that are literally

SPEAKER_26: sitting there in the room, watching their stock begin to trade. And I, I've managed to kind of learn around the edges, how they think about pops. Every CEO taking a company public wants to see 10 to 15% gains in the first day.

SPEAKER_15: It makes them look really good. It gives their employees something to be proud, proud about all the investors. They just had to lock in for the longterm during their roadshow. They sold shares to have a great first day. It really just like smooths butter over the entire piece of bread. And I don't, I don't mind that. I don't mind that the mechanism. Yeah. IPOs are anachronistic to some degree, given how they're done, but the media and cable news, I would not conflate because I don't watch cable news at all because I, I don't have time to waste on that.

SPEAKER_26: And I would not say that, you know, tracking the views of different CNN anchors or CNBC anchors is the, the way to gauge media sentiment because Jim Cramer is what? Very loud. And I don't think he's indicative of what, what I do or what you used to do.

SPEAKER_05: Yeah. So I do think there is something to that nuance where if you're on TV and you have the ticker, you have something to measure the entire point of CNBC or Bloomberg is up to the minute. And if you want something up to the minute, having a data feed that you get to feel the pulse on makes it feel more alive, just like the score in a basketball game. Absolutely. You tune in and it's on the screen. It's moving up and down. So you have a scorecard. It is one of the appeals, but I think there's this misconception that this would be a failure

SPEAKER_06: or, you know, a win plus or minus 10% actually to the majority of people who hold chairs. It doesn't actually matter. That certainly doesn't matter to me because the way I look at this now, and I'm curious your thoughts, the putting aside any of the trip ups that Robinhood had with GameStop and we can talk about those obviously. Yeah. But putting that aside, when you look at the actual metrics of this company, it was 18 million when they filed their S1 in terms of accounts, 17.x% were active every month or something, and then you had this incredible, uh, revelation that now they're 22 million. So maybe you could speak to the scope of, or the scale of this company and what you

SPEAKER_80: think is possible.

SPEAKER_32: Yeah.

SPEAKER_15: I think if you look back to the start of 2020, and then if you told us where we're going to be today, we would be very confused about what changed, but there was during the pandemic an enormous boom in savings and investing activity amongst consumers. This drove Robinhood, it drove M1 finance, it drove, I mean, eToro around the world. I mean, Coinbase got an enormous lift from this. Even Bitcoin began to trade better. People just had a lot of cash. Like Jason, you didn't leave your house for a while. Yes. I didn't. And I spent no money. I went grocery shopping once a week and I just ate bananas. Like I just saved money. And so people put that to work.

SPEAKER_26: And so Robinhood is enjoying this enormous boom, not just in the appreciation of the value

SPEAKER_15: of the stock market and crypto trading in general, but also just folks having cash. It's so true, just as one aside, think about all the money we save not going on vacation

SPEAKER_47: or business trips or conferences. I looked at those three and I was like, you know, for me, I was doing four speaking gigs a year. All of that's business class travel and really, you know, great hotels.

SPEAKER_05: All that money just didn't actually flow during this.

SPEAKER_82: You know, Verizon never put me in business class. I just want to say, and then they sold me to Apollo. Yeah. I protest.

SPEAKER_84: Who owns TechCrunch now?

SPEAKER_15: It's still Verizon Media Group until the Apollo deal closes. And then we'll be owned by, it'll be called Yahoo.

SPEAKER_47: I think again, when you'll be, so you'll be, but yeah, am I correct?

SPEAKER_60: That is a private equity firm now owns and gadget and TechCrunch. The deal has been announced and agreed on, but hasn't get closed.

SPEAKER_15: So we're in that, that awkward period in which like you, you broke up with someone, but you still live in the same house. That's kind of where we're at.

SPEAKER_92: It just says we're in this, on this tangent. Sure. In terms of like management of your brand, is there some, are you guys just off on this

SPEAKER_19: island? Just doing the best you can? Or is there somebody like, we have to hit these numbers and there's a sense of urgency.

SPEAKER_15: So TechCrunch's culture, this is my second time at TC. So I have two different kind of blocks of time at the organization. The ethos of TC has been preserved through all of the corporate Sturm und Drang. And so I, I'm optimistic that we're gonna hold onto it again post Apollo, but you know, private equity has a reputation for a reason. So I'm not gonna promise you anything Jason, but today I fricking love TC.

SPEAKER_11: I still have the independence and freedom and flexibility and support and it's great. So I mean, frankly, I'm happy.

SPEAKER_98: I'm nervous because I'm being sold, but you know, we'll have to see how that, that shakes

SPEAKER_97: out.

SPEAKER_92: And that's, I mean, I made a, I made a salvo in between the AOL and Verizon days of like, Hey, any chance I could shake off and gadget or auto bug? And they're like, yeah, we don't know who you would even talk to about that. I'm like, okay. Yeah. It's like trying to see if I can, or even TechCrunch. I was like, I'll, I'll take all of these brands.

SPEAKER_24: Like, you know, do you have a, are they for sale? And they're like, we don't know. I'm like, who knows? Like nobody.

SPEAKER_103: Well, it turns out the whole package was for sale and we're being sold and you'll love this Jason for roughly 0.5 revenue.

SPEAKER_40: That's our multiple is 0.5, not 13, not 27, 0.5, 0.5 times revenue. 0.6.

SPEAKER_104: Yeah. So it makes 2 billion and it.

SPEAKER_15: We were doing 8.4 billion run rate as of Q2 Verizon media group now Yahoo, uh, and we're being sold for 5 billion.

SPEAKER_50: That is a perfect private equity, uh, moment because they could split these things up and then sell them in packages.

SPEAKER_109: And that's probably what will happen is Yahoo will go to somebody and, you know, the tech crunch and gadget brands will go to somebody it's a, it's a smart move on their part.

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SPEAKER_109: All right, so back to Robin Hood. And, you know, this sort of what the potential of the company is now.

SPEAKER_117: And then we'll back into doing go.

SPEAKER_108: Yeah, actually, I got a question for you about this.

SPEAKER_15: Because one thing I've been really trying to figure out is what happens next, because forget Delta. Let's just presume for the minute we're going more outside over time compared to last year. Sure. This is going to impact a lot of stuff like people spending time online could go down. People's time trading could decrease. And I'm trying to figure out how to think about Robin Hood's growth in the back half of this year in light of the changing world. Because up to this point, the results have been pretty much pandemic results we've been looking at, and they've been amazing. What's your level of optimism that Robin Hood can keep up this sort of like, not just year over year growth, but sequential quarterly growth that has been so impressive?

SPEAKER_47: Yeah, so when you go public, the profile of the company becomes extraordinary. And during a crisis, you know, the profile becomes extraordinary. What happens during a crisis like GME, or in Uber's case, when they had surge pricing crises, is people go, what's Uber? What's Robin Hood? Right. And so this is a paradoxical thing. Now, I'm not saying venture capitalists or CEOs or shareholders hope to have a crisis. Of course, you don't.

SPEAKER_05: It actually turns out almost inevitably, that the crisis grows the company. And so the more the company is put under the microscope and ripped apart or savaged on Twitter by consumers or virtue signaling people or anti capital social people or correctly by journalists or incorrectly by content creators, whatever it is, all that does is elevate the brand. So I think the brand is now getting elevated and people going, oh, how? Oh, it's so easy to use. And you get this, what we call in the industry over the shoulder virality, which is somebody is opening it and somebody sees it over their shoulders.

SPEAKER_19: What's that? Oh, and then they give them a little tour of the product, which is how Snapchat and Uber and DoorDash grew because people would just hand their phone to somebody and show them the app. So I think that that's going to be the big thing.

SPEAKER_06: And then you think about adding Roths, 401ks, you know, mortgages, all kinds of devices could be added here, which the IPO access is one. So you don't need to have the same growth in users that you saw during that crazy GameStop stonk moment, which is like a moment in time, I don't think we're going to see again.

SPEAKER_19: But you can take the existing base and just keep offering them services. So if you're a young person who's never had kids, and now you have a kid and you're like, oh, 529. I can put money tax free for my kid. It says click here 529. You're not going to go find call your broker at Goldman or Alliance Bernstein or, you know, we're Morgan Stanley. You're like, I don't want to talk to anybody on the phone. I just want to take out my app and have that product. And so I think that that's going to be where you're going to see massive growth. 22 million members, you open up, you know, some new product like a Roth. And now you get 1% of people use it. Now you've got 2 million people in that product.

SPEAKER_28: So that to me is a really great bullish argument for Robin Hood over the next couple of years.

SPEAKER_15: But I'm very curious in the next couple of quarters, because they said in the their last S1A filing that they're going to see a revenue decline or at least trading decline in Q3 compared to Q2. Interesting to me because, you know, obviously, a lot of companies struggle with kind of leaving the pandemic. And I wonder if that was part of what the reason Robin Hood didn't have quite the debut. It might have again repriced itself much higher, raised much capital.

SPEAKER_26: The IPO was a success. But I'm curious to some of the declines where investors not wanting to buy into a company about to post a sequential.

SPEAKER_47: Yeah, I mean, if you're day trading and you're buying it in quarters, that could be valid the same way buying DoorDash or, you know, a pure play food delivery at this moment in the pandemic would seem like, okay, we're all going to go back out to restaurants. So maybe is there something other than DoorDash to buy? Is there something that is part of the reopening?

SPEAKER_132: Like, I don't know, taking a Lyft or an Uber there or Airbnb is even better example.

SPEAKER_19: I'm going to go for take a couple of days off and go somewhere post pandemic. But now that seems like that's off. So I think in all these, the markets are so chaotic right now, this maelstrom of Delta, plus like partial reopening.

SPEAKER_92: It does feel like a little schizophrenic.

SPEAKER_134: It feels exhausting is what it feels like.

SPEAKER_15: I mean, I keep figuring out what's happening and then three days go by and everything's different again. And I have to call everyone back. And I'm like, I remember the stuff you told me last week. What's going on now? And that's getting tiring. I would like to know for like a month what was happening without having to reframe everything.

SPEAKER_19: It was so clear that people were going to be going on vacation and all of this pent up energy and money was going to be spent.

SPEAKER_47: And now you're right. I, you know, I really didn't consider that with Delta. Maybe there's another three months of staying in. And so that would argue that DoorDash, you know, and Robin Hood would have another boost because maybe people would stay home and spend less money. I think the ultimate trend here with all these companies is once you have a sticky product on people's phones.

SPEAKER_50: I always ask like, why would somebody stop using this product? What's going to replace it? What's going to displace it?

SPEAKER_47: You know, and you look at DoorDash or Uber or Airbnb or Robin Hood, this like recent cohort. I don't see anybody displacing them for a decade. So I think you have a decade run when you get this kind of escape velocity in the same way Google and Facebook and Amazon got those decade long runs.

SPEAKER_117: And then it's up to them to not screw it up in the second decade.

SPEAKER_15: Yeah, you know, part of me is like, well, once these these Robin Hood users who are, you know, first time investors as they love distress with their small accounts, getting their feet wet, buying shares and companies they love, which is all good to me to be to be clear. Like if I told them you should move to fidelity or Vanguard and I showed them those websites, they would be like, yo, is this my grandfather's website? Are you kidding me? Like there's no confetti. The buttons suck. The UI is terrible. I had to literally Google a fidelity feature the other day to figure out how to use a feature in fidelity. I already use because I couldn't find it. And Jason, I get paid to click my mouse.

SPEAKER_40: Like I can find things.

SPEAKER_140: No, I literally had a similar thing with my Morgan Stanley account. And I'm like, why do I even have this?

SPEAKER_19: Yeah. The reason I have a Morgan Stanley account is whenever there is a stock distribution from venture funds. I'm in that they're just like the easiest, lowest friction.

SPEAKER_47: But I'm like, oh, now I got to move these over to Robin Hood. And I'm like, do I want to have this many shares in a Robin Hood account? And then Robin Hood star user, though, you'd be like a lot of a lot of shares going back into there from Robin Hood. But it does become, I think, really hard to go backwards with these paradigms. Like, it would be like, I'm trying to think of like a really, what was the worst food ordering experience?

David Friedberg: I think it was Grubhub. I don't know if you ever used, I haven't used Grubhub in college.

SPEAKER_143: Yeah.

SPEAKER_05: It was terrible. I mean, it was just so arduous to just get to checkout and then you use DoorDash or Uber Eats. You're just like, here's your last order. You're like, yes, go.

SPEAKER_15: It would be like going from ride hailing on your phone back to calling a taxi company.

SPEAKER_50: Exactly. That is exactly what it would be like. Okay. Now, Duolingo was up 36% in their IPO.

SPEAKER_19: Now, it's a smaller footprint. It's a $5 billion market cap. And they've been trading pretty, pretty flat since they went out 31 times their 2020 revenue.

SPEAKER_15: And then they had just under 100% growth in Q1. And then they had, I think it's 45% midpoint growth in Q2 based on their current estimates.

SPEAKER_63: Got it. So it's a fast growing company. Tell me about Duolingo. Are you bullish on the company and?

SPEAKER_15: I'm bullish on humans wanting to do better for themselves. And I'm bullish on tools that help them do that. I don't know. Self-improvement. Yeah, I'm big on that. I think the world, the world's so much better than we think. Like right now, thanks to Google Translate, I can read anything on the internet. Yeah. Which people forget how awesome that is and how different it is. Crazy. But I think these digital abilities are going to stay popular and people travel a lot. You know? Yeah. And the world's smaller and flights are generally cheaper. And I think, I think language learning is key and they have an amazing consumer brand. And in fact, your earlier point, are you going to delete it for something else? And I, I think the company now with more capital and probably ever had after this IPO has lots of room to double down on products. So I'm bullish on, on the movement. I don't know what the stock's going to do tomorrow, but I will say raised its range price above its range and then had a killer first day. Big success. I mean, the company put up a lot of points for EdTech, Jason, and for startups out there looking to price their next round. Here is some good news, you know, for that argument with your VCs.

SPEAKER_154: Yeah, EdTech has been a really difficult category historically in investing because every EdTech company saw their customer as school districts.

SPEAKER_124: And school districts, you know, they basically will change software, you know, like they paint, you know, the building.

SPEAKER_156: Like it's probably on the same cadence. Like every five years they paint it or something. Oh, that's generous. Yeah.

SPEAKER_18: Okay. It's kind of like when they replace the windows, like every 20 years, you know, like it really does not change that often.

SPEAKER_47: And I'm like, you're going to run out of money before they even sit for a demo. Like it's going to take you a year to get them to demo.

SPEAKER_19: And all the success I'm seeing are people who are just like, you know what, let's go direct to parents. Let's go direct to the consumer and charge them a price that's around the price of Netflix. And when you charge somebody the price of Spotify to learn a language or a musician, which we're investors in, or Tonebase, two music companies we invested in, or Steezy for dance, we're invested in, Calm for meditation. You look at those companies and FitBod for CrossFit. They're all consumer subscription. And they're all, you know, around the price of Netflix. And I think that this is going to be like the new cable channels. That's why we have, I think we have seven investments in consumer subscription.

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SPEAKER_15: So it's interesting one Netflix being kind of like a price anchor or Spotify is a price anchor because I know the amount of like value I get from those two products and I subscribe to both. And so to me, if you ask me for the same amount of money, I have an expectation of like what you're going to give me for it. Uh, the other thing is it's funny to hear us be so bullish on consumer tech and subscriptions because if you go back like, you know, eight years ago, VCs were saying don't sell to consumers. They're higher churn. It's like selling to SMBs, but worse your ACV is trash. And, uh, here we are with Spotify doing great. Netflix is still crushing it. Duolingo showing this is a viable model. Consumers have really changed their behavior. And I think that, uh, it's good to see that model get the respect, uh, now that it didn't get back when it was unfashionable.

SPEAKER_47: And you got to attribute that to Spotify, I think, and Netflix saying, if you pay us, we'll give you something extraordinary without ads in it. And I don't know about you, but I am looking at my collection of streaming services and I've realized I am now getting pulled out of the advertising pool. It's harder and harder for advertisers to reach me because I have the YouTube premium. Yeah. I don't know if you pay for that or something. Yeah, it was called YouTube red. I don't know if they call it YouTube premium now. Wait a second. They change your logo when you have it. Yeah. Pre they call it YouTube premium. Now it used to be red. And so your logo changes to premium. What's really interesting. Our premium, I think it's 12 bucks a month. You don't see ads, which then has made my YouTube consumption go through the roof because I watch Sopranos clips. I watch sports clips there. I watch all my sports shows instead of going to ESPN and trying to find Nick's coverage. I just typed the word Nixon and I can watch all my next coverage with no ads.

SPEAKER_19: Then I have Hulu. Hulu has an option for no ads. I elected for that for whatever it was for bucks extra a month. I think NBA Lee pass for 40 bucks extra.

SPEAKER_47: You can have no ads. And what you see is the arena video. Yes. Which is really great. I love it for like watching. Which is what you want. Which is what you want. And then Netflix and Disney and HBO Max have no ads.

David Friedberg: Yeah. So I think I'm kind of where do I see ads anymore? I don't really I see them on social media, I guess. Yeah, I see them on Twitter.

SPEAKER_15: I can't wait to pay Twitter to take my ads away. But it's funny you bring this up because my spouse and I were watching Hulu the other the other I think last week.

SPEAKER_26: And there was an ad plate and I was like, honey, what is what is the differential in price between no ads and ads? Because I'm 99.99% sure if we should not be saving that money because I'm about to lose my mind if I see this ad one more time.

SPEAKER_15: And YouTube, to be clear, we're going to get to I think alphabet earnings in a little bit.

SPEAKER_57: But like YouTube's ad load is excessive. Like if you ever use straight up YouTube, like just no. It's brutal. It's like there's multiple pre rolls and then mid rolls. They have really.

SPEAKER_178: They're going for it. That product.

SPEAKER_179: They are going for it. They did. Let's just pivot to that. Sure. I think it's really important.

SPEAKER_47: And you do see the mid rolls, which are super annoying. And then the pre rolls constantly feels like every video has a pre roll on it. And I don't think you can opt out. I remember when I was in the partner program back in the day, you could opt out of having ads on your videos.

SPEAKER_92: Now, if you're on YouTube and they store your video, I don't think you're allowed to opt out of ads anymore. Which makes sense.

SPEAKER_183: Oh, man.

SPEAKER_184: Google just gets more and more evil.

SPEAKER_15: I mean, like Google's need to increase its ad density of its products over time has made them hollow out every experience they offered to the point in which I don't like to use their stuff for that ad block.

David Friedberg: It's brutal. I use an ad blocker. And the only time I feel guilty about it is what I'm on, like a journalist site.

SPEAKER_19: And I will undo it on specific news sites where I want them to get the ad revenue. But I don't I don't. Well, I mean, I don't feel bad for it in other places. And it's not like I'm an ad clicker anyway. But looking at YouTube specifically, it grew 80% year over year, $7 billion.

SPEAKER_109: I mean, pretty extraordinary. The growth is crazy.

SPEAKER_11: It's getting close to Netflix and revenue scale, which is simply the same, right?

SPEAKER_191: 7 billion both this quarter.

SPEAKER_26: And what's really fun is if you look at the Google network revenues, so kind of like the offsite Google stuff, the ads they run historically, a big chunk of Google's ad business.

SPEAKER_15: It's now just $600 million more in the last quarter than than YouTube. So YouTube is about to kind of surpass this critical old piece of of Google revenue. But the the YouTube gains were very impressive. But I'm curious what you made of the Google Cloud changes because revenue is a good loss is declined. I was pretty bullish about Google Cloud.

SPEAKER_47: But I don't know how you yeah, I think that they hit a key milestone, which was the cost of providing the service was less than the revenue the service brought in. Right. I mean, I think they're still investing in it. But it's really hard to displace Amazon Web Services because Amazon has just got this relentless march towards it. How little margin they can have. Now, we don't have insight into each of the product lines at Amazon. But the scale of that business is crazy. But Google's cloud is super important for them to win as well.

SPEAKER_124: Because if Amazon just has the biggest cloud in the world, and Azure and Google Cloud fall too far behind.

SPEAKER_15: Yeah, you can't you don't want a monopoly in public clouds. But you know, here's a question for you, Jason, can you talk to more startup founders than I do, which is saying something. I'm hearing tweets and I'm carrying some complaints about AWS pricing from startups and and maybe even some growth stage founders. People are just a little bit dismayed at how much AWS can wind up costing them. Is that going to help Azure and Google Cloud? Or is that just complaints and it's not going to change much?

SPEAKER_47: I think this is sort of like, you know, ride sharing drivers complaining about getting paid where it's like, it's never going to be enough. Everybody always wants a raise. So even when it's a double the minimum wage in the country, or it's 15 or it's 25 or they give minimums, people are always going to ask for more. And in this case, they're always going to ask for a smaller cloud bill. They, you know, they're, they're gonna be like, this is too, too much.

SPEAKER_06: And, you know, if your startup grows, but they're not, this generation is not comparing their cloud computing costs to buying servers and racking them.

SPEAKER_47: Yeah, and just 20 years ago, you know, there was a line item when you were raising your $3 million, you know, series a $3 million series a $500,000 in servers and co location facilities. And when I did Mahalo, we racked servers. And then at a certain point, we're like, oh, the cloud, you know, in the cloud, we had so much traffic, that the cloud charged based on the amount of traffic you used. And when you have your own fiber line, you don't get charged for usage.

SPEAKER_204: No. And so all of those kind of things that are now competing with each other are going to ultimately drive this down. So it's, I think it's, it's much ado about nothing.

SPEAKER_109: And it actually gives Azure and Google Cloud, you know, IBM and other people's clouds, the ability to compete. Yeah. It's a great entry there.

SPEAKER_204: I mean, it's, it's the other thing that's going to be interesting is, I don't know if you know about serverless. But there's this concept of like, you can build these little objects that run on the internet.

SPEAKER_06: And when somebody goes to hit a website, it fires it up, runs it, they run the execution, and then it shuts itself back down. Yeah. And so this can cut down for some tasks and computing 90%.

SPEAKER_204: So with software, you're going to keep seeing the software waste down the utilization on the network, which then kind of games the cloud.

SPEAKER_109: Um, and the same thing with storage and other things getting cheaper. So.

SPEAKER_15: Well, the, the growth of, of usage of these public clouds is crazy. So, uh, Google Cloud grew, I think 54% year over year in Q2. Azure was 51%. So very, very close there. I think AWS was, I couldn't find the number and I was just looking for it. I think it was 37%. But I mean, think about how much total spend we're talking about going to the public cloud just over the last 12 months in Q2. I mean, it's, it's billions and billions of dollars and, uh, you know, thank you VCs for financing all the startups that are currently, uh, living off of it because it's, it's going great for the majors.

SPEAKER_47: It, it definitely has changed everything in terms of the funding of startups. You literally took out 20%, 30% of the cost and the time and the time would have burned months of setup and runway. So really, you know, you could have as much as a third or more of your startups cost being the setting up of your office space and your cloud.

SPEAKER_132: You start looking at that and you're like, wow, you can just put that towards developers or you can fund many more projects, you know, a 250 K check with a two developer startup can last them for two years. You know, they.

SPEAKER_14: So this just came up. I was talking to a startup actually here in Providence. Uh, there are some proud to report them in my, in my, in my new adopted. There'll be more.

SPEAKER_15: Yeah, actually that's what this founder told me. He's like, even in my, the floor of the building, we have a little office and there's two more that are venture backed. I was like, okay, good news. But, uh, I asked him how long his $2 million seed round was going to get his company. Like how much runway is this? And he didn't give me an answer in months. He said 20 to 25 product cycles. And I was like, that's the coolest metric I've ever heard someone.

SPEAKER_213: Probably two weeks sprint or something, three weeks sprint. Yeah.

SPEAKER_15: Who knows? But I mean like that to me shows that they're not thinking about just running out of money. They're thinking about where they're going to get to in terms of what they're building. And if I was an investor and I'm not, uh, I think that would jazz me. Cause it seems like playing offense versus defense.

SPEAKER_217: It is pretty amazing.

SPEAKER_47: When the, the clock ticking down is not making your decision making delighting customers is.

SPEAKER_19: And it really, it is why when we syndicate, uh, a deal to the syndicate.com, which was like, or previously was on angel list. And now we do it there. Yeah. We specifically say, we, we, we will only syndicate you if you have a minimum of 12 months of runway, but we're looking more for 18 to 12, 24 months.

SPEAKER_47: And the reason we do that is we tell them like, we want you heads down thinking about the customer for at least a year, hopefully 18 months. So you don't have to pop your head back up and raise money.

SPEAKER_19: Now, of course in this market, I was going to say, we, I, we literally had to change our accelerator schedule. I'll give you some numbers on this. Sure. We have over 300. I've invested in 300 companies in the last decade.

SPEAKER_47: I'm not sure how many of them are exactly active, but let's say two out of three. Um, so maybe 225 are still effect.

SPEAKER_19: Uh, you know, in effect, we have 65 companies currently raising money. We're in the process of closing. Out of the 225. Out of the 225.

SPEAKER_222: One in three basically.

SPEAKER_06: And there were, were people who are closing before that and people who are thinking about raising money, but having that many in process, I've never seen. Yeah. And it has broken our internal systems because when a fundraising happens, you go to your existing investor. You have to get them to sign off on it, read the documents, agree, and then decide that they want to take their pro rata. It with 65. That means every business day, 20 business days a month. I've got to be making three or four decisions a day and going over three or four sets of documents.

SPEAKER_47: The lawyers in our industry are now saying like, we need four days to turn around documents. We need five days to turn around documents.

SPEAKER_204: Used to be like, we can turn around documents in four, two days, you know, no problem. Just give us two days, uh, maybe three.

SPEAKER_80: And now it's like, yeah, give us a week. We got just wait. I've never seen this level of activity.

SPEAKER_15: Yeah. You think founders are doing well with ample secondary in the markets. Look at their lawyers because the lawyers are doing fantastically right now because everyone needs them right about now at the same time, which means they have enormous leverage.

SPEAKER_26: Great place to be.

SPEAKER_132: Well, I mean, and attorneys are not getting a summer break and a lot of VCs are not getting a summer break. I'm supposed to be going on vacation. And it's like, I'm scared to death to go on vacation.

SPEAKER_47: I'm just like, what's going to happen with all these deals?

SPEAKER_19: And we're basically, we came up with a term that we set my new term of art with founders is standing pat, which is the term in draw poker.

SPEAKER_47: You know, when you say, Oh, I want two cards. I'll take three. I'll take two.

SPEAKER_19: I'll take two cards. You give two cards. They give you two new cards. Standing pat is I don't need any new cards. So I'm good. We're just like, we're standing pat.

SPEAKER_47: We're good. We're not adding to our position. We're not, you know, going to lead this round. We're just going to stand pat.

SPEAKER_132: And I've had to tell companies that we may have actually participated in or lead like we're going to stand pat because we just can't get to this deal.

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SPEAKER_238: So tell me a little bit about where things are most busy. Cause I'm curious.

SPEAKER_15: I mean, I know that the kind of series a plus things to tiger is super active is the precedence seed stage just as busy as the later stages.

SPEAKER_239: I would say yes.

David Friedberg: Um, but I would say it's close.

SPEAKER_19: So what's happened is anybody who's got a series B marketplace or SAS companies. Good question. Anybody who's a marketplace SAS company or consumer subscription that's growing. If you're a growing company, you're going to get a valuation that is double what it was three

SPEAKER_47: or four years ago. So what would have been, okay, you're doing $10 million. We'll give you five, seven times that. So we'll do a $70 million valuation and $80 million valuation. Now all of a sudden it's 10 to 20. So you got $10 million in revenue. You're going out for your series B. You know, between a hundred and 200 million would be the valuation. And there'll be people lining up to put in that $20 million check.

David Friedberg: Uh, and so what I've told them is, you know, if you were, if you're planning on raising money at any time in the next 18 months, do it now. Now, do it now. Do it now.

SPEAKER_242: Yeah. Because it's clear. It's like, there's a party. People are popping bottles. If you want champagne, you know, like get a glass. Get a glass. Get a glass.

SPEAKER_245: Just stand there. Because someone will top you off.

SPEAKER_230: Yeah. Yeah.

SPEAKER_47: Somebody's gonna top you off. Like you should go get that, get that champagne right now. And then you don't deploy it slowly. Um, and then what's happening at the earlier stages, which is really weird that I've never seen is, um, not quite this craziness at the, at the series B level.

SPEAKER_19: That was well document with tiger and other people participating now. What's happening is somebody will close a $1 million round. You know what?

SPEAKER_47: For 10% of their company. Sure. And, uh, you know, maybe they would have previously been a six, seven or $8 million company. But you know, in that zone, it doesn't really matter all that much. Cause the outcomes are so much bigger. So, okay. If you're an early stage investor, you kind of get comfortable with a $12 million valuation where it might've been six previously. The round fills up. People find out the round is filled up. And then another $2 million shows up and says, oh, you know, this person or that person who's notable is in the round. We want to do your series. And it's like, we haven't gotten the money for half this round.

SPEAKER_63: Yeah. The wires haven't hit yet. We can't raise the next one. Exactly.

SPEAKER_06: And so what I say to folks is close that round, give everybody a hard date. Your money gets in Friday. If you don't get your money in Friday, uh, we've now opened a note at 20. And I've had a dozen companies do this where they closed the $12 million round. Literally the next week, they opened a note for 20 million. And then they say to any other investor, we closed that round. We were massively oversubscribed. We have a $20 million cap note that we're going to keep open for the next year for value added investors. We consider you one of those. If you want to be in that round, we're happy to have you.

SPEAKER_109: But, or we can wait until we formally start the round. And then those are starting to fill up. Wow.

SPEAKER_15: So, so there's the amount of money being slung around in the startup world really just to me kind of mirror the amount of money we're talking about with these public company earnings, because the numbers are getting to be almost out of my, my ability to kind of reckon with them. Like, you know, Microsoft and Apple both north of $2 trillion. And at some point I, I begin to lose it. Like I think around a hundred billion, I begin to kind of like lose the, the, my feet on the ground and float away. Yeah. And these valuations are very similar because I, I understand the math you're talking about. When you say, well, if it was six and now it's 12 posts, okay, exits are bigger and it's, it's, it's pre seed money. And you know, okay. It totally. But like when I was learning about VC, you know, 10, 12, 13 years ago, people, you know, people were telling me about how they had to have price control and all of this stuff. I feel like everything that I was taught is now just gone. Like I learned about the stock market when Exxon was the biggest company in the world. Yeah. That was a fricking different era. Like it's a, it's an entirely brave new world. And I'm it's fun, but my gosh.

SPEAKER_47: Well, I mean, if you think about the multiples, the multiples are compressed, even as big as 2 trillion, $3 trillion companies are, their multiple is compressed because people assume it can't grow like a startup. But Amazon, or let's say YouTube, the better example, 80% year over year growth. Sure. That's kind of startup level growth, you know, like later stage startup growth. Early stage, you're trying to triple quadruple your revenue year over year from a million to three or three to nine. Once you get up to 100 million, you're trying to get to 150. When you're at 500 million, you're trying to grow to, you know, 750, 800, you may not double year over year. I mean, you can, but it's not easy.

David Friedberg: And you look at Amazon, 113 billion in revenue for the quarter.

SPEAKER_259: Just, it's absolutely crazy. But Jason, you forgot that the punchline to that particular joke, what happened this morning to Amazon stock? Went down.

SPEAKER_15: It went down.

SPEAKER_11: Now, now, now tell the people why, because this is the funnest part of the show.

SPEAKER_214: Well, I mean, I, they missed their revenue number by 1 billion. I think it was a little bit more than that, but essentially they.

SPEAKER_261: It was 115 was the expectation. They hit 113.

SPEAKER_87: Yeah. I think if I'm correct.

David Friedberg: Yeah. So, I mean, but just looking at the run rate of 443 billion is insane. And then you just compare that to, you know, GDP, they would be the 27th in the world.

SPEAKER_263: That's pretty extraordinary. They would be right by Austria and Iran. Yeah.

SPEAKER_15: So here's why I think Amazon took a bit of a hit. If you look at their, um, Q2 earnings report and you spend a lot of time going past all the bullet points they put on top about new Kindle features. They announced that you're not going to use. I love that. I don't know why they still do that. Like, why do they do that?

SPEAKER_265: It's like, really? You, you even produced the Kindle? When's the last time I even saw a Kindle?

SPEAKER_15: Okay. I, I, well, let's not erase eBooks here. I own two Kindles and I'm a big fan, but like I use them to read, you know, to be clear.

SPEAKER_26: Uh, if you go to the financial guidance section of the Amazon Q2 report, uh, you'll see that, uh, for Q3 of this year compared to the last year, they're expecting net sales to grow between 10 and 16%.

SPEAKER_15: So Amazon has kind of like reached the end of its pandemic growth surge. And I think investors added, added higher expectations and critically it was priced. Like it was going to grow more quickly. And so it lost some of that growth premium. Amazon still had a great quarter. Like if I ever do 113 billion in a quarter, please put a pound on my head and a scepter in my hand. But like compared to expectations and how they were valued, it was a bit of a miss. And so I, I have friends who struggle with like great quarter and it's a miss and it's, it's technical, but like it, it, it, it, it, it was a bit of a miss. But like, it, it, it was a surprise, I think to a lot of folks when they saw that headline number and then what happened to their stock. So.

David Friedberg: Yeah. And I, there's also gonna be this, you know, changing of the guard.

SPEAKER_47: Jeff is no longer in charge. So I think that makes some people nervous and there's gotta be some profit taking going on. I mean, if P, if this was like such a pandemic run up and everybody was getting their, you know, you know, six months worth of, remember that last year?

SPEAKER_269: Oh yeah. Six months on your shelves and like fighting for, you know, wipes.

SPEAKER_47: And we were wiping our food down and wearing gloves and masks to unpack our cereal.

SPEAKER_271: I, I, I was one level below that.

SPEAKER_254: Whatever level of panic that was, I was one step down, but not, not too far different.

SPEAKER_132: I mean, I, I literally remember a month of wiping my groceries down and like wearing a mask.

SPEAKER_269: My wife is like, don't bring that into the house. I'm like the tomato soup. Don't bring it to the house. Okay. I'll wipe it down.

SPEAKER_64: Okay.

SPEAKER_15: I can talk, I can top this though. So, uh, we had, uh, we had a friend in town from college and she was in town for like three months. We did dinners every week outside at her house.

SPEAKER_274: It was lovely actually.

SPEAKER_15: And, uh, she said that her family, uh, early in the pandemic were, they would order food in, you know, and then they would re microwave it to kill off whatever. And they were actually microwaving their salads before they ate them. And I was like, there it is.

SPEAKER_275: Yeah. No, the peak, the peak of COVID. Yes. Yeah.

SPEAKER_278: I don't think your salad has that.

SPEAKER_36: Don't you want lukewarm salad? Jason does lots of limp lettuce. I like, I'll tell you the free say salad with the warm egg and the lardon on it.

SPEAKER_281: Yeah. That's fine. That's fine. It's, but that's wilted. It's not. It's not microwave.

David Friedberg: It is not. Yeah. I don't think anybody microwave, uh, any of this. Well, here's the quote from the CFO.

SPEAKER_47: Our customers are safe and healthy and ordering from us. And we know there'll be more vacations or be more mobility. There'll be things that probably people shied away from last year and that's all good, but it does tend to lead them to do other things besides shop. So we're adjusting our run rates in the period that we see that happen. I do think shopping was like, I think a pastime as was wagering on sports or wagering on stonks or wagering on crypto. And that is all coming apart. What's your take on China banning Bitcoin?

SPEAKER_124: Um, and then some of these, uh, you know, new regulations coming in.

SPEAKER_132: I think, uh, I think was it, uh, Binance is now, uh, deprecating their service in Europe to a certain extent.

SPEAKER_47: Well, are you watching all this and the, and the news tightening and what are your thoughts?

SPEAKER_108: Yeah. So tether. Yeah. Well, look, look, look, let, let's do this in, in chunks.

SPEAKER_15: So first of all, Binance, it, it turns out if you get really, really big and you're not actually following regulatory guidelines around the world, eventually it catches up with you. It's like technical debt for a financial company. It's called regulatory debt and it matters because people eventually start doing mean things back to you. So Binance cleaning up its act actually I like, I hope they figure this out. I I've talked to the CEO. I I I'm generally bullish on crypto exchanges. CZ. CZ is great. I mean, I I've, I've talked to him once or twice, but I liked him. So I hope it goes well, uh, selling derivative products in Europe. That's a lot of work. You gotta have a big compliance team. Not a surprise. Uh, China. Holy crap, Jason. Yeah. Rewind the clock to 2018, late 17, early 18, Chinese venture capital system blowing up. Everyone's talking about how 996 is gonna like take over the U S tech world. The U S people are, are, you know, the tech, the tech workers are lazy, panicking. VCs were just trying to get on the next plane to China to pour money into the space. And then overnight, China decided that a huge swath of venture backed companies, uh, are now gonna go nonprofit, can't list or raise capital. It's, it's, it's like a thunderclap that we, that we almost missed cuz we're in North America versus China. But like, it was an enormous regulatory turn after they went after DD and 10 cent music and so forth. And so to me, there has been an enormous tenor shift in the Chinese market. They should, unless I'm totally fricking stupid, slow VC investment in the country.

SPEAKER_47: Um, I gotta think VC investing from the West in China is over. I would think if I'm an LP and a fund comes to me and says, Hey, we got a China strategy.

SPEAKER_204: I would look at them and go, okay. Cool. Jack Ma had a China strategy too. 10 cent had a China strategy. All these education companies had a strategy and I'm sure the Bitcoin miners had a strategy.

SPEAKER_233: How's that strategy working out for them? Because whatever your strategy is as a VC, it's dependent on entrepreneurs to execute on the ground. Yep. Those entrepreneurs are getting sent to re-education camps.

SPEAKER_230: If you know, uh,

SPEAKER_15: If they can disappear Jack Ma for several weeks, kill off the anti-PO and then make DD Rubik's apps three days after it went public in the US exchange. If I remember my timelines correctly. Yeah. I don't care about your China strategy. There's one China strategy and it comes from the top and that's not you. So like in terms of risk, it's terrifying.

SPEAKER_300: Yeah.

SPEAKER_47: And if you have the, this would, if you have risk capital, you're going to look at what is the spectrum of risk to return? And where can I put that money to work? If it felt like, you know, China was trending towards transparency and engagement. Great. I think people made the right bet in 20, you know, 10.

SPEAKER_185: Yes.

SPEAKER_47: You know, actually, do you know who the guy was who actually did this more than anybody was the, um, Pat McGovern from IDG. Which you and I will know, um, he opened IDG in China before anybody. He was the OG in China. He created all these publications there. And then he was like, wait a second. I could create an adventure firm in, uh, China. And that's how he made all his money. People don't know this.

SPEAKER_19: Um, but he, uh, rest in peace, Pat McGovern came to the first TechCrunch 50 slash disrupt with Mike and I were partners and sat in the first row in like a $4,000 suit. And Mike and I were like, holy shit.

SPEAKER_92: It's Pat McGovern. And we're like, how did he get in here? Yeah. And they're like, he bought a ticket. He bought a VIP ticket. He's gonna be at the party tonight. I was like, oh my God. So I walk over and he's like, I'm like, oh, Mr. McGovern is great to see you.

SPEAKER_269: Thanks for coming. Thanks for coming. And, uh, he's like, I follow everything you do.

SPEAKER_310: Jason. That's not creepy at all. That's totally fine.

SPEAKER_132: Okay. Pat McGovern. And it wound up because people don't remember he owned the demo conference.

SPEAKER_204: Yeah. And Mike and I, 15 years ago, we're like, we're gonna kill the demo conference that charges 20 grand. Yeah. We're gonna sink that thing.

SPEAKER_313: And what does this guy do? He's so gangster. He buys a VIP ticket and comes to the event and sits in the first row. Yeah.

SPEAKER_15: How's that for some, some reconnoitering of the, of the opposition, by the way, the TechCrunch 50, which is the one that Bing sponsored all those bars in the lobby. Was that the four year 50?

SPEAKER_315: I think that was 40. Bing, bing, bing. 40.

SPEAKER_15: That's the time that you guys got me so drunk that I pooped on the side of your venue. And then I also threw up in my badge. And so when I woke up the next morning in Palo Alto, where I was supposed to be, to be clear. My badge smelled bad and I couldn't figure out why. And I was like 18 or something. So, oh my God, that was childish years.

SPEAKER_18: Well, you know, that was when San Francisco and the industry.

SPEAKER_47: Um, I think it was a little more fun and, you know, less content. It was less. Cantankerous between all the parties involved and the scale was still tiny, right? Like Facebook didn't exist or if it did. Yeah. Facebook didn't exist at the time. Yeah. And the things that did exist were 10 million users. There wasn't this discussion we're having today about these things are so big. Yeah. Should they be that big? Okay. So China tightening the noose game over. We're in charge and Bitcoin happened right before that. So what is explain to me your thoughts on Bitcoin getting banned in China and the miners getting kicked out, uh, before they do this crackdown on IPOs. Cause this, they don't do anything without a plan. Yeah. It's China. They have a hundred year plans.

SPEAKER_132: 200 year plans. They're kind of like Putin in that regard. So what is the plan here? If you had to guess.

SPEAKER_15: So the plan is to eventually roll out a digital Yuan as they're currently doing. And, uh, why, why does that matter? Why do we care? Why not use a crypto? Well, it's all about, uh, the opposite of decentralization. It's all about centralization.

SPEAKER_26: If you have a digital currency that the government controls, you can set effectively negative interest rates against it. You can have people's money go away if they don't spend it. So if you want to induce consumer spending, you don't send everyone a check like we do in the US in hopes that they'll spend it on something. You just tell them that money's going to go away if they don't use it. And so suddenly the government has much, much more control over the local economy.

SPEAKER_15: Now, if you're going to have this digital Yuan, people have to use it. And if there's an alternative, say, I don't know, cryptocurrency, like Bitcoin, maybe they have a way out and you can't have that. And there has been constant saber rattling about the banning of Bitcoin in China for so long and the mining thereof that everyone in the crypto community just viewed any China news as FUD. Just ignore it. Yeah.

SPEAKER_113: It's fear, uncertainty, and doubt. You guys are haters. Have fun being poor. Poor. We're going to run psyops on your replies because you, Alex and Jason criticized cryptocurrency in some mild way.

SPEAKER_63: Yeah. Crypto's fine. It doesn't bother me at all.

SPEAKER_15: Um, but you know, and then they finally, after several, we've got a lot of money. After several minor things over the years, the big one happened and now you can't mine crypto in China. And there, there seemed to be very serious about it. Uh, Bitcoin's fine because it is relatively decentralized. Um, I'm more of an Ethereum fan if I had to pick one chain to rule them all. Um, why is that smart contracts? Well, I, I think it's a programming platform and that's very exciting to me because platforms tend to be worth quite a lot of money. Bitcoin, it's the main argument for its existence is there's not that many of them. I don't care. And, uh, it's the oldest one. And I don't care about that because IBM's older than Google. You sound like that guy, Michael.

SPEAKER_333: What's that guy's name? Michael Saylor? Uh, I don't know if it's an insult or a compliment.

David Friedberg: Michael Saylor is the guy who owns micro something, micro strategy.

SPEAKER_47: He took his entire company, which was providing research or something.

SPEAKER_335: Yeah.

SPEAKER_47: And then pivoted it to being basically a holding company. And he just, he is like, when I say Bitcoin maximalist, I mean, to the nth degree. Um, but I, it does seem like China is now saying, Hey, if you have our digital one, your key insight there, I think is 100% correct. And astute, which is control control. China wants control of everything. The data, their citizens, their monetary supply, entrepreneurship, new products and services. And where, where capital goes.

SPEAKER_11: If you go back and read the English language and translated versions of the Chinese government bulletins regarding the crackdown on edtech.

SPEAKER_15: I know that's kind of, that's nuanced, but it was a big chunk of the stuff we're talking about. Uh, one thing that was mentioned was excess, excessive capital flowing into the space. And the way this is being read by everyone who's a China watcher who knows much better than I do, is that China wants to take the direction of its investment away from what it's been so good at consumer, social, fintech, all this stuff. And pointed more towards hard tech, like semiconductors and so forth. Uh, I don't know if you can shift an economy by fiat like that. I don't think you can, but that seems to be the, the overall, uh, read of the situation. But like, to me, Jason, if you think of the most impressive Chinese companies, you're thinking, you know, Meituan, ByteDance, Tencent, you know, Alibaba, you know, these, these big, big names that you know.

SPEAKER_87: Yeah. It turns out these education ones are huge.

SPEAKER_105: Well, and they were valuable until recently. If you, if you want to get a sample of this, look at the stock chart.

SPEAKER_149: If you're listening to a towel education, TAL space education, and you'll see how much ground is lost since February. It's like 90% of its value or something crazy.

SPEAKER_342: Yeah. It was 143 down to $3. It's just unbelievable. And that's really interesting.

SPEAKER_204: They went after education because they also sort of indicated in their language that you shouldn't profit off of education.

SPEAKER_47: This is a state run thing, which dovetails with exactly what I was saying is control. Our education system here in the United States is broken. Uh, we do such a terrible job on a, on a public basis that people want to route around that and have competition of buying apps. Actually, the other one we're in is brilliant.org, which does math and STEM. And that's an affordable subscription that people are going crazy for. Um, so this to me seems like the central control of the currency of education and of communication platforms.

SPEAKER_204: Uh, yeah. Gautau, Gautu Te Chedo, I think is how it's, um, the one I'm talking about is Gautu Te Chedo, which is G-A-O-T-U. Uh, Tal is a separate company, both are down 90%.

SPEAKER_47: But if you have the digital one, I don't know if you heard about this, but the real cynical case with the digital one is it provides even more control than print money in China.

SPEAKER_204: Because let's say you say something about Xi Jinping. Uh, like I think he could do a better job. Ooh, spicy. Yeah. I, I think that, uh, you know, he could, uh, be a better listener.

SPEAKER_47: Um, you say that they could literally be like, huh, Alex, Jason, having that conversation on your podcast. Beep. Your money is frozen. Yeah.

SPEAKER_350: They know.

SPEAKER_233: They know. Yeah. They can just freeze you on the blockchain. Okay. We've got all your money. Um, why did you guys come down to the office and talk to us?

SPEAKER_06: Yeah. Okay. My money is turned off. Okay. And your penalty is the house we just took for you in your home. Well, and then they know every transaction you've made with every person. Yeah. And if you, they'll basically move to the point where they say, you cannot use real money. You must use blockchain money. Think about, you know, we opt into using apple pay, but we can, if we want to do transactions anonymously using cash or whatever we want. Um, they will know every single thing about you on a communications platform basis and on a monetary basis.

SPEAKER_114: Yeah.

SPEAKER_160: And there is no room for dissent. And so the interesting question is where does this take them economically and where does this take them in a technology perspective?

SPEAKER_11: I think, I mean, look, I'm going to, I'm going to come out as a capitalist once again on this show, but like as a capitalist and someone who's in favor of liberal democracy. I don't think so. Be careful. You're going to have to get canceled.

SPEAKER_357: No, no, I'm not.

SPEAKER_11: I just, I, I just don't. You're admitting it. Oh, no, I'm a vehement capitalist, but I'm a very loving one. I'm a kind of a Danish capitalist, if you will.

SPEAKER_15: Okay. Um, I'm a big fan of progressive tax rates. Uh, but as a capitalist and a liberal, uh, Democrat with a small on a small D, you know, to me, this just looks like the long setup to a series of, of misallocations of resources.

SPEAKER_26: Like, I mean, Jason, why, why does he know better than the entire combined wisdom of his economy where this money should be deployed and so forth. And also it's just an enormous human freedom catastrophe to arrogate to one person.

SPEAKER_358: Human rights catastrophe.

SPEAKER_47: Yeah. And it's happening in front of our eyes. Yep. Yeah. And this is not the number one story in the world. We're talking about all kinds of other things. The largest country in the world. Yep. With, you know, basically tied with us for the most influential economy in the world, has now shut down cryptocurrency, public market companies, taken over Hong Kong, saber rattling at Taiwan, building more nuclear, uh, silos, building more nuclear reactors.

SPEAKER_19: And the God King said, I'm in charge forever. And he just took control of everything. Like what could go wrong here?

SPEAKER_103: Yeah. So actually, do you know how seriously I'm trying to take this?

SPEAKER_15: I'm, I'm actually going back and rereading old, uh, Xi Jinping speeches from earlier in his, in his tenure to get a better vibe for his politics. And I, I've added a, a, a Marx novel, not novel, Marx novel, uh, a, a, a Marx book to my, uh, my book club with my dad, because I, I need to go back to my college days and figure out what, what, what, what some of these phrases are. Cause I've forgotten some of my basic marks. And so like, I, I feel like that's how important this is, but apple had earnings this week, did really well, makes them all in China or makes a lot of China.

SPEAKER_11: How do you feel? I mean, like, I'm not gonna lie. I feel kind of, I feel a little heebie jeebie about that.

SPEAKER_47: Uh, you know, for me, yeah, I think what we're gonna see is the great disengagement. We had this great engagement policy for decades. It felt like China was possibly going in the right direction on human rights, on open markets, on free trade. And I think we got lulled into thinking, Hey, this is just gonna be a straight train to democracy. And, you know, when they go into Hong Kong, I'm sure they'll have kid gloves and they'll be reasonable. They don't want to go into Hong Kong and just, you know, tear stuff up and they're just like, yeah, what's the newspaper apple?

SPEAKER_204: Okay. Yeah, that shut down. You're all in jail. Okay. Who's selling books? You're all in jail. Great. And, uh, by the way, the court system is now not in Hong Kong. It's on mainland. So whenever you guys get a speeding ticket, you're gonna cross the bridge and come to mainland China. We're gonna talk about it over there.

SPEAKER_92: Yeah. No discussion.

SPEAKER_15: Even more than this, Jason. Like, I forget which American clothing company was, but they decided to not buy cotton from the, I'm gonna butcher this. Sorry, everybody. That John Jing reason, region where the, where the Uyghurs are.

SPEAKER_233: Where the Uyghurs are because they literally have the Uyghurs going into fields with zero sense of history, irony, uh, or anything. They literally have 3 million people in a concentration camp walking over cotton fields to pick cotton.

SPEAKER_15: Yeah. Well, they, they don't care about looking bad. Um, but, uh, this, this, uh, this American cotton company was then excoriated on Chinese social media by Chinese nationalists for daring to push quote, false narratives or whatever. So there, there is that you have to be okay with being silent on cultural genocide or you're out of China. And if that's the binary.

SPEAKER_108: Okay, cool. Yeah.

SPEAKER_233: Thank you for making it easy for me. I mean, Daryl Morey does the most modest of support for Hong Kong. And LeBron James has nothing to say about it. Uh, and, and all the, I'm not just saying like the NBA, but the NBA is a very woke group of individuals who are very involved in social projects. So is Hollywood. Yeah. And you think about those two people are exporting to China and they will for the extra 10% on their dollars, 15% on their dollars. Do it ever that communist regime that has 3 million people in a concentration camp. Um, just for an extra 10 or 15%, like would you or I take an extra 10 or 15% to sell my soul?

SPEAKER_374: No.

SPEAKER_233: Yeah.

SPEAKER_06: I was like, you know what? I don't want out. I had all these LPs from China big, you know? Oh yeah. Well, you know, big, we're talking big pools of capital who would give me giant pools of capital.

SPEAKER_375: I was like, yeah, not for me. Thanks.

SPEAKER_82: Don't take Chinese LPs period. Yeah.

SPEAKER_15: And to be clear, just listening to this, cause it's gone on for a couple of minutes now. Uh, no beef with individuals in China, no beef with Asia as a place.

SPEAKER_381: Um, the citizens of China are, you know, are great humans and yeah, they're the victims in all this.

SPEAKER_15: Yeah. I just wanted to make sure we threw in that caveat. They were not conflating the Chinese people with the Chinese government, very different things. So.

SPEAKER_47: I think the Chinese people would very much like to have a path to having a voice and some freedom and freedom of religion, maybe freedom of speech. Yep. Um, and have some, you know, I don't know what the solution is for the people making hardware over there. You know, Amazon basics cables or iPhones. I think that that is less of a problem for me.

SPEAKER_124: Um, you know, because they're not turning people over to the, you know, authorities like, you know, Facebook would have to if they were over there. But I don't know if you knew this, they have iCloud in China.

SPEAKER_132: And iCloud, the way Apple was forced to do that, because the iPhone is getting popular in China and Hong Kong. Yep. And the way they were doing that is they outsource the cloud ownership to a third party.

SPEAKER_47: So Apple could say, we don't turn anybody over. We don't even run iCloud in China. Yeah. You don't run iCloud. You don't run iCloud. The company they told you runs iCloud runs it. Right. So Tim Cook can say everything he wants. He can virtue signal all he wants about human rights and, you know, uh, whatever, uh, practices. But if you look in their backyard, if you're using an iPhone in China, and Apple is super privacy conscious here, they're handing over dissidents.

SPEAKER_19: They're literally handing over dissidents.

SPEAKER_199: Well, that's because there is no privacy in the digital system. Yeah.

SPEAKER_15: So anyways, uh, Apple's earnings, though, fantastic. Uh, Q3 Mac sales were up, uh, 18% year over year to 8.2 billion. iPhone sales were up 50%. Jason, a very fantastic number to 39.5 billion. Play the music.

SPEAKER_386: Dude, we need that music from, uh, what is the, the, what's the NPR show?

SPEAKER_387: Um, all things considered or, uh, fresh air?

SPEAKER_386: No, no, no, no. There's one for, uh, market, uh, the one for markets. I don't listen. I don't, I don't.

SPEAKER_388: Marketplace. Yeah. Oh, marketplace.

Chamath Palihapitiya: Okay. Anyway, they play music on, and now let's go to the numbers. And so Kai Risdahl does all the, is that your NPR voice?

SPEAKER_391: That's my NPR voice. Okay. The DASDAQ was down.

SPEAKER_64: I don't know if it's accurate or, uh, or a good joke. Anyways, Apple had a good quarter is what I'm saying. Uh, as always.

SPEAKER_06: What drove that? Was it people staying at home or having STEMI checks? Feels like STEMI checks.

SPEAKER_15: It was iPhone.

SPEAKER_26: It was a really good iPhone cycle for the company. So that may be partially driven by STEMIs. Uh, you get a STEMI.

SPEAKER_394: What are you gonna spend that on? Why not upgrade my phone?

SPEAKER_15: It depends on how cash conscious you are. Like if a check changes your cash position by a material percentage point,

SPEAKER_103: it may allow you to buy something you couldn't before. And maybe that drove a lot of this.

SPEAKER_63: So.

SPEAKER_47: And if you were thinking about upgrading next year, maybe you just do it this year. So you're, you fast forward a cycle. I also think those IMAX. I don't know if you saw those beautiful IMAX that came out.

SPEAKER_132: Oh, this gorgeous. Yeah. I thought those were beautiful.

SPEAKER_397: I almost, I almost bought one and I have no use for one. I have no use for one either.

SPEAKER_47: I mean, I, I have a windows machine with a, you know, a Dell with a 49 inch monitor. And then I'm using the Mac mini here on my studio setup.

SPEAKER_132: Yeah. From the M one Mac mini to my, my windows machine. So I have a gaming machine, 49 inch monitor. And then I, I go back within the two, but, uh, I, I like to have large monitors. So that's a tiny monitor for me, but I bought it for my mom. She loves it.

SPEAKER_14: I want the red, I want the red one and I really want an M one chip.

SPEAKER_103: So I have, I had this work MacBook pro that I'm currently on and it's one generation before the M one. And so it's got like six.

SPEAKER_108: M one's a game changer. Yeah. I, I, I just, I wonder if I spilled water on it. I would get, I'm not gonna do that. I'm like, I'm very tempted. You just fell off your desk.

SPEAKER_179: Fell off your desk.

SPEAKER_105: Well, now I can't do it. Cause now I've said it on the podcast. And they'll be like, oh yeah, we heard you.

SPEAKER_179: We'll beep it out.

SPEAKER_404: No, I mean, I, I literally bought the new Mac book. Uh, cause I had an old air and I was like, you know what?

SPEAKER_204: I was gonna get the air M one or the Mac book M one. Let me get the Mac book M one. And it is unbelievable. How long that goddamn battery lasts and how fast it is with, uh, your browser. Ah, yeah.

SPEAKER_103: So I run a lot of tabs. So that that's pertinent to my interests.

SPEAKER_47: But if you're a part of the 50 plus tabs, you know, and multiple monitor club. Oh yeah. It is so amazing. And it never heats up. You never have the fan come on. Whereas yours sounds like it's like a V tall taking off.

SPEAKER_185: Like it's a Joby.

SPEAKER_103: So literally the fan on this thing runs whenever I don't have the AC turned on my office, but I can't have the AC turned on my office cause I'm, it blows onto the microphone. So I have to literally just sweat it out on pods. It's terrible.

SPEAKER_92: It's brutal. That new one. You get zero of that. The battery lasts forever. Uh, it's just an extraordinary.

SPEAKER_109: Okay. I got a question. How did this happen?

SPEAKER_15: Because Intel has been making chips since before I was born. Yep. Apple newer to the semiconductor space. And yet they come out with the M1 chip and it's like all the things you just said. I can't recall the last time I got hype about a processor.

SPEAKER_14: It was the Pentium three when I was like 15. You know, like this is how did, how did Apple do this and not Intel?

SPEAKER_204: Okay. It's a great question.

SPEAKER_47: I think what happened was Apple got very, uh, interested with the A series of chips in the iPhone of we need to control our destiny and the chips we're getting from other people are not going to get us where we need to get in terms of a competitive advantage.

SPEAKER_132: And once they start, we started realizing, uh, graphics and battery life are two of the key features of the phone.

SPEAKER_47: In other words, if your battery lasts longer, you can do more intensive processing. If you can do more intensive processing, you can do take better pictures, do better picture software. You can play better games. That combination of needs said purpose driven chip.

SPEAKER_05: Okay. We have unlimited money. We are selling billions of these devices. And then the engine in our car is made by somebody who doesn't understand what we're

SPEAKER_47: building and the scale of this effort. We have to do it. Now you start doing that and you start realizing, wow, the margin on these things, right? Cause when you would buy a Dell computer, whatever you remember, they would offer you an arm chip or the Pentium or whatever. It was AMD or Intel. Yeah. AMD or Intel. And you're talking about what was the different $200 on the cost of a computer?

SPEAKER_413: It was always steep to get the Intel chip. Yeah.

SPEAKER_233: So you're like, okay, $1,200, $900, or I can get a 1200 to 1200, but I can get 32 gigs of

SPEAKER_47: RAM versus eight gigs of RAM. We've made those trade offs. And I think that's why purpose driven Silicon came to the phones. And then they were just like, you know what? What is good? How do we win laptops, batteries, and these stupid fans going off? And then once, so I think the, the iPhone gave them the dexterity in the muscle memory,

SPEAKER_06: you know, to do it. And then they just got emboldened. Like imagine if we had one chip for the iPads and for the desktops, then we recapture all that margin. And then we can make it specific to the use case. Well, what's the use case? They could just look at the data. People, people use their laptops to surf the web. That's it.

SPEAKER_233: It's 90% of what people are doing. They're in a web browser. All their software is in a web browser. Even the software they download. That's not a web browser. It's just a wrap web browser in a lot of cases. So, which is why tweet deck runs out of RAM.

SPEAKER_47: Yeah, exactly. And so I think purpose. And then I think that's why Elon put, made his own chips for, uh, the Teslas. Like he's got his own circuit board that they made specifically for that use case, which is real time processing of, you know, visual data across X number of cameras.

SPEAKER_132: So that, that seems to be the beginning and the end of it. And yeah, I mean, Intel's over.

SPEAKER_15: I mean, do you know who should be really mad right now? It's Satya Nadella because he inherited Wintel, right? This, this, this union of Intel and, and windows. And then Apple just came along and was like, oh, you guys are terrible at this.

SPEAKER_57: And they just made a much better chip on its first try. It's the M one. That's so good. Can you imagine how dope the M three is gonna be?

SPEAKER_417: It's gonna be incredible.

SPEAKER_394: Yeah. I consider the M one, like the, a 15 or whatever. Yeah.

SPEAKER_214: Cause they're up to, I think they're up to 14 or something with it. Oh, it's been that many. Gosh, I'm good. Yeah, it's been a lot.

SPEAKER_19: I'm trying to look the, the a four was March 10th to September 2023. That's the a four. Wow. In the series.

SPEAKER_47: So, and the a 14 bionic is September 2020. So, I mean, they're doing it every year. They come up with a new a processor. Um, and that that's the soup to nuts, you know, experience that. I think Elon is doing with Tesla. It's like, he makes every part, not being dependent on anybody in the supply chain is, I think, Tim Cook and Elon came to that observation at the same time. Yeah.

SPEAKER_103: It's interesting.

SPEAKER_15: Actually, Tesla is working to secure different elements for its batteries from direct from mining companies now. Yeah. Going back to the going direct thing. I mean, they're, they're literally saying, look, let's just, we're buying a lot of this stuff. We don't need to go through anyone.

SPEAKER_97: I literally have talked to Elon about this many times over the years. And he's like, materials come in this side of the building. Cars come out that side of the building.

SPEAKER_132: Cars come out the middle. And then in the middle, there's a battery pack being made that goes into the car. But basically, you know, he said some, I remember when he was building the gig effect. I usually don't talk about my conversation with Elon, but this is public knowledge. Now the gig factory, um, out in Nevada, we, he showed it to me when he was just building it and gave me a tour. And he's like, this is the company. The company is the factory. Yeah. It's not what comes out.

SPEAKER_394: The factory itself is the product. And that was like, oh, my mind is blown now. The factory is the product.

SPEAKER_254: Amazon and warehouse tech. Exact analogy. Yeah. Amazon, Amazon, when no one was looking, was building robots for its factories and building these hyper efficient, um, logistics setups.

SPEAKER_15: And everyone thought it was just like this bookseller. It turns out that the, the, the warehouse is Amazon and the, they bought that company, right?

SPEAKER_70: They bought that robotic company that does the couple of them.

SPEAKER_204: I think about more than one. Yeah. Yeah. They bought the one that's like the flat one that zips around and yeah.

SPEAKER_427: Looks like a hockey puck. It looks like a hockey puck zipping stuff around.

SPEAKER_47: It does seem like this, the super cycle of tech combined with the pandemic is this like perfect, um, super storm, if you will, of adoption of this technology.

SPEAKER_19: Because I don't know what it's like in Providence, but I'm assuming when you go to a restaurant, there's no more waiters. You just take a picture of a QR code. You order from your phone on toast or something, and then they bring you the food with a runner. It depends on where I'm going.

SPEAKER_15: Um, I, I live in a, in a kind of a small business-y part of town, kind of one of those collegiate streets, but lots of little shops. So those are still pretty hands-on, but even at those now the QR scan, the thing, pull up the website is happening. Uh, even in those places. And, and a lot of restaurants are still mostly, you know, pickup. Like there's this little cafe in my house called, uh, it's fantastic. I eat there like more often than I should, cause it's around the corner. And, uh, you know, they just have a whole table now set up permanently for pickup. And like, that's just now a de facto thing. So it's all digital for me essentially. Yeah.

SPEAKER_132: And I think that if you think about the, uh, economy post pandemic, whenever post pandemic exists, which I was, I thought we were in the post. I'm so depressed about, I'm frustrated. I have a lot of emotion about like how we screwed up the reopening. Cause I thought this was the Yolo time. We start going to concerts again. I want to go to Broadway. I wanted to do everything this fall and summer.

SPEAKER_431: And my Lord, these selfish people who won't get vaccines.

SPEAKER_15: We have to figure out a way to get them over the, um, but before we go to Pinterest and we wrap up, like, let me just make a point about that. I haven't seen my parents since December of 2019. And if Delta blocks me from being able to fly them out here, I don't see them until this Christmas because some people won't get vaccinated. I shall be mad. I miss them.

SPEAKER_36: I like them a lot. They raised me. I would like to give them a hug. Well, but they're vaccinated. I assume. Oh yeah.

SPEAKER_101: Yeah.

SPEAKER_199: My whole family is full of rational scientists. So no worries. It's fine.

SPEAKER_101: Yeah. They're like, Oh my God, the people who are getting vaccinated.

SPEAKER_47: The people who are in the hospital in this town are vaccinated. It's like the town is 90% vaccinated. And you're, of course, some who do come, some are going to have COVID, but they're not dying.

SPEAKER_132: Um, but anyway, my point of this all was, I think a lot of, that's one of the things that's going to stay.

SPEAKER_47: And the idea that being a waiter or a server, I think we're going to just get rid of millions of jobs in this country that were hostess, server, maitre d, uh, and, um, register or whatever cashier.

SPEAKER_19: I think those are just, everybody is applying that technology. And there were restaurants who did not ever think they would let people order their own food from their smartphone, who are like, this is so much better.

SPEAKER_109: Oh, Jason.

SPEAKER_358: This is so much better. Uh, nearish to me. That's vague enough.

SPEAKER_15: So Nick doesn't have to bleep it out called Al Forno's. And it's a, it's a relatively well-known Italian restaurant. If you live in the Northeast, you've heard of it. It's, it's, it's fancy and lovely. Uh, and they came up with a really amazing takeout strategy during the pandemic. Like this is the restaurant where like, it was like only a value parking and like fancy people go there for like, you know, like birthdays, you know, it was, it was, it was, it's, it's, it's. And now they're like parking slot four and we'll bring out your Italian food. Like everyone adapted so quickly across the economy.

SPEAKER_14: It's been a real human story of, uh, of flexibility in the last 18 months.

SPEAKER_443: All right. Should we add on Pinterest or going back to work in offices and the delay of that?

SPEAKER_98: Oh, let's do, let's do going back to work in offices. Cause I'm, I, I read your notes about this and I want to hear your thoughts.

SPEAKER_132: Uh, well, I think we talked about this on the all in pod. You know, we predicted a couple of episodes ago, like, of course, if you're in tech and you're going to reopen your office or, you know, uh, you're going to force people to be vaccinated or they can't come to your office, especially if you're doing hybrid, why would you allow unvaccinated people in the building? Mm-hmm. And so of course, I guess Netflix, Google, and a group of people are now going to force you to be vaccinated if you come to the office. Mm-hmm. And I think that's the carrot. And I think that has to make its way to sporting arenas, restaurants in San Francisco.

SPEAKER_19: There's a movement to force. Uh, if you want to go to a bar, you got to show your vaccine card at Lollapalooza. They said, uh, you have to show your vaccine card.

SPEAKER_204: And if the FBI put out a notice, if you, uh, make a fake card, you're going to go to jail and you're going to get a huge fine.

SPEAKER_132: So like there will be enforcement of people doing fake vaccine cards.

SPEAKER_124: So I think that this is the only choice we have to keep the economy going is to have vaccine.

SPEAKER_47: You know, I hate to say it, but you know, like the carrot didn't work and now there's going to be a stick. Like you're just not going to be able to participate in certain things in France, Israel, and now the United States period.

SPEAKER_247: Yeah.

SPEAKER_103: Which is, which is reasonable given the vaccine is safe and it's free and it helps protect other people and stop being so selfish.

SPEAKER_26: Now to be clear, if you can't take it because you're immunosuppressed or so forth, we're not talking about you. We're having people who can get it and won't.

SPEAKER_424: Those people are the problems. Not, not three year olds who can't get it yet. I'm talking about the people who are 37 in Duluth who are refusing.

SPEAKER_15: I hate you. Everyone else is fine. Uh, question though. Yeah. So I'm, you're, you're not at the office right now. I can tell that I've been to your office. I've not been to your house and that looks more like a house. Uh, I'm at home and, uh, I'm feeling great. Nick, uh, running the pod with, uh, with Charles here at the, at the, at the studio.

SPEAKER_46: Charles is at the office and Nick is at home.

SPEAKER_15: Yeah. Yeah. But I mean, like, you know, I used to show up to do this with you and now we just do it like this and I feel fine. And it's better to me, to me, remote work is, uh, has saved my life as a, as an individual way before the pandemic. So let me do stuff, uh, you know, and support my spouse. So, you know, to me, the whole hull of blue about companies wanting people to go back. I, I just think they have big leases. They didn't want to fill. I can't figure out why, um, these progressive companies in the work management sense, uh, are, are turning into the, the most boomer-y sounding companies. Like come back three days a week. No, I won't. I refuse. Yes. Absolutely not.

SPEAKER_132: I think it's a great rotation. I mean, if you were forced to come to an office, you would look at other options. The instantly instantly.

SPEAKER_47: And so I think that, and I was predicting this, which is, you know, if you want to keep the most talented people and some number of them want to work from home. It's so hard to find a game changing employee, talented team member. You're just going to have no choice. I mean, if you're Netflix, if you're Reed Hastings, if you're Tim Cook and you're top person in PR, in marketing, in engineering and design, whatever it is.

SPEAKER_457: Yeah.

SPEAKER_47: Whatever. If they say, you know what? I'm working from Tahoe or I'm going to work at a startup. What are you going to do?

SPEAKER_254: You're going to let them work from Tahoe and probably subsidize.

SPEAKER_15: They have gigabit internet because that's the most efficient thing to do. But going all the way back to the first part of our conversation, I would go to the office and I would do social things. I would, I would stand in the kitchen and I would talk to people. I'd make a couple of connections. And to be clear, those would occasionally be useful and work sense. Sure. When I was doing 50, 50 SF and, and, and Providence, I would like go to SF and do company stuff for two weeks. And then I would go home and work for two weeks. Right. And like my output differential as a writer was so extremely different because. Yes. Here, the only distraction is my puppy when she needs to pee two minutes and then I'm back.

SPEAKER_37: You know what I mean?

SPEAKER_179: Which is actually kind of a nice break take to, if you're a writer to get that little fresh air break is actually accretive to your performance.

SPEAKER_460: Yeah.

SPEAKER_15: Yeah. And she's been great for that. But I mean, like if you told me tomorrow that I have to start driving to the train station, taking the commuter rail to Boston, buying a small muffin somewhere along the way, and then walk across Boston to the office and then to shake hands to the icky people and then like sit down at a desk. That that's, that's a two hours of my day.

SPEAKER_145: You better be paying me like a hundred percent more if you're going to take us to four hours of my day, because what?

SPEAKER_132: Yeah, I think you can't put the genie back in the bottle.

SPEAKER_47: No, I think that what could be very interesting is, and I've been thinking about this, like if I moved to Austin, if I moved to Austin, I could find an area where people could afford to live and walk to work in one of these small towns there. And I was like, you know what, that could be quite charming if I had my own event space slash, you know, there was affordable housing. I think actually people would love to go to work three days a week, or for four hours for a day and get out of their house.

SPEAKER_204: Like if I said to you, hey, we're gonna on Wednesdays, we're going to tape the show and have lunch. And we're going to do, you know, a meeting about the editorial for the week and we were working at the same company like dope. Yeah, get out of the house one day a week, I get to see everybody.

SPEAKER_47: So it does seem like that hybrid model will become the default. Yeah.

SPEAKER_15: Back in the my first stint at TechCrunch, we had mandatory fun time, which was I think like 4pm on Thursdays. And everyone was supposed to come into the office at 4pm on Thursdays and have a beer. And then it was a way to like engender camaraderie and make sure everyone knew where their badges were.

SPEAKER_108: And you know what, it worked reasonably well.

SPEAKER_204: I have a bunch of people working for me. I've never met. And that is the thing I miss most about this.

SPEAKER_19: And I hope we get back to and I do think it's a boomer thing. Like you invest in an Apple Starship $4 billion campus or your Google.

SPEAKER_47: I do think that those folks think great product is made in a space and that that space is going to be a competitor.

SPEAKER_204: I believe they believe that.

SPEAKER_469: I also believe they're probably wrong.

SPEAKER_471: Yeah.

SPEAKER_472: Yeah. That it's necessary for all employees.

SPEAKER_185: It's probably I'm wondering, do you think the iPhone and the design of it could have been made remote today with today's tools?

SPEAKER_474: I think small physical product teams are always going to have a different set of requirements in the information workers that we're discussing. Yeah.

SPEAKER_204: You know what I mean? Like developer different than writer and writers and developers different than Johnny Ive and Steve Jobs. Yeah.

SPEAKER_15: Like if you're, if you're literally inventing a new like category of device, you're going to want to sit in a room with mock ups and touch them. Yeah. Good. Johnny Ive can go to the office. In the meantime, I won't be. Last question. Last question for you. Yeah. And a lot of people that, that thrived in the office environment, um, feel increasingly superfluous to me in this, in this moment of more productivity and going to work.

SPEAKER_103: So does this thin out the leadership ranks of companies? Okay.

SPEAKER_47: Two great things that people will not talk about publicly, but is that it is being talked about privately on boards on walking talks between investors and management, which is dead weight. Middle management that, you know, set up the meeting, set the agenda for the meeting and basically lured over people and made sure they were at their desk on time. All that bullshit is gone. And because we're just looking at output. Yeah. And it's hard with remote workers to judge output. But if you're forced to figure that out, which everybody has, just like the restaurants were forced to figure it out. That what you eventually realize is, okay, those middle managers were doing nothing. They were just really performative. And maybe they wrote great TPS reports, but you don't need a TPS report if your team is keeping track of themselves on notion.

SPEAKER_19: So self reporting is something I worked on with my teams and the investments is just have people write in slack what they're doing at the start of the day. And at the end of the day, reply to their own start of day with their EOD. And I wrote this whole article, which is my whole teams at inside and at launch right SOD closing this deal doing this, you know, cleanup work, reviewing these legal documents. At the end of the day, they reply back to and say what they did. Total transparency, you manage yourself.

SPEAKER_06: And then when you leave the company, we can look at your end of weeks. Yeah.

SPEAKER_204: And what you did and we say, okay, reviewing legal documents will outsource that that seemed to be 30% of what this person was doing. And the other two thirds, okay, you're going to do one third and you're going to do the other third, or we're going to deprecate what we're doing. We don't need to refill that position. Yeah. So it actually makes you understand exactly what everybody in the company was doing. Yeah.

SPEAKER_485: And that'll scale up to 100 employees. And that means no middle managers.

SPEAKER_15: Yeah. And that'll scale pretty well. And there'll be some other model for something else. But I mean, the idea of having like 13 layers of management between X and Y. Over. I mean. And thank God.

David Friedberg: Thank God. I mean, those people were annoying. They were the people who would come by your desk and talk to you and take you out of your rhythm. No. Yeah. Let's go. Can we go for a walk and talk?

SPEAKER_60: And you're like, hey, literally, you're stealing my words. Yeah. You got you got a minute? No, I don't. Because it's 15. And two, it means I'll have to leave late. Yeah. Don't you have anything to do?

SPEAKER_47: You know, like, and then you think about the cost of the space, then you think about the cost of reception, food, all this stuff. I mean, I think companies are gonna save 30 to 40% on top of a 30, maybe 20 or 30% savings and salaries.

SPEAKER_19: Because when you are hiring, I mean, we know at TechCrunch writers in San Francisco and in Gadget writers in New York, we're getting paid. It was double or triple what people working from home were getting paid. Vox's average salary is 45 to 50k. I think. And there I know I think actually I was looking at Vox's because I was comparing it to insides where we're paying $75,000 for our analysts.

SPEAKER_132: But it's you can work from anywhere. So I'm hiring people in Canada, in Europe, from anywhere. And I thought $75,000 is pretty good for an analyst with four or five years experience to write and host events.

SPEAKER_233: And then if you look at Vox, their starting salary is $52,000. So I think that's the minimum. That's the minimum is $52,000. And I think the average is $65,000, $70,000. And I was like, Okay, well, we're beating them. But TechCrunch writers were making $100,000 or whatever. And Gadget writers in New York were making $100,000. Okay, and it was, you know, I think that those salaries don't get reversed.

SPEAKER_19: But I think over time, you'll see salaries average out from cities.

SPEAKER_273: And if you were forced to, you know, take a pay cut or whatever, it'd be like, take a pay cut, stay in Providence or move to a city like, oh, I mean, gun to my head.

SPEAKER_15: I'll take I'll take like, I'm not gonna say it out loud, but a relatively material pay cut to stay here because I like it here. But like, yeah, I think you're right about the average of the salaries. I think we're both right about middle management. And to me, just, I actually have to go write a newsletter for TC. Me too. I think it's a better future. I think. So like, this is gonna be painful, you know, there's gonna be repercussions and things we don't expect to happen. But I think generally speaking, we're moving towards a more healthy conversation about work and work life balance. And, you know, thank God.

SPEAKER_87: More choice. Yeah.

SPEAKER_19: I think it's really about choice. There'll be a group of people who wants to go to that office and be part of that. And there'll be a group of people who prefer to stay home and a group of people in the middle. And I think it's flipped power.

SPEAKER_132: Now, it's like, you don't get to lord over employees. This is how it's going to be. It's going to be a negotiation. And you'll just you can't dictate anymore. And you have to get comfortable with that. Employees are empowered. And the best ones always have been they just didn't know it.

SPEAKER_179: Yeah, those top employees didn't realize that if they said I'm working from Tahoe at the lake and I want the same salary that Zuckerberg would have caved, you know, and the world used to be run by VCs and middle management.

SPEAKER_15: And now it's run by founders and ICs. So hahaha, the world has come towards me.

SPEAKER_47: Well, it is it is the, the virtuosos, the people with the actual skill who actually move the needle forward and done at a company. They are now absolutely recognized. And all the performative nonsense is is sucked out of the system. So I think you're right. And that's that is ultimately healthier. And it gives everybody a path.

SPEAKER_233: Just work on your skill, provide some specific tangible benefit to the company or organization you're working for. And then you get all that time back, you get 10 more hours back a week. And you don't have to take a shower if you want to see your kids or your dog during the day. Mazel Tov, go for it.

SPEAKER_506: You still have to take a shower. Don't listen to Jason. Shower twice a day. Don't be gross. Please shower.

SPEAKER_425: Don't be gross. All right.

SPEAKER_204: Listen, great job, Alex. Love having you on the show. And everybody follow Alex, A-L-E-X on the Twitter. And then for the podcast, you're doing, are you doing the podcast regularly? Yeah, yeah. We do a couple every week. Yeah, yeah.

SPEAKER_233: Yeah. So which, what is the name of the podcast that people should subscribe to? Because there's like 10 of them over at TechCrunch.

SPEAKER_57: Yeah, it's called Equity. We've been doing it since 2017.

SPEAKER_15: It's a, it's a show. If you like startups and VC and bantering about revenue multiples, it's the show for you. Like, because it's, I've been on it forever. And it's just, it's how I kind of like digest what's happened during the week.

SPEAKER_103: And we should have a good time. It's about 30 minutes long. So it's not too long. Perfect. Good times.

SPEAKER_204: Everybody go to your podcast player and search for Equity or TechCrunch and you'll find it. And subscribe. We'll see you all next time. Bye bye.