SPEAKER_00: hey everybody welcome back it is monday you're shaking off the hopefully you don't have any more leftovers in your fridge i ate the last of the stuffing this morning we're back it's going to be

SPEAKER_01: a big week we had so much news and there was a potential that i was maybe having to go on a

SPEAKER_03: secret trip but i didn't uh but we booked alex wilhelm uh from tech crunch to join us today so we chopped it up first we talked about pipes co-founders abruptly stepping down all these rumors online of malfeasance harry responding to the rumors and just breaking down the lessons of uh these kind of situations for investors and founders yeah exactly how we get there and how

SPEAKER_00: we avoid it in the future then we have a great conversation about what's been happening in china with all of those protests and then apple's involvement and arguable misstep in its new ios rollout but what the future might look like in china and for the xi jinping regime you might not

SPEAKER_08: know this but apple's been building iphones in another country we'll tell you which one then

SPEAKER_09: we're going to end with some interesting statistics about this year's black friday spending two services are surging in their usage and a couple of uh older legacy services are collapsing we'll

SPEAKER_13: explain the trends in consumer spending on today's show it's gonna be a great show stick with us this

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SPEAKER_20: slash twist all right everybody it's monday hope everybody had a great thanksgiving molly how's your

SPEAKER_00: thanksgiving it was epic it was an epic it was like a it was like a march my thanksgiving i hosted three

SPEAKER_23: dinners and a brunch and i did the turkey trot it was a whole it was three dinners and a brunch yep yeah

SPEAKER_24: i met a baby this was like one of the it was a weird year because like some people got covid and then

SPEAKER_00: there was like a family situation and so i had to kind of spread out the dinners instead of having one big one i had three smallish dinners and then a big ladies brunch with bagels and lox and it was just a whole freaking delightful so great and i'm tired well yeah we knew you're gonna be tired i'm exhausted

SPEAKER_10: after my trip uh so we brought alex wilhelm in here from uh the the tech crunch how are you alex how

SPEAKER_33: was your thanksgiving it was good it was just me my spouse uh in-laws and five dogs so yeah on the

SPEAKER_32: whole lovely how many dogs do you now have and how many of the in-laws dogs we have three they have two

SPEAKER_33: but their two dogs are weimaraners so they're small and so like three little dogs and then two horses

SPEAKER_37: and trying to keep all five of them from eating one another is is brutal but it's it's fun it's it's

SPEAKER_38: like hard fun you know like not that annoying sort of thing yeah it's like when you have five kids

SPEAKER_40: running around it is at times you're it turns into chaos and other times it's fun i went to dallas to

SPEAKER_09: see the in-laws um there was some crumbling how was it it rained for five days straight and when i

SPEAKER_41: say rain i mean torrential rain to the level that at three or four in the morning it's so hard on the roof that you will wake up you know that that level of rain yes so i wasn't able to go work out wasn't able to go on hikes or anything uh so i basically ate meat korean barbecue then uh what do they call

SPEAKER_09: that uh brazilian uh oh yeah um yeah i know what you mean it decided it wasn't fogo de chow it was

SPEAKER_41: another one that was exceptional like a high-end version of that and then i went to the best italian restaurant uh which on the top floor a place called monarch in dallas was very nice but i would say um you know everything is very large in dallas is my perception every guy looks like a linebacker from the dallas cowboys uh the the serving sizes are absurd and when i say absurd alex and molly you know

SPEAKER_09: we ordered a crème brulee for one for five it was absurdly large yeah it's like a pumpkin pie it basically was like they they served it in a pie dish yeah exactly correct um the highways are absurdly large the off-ramps are bigger than the 405 freeway i mean it is uh and then the airport

SPEAKER_53: dallas fort worth airport is ginormous so this everything is bigger in texas has in fact been

SPEAKER_55: confirmed that that's because it's flat there's nothing there you can just build you know there's

SPEAKER_24: no pesky mountain ranges or rivers nick really wants to know if you saw the world's largest

SPEAKER_00: highway intersection which is i think we may have to take a field trip because nick has a lot of feelings and obsession with the world's largest highway intersection i mean every one of these

SPEAKER_41: intersections i kid you not it's like they're 101 it'd be like you take the 101 or the 280 here in the bay area and those are the exit ramps i mean it's just the scale of things is crazy and then there's all these houses in dallas that cost 600 a square foot i was starting to have like uh what is it they call it like the zillow porn kind of thing where i visited somebody's house and they had like a 15 000 square foot house on like a just a walking street and the house just goes on and on and on and

SPEAKER_62: then they told me a joke which was the price no yeah 600 a square foot it's pretty amazing yeah they

SPEAKER_41: said hey alex you ever think of uh building your own home like having a movie theater and a massage

SPEAKER_49: room and uh like a japanese tub you ever think about like designing your own home i mean if i'm particularly high at that moment maybe but yeah and so molly like you ever think like oh wow i could

SPEAKER_41: have like a yoga room and like a proper studio and a guest house uh and uh you know maybe like an extra kitchen like a commercial kitchen that house is waiting for you in dallas like you don't

SPEAKER_65: have to build it it's there you just have to go buy it yeah yeah but then i have to live in in dallas

SPEAKER_33: and that's no disrespect your in-laws but um yeah i'd sooner move to like the bottom of antarctica

SPEAKER_69: yes oh you know i i like austin sounds like the food's pretty good the food was pretty great uh

SPEAKER_41: everything and just nice to see family and i i literally did about a third of the amount of work i usually do uh on these weekends but that didn't stop our chat from going off at a just a violent velocity yeah alex molly and i've been talking about this on the program is there something going

SPEAKER_72: on that in the last year the pace of news seems different than the last 20. oh i'm very curious uh

SPEAKER_09: acceleration or deceleration just the number of stories and the the velocity of the stories and the absolute insanity or seeming insanity of the stories i mean just maybe on the news cycle are we experiencing

SPEAKER_37: like a tsunami of news right now yeah i think it's just the hangover from last year i mean we saw so much crazy stuff happen last year in terms of like deal size valuations lack of diligence and so forth and now we're seeing kind of the the comeuppance for that so i'm not shocked that this is crazy but i will say waking up to bankruptcy filings on monday morning does feel like an apparition from where we were up until early this year so yeah it's different i agree so molly you're i think this roller coaster

SPEAKER_41: theory like you know those super roller coasters where it's like straight up and you're like oh my god this is insane this is insane you're just saying this is insane and then you get to the top and then you really actually see what insanity is about it's the way down that is truly insane it's also not

SPEAKER_00: political news it's it's news in our wheelhouse so it probably feels like for years and years there was just an intensity of political news and that was like non-stop and so on marketplace that was all we would you know we would talk about economics and politics and covid and now there's the same almost the same you know volume of water coming over the waterfall but it's all our stories

SPEAKER_86: so it's like whoa whoa man i don't like the spotlight someone get me out of here

SPEAKER_43: wow i mean i think the great thing to do at times like this is where journalists and uh commentators can be helpful is breaking down this news and the lessons learned inside of the news how did we get

SPEAKER_41: here what can you learn from it what can you take away from it in your day-to-day uh i met the pipe founders many times over the last couple years pipe.com uh really smart cats um harry hurst uh being the the leader of the group and i thought a very innovative business model a couple of my friends i think chamath and sax both invested in pipe i'm not sure which rounds but a very clever idea as

SPEAKER_58: pitched to me hey you have reoccurring revenue we'll take that reoccurring review and not factor

SPEAKER_41: it and give you an advance like a bank might but uh we will put it on a marketplace and let people who are looking for a return bid for it they can pay 90 cents on the dollar for next year's subscription revenue whether that subscription revenue was a netflix service or a slack service uh but something went wrong on the way to heaven so maybe you could tee this up molly and then alex you can give us your

SPEAKER_92: thoughts on what happened yes so well i think you set it up pretty well which is this was the startup

SPEAKER_00: darling this uh marketplace where companies with recurring revenue could sell that future arr what seems to have gone wrong and let's go through a little bit actually before i get to what went wrong what was going right was that pipe was raising tons of money the valuation was ballooning in september 2020 they raised a 66 million dollar seed round 26 million of that was from vc 40 million was debt at 166 million dollar valuation led by craft by july 2021 you did say seed round seed round 66 million 66 million they raised a dallas sized seed round in seed seed seed seed around 166 million valuation and then uh you know a little over a year later in july uh not not quite a year 250 million dollars they raised at a two billion dollar valuation so their series a i assume was a two billion dollar valuation that was led by greenspring and then again according to pitch book in october 2021 pipe raised an undisclosed amount at an undisclosed valuation so that's uh obviously when everything was going awesome and then last week all three founders quit like abruptly stepped down is the way to put it according to a tech crunch article hey we know them first said the following over email pipes founders have quote always known that the next phase of pipes growth would include a veteran operational leader so they said that they initially started a search for a coo in the second quarter and then realized the role that they were defining was actually that of a ceo oh and then the whole point of them stepping down was to help the company reach true long-term potential hurst added quote we're zero to one builders not at scale operators said traction not the problem he said pipe is on track the triple revenue in 2022 uh and then pipe told tech crunch who we know that 22 000 companies have

Jason Calacanis: used pipe and there's seven and seven billion dollars of arr has been connected to the platform hey

SPEAKER_104: everybody i'm here with my pal tom eschbacher he is the senior sales manager at linkedin marketing solutions and today we're going to talk about marketing for startups and linkedin did a great new internal report called today in startup marketing welcome to the program tom thanks

SPEAKER_106: jason one of the main topics covered in the report is validating product market fit that's so essential

SPEAKER_107: so how does marketing play a role in validating pmf one of the challenges from the pandemic was it disrupted normal feedback loops that startups get and particularly when trying to scale assumptions based on small sample sizes you can't go to conferences anymore you can't do events and so we've seen a clever adoption of linkedin's free analytics tools here and one that's become table stakes and i mean 92 percent of series a startups are using it is the linkedin insight tag a feature here is the website demographics functionality that provides a valuable view on your site visitors professional attributes what's their job function their seniority level what company are they at the industry the company size this is all a bunch of actionable insight that you can use to back up your instincts around who your addressable market is and help inform early marketing strategies

SPEAKER_104: fantastic okay and so if you would like to get this incredible report you can go to linkedin.com this week in startups and not only can you get the report for free you're also going to get a hundred

SPEAKER_09: dollars off your first marketing campaign from tom at linkedin way to go tom do we buy this

SPEAKER_109: story there's another story from tech crunch coming uh by the time people hear this uh on a podcast

SPEAKER_37: it might be out um i i went ahead and pre-read the draft with permission from my dear colleague marianne and you know molly there were some tweets about some possible improprieties or some possible bad decisions made involving tens of millions of dollars and then there was a twitter storm from i think i think harry himself talking about kind of a response to it um what i'm really curious about is from your guys kind of venture perspective where does this net out between the allegations of you know bad loans to crypto mining firms taking too much money off the table loans against shares to the rebuttal where do you guys now sit in vetting this company's health and uh ethics okay so a lot to unpack here uh this was

SPEAKER_117: obviously a great idea allegations by the way we didn't i didn't get to that more yeah maybe we

SPEAKER_120: could just yeah give us the bullet high level bullet points on the allegations so the audience

SPEAKER_23: understands so then a tweet popped up from tyler hogg saying for you know because of course everybody

SPEAKER_00: on twitter was like what is actually happening right uh and this is a now deleted tweet in which exactly in which uh this the four people supposedly shared what had happened and that that included the pipe ceo loaning 80 million dollars to a bitcoin mining company and didn't tell the board about it lost it all the board uh reportedly fired the ceo months ago they had all sold a bunch of secondaries and may have taken out personal loans as well and i want to reiterate that that tweet has since been deleted but then harry did respond with this long tweet storm responding basically and saying uh that these rumors have become so outlandish that i need to uh come and defend what's happened

SPEAKER_123: yeah so he said by the way is a scout for a16z

SPEAKER_43: okay the board didn't fire us months ago harry says we haven't loaned 80 million to a bitcoin

SPEAKER_125: mining company and lost it all we do have some customers in the space but none of them have gone to zero okay so there's some truth to that whenever you see these rumors typically it's

SPEAKER_41: somebody with an axe to grind uh and in this case it might be somebody who's an angel investor or a smaller investor who feels pipe screwed them and this was a big part of their portfolio so i would say if you're going to pin the leak and we're all experienced journalists here it's either a former management team member who had some inside information or an investor who feels harry wronged him so when things come apart and people lose money yep then people start talking and if they have an axe to grind they're going to grind it and they're going to sharpen that axe to make the other person

SPEAKER_129: look terrible here he says we haven't loaned 80 million to a bitcoin mining company and lost it all we do have some customers in the space okay so there's some truth to it but none of them have gone to

SPEAKER_09: zero okay that's not very good it does mean there probably is some investment yeah that went bad now

SPEAKER_131: did they loan it to a mining company or did they use their cash reserves to then give them uh or to

SPEAKER_09: buy some of their future revenue it might have been that harry looked at hey the future revenue of this big coin mining company looks really good i'll take that action right you could buy future revenue so maybe he used the house money to buy future revenues and maybe that people feel was unethical i'm just purely speculating here of what's the difference between harry's comment and the leak yeah and that's really what we do as journalists uh is try to triangulate hey what's the truth here if this

SPEAKER_03: thing was still growing it would be fine now the other possibility here is with the secondary offerings and that's going to be really the story that's going to be unpacked in a major way uh for this era of silicon valley uh you it's totally fine and we've talked about this before on the program to take a little secondary pay for your home pay down your mortgage maybe have one or two million dollars in the bank what happened during this last period is you have things like the poppin ceo selling nine figure hoppin ceo rather selling nine figures worth of shares in the company and then the company collapsing or having troubles headwinds whatever you want to describe it so here what probably happened is there's some resentment the founder sold who knows how many tens of millions of shares i'm going to guess it was in the tens of millions because that would be the

SPEAKER_41: amount that i would consider maybe too much egregious maybe egregious maybe uh you know uh but listen

SPEAKER_09: people bought them so these are sophisticated investors who offered to buy their shares so there is that as well the board and the governance is the underlying issue here and the imbalance so what probably happened here there are investors who didn't get to sell in secondary these founder shares happened in that person's mind covertly now they may have happened with the blessing of the board but they're not under obligation to tell those seed investors those people are like hey you got to sell at 2 billion now the company i perceive is worth 500 million a billion whatever it's worth it's still growing it's you know it's going to be here it's not a zero but why didn't i get to sell at that peak valuation and you did these other things so they're kind of building a case against the founders

SPEAKER_129: that's really just so people understand what's happening here there's your version of the truth there's my version of the truth there's the actual truth rashomon is the uh famous kurosawa film and

SPEAKER_12: that's what we're seeing here harry's got his version the disgruntled person has theirs this other third party is the proxy sharing the information okay let me clarify here with a question for you guys

SPEAKER_37: if if you were in a startup and all the founders quit and they came to you and said look we need to find someone who can run this thing do you say great maturity we people used to bring in operational ceos back in the day google had one a good idea or are you guys freaking out if you get that phone call from a portfolio company because to me it sounds in this climate like an insanity the idea that founders would give up control for a better ceo who's more operational experience lost all of its in market standing i think it's a concept in the last couple years molly did you say that

SPEAKER_144: the the leak claimed he was pushed out months ago he's claiming he moved up to vice chair and he did

SPEAKER_117: it i mean he moved up to vice chair and was looking for something operational i mean i can tell you i

SPEAKER_00: don't i and again i'm somewhat new here but we're clearly seeing the pendulum swing back toward you know away from founders of the god kings of the universe and can do no wrong until they do so many wrong things that we all of a sudden have to revert to bring in the grown-up so i don't think that it's taken at face value i don't think that it's a negative sign for founders to say we want to bring in somebody operational as a ceo if they quit first right there's like this is just a there's just too much smoke here if they've all stepped down and then said we're looking for an operational leader there's a question if all of a sudden it's you know some allegations have emerged and the and and harry is writing this tweet storm that's like well yeah i 100 sold a bunch of stuff on the secondary i support that i wrote a piece saying it's the right thing to do right uh i didn't lose a ton of money on bitcoin loans but i made some like it's all of a sudden you have smoke that's unrelated to do you

SPEAKER_03: need an operator as a ceo so all right we don't know if he was pushed out uh if he voluntarily moved

SPEAKER_08: out of the position they were not right there's him but there's two other all three co-founders

SPEAKER_41: that's such a big deal here they're all so this reads to me like there was the the company was there

SPEAKER_03: were feelings um from the investors the company was being uh not managed properly and so i'm just going to put it gracefully some investors might have thought it's been completely mismanaged in a

SPEAKER_09: debacle other people might be hey there's headwinds in the industry we need to get somebody in here to steady the ship you know just like peloton did right so when when i look at this i think it's a dereliction of duty for the founders to leave without the ceo in place yes why leave before yeah it's a dereliction of duty now exactly that's if they chose to leave we don't know that yet so if they were forced out then they weren't able to fulfill their duty which is to stay with the ship until the ship makes it to dock or they're the last people to get off the ship and if there's no room in the lifeboats they sink with it right you know that's i'm hardcore i'm old school you

SPEAKER_131: don't leave the ship without a captain you don't have the ship that's like the pilots leaving the cockpit and not handing the controls over you hand the controls over you move to the co-pilot seat then you move to the jump seat the navigator seat you know and then you give them one last are you

SPEAKER_164: sure we can leave the ship here and go on kicking it in the back by the bathroom having many bottles

SPEAKER_86: of vodka but we are looking for a new pilot i mean again so we don't know the details yet so yeah vice chairman but we still know that the order is wrong the car is way ahead of the horse here in

SPEAKER_41: terms of leadership of this company and people spin this stuff right alex so you'll as a journalist have had this experience molly as well the ceo will tell you this is totally voluntary the leaker uh will say yeah you know what the board was at their wits end you know and uh they gave them an ultimatum get somebody on board and then on mass they said okay well we'll just all resign and so the truth is probably between these two extremes yeah what i will say is there's two things to note here they started to search for a ceo so just in terms of lessons if we may move

SPEAKER_03: to the lesson part of this if you're a founder or a co-founder uh you have three co-founders and you're searching for like a coo to do operations one of the three you need to buck up and get the operations dialed in stop with this like ceo coo stuff there's three of you

SPEAKER_41: get control of the ship stop going to parties stop living the life in miami go to the office

SPEAKER_09: don't leave the office work 18 hours a day seven days a week until the ship is tight that didn't

SPEAKER_131: happen here i can assure you that these three founders were not at the office seven days a week

SPEAKER_173: for 18 hours a day be dogging is that your miami party you got to be hardcore when your ship is having

SPEAKER_09: a problem again back to if people are if the ship is if the plane is hitting turbulence if there's an engine out that's when you become the goddamn ceo coo that's where you do whatever it takes and i don't

SPEAKER_131: feel like i know based on what i'm reading here that there was not a hardcore let's write the ship

SPEAKER_09: uh and this idea that we're zero to one builders not at scale operators if you can do zero to one you could do the operating stuff okay it's just a focus issue it is your personal preference so i don't want to say there's some entitlement here but this feels a little bit this screams a little bit

SPEAKER_131: of entitlement i want to do the zero to one fun stuff i want to build product but i don't want to put out the fires i don't want to figure out what's wrong with the engines i don't want to fly through turbulence you know what henry harry buck up i mean in fact he did bail if they all jumped out with parachutes golden parachutes in fact not cool if they were pushed out with golden parachutes okay that's

SPEAKER_129: not their issue so i'm going to give both messages yeah i got pushed out or it's your issue and that's

SPEAKER_183: why either way there's an issue yeah something went wrong with the management to the company to get

SPEAKER_124: to this point but i mean exactly your board doesn't push you out for no reason either

SPEAKER_183: no i mean because the board doesn't want to be known as a group that pushes out that's

SPEAKER_78: founders very small chance right like these days especially people are not getting pushed out for

SPEAKER_186: no reason no no anyway it's a disappointment i thought it was a cool model all right listen the

SPEAKER_41: holidays are almost here and for many of us this is a hard time i gotta tell you i got a hard time i already got the pecan pie going lots of eating i've been doing the pre-game on the pecan pie i might have a couple of beverages sure and i'm going to be traveling on planes making bad decisions well you

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SPEAKER_78: supergut.com and use the promo code twist to save 30 but i want to say though there was a focus issue

SPEAKER_37: with the company itself because we're talking about here pipe selling arr on its marketplace for other companies they expanded into entertainment they expanded into media um sectors that have done not great since that came out i think it was in february so i'm curious also if there's an overall marketplace quality issue at play here because if i bought media revenue in february i'm pretty peevish

SPEAKER_63: about what it looks like today and they went into crypto oh god there anytime you get that contagion you know it's it literally it's so toxic it's like oh yeah and by the way we we brought some radioactive

SPEAKER_41: material onto the plane it's like oh really stupid race there's gonna be two lessons overall so i'm gonna put pipe over here for a second and harry over here for a second uh i like harry seems like a jovial guy uh and does seem like a creative entrepreneur i think it's a great idea and it was

SPEAKER_58: great execution for some period of time and and it could still be a very big win so this is not a

SPEAKER_41: company that's gone to zero like um fast or something like that where we can look at it and be like oh wow that was a disaster there's really gonna be two lessons of the uh speculative asset

SPEAKER_129: bubble speculative asset recession that we're in the two lessons are going to be a lack of focus

SPEAKER_09: and uh entitlement these are going to be the two lessons now the the lack of focus you described perfectly they were in what eight categories here like stick with the stick with your knitting you know and don't expand too fast make sure you're on safe footing right when you start walking out on that ice and you hear a crack that's when you walk back a couple of steps or when you're going skiing and you see like a little mini avalanche that's when you turn around and go the other direction other people keep going down and they're like oh it's just a little avalanche oh it's just a little crack in the ice when you start hearing the ice crack that's your signal to move back to the core so focus now when we talk about entitlement this is and people are like oh you're talking somebody was challenging me when i talked about this on twitter oh you're talking about the employees and free food no i never mentioned employees entitlement starts with vcs and founders that's the dance and then the management teams that's where entitlement happened not the employees the employees are around

SPEAKER_129: for the ride you give employees free food they eat the free food that's not the employee's problem you put the free food in front of them you give the employees a massage you you know with massages at

SPEAKER_204: the we know we know what you mean don't massage your employees yourself

SPEAKER_207: yes no massages okay just writ large no massages no dry cleaning no coddling you did the coddling you embrace that you created coddling culture so you can't blame the employees for being like well

SPEAKER_208: you told me bring my dry cleaning so i brought my dry cleaning to work that's the fault of management

SPEAKER_41: it's the fault of founders and it's the fault of vcs ultimately who enabled this and the vcs could

SPEAKER_210: have said no exactly it is that and we to go all the way back to your original question alex about

SPEAKER_00: like what does this mean for look there are always going to be vcs who are going to fund something at 166 million valuation at seed round i suspect that we will see far fewer of those um and i am i am happy to work at a shop where we have a rule about that which is if you have a hundred million dollar valuation and no revenue you're probably a scam like there's just no or we can wait we can wait or

SPEAKER_33: we can wait yeah well revenue multiples today are what like 6x for you know mid-growth sass so you only

SPEAKER_37: need 25 million dollars sorry no less than that i can do math on the air um you need a large amount

SPEAKER_41: of revenue you don't have to earn that valuation yeah they probably you know that one of the things was the mislabeling of rounds i think the seed round was just mislabeled it was like a big series a or a series babe yeah so i'm guessing sacks you know who's very disciplined uh there was actual real revenue here and it was growing at a particular velocity was it a high valuation i'm sure was the green spring valuation we're in business with them by the way they're one of our lps uh they're a fund of funds uh very smart people did they pay a high price i'm sure they paid a high price but i'm sure the growth was there as well so these were high prices for high growth and who knows he said the

SPEAKER_09: company tripled in revenue this year so maybe it's still a strong company maybe it would be maybe this is a company that will do even better in a down market because more people will be looking for

SPEAKER_125: solutions for alternate fundraising and i'll remember those yeah two lessons yeah well and

SPEAKER_00: and nick makes a point that sacks invested when pipe was only focused on sass and high margin subscription revenue ah right so it is so that so it you had a company that was presumably making money that was fully focused on high margin solid growth sass software companies and lost so it's almost a it's a and look that i don't know and i suppose i will learn over time i don't know how you identify a founder who is likely to get to lose his damn mind right or three founders who are likely to lose their damn minds when they have too much success like it this feels less like a collapse of something in a ponzi way where they were trying to keep it alive but it was you know and more like a high on

SPEAKER_149: your own supply situation like they did too well too soon and then lost focus and we're cashing out and making and getting into bitcoin because you couldn't help it so excited you know and just like

SPEAKER_00: like chickens with it like the heads got cut off the chickens and they lost their minds this is what it feels like it's too much money i mean if you raise nine figures when you don't need

SPEAKER_37: it and everyone last year was doing this they told me it made sense you're gonna have a problem with focus and discipline and you're gonna make some wacky choices like just imagine back when you guys were like super paycheck to paycheck and you made like a 10k a year raised to your salary that at the time felt enormous and you started to spend dumb money on dumb things now imagine that times like 10 000 it's tough you have to have real discipline to not screw up a real big bag and i don't think a lot of us had it last year period this is going to be the grand shift from distraction

SPEAKER_41: and entitlement to focus on austerity that's what the suffering and pain people are feeling at this time to answer your question molly you said how do you identify the founders you know who could come

SPEAKER_03: off the rails i actually would say uh don't create an environment in which people don't go off the rails

SPEAKER_09: in other words if you're at a party and you're enjoying a nice bottle of uh you know red wine you

SPEAKER_41: go out to dinner right uh we went to miller lux we have a nice dinner oh maybe we order a bottle of wine everybody's enjoying it and then somebody says let's get shots right and you know what i do as

SPEAKER_242: the leader i say no no thank you enjoy the wine we're not doing that work i have people do this all

SPEAKER_75: the time in a corporate setting let's order shots and you know what i say i just say it's not the right

SPEAKER_243: environment for shots you say the shots when you reach your frat brothers we're good no shots i have

SPEAKER_131: had this conversation with people yeah let's keep this thing on the rails here everybody's going to bed early i'm watching two bottles of wine eight people that's enough everybody has two glasses i hate to

SPEAKER_246: be the hall monitor here you didn't have you didn't have don julio instead of lecroy we don't do that

SPEAKER_09: no everybody pump the brakes here pump the brakes and again vcs management teams you know they created management teams including the founders they created this environment where founders were enabled to be distracted probably they came and said hey you know things are going so great in sas we think we should go into movies and start doing you know advances against you know people who are celebrities

SPEAKER_131: in hollywood because i met a celebrity when i was at a party in miami and they said you know what else has future revenue my residuals from my superhero film and they said oh yeah we'll give you an advance

SPEAKER_09: on those sure we'll auction off robert downey jr's future revenue i'm making this up here yeah everything seems like a great idea yeah but you need to focus it's enough with the distraction if something's working double it and then double it again if you're you know as an investor if your accelerator's

David Friedberg: working okay do two accelerator classes a year instead of one okay it worked go to four oh if

SPEAKER_207: you're uh an editor and your deep dive worked alex and you did one deep dive last month this month

SPEAKER_208: you're gonna do three and you're gonna assign people to do three deep dives right you look at what's working you double down on what's working not be you know spread then like peanut butter across a big

SPEAKER_37: wide piece of sourdough yeah yeah i want to go back to the speculative asset bubble comment from earlier because i've been thinking a lot about so last year people were uh trading everything i mean i understand trading cards have always had a market it got much bigger shoes have always had a market the shoe we sell market got a lot bigger etc etc etc and as a very boring non-collector i didn't quite understand this but i thought you know what cultural moment i'm here for it i'm not here to yuck anyone's yama this is the jam it's the jam but it seems like a lot of that was just what you said a speculative asset bubble and i'm very curious what's going to happen to the companies that would looked simply phenomenal and i'm thinking about stock x i guess other companies like that uh this year i wonder what their numbers look like i don't know how they're going to survive because it does seem to have uh kind of a there's all the heights got out of that souffle you know you need to have buyers

SPEAKER_257: yes if you don't have buyers and you have too much supply what happens molly solana prices crater

SPEAKER_149: exactly of solana but consumers i mean i don't know can the consumer is still strong but yeah 100 like the marketplace yeah i mean what do you think of the consumer molly i think the consumer's still

SPEAKER_262: pretty strong strong but how are they strong well yeah they're strong they're financing their their

SPEAKER_00: lives right now on credit cards and buy now pay later so that is a problem they're still buying but i think what's what we're gonna you know i uh i i think we may see that some of these darling business models all of it will will be more care right it doesn't mean like sass is over as a business model no marketplaces are over as a business model those will still be solid business models but with a lot more care because a marketplace just like you said we're like oh yeah

SPEAKER_149: that's a slam dunk business model assuming that your marketplace has two sides both of which are

SPEAKER_266: robust yes uh like for a long time yeah nobody made those assumptions it was like yeah i'm sure

SPEAKER_59: there's i'm sure there's somebody on the other side to buy it i'll just say the consumer which has been

SPEAKER_58: having a wonderful full time on the ice dancing around yeah exactly they're starting to hear the

SPEAKER_207: cracks they're starting they're starting to hear the cracks i would advise consumers who are hearing cracks in the ice uh their balance sheet maybe come back to the the thick ice right let's go let's

SPEAKER_211: stay on the thick ice not the thin ice of modern life right it's a little too

SPEAKER_165: cancel subscriptions i've been canceling subscriptions like a beast lately just just don't cancel tech

SPEAKER_195: plus i need to run it it's the best best thing online code twist to get 25 off i will go try to set

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SPEAKER_109: that i've always been a big fan of sass and now i'm tasked with running a sass business and um i i am

SPEAKER_37: stuck listening to things i used to say to people like why aren't you growing faster why haven't you

SPEAKER_288: fixed churn and i'm just like oh i should have been nicer this is brutal i mean also you have

SPEAKER_58: an ad-based business at tech crunch that is super robust and when you have an ad-based business under

SPEAKER_41: the umbrella and you have a subscription-based business then every part of your life becomes

SPEAKER_43: uh the ad group saying i need more impressions and then the subscription people saying oh this is great content put it behind the firewall oh my gosh how do you know my day today that's literally

SPEAKER_49: i just i mean for this week in startups we started a patreon and they're like hey jacal i'm getting

SPEAKER_03: four episodes a week with you and molly i got the all in i get this like i'm gonna pay for the fifth or sixth or seventh like you either have to be three articles and you're done subscription or you

SPEAKER_09: got to go for advertising and trying to do both at the same time and that's tough that's like running a fine dining restaurant at the same time having an all you can eat component you know like buffet

SPEAKER_129: you got a buffet over here all you can eat on one side of the business that's the ad business and then you got fine dining over here where you're expecting three hundred dollars ahead and you're

SPEAKER_41: like hey we're jean george and you're like everything's like really precious and amazing like yeah but you got the same things over there and i could just put eight of those on my plate for

SPEAKER_298: you know 1995 like which one is it alex is like uh oh sorry i don't mean to be a bummer back there

SPEAKER_109: like take this clip back to management no no no i'm just trying to i'm just trying to think about how

SPEAKER_38: i can respond to this without getting my my job removed before i go and print to leave i would say jason that is a fascinating analogy to describe the tensions between an ad-based business and a paywall based business at the same publication and i would say i feel those tensions and we are working every day to resolve them and now i'm going to become the vice chairman goodbye goodbye i just

SPEAKER_305: bought he just pushed himself upstairs all right listen the other thing that was coming across

SPEAKER_03: uh my feed yeah and i have been a you know i had been predicting this for years having lived through tiananman square uh and i remember in my youth covering that uh and then watching hong kong i know authoritarians and authoritarians squeeze and the tighter they squeeze the more galaxies will slip through their fingers as princess leia pointed out uh and sure enough china apparently is squeezing their citizens a bit too hard and uh there have been a lot of videos molly circulating on twitter again who knows which ones are real sometimes people will publish old videos from from

SPEAKER_10: previous uh riots but it's been confirmed now i think across many publications including the new york times and washington post that there are significant uh protests going on in china maybe you could fill

SPEAKER_00: us in on the details yeah we should probably note that any protest in china is significant because it is so rare but i will once again give a plug for my friend jennifer pack who is the marketplace shanghai correspondent jay pack radio jpak radio on instagram i mean first of all her chronicles of all of the times that she attempted to travel all the times that she was put into quarantine had to stay you know there was it was like she went out to brunch with some girlfriends one of them was had walked by someone who had coveted all of them had to go into quarantine for 10 days she would chronicle like the food that they would give you in what are effectively these like dorms you could see like if you are actually following somebody with boots on the ground in china you could see the point at which things were going to inevitably break because no one wants to live like this and then on top of that she has been posting from some of these protests which look

SPEAKER_210: really real and again i cannot say you know this is instagram your friend jpack is on or tick

SPEAKER_00: yeah instagram and it's jpack jpac jpak radio jpack radio yeah and so her images from these protests are startling there there have been of course uh videos all over twitter but these protests seem to be related to a fire in urumchi um which killed they think at least 10 people if not more injured nine people who were sealed inside an apartment building there's you know and firefighters couldn't get to them they weren't allowed to leave i mean they're literally locking people into apartments and their homes and have been for years and so you have a confluence of things right like the removal of rights that people in china are somewhat used to but now you know there was somebody made the comment that they're like watching the world yes now and seeing how completely i mean these videos are this does not

SPEAKER_24: happen yeah this is so crazy to see like so crazy step down like that does not happen do you remember

SPEAKER_37: that one guy who posted the the sign on the bridge in beijing a couple weeks back with the little fire and how big of a disturbance that was online because someone made a protest publicly in beijing this is

SPEAKER_184: that times a thousand i mean i just keep watching this on repeat it's it's edifying and very encouraging is it i think it's terrifying i think well i mean i think they will kill all these people

SPEAKER_10: i'm you know revolution is a bloody and painful business and a process but sometimes it results in democracy and freedom and so for the people who are living under authoritarian regimes if i was one of them i would fight um and i would you know that would be my choice it's it's people's choice and

SPEAKER_257: you know people get squeezed to a certain point they would rather you know die on their feet

SPEAKER_00: than live on their knees i'm not telling them not to fight for their freedoms i think that is really important what i'm saying is i do not i am not one of the people who thinks this is going to result in the overthrow of xi jinping or the ccp i think they will kill as many people as they need to kill to stay in power now the question will become whether the economics of the situation are what are really driving this right so like the the people who are used to living handsomely and getting paid well are not gonna keep having that experience china is experiencing a real recession whether or not they're cooking the books on it and they seem to be and that's not that's where things start to get really real like that's where xi jinping could have a problem again i'm gonna say i highly doubt it

SPEAKER_20: majority chances they lose majority revolutions are squashed yeah but then once in a while yeah

SPEAKER_329: i'd bet on it for fun in this case the ccp has the um willing help though of big american tech giants

SPEAKER_38: that was my segue i was gonna take us there okay all right alex good you do it okay so part of this

SPEAKER_37: unrest is not just the fire in a room chi or the lockdowns in shanghai there's also been a lot of unrest at various foxconn facilities because when there is a covet uh crisis in and around one of those areas they just put the factory onto a closed loop setting which means that you can't leave but you can still work because you're in a dormitory attached to the factory uh you get really really close to the forced labor issue here pretty quickly i think if you can't leave and you're forced to work and a lot of these factories make electronics that we listeners of this show included use and so i'm starting to wonder if there's a way to do business ethically in china and if there isn't i wonder how many american corporations will begin to fully displace themselves from it and if that happens chinese economy is going to be in a lot of trouble right in the short term what we're seeing we should point

SPEAKER_00: out that the video we were watching earlier was actually from the foxconn plant that wasn't even some of these are room two ones that was the um foxconn protests which have gotten so intense that you know i think the government has started to offer people like eighteen hundred dollars to stay and fourteen hundred dollars to leave and there were reports that apple could be losing up to a billion dollars a week because it was going to delay shipments of the iphone iphone 14. also earlier in november like as some of this was starting to bubble up apple released ios 16.1.1 and it had a specific feature change that only rolled out in mainland china which was that users could not use the everyone option in airdrop for more than 10 minutes currently under ios 16 and if you're not in china you can just turn on this this everyone feature in airdrop which means anybody can send you files all the time as it happens this is a way this is one of the few if not only ways in china

SPEAKER_149: that people have been able to share files and information about protests or material that might

SPEAKER_00: otherwise have been censored and now all of a sudden and what what frankly if apple had rolled it out to everybody could be portrayed as a pretty good security feature because like you know you don't want people to be able to airdrop you anything any old time but only in china that is now restricted to 10

SPEAKER_340: minute periods is it possible to do business ethically with china exactly uh here so far well here's what

SPEAKER_125: i'll say the messier the more convoluted the more conflicted the situation is the more progress is

SPEAKER_13: likely being made uh progress is messy and engagement as a strategy with these authoritarian regimes although

SPEAKER_129: is not a strategy i would personally want to deploy uh is uh going to result in some amount of progress the fact that so much is at stake for both parties and apple being the number one company that has this much at stake amazon probably being number two you know in terms of all those products being shipped from there this is causing a massive amount of tension for xi jinping he now has to deal with the fact that these people are revolting against him founders of companies have revolted against him uh and he

SPEAKER_09: now faces apple saying you know what we're going to start by building semiconductors and buying them in arizona uh the united states has passed passed the chip act oh they're going to start making medicines

SPEAKER_12: in other places oh japan is paying uh businesses or giving them big juicy loans with low interest rates or no interest rates to move to vietnam to india oh if we squeeze too hard

SPEAKER_09: people are going to start pulling out now if you weren't there to begin with then that cost would not be there so if you start thinking big picture the cost

SPEAKER_03: of losing engagement is now going to lead to xi jinping being in a very bad place if all of a sudden foxconn can't make iphones what are all those people who move from the north from farms who were living you know not great lives you know under the poverty line but perhaps not as painful a life as losing your factory job and having no safety net in a major city with you know some amount of rent cost and you know whatever uh and already a population that is declining and now people are like well i'm definitely not going to have a child now or a second child if i have no job at foxconn this could be the complete collapse of the chinese economy where do these hundreds of millions of factory workers go if the jobs move to china in india and so it's messy revolutions always

SPEAKER_09: are rebellions are always messy being an authoritarian leader is the hardest tight rope you could ever walk look at putin in russia how does he deal with mothers in russia who have their sons being conscripted while germany is now going to get off oil uh and do more nuclear or find other sources the middle east to get them natural gas it's always messy and i think the engagement as much as much as i hate to say it the engagement of apple could be the linchpin that moves towards better conditions for humans in

SPEAKER_37: china that would be a win for capitalism and i'm a i'm a capitalist at my core so i would like to see that i i think i think apple's been insufficiently leadershipy on this uh i i would say in the last couple years this didn't all come up in 2022 right this is not the first time we've seen issues with facilities management of foxconn for example and we all keep buying iphones yeah capitals weaknesses

SPEAKER_00: apple didn't start trying to divest from and to be clear like even if this ends in all of the places that you have predicted jason it's going to be a 10 to 20 year process right like all of these new foundries that that company a foundry takes 10 years to build it's not you don't don't just pop up a new you know chip manufacturing facility the size of tsmc and you don't just move all of your operations like apple has let a lot of things happen at foxconn it certainly did not have to introduce a hardware level restriction that only applies to mainland china that happens to stop protests right now like there's going to be the you know the moral yes it's messy the moral compromise

SPEAKER_149: is real and will go on for as long as this regime stands and and china we should be clear too even if apple pulls out and tesla pulls out and everybody's like we're doing this business it china still has plenty of buyers for its own goods and with the china 2025 initiative has actually

SPEAKER_00: started to create a high-tech economy for itself i'm not saying the economy is going to be okay but it's not like it's not going to be an overnight collapse i don't think about the the chinese

SPEAKER_37: construction market and how that's going to ripple over into other parts of its economy and how much debt there is but i will say that i don't disagree molly you don't knock over a mountain overnight it does take time but there have been mounting issues in china for long enough now that i wonder if we're closer to an earthquake than a rumble i think the economy is way worse than i mean it's way worse than

SPEAKER_337: they're letting on like i think it's a i think it's a very bad scene for sure yeah china cannot grow

SPEAKER_10: or evolve or thrive or any of those things in an isolated isolated fashion they must continue to do

SPEAKER_03: trade with the rest of the world they can't turn inward and be isolated they need to put a billion

SPEAKER_174: people to work too many people i don't think they can just be right but i'm just saying they've got

SPEAKER_92: they've got by they've got russia they've got india they've got you know united arab emirates like a

SPEAKER_149: lot of saudi state like plenty of come we're pretending that what you're saying is they can't thrive without the us i'm saying they can't thrive without the buyers china 50 of the world is

SPEAKER_33: a germany is doing huge deals with china right now yeah well that's that's that's a slight nuance if

SPEAKER_37: you lose the eu and you lose the north american block china's economy does not recover in 50 years if ever just because they're such an export-based economy model i mean there's not enough money in saudi arabia and russia to i think to sit and in the plant well i mean india has some issues

SPEAKER_369: competitor yeah they see them as a competitor more than uh you know look up that border disputes i you

SPEAKER_125: know yeah may you live in interesting times like i think what we're witnessing is you know it's been

SPEAKER_10: a hundred years of communism in china all right um and i think what we might be witnessing is the slowly

SPEAKER_09: the slow painful unraveling of that where individuals would like some freedoms yeah and they tried it right they gave them taste of freedoms they let them move from the north to the south they let them become middle class they let them have a taste of technology they let them become entrepreneurs you know and this is the problem authoritarian space is your people taste and you start giving them that taste and then you take it away because they like it too much or because it destabilizes you

SPEAKER_12: and then you're in the trap you're in the trap and it winds up being like cuba north korea

SPEAKER_10: you know or any other authoritarian regime where your growth is capped your growth is capped and this is where capitalism plus democracy always wins yes do you think the coveted lockdowns are

SPEAKER_23: actually about coven or are they about population can there because now i mean there's sort of a

SPEAKER_377: couple i've heard that theory i think about that theory that's that's happening because this is

SPEAKER_10: this is a controversial theory about covet i think you're going with the one of like why aren't old people being vaccinated why isn't there a push to vaccinate old people because there's an excuse to

SPEAKER_382: not open because then they don't have to open and when you don't open you can't you know in theory do you think i guess that you can't get revolt like i just think it's or have they caught

SPEAKER_149: themselves in such a trap now because the thing is they're not going to be able to reopen right if they if they're because it is going to rip through you have a mostly unvaccinated population

SPEAKER_233: well not mostly but less less vaccinated yeah i think it's not majority vaccinated is it oh i thought it was i'll check that for us i don't know and the and even if that even if that's the

SPEAKER_149: case the vaccine is the one that's like at least said to be not as effective but so you have this

SPEAKER_386: sort of like almost virgin population like if you reopen yeah i mean this is going to be incredibly

SPEAKER_22: i thought they were getting close to 50 vaccinated yeah i read that it was the the the elderly

SPEAKER_37: population that was majority unvaccinated and the the younger folks tended to be more vaxxed lovely it's the older folks that are more vulnerable i don't even want to play with that

SPEAKER_10: conspiracy theory well i mean this was 65 she was talking about this on face the nation this weekend or the press i had heard it on one of the sunday shows yesterday that like wait what is their

SPEAKER_03: strategy here why wouldn't you vaxx and is it oh because we want to keep young people working in the factories or something more sinister maybe we older people are an overhang and we don't need to protect them because they're a cost society i mean the mind does wander to very dark places i mean to be

SPEAKER_00: honest florida kind of did that um 65 at the end of 2021 reading over 70 according to nick i'm sorry but not only did they like straight up do that but when i tell people like well i just literally had an argument with a friend i was like florida had the highest among the highest deaths per capita

SPEAKER_149: in the united states and she literally said to me well that's because i have so many old people

SPEAKER_393: yeah i'm like yeah wouldn't you try harder to protect them like yeah wouldn't you put up more

SPEAKER_400: you made a really vulnerable ones like what yeah anyway yeah let them die i mean listen there's there's

SPEAKER_242: there's a hindsight in the pandemic is super valuable and china has the value of hindsight they now can look at what happened here and in europe and deploy a strategy based upon all the mistakes we made here and politicizing all of this um anyway this is um and i apple operating there and

SPEAKER_12: obeying the rules there and you know i don't agree with but i also and now look at apple's involvement in china as being having reduced massive suffering i do appreciate the things that apple's involvement has done they brought more human rights and more worker protections to people who were essentially slave

SPEAKER_09: labor before apple you know um because of bad press and foxconn in the united states and in the west that led to apple going there and saying hey we need to have some standards here this blowback is

SPEAKER_12: causing us problems in our country this is the power of engagement i'm not saying i'm for engagement i mean you've heard me say disney and you know nba should pull out but now that apple is entwined they have an amount of leverage that is not insignificant um and they they prove they have that

SPEAKER_09: leverage remember when the people were jumping off the roofs of factories right and they said hey this is way too much bad press and this is where the western press apple's involvement creates massive massive leverage against xi jinping he can't ignore it he can't say oh the factory conditions can't improve

SPEAKER_129: they got to actually go in there and tim cook and the chinese communist party have to collaborate

SPEAKER_208: on making these stories go away uh look at the pressure on tim cook today on twitter people are going

SPEAKER_03: crazy on tim cook today on twitter uh this is going to be very uncomfortable for them and this they'll be pulled before congress senators whatever there'll be the talk of the sunday morning shows this sunday there's going to be massive pressure on apple to explain what they're doing in china

SPEAKER_37: from the coming months yeah it gets even harder if you happen to own a social network and do business in china it's going to be an interesting combination of factors there it's going to be

SPEAKER_195: hard for everybody who's got engagement over there 100 yeah back to my question is there

SPEAKER_420: a way to ethically engage in china i have to go do therapy in a minute or two but um it's a bad knee which is important oh no uh talking anxiety yeah yeah yeah because i i was born with a brain enough

SPEAKER_38: or this has triggered you and you're just like burning i'm running uh i i was i didn't know what

SPEAKER_37: we're going to talk about today and i just want to say that this is not where i thought we were going to go and i i'm very glad that we sat and had a conversation that i think we would have had over coffee or a drink but we did it as a podcast so like if we didn't get something right in that it's because we're trying to talk through it we're chilling yeah yeah we're working it out we're working it out

SPEAKER_431: together alex thank you we appreciate it a pleasure as always guys and i appreciate the care for

SPEAKER_313: individuals go to subscribe tech crunch premium pay the money people pay the fee just make me look

SPEAKER_37: good internally it's making my baby can afford to go have her nanny congrats in advance congrats in

SPEAKER_436: advance on the baby thanks all right let's keep moving molly and anything else here on the uh

SPEAKER_03: listen i am and i am the isolationist china hawk of all hawks but yeah i'm kind of liking that tim cook is going to have to deal with this because they are such a virtue signaling high-end

SPEAKER_23: our reputation matters company are they that oh yeah i mean i mean i think they're like i think tim cook is legitimately a do the right thing kind of person and also they are ruthless the most ruthless business people i mean come on like well that's why i said virtue signaling that's why i said

SPEAKER_165: stopping people from jumping off of the top of your building is arguably the literal least you can do

SPEAKER_03: yeah exactly but i mean look at how delicate kid gloves they are here in the united states you know

SPEAKER_08: very careful there is a cause they're going to be on it right uh and they care about their reputation so like if they care about their reputation i think they really i mean if zuckerberg was in there

SPEAKER_455: he'd be like i don't care what you think to the extent that if there's a cause i don't think they

SPEAKER_149: just like jump on it i don't i don't know i i dispute that characterization ever so slightly

SPEAKER_23: okay but if but i think apple wants to be i don't know that they want to be all the way to the good guy but they want to be they brand preservation is very important they want to be the good guys and

SPEAKER_07: gals yes for sure they want to be they want you to never think about the little tiny children hands

SPEAKER_242: that made that iphone i don't think kids are building iphones uh i no i don't think he would allow that that's my point holly that's dark uh now i'm just is the age of working in china 16 or 17

SPEAKER_131: are there people working in the supply chain that feed foxconn do they have 15 and 16 year olds

SPEAKER_465: working in the arc of history does a communist country care if a 14 or 15 or 16 year old is working

SPEAKER_00: full-time and out of school i mean to be clear we just had a giant child labor scandal in america we didn't meet yes all the meat packing the meat packing industry is like a vertically integrated disgusting uh duopoly at best and yes there was a huge child labor scandal i'm reading from the new

SPEAKER_243: york times one of the largest food safety companies in the united states illegally employed more than

SPEAKER_12: two dozen children in at least three macking plants several of whom suffer chemical burns from the corrosive cleaners they were required to use overnight shifts so i'm just saying 31 children okay so foxconn's doing it and here in the united states ranging in age from 13 to 17 uh so here in

SPEAKER_03: the united states when that happens uh people go to jail uh companies get in big trouble one 13 year old one 14 year old who work from 11 pm to 5 pm am five to six days a week school records show the student fell asleep in class or missed class because of the job how did they ever do this did the person have uh papers because that's illegal they must have had papers they must have faked it or something

SPEAKER_07: or they turned a blind eye wow that is there it sounds like they were mostly immigrants the boys mix of boys and girls were not fluent english speakers and were interviewed mostly in spanish so yeah so here's

SPEAKER_41: the difference like in china there might be a thousand fourteen and fifteen year olds in a supply chain somewhere uh or a million or they could be hiring and it's totally illegal here in the united states if

SPEAKER_470: it happens somebody did something really wrong and they're going to be in big trouble um so yeah anyway

SPEAKER_337: i'm just saying that when i make that comment like there's i don't i'm being a little bit wrongly

SPEAKER_00: cavalier but i think what i'm trying to say is this happens when business gets big enough bad things happen and at the end of the day the business is the priority and for apple the business is the priority and has been and the pressure you know the pressures that are pushing apple to get out of china have less to do with society and more to do with it suddenly being an

SPEAKER_323: unreliable factory um hmm i don't think i mean i don't think they're getting out of china to be the

SPEAKER_03: good guy it's like oh we can't count on untouching there i think if it becomes untenable because of social

SPEAKER_41: pressure um or geopolitics makes it impossible because of the taiwan you know uh if god forbid a taiwan conflict happens it could become untenable for that reason and i think you know

SPEAKER_03: dealing with a communist country with a god king that might just be too high of a risk factor for somebody who's obsessed with the supply chain as tim cook is tim cook is probably looking at this going it was good while it lasted yeah we cannot have dependencies he must have seen this you know 10 years ago and he must have identified it and i guarantee you they have you know buttons and plans and plan b's and plan c's to do this in india they've been i know they do some

SPEAKER_211: things in india vietnam other places yeah yeah no we totally agree there i think i mean that's

SPEAKER_09: exactly it's a supply chain risk it's a supply chain risk and he's on that they do the older models of the

SPEAKER_149: iphones already in india so yeah i mean it's a hundred percent interesting times like i agree with

SPEAKER_165: alex that i think this is one of the bigger developments to happen in a sea of noise this is news

SPEAKER_451: and in fact actually i just saw it here in september apple announced that they are making the local

SPEAKER_10: fur version the current lineup for the first time in the same calendar year in uh india so they have actually made that change so this is the uh this is the escape valve this is the escape hatch the great uncoupling it's the great uncoupling and you know what that is going to be i predict uh china is going to have to address the human rights concerns and they're not going to be able to afford to lose the business and so i actually think we're going to look back on the arc of history and it i know this sounds crazy i think apple and amazon because they are so dependent and they have so many other options now and they're and they're doing it because remember we talked about in this program there was that uh solomo there was some house brand that amazon was doing that we were

SPEAKER_12: really into limo so limo that was an indian brand we had done the research on it so amazon and apple

SPEAKER_03: have already addressed this they're already in india india sees themselves as the big rival to china india has blocked all those chinese apps including tick tock from being there india is gangster they'll take the oil from the lowest price place they are not they're they're not uh i don't think they defer to the united states they have a or china i think they see themselves as contemporaries and rightfully so and as contemporaries uh that creates the counterbalance which is hey if china doesn't want the west business india does vietnam does what is china going to do lose the jobs and then have more civil unrest i mean he's got people chanting to oust xi jinping that's the first we've heard of it

SPEAKER_00: but yes all of that 100 that is one way this could go i just would be hesitant to assume that the value system is the same like you and i have decided that like capitalism is right like i have decided that and when it comes to climate solutions which i am 100 ruthless about capitalism is the best way forward yeah i don't like none of that value system is shared so if you look at cuba and how long

SPEAKER_149: castro kept cuba in the dark ages yeah rather than give up this philosophy if you look at north korea

SPEAKER_00: if you look at the times that china has allowed millions of its own people to starve like stalin doing the same thing i just i think that the

SPEAKER_149: you we're assuming that pressures that would work on us will work on xi jinping and the ccp in china and i don't know that they care i think if anything they have demonstrated in the last

SPEAKER_431: three years right like nope philosophy over power overall yeah i mean listen an economy be damned

SPEAKER_10: they to your point they rolled hong kong they rolled uh tiananmen square before that and uh you know they have been keeping people they have a million uyghurs in concentration camps to slave labor you know yes you're correct and i think they will hold on to control they got rid of you know uh the education startups they moved dd from the public markets here to the public markets in hong kong so yes they're going to keep squeezing yeah and then until you can squeeze your people no more and then you're you're fighting it with them in the streets and they're fighting with them in the streets now and you know what tiananmen square it didn't work out hong kong the protest didn't work out but i don't think they want this to be the standard way that they wake up every morning i don't think xi jinping wants to wake up to this every morning and yeah maybe he squashes it that's the majority case i agree but i hold out hope that this could be the tipping point i always hold out hope that there could be a tipping point i think it's going to happen in iran i think it will happen in cuba

SPEAKER_470: eventually uh just like the berlin wall fell you know and uh you know that that's a good time that

SPEAKER_496: did happen yeah it takes time it does it just this is something that takes 50 years 100 years

SPEAKER_03: yes what i hope is that xi jinping gives the people some amount of rights that they didn't previously have and that we rebuild uh our relationship with them and engagement increases with just some basic

SPEAKER_09: advancing even if it's slow of human rights uh that's what i would like to see that's what i'm hoping for and i think apple and and you know uh capitalists and democracies in the west can play a

SPEAKER_10: role there and i think actually that was our strategy i think the engagement strategy was hey it's good for business and it's good for moving the world towards democracy i think we pursued it with them and we set a trap i think we set a trap with engagement and now who loses in that trap we're not going to lose america's not going to lose we're going to just move the we're going to buy our goods and

SPEAKER_502: services which are already too cheap to india if if americans have to pay twice as much for a spatula

SPEAKER_00: who cares like the prices on amazon are absurd we're paying less than it costs to make these things

SPEAKER_12: like it's not it was never certainly less than to make them humanely right so if i had to pay twice as much for a spatula the average american did would it matter no you just don't buy as many spatulas like people are upgrading their constantly if i have to drive a car for twice as long or anybody has to

SPEAKER_09: drive a car for an extra year or two it's not going to kill us we are a consumer society gone wild

SPEAKER_00: we've gone wild with our consumption oh my god what an amazing segue into our upsetting next story about black friday shopping and then we'll enough i'm doing zero shopping what i wanted to note specifically about black friday shopping is that our consumer society remains as strong as ever and we even brought

SPEAKER_149: this up earlier so it was a it was a record 9.12 billion dollars it really was black friday was yep a 2.3 percent increase year over year somewhere jerome powell's pulling his hair out he's like why can i not win here why can i not win and you know we're in a recession because all the orders made using

SPEAKER_00: buy now pay later jumped 78 percent whoa 80 it was uh in the week over last november 19th over last year in the week of november 19th through the 25th buy now pay later revenue spiked 81 percent compared to the week before to the week before got it and then i think it was 78 over last year the buy now pay

SPEAKER_518: later that's extraordinary yeah that means that feels bad well here's what jpo wants or right jpo wants

SPEAKER_03: you to extinguish your savings get a little credit card debt and get a second job or work a little overtime or go back to work and he wants labor participation to hit 68 and 69 70 percent and he wants those 10 million or whatever 9 million jobs to go down to five he wants unemployment to go up to

SPEAKER_41: five or whatever it is he wants to slow the economy so if if you can't stop spending yeah and you're just

SPEAKER_521: gonna make it worse for you he's like again he's laying the trap for you stop spending everybody

SPEAKER_208: it's a trap it's a trap it is a trap it is a trap it is stop spending everybody pay down your bills be prepared for a long winter i'm slowing down my spending my wife and i sat and we were like you

SPEAKER_131: know what no major purchases yeah off the table yeah we inside of my companies show me every bill we're tightening our belts like i'm just battening down the hatches i assume a storm is coming i'm battening down the windows everybody's got to perform at a high level everybody work harder everybody spend less do more with less let's be more resourceful the end make your spatula last people well yeah i mean

SPEAKER_526: i just the consumption is crazy i i have a garage full of stuff and sometimes like i order something

SPEAKER_242: and somebody yeah i don't know if you have this happening around so somebody opens it puts it away

SPEAKER_208: i forget i ordered it yeah and i'm like where is that thing and i forgot i ordered it and then i reorder it and then my life's like oh it's right here and she pulls out this proverbial spatula and i'm

SPEAKER_03: like wait a second yeah and she's like and then and then we're sending stuff back because i'm such an idiot so now i'm checking my orders on amazon to see if i ordered something previously and i'm just

SPEAKER_208: being more thoughtful about all spending and i'm trying to work harder so i'm i'm i'm taking on the

SPEAKER_07: austerity personally i love to hear it i mean honestly as from a climate perspective alone little

SPEAKER_149: you know and also just the problem is again a stat that never stops astonishing me what 80 of gdp is consumer spending at the end of the day j powell wants you spending they want us buying remember when

SPEAKER_31: remember when bush w right yeah w gave everybody like a thousand dollars to spend money i don't remember my crap oh did he yeah it was like a tax credit he aired all the tax breaks all americans remember that yeah now i do patriotism shopping love it no you don't love it i know i'm just joking

SPEAKER_534: i just oh buying of votes is just on both sides of the aisle is just crazy to me like we need people in

SPEAKER_535: office capitalist country like why do we think why are we surprised by this i just think we got to get

SPEAKER_09: like big money out of politics and we have to start thinking long term it's just i know our system is not designed for that but can there be some adults who like i really think my issue for this next

SPEAKER_10: election you know after choice like i can't vote for somebody who's anti-choice um that's like a deal

SPEAKER_09: breaker for me um i kind of feel like we need to balance the budget or control spending in some way so if both parties could put somebody out there for me to consider who actually is looking at the amount of spending and saying huh what's reasonable here i'm nervous i'm nervous about the how to control spending and then i what's going on with j powell i mean he seems to be like he's on his own path where he's like i'm going to slow this thing down and then everybody on the other side is like

SPEAKER_21: airdrops let's airdrop it's like right because well nobody wants it to slow down because the stock market's going crazy and everybody i mean it's yeah i don't know it's it's a lot it's a lot

SPEAKER_09: austerity and excellence everybody in america who hears my voice work harder and control spending these two things will get us out of this we had a party and now everybody's gonna have to just have an alka-salsa go for a hike hit the hit the sauna sweat it out a little bit be focused at work i started 8 30 this morning you know with a meeting i i'm just i'm working till eight o'clock tonight and it's

SPEAKER_131: my birthday my wife's like what are you doing for your birthday i'm like i have an 8 30 a.m meeting and i'm ending family university at 8 p.m that's my birthday 8 30 a.m start time get in the game

SPEAKER_242: emergency management team meeting 8 p.m punch out anybody who works for me that's my day keep up let's

SPEAKER_361: go you had like a little party on the weekend though i hope right they gave me a kid they did they got me a they got me so i was pretty happy about that i get to spend it with my daughters all i care about

SPEAKER_12: spend time with my family have a lot of laughs at my daughters uh you know like traveling with my kids i love it i love we make a game out of it it was so sweet my 12 year old was like sleeping on my shoulder we had like the crack of dawn flight yesterday oh yeah you ever do those yes definitely

SPEAKER_243: i kind of like coach i'm in coach crack of dawn uh i think we had a 7 30 flight we had to be there at 6 a.m it's a i got up at 4 30 i got the girls up at five you know they're like six-year-olds like

SPEAKER_208: like a 12 year old they're like dizzy i'm like buckling them into an uber to get to the airport

SPEAKER_449: we got there early i gotta make sandwiches that's adorable happy birthday really take a minute and

SPEAKER_432: wish jason yes happy birthday i feel like the luckiest guy on the planet i take nothing for granted

SPEAKER_208: i'm healthy i got people i love working with every day i wake up with a sense of purpose i got great friends life is exciting i lost 25 30 pounds i look great i feel great healthy i might get to ski this year i'm i'm i'm thankful for all the simple little things as i said on my tim ferris podcast people are freaking out about my appearance on tim ferris like a new side of jacow

SPEAKER_61: the human side you didn't you didn't listen to it i haven't listened to it yet yeah i'm listening i think you get enough of me i don't believe i'm gonna i'm gonna i'm doing speaking gigs again though i took two speaking gigs i was like you know what back to austerity measures i'm gonna get

SPEAKER_246: on the road i am on that hustle also i know i'm like f it people throwing me 50 dimes i'm on the road

SPEAKER_75: let's go give me the 50 dimes and then i'll meet with qps get people for launch fund four meet your founders let's go send me on the road i'm excited about austerity here because the thing

SPEAKER_149: the thing is i mean it's i have no hope that a boom bus cycle is going to magically go away or whatever but and i'm happy that you pointed this out it's the it's the regular people who suffer right it's like every it's like the people who go crazy or not they'll be everybody is sort of just

SPEAKER_00: like most people right 80 20 rule are just kind of along for the ride of whatever society is bringing to them and so it's like oh it's awesome times great thank you for like you said the free lunch and then it then they get they're the ones get they get canned and it's like it's somehow it's their fault or like you're not spending enough no you're spending too much and whatever and it's just

SPEAKER_03: sort of like this recession is so weird we have so many jobs available so many jobs available yeah so much gig work at 36 an hour to drive for uber it's absurd the uber fees and the doordash fees

SPEAKER_07: are through the roof the rent's too damn high and yet we're kind of relying on gig work to keep people alive because we're still not right you know it's like no no we're not we have 10 million jobs

SPEAKER_149: they need more the reason they're paying 10 million jobs and also people are working two jobs like

SPEAKER_92: that's what i'm saying the weirdness is everywhere no they definitely are the latest labor report

SPEAKER_13: actually said oh really maybe yeah that's what we need 61 labor participation down from 69 70 percent in

SPEAKER_92: the in the 2000s it's so weird it's like you literally have some people quiet quitting you have lots of people working two jobs just to pay the rent like it i i bring that up as weirdness not

SPEAKER_361: even to okay disagree it's like all things could be happening at the same time right all the weirdness

SPEAKER_576: is happening so weird i i'm gonna quiet quitting a lot of vcs quiet quitting a lot of vcs are quiet

SPEAKER_578: quitting we should do we should do some deals right now because there's a lot of vcs who are quiet

SPEAKER_206: quitting i'm like hey i got a deal for you they're like ah i'm good i'm like don't want to make any money like this is hot and they're like yeah i'm kind of wrapping up for the winter break i'm like it's november they're like yeah let's talk of the new year i'm like talking the new year we got 20 days

SPEAKER_242: we can hustle 22 days before the break let's go yeah nope nope quiet quitting seed funds quiet quitting vcs including the quiet quitting and explicitly quitting pounders kind of quietly quitting

SPEAKER_00: just because it's getting hard doesn't mean you should quit i literally got a fortune cookie the other day that was like geniuses shown in the hard times or whatever and i was like all right let's

SPEAKER_211: do this well people's character too you know you really start to find out people's character in

SPEAKER_00: a crisis i had a girl's brunch this weekend back to the thankfulness train and we were like just all talking about our favorite time of day and you know somebody was like oh i love my morning coffee and like i love the like the sunset and i was like i love all those things and then i literally was

SPEAKER_85: like i really like doing my podcast with jason like i really i genuinely do like there's the moment when you come out of the podcast and you're like yeah you're kind of like got a little high so the energy

SPEAKER_12: level is high yeah we don't always agree delight uh but we learn every day together here's something i learned from your stat i like your buy now pay later story if we could zoom in on the chart that molly provided it shows the last three these are three green bars i'll describe it for people and uh this is the share now if we zoom in you you'll see credit card it's going down right from a peak lav three two two years ago 54.3 down to 49.4 and paypal also coming down from 28.5 to 26.7 okay those are going down debit cards smashing up i guess people want to use their cash they're a little concerned that's one group of people that's interesting here's the thing i think is super interesting can we zoom in on apple pay and buy now pay later these are the two new kids on the block

SPEAKER_207: yeah i'm using apple pay constantly if i don't see apple pay i'm infuriated when i'm on my mobile phone

SPEAKER_03: and i have to type in my credit card i'm infuriated yeah apple pay is going to be 30 percent 40 percent of purchases i think apple's gonna this is going to be apple's new thing apple pay 12.7 percent of purchases of black friday up from 7.8 percent last year 8.2 percent last year it's up 50 percent year

SPEAKER_23: over year molly and look at that look at that compared to this slowly slowly shrinking line of

SPEAKER_00: paypal apple pay is already up to almost half of the share of paypal which used to be the only way

SPEAKER_257: that you would check out online yeah look at that you're gonna look at venmo venmo letting people

SPEAKER_23: and look at google pay i have done these services i've done the pay with venmo thing it's so great

SPEAKER_00: because then because you i don't know about you but i always have accidental money in my venmo because my kid uses my card primarily to buy sneakers and then he venmo's me the money and then i always leave it there but then i'm always excited when i see pay with venmo because it feels like i got it for free because i just paid with my money that was still sitting there all right almost like your

SPEAKER_07: secret accidental checking account here's my advice no more whatever your yearly salary is

SPEAKER_12: keep your debt to no more than five percent of you make 50 2500 you make 100 5k it's my five percent rule no more than five percent of uh any of this kind of debt and make sure you're looking at those

SPEAKER_601: interest payments yes oh no zero you should not have zero guy too but no i'm talking to people who

SPEAKER_611: are these people who are doing that now pay later i'm just trying to give them a number and an easy heuristic okay fine you're right you're right just trying to help you're right that's how you and i

SPEAKER_165: are you know what you worked on marketplace you know money abstinence doesn't work you're right you got to give them the protection version yeah this is more towards my team members i know i got

SPEAKER_208: some producers here who maybe are going out on having a couple cocktails on the weekend and buying expensive later rachel uh rachel i don't want to see you buying 12 lemonades okay i don't know kombucha for you water you make iced tea at home you don't eat kombucha as well the avocado next like producer

SPEAKER_31: makes like i'm seeing ads for buy now pay later on door dash orders who would pay for chicken parm with four installments of three dollars and fifty cents you know we are in a higher interest rate environment

SPEAKER_165: though i will say like i you know i bought some three month cds or whatever and uh four percent interest

SPEAKER_521: is free money all right so i don't want to see any more of this wawa lemonade all right it's enough

SPEAKER_626: already what is that cost what is a wawa lemonade cost this seems expensive lemonade is this a thing two

SPEAKER_131: dollars oh yeah sugar water and lemon make it at home i make lemonade at home i'm rich we squeeze lemons in the calacanis household my i put my daughters to work they love it they got the manual lemonade press we make simple sugar that's how we do it in the calacanis household oh my god you could probably

SPEAKER_634: take this chart away now we just squeeze lemons we have food at home i'm literally turning into

SPEAKER_09: internet dad i'm rachel's internet dad i'm just like rachel i talked to rachel's dad this week and we're gonna we're we're gonna go over rachel's expenses no more wawa at christmas it's enough rachel

SPEAKER_75: what are you saving rachel i want to know what's in the wealth front account enough with the wawa

SPEAKER_405: i feel like we're gonna find out any second water manhattan water is delicious it's the best water in the world you don't need to buy it in a bottle we're gonna find out any water and they sell it

SPEAKER_00: to people in california rachel's actually fire like you just wait rachel's like in the fire movement she's like um actually i saved 70 percent of my income i love it i love it let's do it let's do it

SPEAKER_10: all right everybody that's been a great episode if you have ideas for the show at mollywood at jason we got ideas producers at this week in startups.com if you're a fan of the show if you're a pr person we insta block you and we sorry our can response sorry we do not

SPEAKER_548: take pictures for the pod but fans of the pod we will take your insights we love your pitches

SPEAKER_149: well it's going to be a great week too we got a good week coming up i think the crypto boys are going to come back we're going to be talking about the block five collapse and the this and

SPEAKER_174: that and that happened too right we didn't talk about that on today's show we saved

SPEAKER_643: exactly so we're saving that bankruptcy production five filed for bankruptcy it's the miami crypto story which we could do tomorrow which is yeah let's definitely do that one okay all right so

SPEAKER_243: uh leave this in the show nick uh including you breaking in people like when you break in they do

SPEAKER_648: love it do they i don't think they do oh they love it they love i started listening

SPEAKER_629: bob bob buoy i want you to keep this in and i want you to yeah nick was when i started listening to the

SPEAKER_165: show like as i was in the process of getting hired and listening to it every single day and then i was like

SPEAKER_12: who's that guy yeah a while before i don't leave the break-ins in especially at the end a break-in at the end is like a little piece of candy for everybody is enamored with producer nick who's producing the best christianic's great and he's like a mystery so as producer nick said there is

SPEAKER_243: a crazy crypto bottle popping story we got block fi we have an address we have a startup of the day

SPEAKER_548: we got we live in the future just so much to go over we're back babies we're back babies see you tomorrow everybody bye bye bye