SPEAKER_00: Today on This Week in Startups, Jason's joined by acquired co-hosts Ben Gilbert and David Rosenthal. They break down the current state of the VC market, the year of retrenchment, how startups have had to adjust in 2023, and they also unpack the news about why Combinator shutting down its continuity fund. They also cover some distortions created by zero interest rate policies, and so much more. This Week in Startups is brought to you by the Microsoft for Startups Founders Hub helps all founders build a better startup at a lower cost from day one. Startups get up to $150,000 in Azure credits, access to OpenAI APIs, free dev tools like GitHub, technical advisory, access to mentors and experts, and so much more. There is no funding requirement, and it only takes minutes to join. Sign up today at aka.ms slash This Week in Startups. QuickNode gives blockchain developers unparalleled reliability and speed, with access to unlimited endpoints across 18 chains and 35 networks. Get one month free by using code TWIST at go.quicknode.com slash TWIST. And House of Macadamias is the next big health trend. Get 20% off your first purchase and a free bottle of cold-pressed macadamia oil at houseofmacadamias.com slash TWIST by using code TWIST20.

SPEAKER_02: Hey, all right, everybody. Welcome back to the show. Every quarter, I like to have my boys, Ben and David, on from Acquired FM. If you don't know Acquired FM, where you been? One of the great business podcasts in history. They'd love to go in there and do deep dives on the history of awesome technology business startups, companies that made it for time periods. Ben Gilbert is at Gilbert.

SPEAKER_04: And David Rosenthal is at DJ Rosent on the Twitter. Gentlemen, how are we doing?

SPEAKER_05: We're doing great. One of our favorite listeners just yesterday described Acquired to us as we like to crawl

SPEAKER_08: inside of a company history and live there for a few weeks and then come out and tell the story.

SPEAKER_10: It's a great format, Ben, like to just do a case study.

SPEAKER_13: Like this is what happens in business school, right? They do case studies. Maybe you can learn something.

SPEAKER_14: I've heard that. I've never been to business school, but I do hear that they do things like this. You went to business school, David?

SPEAKER_07: I did. I went to Stanford for business school, which was wonderful.

SPEAKER_05: And I was just listening to your wonderful interview earlier this week with one of my professors from there, Andy Ratcliffe.

SPEAKER_19: Ah, yes. Andy's amazing. Product market fit.

SPEAKER_20: He created the word. He co-founded Benchmark. Wealthfront. He's the chairman of now.

SPEAKER_23: And just an amazing, amazing.

SPEAKER_25: Yeah, pretty, pretty good. What was, what course did you take, David, when you were at the GSB at Stanford?

SPEAKER_27: The GSB. So sadly, Andy, I think he had coined the term before, but he teaches a course there called,

SPEAKER_07: uh, I think aligning startups, product market fit, like aligning startups with their markets or something like that. Uh, he didn't teach that my second year, uh, cause he was going back into the CEO role at Wealthfront, but he did co-teach the legendary venture capital course there, which I did take with Peter Wendell and Eric Schmidt. The three of them were our professors.

SPEAKER_29: Wow. It was pretty awesome.

SPEAKER_28: That's wild.

SPEAKER_30: I mean, celebrity professors coming in. And they came twice a week, every week. It was like amazing.

SPEAKER_31: Well, I mean, here's the thing about Stanford. People live 15 minutes away and you go and, you know, you, you, you can find great investments

SPEAKER_23: or great potential hires there. So it's, it's a pretty productive use of time.

SPEAKER_20: I think for folks, I go there for Jeffrey Pfeiffer's class twice a year, cause he wrote a, that power class. I don't know if you took that one. Did you take that?

SPEAKER_35: I did not, but, uh, I read the book and many of my classmates took it.

SPEAKER_20: Yeah. So I, I, uh, he, he did a case study on me and how I accumulated power as an outsider.

SPEAKER_37: And I go there and I, oh, that's fun. Is that in the book? It's not, I think his latest book, he mentions me, uh, but he did the case study a couple of years ago and it's quite, it's quite charming.

SPEAKER_38: You know, you go to Stanford, you meet all these students and I've been going there for

SPEAKER_23: like founder pitches. They held the founder pitch night for me, classroom of 60 or 70 people and 150 showed up.

SPEAKER_37: And then we went out to like some really terrible on campus. Pub and eat bad pizza.

SPEAKER_39: And was that interesting lead gen for you or, or deal flow? Like, did that lead to any launch companies?

SPEAKER_38: It hasn't led to an investment yet, but it was, these were solid pitches. Um, but I think it will eventually lead to one if I keep doing it consistently. Um, you know, the kids coming out of Stanford, they have a lot of, because they're starting

SPEAKER_41: on second or third base there in terms of VCs assessment of them, I think they can raise

SPEAKER_42: a larger round, you know, faster rather than a seed round. Right. They might skip that step or they might immediately go to third base, but that was

SPEAKER_10: basically the career path. I think was like, if you go to GSB Sandhill roads, right next door to Stanford, you can

SPEAKER_48: just after school, go raise money.

SPEAKER_49: There was some astounding percentage, like 20%, I believe of my class started companies after we graduated out of a 400 person class.

SPEAKER_07: Uh, and I'm sure that continued to go up and we'll probably go down now, which is a good thing.

SPEAKER_19: Pretty diverse group now at GSB. I don't know. When did you graduate?

SPEAKER_54: 20 14.

SPEAKER_55: Yeah. I mean, it is very diverse right now.

SPEAKER_20: 10 years later, gender, just people from around the world. It is, um, astounding like how diverse it is. So I think it might have had a reputation 20 years ago of being a bunch of folks like David Sachs, Keith were boy and Peter Thiel.

SPEAKER_41: And now maybe it's less white guys from South Africa.

SPEAKER_08: Yep. It was, it was like along that transition when I was there, but it was still two thirds men, one third women and, um, yeah, it's, it's, it's continued to go in the right direction.

SPEAKER_37: All right. Well, let's take a look at the market.

SPEAKER_38: Uh, you, uh, all three of us like to do early stage investing and I would just like to ask, generally speaking, are you seeing more companies now than you did during the peak years, 2020 and 2021, the same amount of companies and then maybe qualitatively, what are you seeing valuations, maybe attitudes, business models, level of seriousness, Ben?

SPEAKER_63: What's, what's it been like for you in 2023 now that the horrible 2022 years in the books.

SPEAKER_12: Yeah. Well, in 2023 so far, it's just been all up into the right.

SPEAKER_14: Oh, of course. Yes.

SPEAKER_66: It's interesting. I mean, I think so, first of all, the stage at which I invest is basically just formation stage. So for PSL ventures, 70% of the times or of our initial investments are within two months of the date of incorporation. So super early stage, um, firm up in Seattle. And so it's kind of the same thing we've always done where we run a super concentrated portfolio. We invest two to $3 million checks and each partner invests in one to two new companies a year. Um, and the interesting thing is I don't think the volume of companies has changed. I think the, at least from like literally just the, when I look at my own calendar, but I do think the, um, physics of company building has changed. So when, when founders are pitching, it's less about, uh, you know, I want to raise five on 20 and then our goal is six months from now to go raise a big series a it's less about the goal is the next round. And it seems like a lot more of my goal is to see if this is enough money to build a profitable business and then the option value to go figure out if we need to raise a bunch of money or not. And I think that's a, that's a, um, as long as your competitors are playing the same game, that's a great position to be in. But if your competitors are playing a game where they can show up with a hundred million dollar investment from soft bank or someone or tiger, then like you kind of can't play the maintain your option value game. You have to play the go big or go home game. And so I, I, I think we're, um, I kind of like this phase of the cycle where, uh, we're seeing more traditional entrepreneurship.

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SPEAKER_75: you seeing?

SPEAKER_35: It's interesting. I do. Well, I do some formation early stage, uh, investing like Ben, uh, often alongside with

SPEAKER_07: Ben, um, that's a smaller part of what I do. Mostly I do late, you know, mid to later stage stuff. Um, that has been interesting deal flow went from extremely high in 2021 to, uh, slowed to a trickle, but maybe this is counterintuitive. Like we're seeing and doing some investments that I'm pretty excited about, uh, that are opportunities I think wouldn't have necessarily come around in other markets. Uh, two examples, um, one, we actually just invested in long time partner of both of our shows, tiny, uh, who, uh, I know you know, Andrew Wilkinson's company. Yep. Um, they are using kind of this opportunity along with several other things to double down and go bigger on what they're doing. So they're raising extra capital. They're actually going public. Um, which is, uh, it's gonna be, it's gonna be totally transformative for them.

SPEAKER_80: Explain what tiny does.

SPEAKER_07: Um, so if we will, don't know tiny, uh, the goal, the thesis has always been to build the Berkshire Hathaway of the internet.

SPEAKER_08: So just like Warren and Charlie at Berkshire acquire wonderful, profitable businesses and have always said they don't understand technology and they're scared of it and stay away with

SPEAKER_07: it, uh, from it, despite Apple being their best investment of all time. Uh, but that was, that was the investment managers, Todd and Ted, not them. Um, tiny, uh, Andrew and Chris, like this is what they want to do on the internet. And they had this incredible insight 10, 15 years ago that there are businesses like that on the internet that have not raised venture capital that are spitting off cashflow that have great margins that are growing. Um, and that the owners of them want to sell for whatever reasons. And so they started buying them, uh, they bought, well, they started one themselves metal lab, which is the premier UI design firm in the world. Um, that was the kernel of what they built. Then they acquired dribble, uh, which is an incredible design marketplace. Um, we work remotely, a bunch of job boards, stuff like that. And they've just been scaling it up.

SPEAKER_12: Now they do 150 million in revenue and, uh, you know, very, very high cashflow margins. It's incredible.

SPEAKER_13: Metal labs, of course, famous. Well, maybe a controversially or famous for slacks.

SPEAKER_84: It's slacks a beautiful design, I guess, slack coinbase for, and then people were upset.

SPEAKER_86: They're like, you didn't actually do it, but you did do it. And it was just sort of like a weird debate online. I guess when something is that beautiful and successful, everybody, lots of fathers,

SPEAKER_35: uh, yeah, the other one they did is a partner.

SPEAKER_07: I think of both of ours as well. Uh, Vanta. Oh yes, of course. Great, great, great company. I'm a little piece of Vanta. Yeah. Yeah. They, um, uh, I did a very large for me SPV into Vanta, uh, alongside fellow, one of your fellow besties, David Sachs and craft. Oh, great. Um, they just did a pretty great acquisition for them that they use the extra capital for a company called trust page. So something like for the best companies at the kind of mid to late stage, they're being

SPEAKER_12: pretty opportunistic right now.

SPEAKER_37: It does seem like, um, as the late stage has cooled off, people are less distracted by

SPEAKER_38: that noise and that goal, as you're saying, Ben to build some giant war chest or just using valuation and money raised as a scorecard. And now we're back to basics, customers, customer delight, margins, revenue, growth, efficiency, all of those things. Uh, we're back to 2010 again, where, Hey, we have to build a real business and we're going to get funded based upon the milestones that we set and we hit and our credibility with the venture community, which has been wonderful for us too, because now I see all these companies that we didn't invest in, or we passed on investing in previously, um, coming

SPEAKER_23: back and their valuation expectation is no longer the TPG around, as you mentioned, Ben or Koto, whoever was, you know, dancing around and making these huge bets. Now their valuation is, Hey, whatever we can raise, whatever the market says is market value. We're comfortable with. We don't want to dilute too much, but we're realistic and we want our partners to make

SPEAKER_38: money as opposed to, we want our investing partners to take a haircut down and kiss the

SPEAKER_23: ring and, and bow down and kiss the ring and whatever it is. So it's, it feels like more normalcy, I would say, but it's not cool, right? It hasn't cooled off completely.

SPEAKER_66: No, but the fun thing about early stage is it can only get so screwed up and like the me median precede valuation that I was seeing before was like 10 ish million. And there's some people that are raising the like 18 cap YC safe type thing, uh, uh, in the, in the, that was sort of the, um, median of YC graduates, uh, a year ago or a year and a half ago. But now it seems like the median of most companies raising this super early stage two ish million dollar round has shifted from like 10 million to like $6 million valuation, $5 million valuation.

SPEAKER_98: So, you know, it's a half of what it was a little bit 60% of what it was when you're looking at these growth stage rounds, people were raising it a hundred X, 200 X revenue multiples. The public market's paying 7, 8, 9 X for SAS multiples right now in some of the best companies. And so, you know, you, you gotta give private companies a little bit of a better situation than that. Cause they're growing faster.

SPEAKER_66: Um, they're, they're in these big emerging markets. So, you know, you could, you could see giving, uh, those companies 13 to 15 X revenue multiples, but for a company that raised a year ago at a hundred X, 150 X, I mean, this is shocking.

SPEAKER_35: Yeah, it's shocking to go from kids, like toddlers, they don't have far to fall. They fall a lot and like, it's fine. They get back up.

SPEAKER_38: Yeah. Kids when they're skiing. Yeah. There's not, there's not a big, large distance from the, from the ground. So you probably saw, uh, Y Combinator shut down their growth, um, group laid off 17 people.

SPEAKER_20: What was your immediate thought in terms of Gary Tan, who has taken over as CEO, really

SPEAKER_98: friend of the pod and an awesome, uh, I, I think we, yeah, uh, I haven't spoken to Gary

SPEAKER_66: about this. Um, obviously a, a friend of all of ours. Uh, I think this is the same thing that you're seeing in every smart company right now, which has retrenchment looking around, figuring out where we were taking cheap capital and, um, leveraging our brand and, and sort of, uh, finding these new growth opportunities. And we're kind of looking at them now and saying, is that paying off? Is that the right thing? Should we kind of niche down and go back to our core? Uh, and I think every smart company is doing this. And so it's no surprise to see why see who, you know, did have a very large growth fund and it's very talented people managing that fund. Like, come on, what are they? They're why see, they are an early stage startup accelerator. They're the best one of those in the world. And so they should probably lean into like making the main thing.

SPEAKER_40: The main thing you agree, David, cause I guess the counter argument would be, Hey, if you

SPEAKER_38: do find a company like Airbnb or GitHub, you want to plow as much money into it as possible. Um, so does this say to you that maybe it wasn't, they want it to focus, but maybe they were having, maybe they didn't have great returns on that fund or maybe LPs didn't have the same appetite for it. Um, cause I, I don't know what the situation is.

SPEAKER_41: So is it, do you think retrenchment or maybe the LPs just weren't as interested in doing it?

SPEAKER_109: I don't know. I, I, I can't speaking and not having talked to Gary or, or any of the folks involved.

SPEAKER_07: I, I've, I found it a little puzzling because, well, I definitely agree with Ben too. I mean, it's focused and doing what you're best in the world at is how we think about acquired too. It's why we do like one episode a month. But, uh, but, uh, you know, I think what we've also learned from studying lots of venture firms is that while there are many paths to success, you do the best when you get access to the very best companies, you partner with them as early as possible. And you invest in them all along the way, you know, nobody's been better than this at Sequoia than Sequoia. And, um, I thought it was really smart when YC added the growth fund, the continuity fund to what they were doing for that reason. I was like, oh, wow. They have earned the right to do that. Um, I agree with you.

SPEAKER_38: The, the thing I added to my game was follow on investing and trying to build a larger position, copying what happened with Sequoia and WhatsApp. I explicitly changed that because when I started to meet with LPs in my second and third funds, they were like, Hey, what is your follow on strategy here? I didn't have a perfect track record and or answer. And I, I solved that. Now we do get to 10 to 20% ownership in our winter.

SPEAKER_41: So I did find it a little perplexing. Uh, that's what led me down the rabbit hole. Again, without having information, I haven't spoken to Gary either. Maybe they had some resistance to it in terms of raising money or other possibility.

SPEAKER_37: I thought of Ben was maybe the resistance is they don't like competing against Sequoia

SPEAKER_38: and Andreessen in those rounds. And they found it was creating maybe less investment in YC companies at the early stage, because people felt like, oh, well, YC is just going to slurp this up. Any thoughts on that? I don't know.

SPEAKER_66: The continuity fund was not a high volume fund. And so I think that they made sort of few enough investments that I'm not sure a Sequoia would say, like, we don't want to do business with YC because the continuity fund might fight us later for ownership in this company.

SPEAKER_119: I, I believe it if they were doing super high volume checks, you know, if they became tiger, but I don't think it was that.

SPEAKER_120: It was 700 million. That continuity fund. That's pretty big.

SPEAKER_121: Um, but they're, they were big checks. They were like $50 million over this, I think, yeah, they were writing fairly large checks.

SPEAKER_31: I think, uh, oh, you know what it could have been too, in terms of David conflict.

SPEAKER_38: The conflict of why don't you believe in us anymore? We gave you a great deal. We gave you 7% of our company for 150 K and now you're not continuing to invest. Therefore the founders felt ignored by the continuity fund.

SPEAKER_27: Yeah. That actually might be, I wonder if, uh, you might be on to something. I just thought of that.

SPEAKER_07: Paradoxically for YC specifically in this type of market is where the conflicts paradoxically are worst because they, they position themselves as we're on the side of the founders. And now the founders are like, Hey, markets are tight. Times are tough. We need growth capital.

SPEAKER_130: We need continuity fund. Yeah.

SPEAKER_07: Right. And like, they don't want to be in a position to be funding thousands of companies at the

SPEAKER_12: later stages.

SPEAKER_131: This is what happens when you have two smart guests and we sit here and we chop it up. We can do our little Columbo investigation and figure out, Hey, which theory is the most.

SPEAKER_23: I think that's the theory.

SPEAKER_109: How do you handle this with, with your launch companies? I mean, cause you have. I have had to. Hundreds of companies.

SPEAKER_23: Yeah. Yeah. I've had to really work on this because no matter what you tell founders, they will believe they should be the exception.

SPEAKER_38: They all think they're special.

SPEAKER_135: Yes.

SPEAKER_38: And so what we said was, Hey, when you graduate from the accelerator, uh, we will likely do half the round. We'll let you know. And we actually have a super pro rata right to do that. And if they're growing and they have a lead and somebody else prices, it will participate. I would say maybe four or five out of each seven graduates. We participate in the round. Maybe one does a party around and we don't participate or the terms aren't, you know, uh, what we think they should be. And then maybe one or two don't choose not to wrap. Maybe one doesn't do around because they don't need to. And one maybe doesn't clear market. Right. So I think the track record has been five of seven. And then the two times it's not, it's sometimes not our fault. They just, they don't raise or they don't want to raise.

SPEAKER_41: So it's kind of involuntary our participation. And then we tell them in the future rounds.

SPEAKER_38: Um, and this is why we take board observer seats when we have over five or 10%. So we know when the round is coming. Yep. Uh, we will probably take our pro rata, uh, for the next two rounds. If it's, if you, um, get a lead and you have a growth and if it's not growing, we'll take a look, but it is hard because people believe growth is they want to start up competition. They added five employees, not the growth we're talking about. So we've been more specific. We're looking and we just ask them, can you send us, uh, the, these five numbers for every month since you've been around, how many customers do you have? What's your revenue?

SPEAKER_41: What's your spend? We'll do a number there, which is, uh, we'll subtract one from the other and then tell us your churn if that's a relevant number.

SPEAKER_139: Wait, and I I've heard, I've heard, uh, talk of this thing. Are you profit?

SPEAKER_75: Is that what it's called? We call it the chart.

SPEAKER_131: So we have something called the chart and the chart has revenue minus expenses. Revenue minus expenses. And we call it the chart internally.

SPEAKER_38: So I just say to people, can I see the chart? And they show me the chart and the chart will show the, the trend line. It doesn't have to be perfect. It's obviously gonna be spiky. So we just try to have honest discussions about that. And we tell people if you're growing two, or it used to be three X, if you're growing two or three X, um, you should let us know.

SPEAKER_41: And that's why we like to get monthly updates from folks, or we'll ask them every three months if we don't hear from them and we get those updates. Um, we will originate a term sheet in some cases. If it's three X growth year over year or more.

SPEAKER_38: Um, but of course founders, um, will be like, why are you abandoning us? You know, you hear those discussions and it's, we are a seed fund. We will place a hundred bets, follow on with 50 and then follow on with five. So you just have to understand the funnel that for our LPs, we tell them we're going to increase our position in the high highest growth companies, three X or more. We're going to maintain our position in the growth companies. And we're not going to take the, we're going to stand pat. And that's the term we use, stand pat poker term, because it's less emotional. We're going to stand pat with our investment. We're not saying no, that we're, but we're just going to stand pat. And I think that's reasonable. And I I've had to try to become less. I've tried to take the emotion out of this early stage startups. It's just so emotional. Cause you get so caught up in it. And that's what I think J trading and being a public trader has done for me is I am completely unemotional on the J trades. I don't know the management. I'm just being a trade. So I've tried to bring a little bit of that, which is. The investment team meets and I have them give their recommendation. Hey, give me to the president and two managing directors. Give me your votes on if you think we should continue to invest. And then I can overrule it, of course, as a solo GPA, but generally I don't.

SPEAKER_146: So I like to have them have that dialogue. So it's a great question.

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SPEAKER_07: Who have you, I'm curious, have you, uh, because this is all sort of new ish, relatively new muscle for you. Like, have you learned from, you know, my senses that you're, uh, like your other besties are very good at this, uh, have you learned from them? Are there other folks that you've modeled?

SPEAKER_153: Like, I think, you know, Sequoia is one, um, and they will prioritize other investments.

SPEAKER_38: I think is the language they will use. We have to prioritize other investments. So I have become really now that I'm, I'm raising our fourth fund right now, and it's not easy to raise money in this.

SPEAKER_41: I have become ultra focused on what works and getting our team focused on what works and what works is making a lot of early stage investments and then five, four or five X-ing our position,

SPEAKER_38: or at least three X-ing are the size for our position going from 5% to 15% be a good back of the envelope math on the ones that are high growth. Yep. And, and that really is the early stage game. It's not about one bet. It's about making three bets on the winners.

SPEAKER_14: That's my, can I throw it? Go ahead. Can I throw out something I've been sort of thinking about to, to you guys about interest rates? Yeah.

SPEAKER_66: So I mentioned earlier, it's nice to sort of feel the physics of business again, where your competitors are kind of competing on the same field as you. Capital is scarce. Um, talent isn't getting hoovered up for $2 million a pop from the big companies. You can actually hire great people. Uh, and I, I sort of think this higher interest rate, real cost of capital thing is good for the world. It's certainly good for investors and owners of capital to see better returns on that capital. But I'm curious to get your thought on, is it good for the world? And more particularly was, was there an, any sort of innovation benefit for the world from free money

SPEAKER_161: everywhere forever? Or, or was that all just sort of like. Values?

SPEAKER_162: What do you think? Good question, David.

SPEAKER_163: Uh, sometimes I feel like the guy asking the question has an answer ready to go. Oh man, I don't want to. You obviously have my, yeah.

SPEAKER_07: I'll, I'll pose, uh, since Jake out through the ball to me, I'll, I'll pose, um, two ex, two, uh, potentially controversial ones of, um, where, yes, I think it was. In general, for most companies and sectors, I think, no, it made the game on the field harder and it slowed down innovation paradoxically, but, uh, in AI and in electric vehicles,

SPEAKER_168: I think ZERP zero interest rate policy, uh, helped advance things. Cause the amount of capital that both of those sectors took was just enormous.

SPEAKER_170: If it was impossible to raise a billion dollars, you, you couldn't enter either of those markets.

SPEAKER_66: Yep. Yep. That's a great. I, so if you sort of will something into existence. Hmm.

SPEAKER_38: I think what this ultimately the answer is ZERP will help. Push through a very hard innovation breakthrough. So self-driving is another one that got massively on overfunded. And now you're seeing all of those get unwound, uh, Uber and ride sharing also overfunded.

SPEAKER_41: And now you're seeing that get unwound and Uber is the going to be the last startup standing. Uh, and now they're getting the network effects. You see lift deprecating every quarter, just worse and worse performance. And, um, that makes sense. And, but then it didn't work with crypto. So I guess it ultimately means does this product, does this sector have product market fit? Ultimately, can you achieve a great outcome for humanity?

SPEAKER_178: Self-driving looks like it's getting close, but boy, that's taken a long time. A lot of capital. Yeah.

SPEAKER_109: I mean, EVs I think have been an unequivocal success though. Which one? Of the last several electric vehicles. Oh, EVs, yes. In the second decade.

SPEAKER_07: Tesla most prominent amongst them, but like you look out on the road today, at least in California and like, it's not just Teslas. It's nuts.

SPEAKER_38: It's hard to find a tailpipe. Yeah. There are not many tailpipes left on the highway.

SPEAKER_43: So that's a, I think you nailed it. What do you think, Ben? You got, you got any off the top of your head? Crypto was a disaster.

SPEAKER_66: Well, okay. So this is interesting. Uh, I, I, I think we've sort of narrowed in on what the, what the answer is here. It's if there is something that will provide a lot of unit economic positive value to real customers, but it takes a lot of money to like, will it into existence? Then Zerp is great. But so far we haven't found that thing for crypto. Like what is the mass consumer use case that people actually, you know, want that makes their lives better. Um, and so it doesn't really matter how much free money you throw at the problem.

SPEAKER_07: I think there's not actually a value for consumers at like, uh, there was so much water in the pond that like, and even anybody who was like a legitimate product just got drowned.

SPEAKER_140: Like I, so I think it was, it was collapsed. You know what?

SPEAKER_189: It's actually, it might even be too many fish in the pond as opposed to too much water.

SPEAKER_190: So much, so many fish that they just all ate all the algae, all the insects or whatever.

SPEAKER_38: And then you have this like collapse where it just never became a sustainable thing. And I would say just firsthand watching Uber. It created a five year period where people just never believe these businesses would ever be unit economic positive. And now finally people now believe it, but I think probably a third of the market still doesn't believe it. I still hear people on CNBC saying like door dash and Uber will never be profitable.

SPEAKER_193: These businesses are toast and it's like free cash flow, positive quarters.

SPEAKER_38: Yeah. What do you mean? Yeah, it's just, it's an overhang. It's an overhang of people believing that the drivers don't make any money. Despite the fact that drivers are continue to flock to the platforms and that it can never be profitable. Despite people are paying, people are seeing their own Uber eats and door dash bills and see themselves paying $25 in fees for 60 bucks in food. And they still don't believe it can be profitable.

SPEAKER_98: It's like, you just paid $25 in fees to deliver your dinner. Say one or the other like, yeah. And people tweet those things back to back.

SPEAKER_202: You know, you're like, you can make fun of the fees or you could say, or you could say it's a great business, which is it?

SPEAKER_194: Well, it's the same with the drivers. I mean, this was the thing that made me mad was the insincerity of the press.

SPEAKER_38: They hated Travis so much that they would lie about what was happening with the drivers. And here was the game they played. And this is why being a capital allocator and being on the inside, you actually have to trust your own analysis. The press would have you believe that these drivers were making $3 an hour, $4 an hour. And then you'd have to say, well, wait, why is a driver showing up for $5 an hour when there are an unlimited number of jobs at the Apple store, Target, you know, Starbucks, all offering 16, 18, $20 an hour, right? We saw that escalation where people blew past the minimum wage, because they just were desperate for workers. So you're like, hey, why would they do that? Is it just for the convenience? They would work for $5 an hour. Oh, wait a second. The person is putting the cost of the car, like the initial purchase of it, and then the wait time into this. And it's like, okay, the wait time, you're not supposed to count the wait time for this. If you're, you know, a hairdresser doesn't get paid waiting for the person to come get a haircut. An attorney doesn't get paid to sit there and wait. If they have to wait six hours and then they get a customer, they work for six hours, they get paid for the six hours, not the wait time. And that, when you eventually calculated it, the Uber started calculating the time to go pick the person up. So they conceded half the time, which was the pickup time.

SPEAKER_210: You're getting paid for that.

SPEAKER_61: And it turned out to be $36 an hour. I think that was the number that Dara recently said. It was 36, 35, something like that an hour.

SPEAKER_41: And there's just the insincerity of, oh, I bought an Escalade to 120,000. You're not supposed to buy $120,000 car to be an Uber X driver. You put $120,000 in there. Nobody's making it doesn't make any sense. But if you use a Prius that's, you know, three or four years old for a ride sharing, you're going to do pretty well. Anyway, that's, that was very frustrating for me was that people just couldn't.

SPEAKER_38: And the other thing that was weird. Okay. They're doing a billion rides. They're losing 50, they lost 500 million. They're losing 50 cents a ride. Okay. If they raise the price $1, would it impact consumption? No, it would just impact who got certain market share versus Lyft versus Uber versus sidecar. So they were in this crazy market share battle.

SPEAKER_12: And now that that's normalized a lot. Now these companies are making cashflow.

SPEAKER_219: Now the distortion is gone, right?

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SPEAKER_222: Let's shift to AI. Ben, is AI going to be flooded with this?

SPEAKER_18: And is it worth the flooding of cash into the space?

SPEAKER_66: I think so. I mean, you just look at the incredible flocking of regular people, like not us, like regular, not non-tech people to chat.openai.com. I mean, it has, it has found product market fits so quickly. And we can all get mad that like, oh, they're using it to generate essays and people are using it to, you know, who, who cares, who cares what they're using it for? People are using it and there's a hundred million of them and it's super, super fast. It is so clearly the next technology wave and like it is massively hyped.

SPEAKER_98: Is it overhyped? I don't know. Is it a unit economic positive? I don't know. I know these things are incredibly expensive to, to do the training and the inference.

SPEAKER_66: So there's going to be like, it's, it's like capitalism and innovation at its finest right now out on the battlefield. And I think it's like the most exciting time to be playing with new technology since the iPhone.

SPEAKER_229: I have to agree, Ben. I'm sorry, David, what do you think?

SPEAKER_15: Uh, I feel behind the times on this. I, I need to spend more time on it. I, I'm, did you pay the 20 bucks a month for the pro? No, I did. You know, I'm really, I, I need to read.

SPEAKER_38: I forced everybody in my company this week. I told everybody in the company that they have homework on the weekends. I'm giving people homework on the weekends now. I said, if you want to be an investor and be a great investor, seven day a week job, you gotta do homework. And I said, the homework this weekend is to pay for jet GPT. I'll pay for it, you can expense it and then figure out how to do your job better with

SPEAKER_41: it and then share it on Monday morning. That's cool. So I gave everybody homework this weekend. Cause I did the sales team and the sales team got great, uh, results from it. And I was like, wait a second.

SPEAKER_236: And the sales seems like an amazing use case for GPT.

SPEAKER_41: Pretty great.

SPEAKER_42: Yeah. I mean, and so anyway, just making everybody pay for it. But you think this, this could be it too, David?

SPEAKER_239: No, I, um, I, I think I have a, I was pretty bearish on it. Uh, and I, but I think I got a little bit of a false.

SPEAKER_241: Yeah. What was your initial?

SPEAKER_07: Because you know, what we do, uh, what we do, at least what I do, uh, 98% of my

SPEAKER_08: professional energy goes into making acquired episodes, which for us means researching deeply real. Like, you know, we tell a four or five hour story of like a company. Uh, and so when the first iteration of chat GPT came out, I was like, oh, well, I wonder how this would help me write scripts. So I read, uh, for my side of the research, I write a 30 to 40 page script for each episode. And I was like, oh, well, let's see what this does. And it would generate these scripts. I was just like, we can't use them. This is wrong. It's just wrong. Yeah. And, uh, so I had a, uh, a violent negative reaction to that.

SPEAKER_244: And I think it caused me to write off, uh, a lot of it that maybe I, I should re I need to reassess and think about other ways that it should be used.

SPEAKER_170: I think this whole thing is a red herring, this whole, like, oh, it lies.

SPEAKER_66: It hallucinates thing. Like, I mean the, the, in 2002, the number of people who made the joke, oh, it's on the internet. You can't really trust it. Yes. It's like, it's gonna go away. They're gonna get better at it. We're gonna find ways to say like, sorry, what's that citation from or figure out where the facts are being pulled from. It's just, it's a, it's a short-term problem.

SPEAKER_20: They're afraid to put the citations in right now, because my understanding is the number of lawsuits against Microsoft and chat GPT or chat open AI, I should say the lawsuits.

SPEAKER_41: Right. Uh, over not doing citations and who trained the data. There was just a story. I think in the journal about this is that everybody's kind of gearing up and there's, uh, a lawsuit for, uh, get hub co-pilot, I guess, open source person is suing for that. And then, um, get images were suing.

SPEAKER_39: I think stable diffusion. They should sue Dale's stable diffusion when they put the logo in there.

SPEAKER_253: Yeah.

SPEAKER_39: There's so many times I get the watermark when I'm just like, really guys, come on. Uh, but I give credit to Poe, which is the, um, language, um, because I talked to the founder

SPEAKER_41: and he said, uh, from core that they're gonna put citations in it.

SPEAKER_24: And then the other one, there's another one from that search in Neva. Is that the search engine?

SPEAKER_256: Neva. Yeah.

SPEAKER_41: The, um, Google exec, the ex Google exec. He's putting citations in it already. And then I did barred. I got into the bar dot Google. You have to use your Gmail account. Yeah. Like you can't use your Google docs account. You gotta use Gmail. I got into it. Freeberg got me in. Um, he knew somebody at Google and I started playing with it. And it is up to date. So this whole thing, like I just asked chat GPT, right?

SPEAKER_260: Um, it cuts off in 2021, September of 2021.

SPEAKER_41: It's cut off, but it said at that time, why comment had raised two continuity funds. First was announced in 2015. I don't know if this is true. Second one was raised in 2020. We'll see if that's true.

SPEAKER_38: Um, but, uh, barred was getting information that was much more recent. Uh, and so I think Google with their real time crawling. Is going to roll over, uh, open AI. I know this is crazy to think of, but I think Google is going to have the better product

SPEAKER_41: and it will be like this leapfrogging thing where Bing and Azure will leapfrog. And then I think Zuck's going to release one of these because he always loves to copy people. And then I think this puts Zuck in the search space, right? In the knowledge space. And then Reddit supposedly was in discussions with open AI because they had been indexed.

SPEAKER_86: And I think they were not pleased about it. Um, is the back channel, I guess.

SPEAKER_168: It just, this will be a huge new revenue stream for them to license their, all their, uh, hundred million dollars. All their content. Yep.

SPEAKER_38: One hundred million dollars is what I would offer. If I was read it to open AI five year contract, 500 million dollars. I think they get it. If I was core, I'd offer the same thing. A hundred million dollars a year, 500 million. Um, to whoever wants it, but nobody else gets it.

SPEAKER_269: The end.

SPEAKER_53: Oh, you do exclusivity. Of course, exclusivity. That's why it's worth 500 million. If Google, Google will go and give a hundred million. You don't think that they could charge a hundred million to all of them. They know.

SPEAKER_38: I think what you do is you give an exclusive. And just like the search box on apple is exclusive to Google.

SPEAKER_41: I think Google just splashy, cashy, a hundred million core, a hundred million to Reddit. You know, and then maybe a hundred million dollar donation to Wikipedia. Although Wikipedia was created under creative comments. So I don't think you can do that. But clearly citations have to come to the space. What do you think of the API potential Ben or any other comments on the.

SPEAKER_20: Business development that could occur here.

SPEAKER_66: Well, one, one thing we talking about this 2021 cutoff is that if your model of the internet is a pre GPT model of the internet, it's a really good thing to train on. If your model of the internet is the internet today that has already had hundreds of millions of lines of GPT generated text on it, and you are training your models on that. You sort of have a polluted model. And I I'm really curious how both of them are going to handle this as the internet becomes more and more AI generated. The model you would think would have to evolve to like discount things created by itself.

SPEAKER_20: This is where this whole thing collapses on itself is you're going to have to remove stuff that is poorly created by AI.

SPEAKER_38: But they seem to be able to have the I think there's plagiarism detectors that are figuring

SPEAKER_23: out if something was created by an AI.

SPEAKER_66: They're only like 90% accurate though. Like unless uh GPT is keeping a record of everything it's ever spit out. The genie is sort of already out of the bottle on um, having 100% certainty.

SPEAKER_127: Maybe you discount anything created after 2022 on the internet after GPT four came out and then you

SPEAKER_38: try to identify and you say hey listen the corpus of quora the corpus of reddit is even more valuable.

SPEAKER_287: Right. I don't know if you saw Adobe Firefly internet. Yeah.

SPEAKER_55: Pre-gpd Adobe Firefly um just came out and they're doing like generative AI uh for creators.

SPEAKER_38: They licensed everything.

SPEAKER_41: So they guarantee that everything in there is properly paid for and sourced. In other words, they didn't steal anything.

SPEAKER_66: Uh, I don't know. It's it's fine but like users are going to use whatever the best one is and users do not care what deals were signed behind the scenes and as we saw with LinkedIn when they were first getting started being super aggressive on you know um doing things that were I think. Exporting your address but. Just yeah to to send all your contacts like a slap on the wrist later kind of pales in comparison to the enterprise value created by becoming a technology leader in the space. Yeah the other day uh that blew my mind.

SPEAKER_109: LinkedIn is a five billion dollar a year advertising business alone.

SPEAKER_07: They're like a huge social network. They are there uh I believe they're well over 10 billion dollars.

SPEAKER_20: 875 million members now. Yep. So they will hit a billion uh it's it's a juggernaut. It just doesn't stop growing.

SPEAKER_158: So yeah uh how would you ever stop how would you ever stop it from growing?

SPEAKER_08: We need to revise our top 10 acquisitions of all time and uh definitely put that one

SPEAKER_12: in there like what a steal. Microsoft bought that for 26 billion dollars.

SPEAKER_55: I gotta think. Which would you rather own? YouTube or LinkedIn?

SPEAKER_120: I go YouTube.

SPEAKER_310: Yeah YouTube. YouTube. YouTube.

SPEAKER_120: Okay.

SPEAKER_310: Uh now we do. I would love to own LinkedIn.

SPEAKER_311: LinkedIn versus Instagram.

SPEAKER_312: Instagram. Ooh interesting. Today?

SPEAKER_63: Today and for the future. You gotta own it for the next 10 years.

SPEAKER_314: Not like we're not talking about 10 years ago. We're talking about today. No no no no.

SPEAKER_42: We're talking about I could gift you one or the other. You gotta run the business for the next 10 years. I go LinkedIn over Instagram.

SPEAKER_07: I would uh I think probably if we're to look at the numbers. Instagram is probably just so much bigger that like you should take.

SPEAKER_08: But I think Instagram is very likely to decline. And I think LinkedIn is just going to continue to grow. I'll take the opposite side of that bet.

SPEAKER_98: Oh really? Go ahead. That's fine. Yeah.

SPEAKER_66: Cause I think they have so successfully cloned tick tock that for creators, whether you use YouTube shorts or tick tock or Instagram shorts, uh, or Instagram reels or Facebook. Reels.

SPEAKER_321: Things like something.

SPEAKER_66: It's literally the exact same format. So I don't have to do anything different.

SPEAKER_98: Unlike the past where like Twitter videos were different than Instagram videos, which were different than Snapchat. So it's like all the exact same format. All the feeds are algorithmic. So your followers matter less because the content is just going to get promoted to the whole world.

David Friedberg: If it's good content and no one, if it's bad content. If it's good content for you too.

SPEAKER_41: So, you know, if you're into fly fishing, I don't have to buy ads to get fly fishing people. I just have to make great fly fishing content and tag it properly.

SPEAKER_325: Are you into fly fishing? Is that what your tic-tac feed looks like?

SPEAKER_303: It sounds like my, that sounds like death to me.

SPEAKER_66: Instagram is like, if there is a thing that happens where the Biden administration forces

SPEAKER_246: tick tocks divestiture, which causes a downward spiral for it because no one's, I don't think anyone's going to pay $80 billion or whatever to go buy tick tock.

SPEAKER_170: I don't know that there's a buyer for it that actually has that kind of change. If, if they do force a divestiture or a shutdown in the U S, whatever this sort of looks like, it's really good for Instagram. And they're super ready to absorb. All right.

SPEAKER_43: So building on this, who is now we play the next part of the game with three podcasters

SPEAKER_20: who also invest and think about business incessantly, who is your most likely buyer? If there was a bar, let's put price aside, uh, and let's put, no, we won't put antitrust aside, but the most likely landing place, which means meta has no chance of buying it.

SPEAKER_41: We will agree on that. So we take meta off the table for antitrust reasons, everybody else on the table. Uh, that's how we play the game here. Who's the most likely buyer. And then we'll go to wild card.

SPEAKER_86: Most likely buyer makes the most sense.

SPEAKER_311: And then a wild card buyer.

SPEAKER_170: My most likely buyer is sort of a boring one, but I think what might happen is we have the same one.

SPEAKER_66: They IPO it. So the American public becomes the buyer, uh, Byte dance is forced to liquidate its stake or go below a 5% position. No problem. And there's some particular clause, which says that, um, the U S government has an inspection right on for 20 years data as a publicly traded company, or some audits and forced to, uh, uh, host with a U S based, um, cloud provider. Okay.

SPEAKER_98: And so I think that's the only deepest pockets because otherwise like, okay. So if an IPO, I'll just restate the game.

SPEAKER_20: If an IPO is off the table, but it gets sold and was bought by somebody. So we're gonna qualify it again. David, you go first.

SPEAKER_38: Now that Ben keeps filibustering here, who is your most likely buyer? I know filibustering. When I see you're trying to think who's the most likely.

SPEAKER_336: The caveat that this is a hot take. Cause I have not researched. It's a hot take. Uh, I can give you mine if you guys are struggling. I'll go with Oracle.

SPEAKER_337: I go Microsoft as my most likely. And I'll tell you why.

SPEAKER_38: I think it is the most friendly, fun, jovial, uh, of the social networks, right?

SPEAKER_41: Twitter is just all these intellectual people battling it out and politics and it's vitriol. And it's just, it's full contact, right? Instagram, Facebook, can't buy it. But Microsoft did a pretty good job with Minecraft. They're buying studios. They're getting comfortable with content. And this is content. It's video content. They're doing the ads for Netflix.

SPEAKER_341: They obviously have Bing ads and they have Azure for the cloud. So they got all these components there. They could just plug it right in.

SPEAKER_41: Google never understood social. So I think I take Google off the table because they never understood social. Their cloud, you know, uh, is trailing. I think they're number three or four in cloud. Three. Um, still number three. Um, no, I don't think their cloud's bad.

SPEAKER_38: I just think they're just haven't made it a real super focus. Um, so I go with Microsoft as my most likely destination. If an IPO. I'm going with you.

SPEAKER_346: Okay. Who do you got them for you most likely? Or if you want to go to wildcard, we can go wildcard.

SPEAKER_98: I don't think Microsoft buys it. I think the brand risk is too high. Okay. Uh, there's too much that can go wrong owning tech talk.

SPEAKER_66: The government might like them to own it though, because there's a very tight relationship between the U S government and Microsoft and sort of a trusted, um, a trusted partner. Ooh.

SPEAKER_351: Uh, super wildcard. Yeah. Wildcard it then wildcard.

SPEAKER_96: Samsung.

SPEAKER_351: Wow.

SPEAKER_96: Wow.

SPEAKER_38: With their billions of dollars in free cash flow and their phones and you buy the galaxy 17 or whatever the number they're up to now. And you get the beautiful cameras.

SPEAKER_55: What a wildcard pick. I like it.

SPEAKER_356: I like it. 300 billion dollar market cap company. 25th biggest company in the world. Yeah.

SPEAKER_66: I mean, even if they have to like cut off a quarter of the company to go buy it and they don't have the cash to do it, it might just be worth it.

SPEAKER_131: What, what about, what if they sell an incremental? How many incremental phones?

SPEAKER_96: If they sold as Samsung's margins, a lot, a lot, and Apple's margins, not that many.

SPEAKER_88: What if they made a S what if they made a special tick tock phone that had a better front facing camera than a back or something crazy like that?

SPEAKER_41: They could make a premium phone.

SPEAKER_363: Unique access to, uh, uh, distribution on tick tock or something like that. Oh my God.

SPEAKER_61: But what's such an interesting idea about that is you're saying their margins are so low.

SPEAKER_41: What if tick tock gave them the ability to have a high margin device and could drive margins? Is that even possible?

SPEAKER_368: Young people love tick tock.

SPEAKER_366: Young people love tick tock.

SPEAKER_368: David, you got a wild card. Who's your wild card? I have an interesting wild card.

SPEAKER_07: I don't have a great wild card, but I, I, the more I think about it, the more I'm with you, Jason, that, uh, the reason at first I was like, didn't want to say Microsoft was because what Ben said of like Microsoft's family friendly, blah, blah, blah, tick tock's too controversial. But I think the most controversial thing about tick tock is China. Exactly. If you solve for China, then Microsoft would love to own it.

SPEAKER_41: And they, according to the CEO who was testifying for, for a horse and did a terrible job. Um, he has 40,000 people and they have no problem censoring stuff.

SPEAKER_370: If you're doing something that they think is inappropriate, like, yeah, we'll take it right off because they're Chinese censoring is like kind of in the DNA, right?

SPEAKER_27: It's like, yeah, these books, no good. Like they love censorship to your point. Like tick tock is not about vitriol. It's about dancing.

SPEAKER_373: Fun. Yeah. I mean, the, I, I, I got a, I got a fun question.

SPEAKER_07: Can I ask a, a fun question for you? Yes. Given, given your personal history, uh, would you rather, would you, if you could own one, would you rather own Twitter or tick tock?

SPEAKER_376: Hmm, great question. I, oh, come on. He's conflicted. He can't answer this. I'm a bit conflicted. Feel free to pass.

SPEAKER_341: I wouldn't know. I'll tell you my, how I would assess each. I think Twitter, you know, is so intellectually stimulating and has so much of the digerati,

SPEAKER_88: literati, those kinds of folks that would be more interesting for me.

SPEAKER_383: Yeah.

SPEAKER_35: It's also kind of say like Twitter for all this stuff we have made, like we have generated

SPEAKER_07: millions of dollars of revenue in BD from Twitter. Like, of course it is, it is unbelievable what you can, who you can connect with on

SPEAKER_08: Twitter and DMS are incredible. Yep.

SPEAKER_178: It's unbelievable. I mean, I, I mean, listen, I'm not trying to do this to, um, show off or anything,

SPEAKER_41: but since all in broke out, you know, of the past year or so and became like, it was number eight in the world two episodes ago. Wow.

SPEAKER_387: That's, that's pretty high in the rankings.

SPEAKER_15: That's wild. That's real scale. That's okay. We got, we got to put a pin in that combat. I want to hear how your life has changed because of that.

SPEAKER_370: Man, it's crazy.

SPEAKER_38: Anyway, putting that aside, like Jeff Bezos follows me, Bill Ackman follows me, right? Like it's, I see followers who started following me, who I would, I didn't know they were following me.

SPEAKER_370: I don't watch, I get so many new followers now, you know, I get like a, maybe 500 or a thousand a day now, new followers. So I'll hit a million. Like every time the podcast comes out, it's just a little spike.

SPEAKER_14: Um, 699,000 followers. Jason.

SPEAKER_38: When I started the pod, I think I was at 300, 350 and I'll be honest with the at Jason handle

SPEAKER_41: and me getting started so early, I have a large number of dead accounts. I would say 90% of my followers.

SPEAKER_392: When I was at 350 were, you know, just dead accounts, were you on the who to follow list when Twitter first started? I never was.

SPEAKER_41: I offered a quarter million dollars for five years to be on it.

SPEAKER_392: We talked about this a few episodes ago. Yeah.

SPEAKER_41: Yeah. It was like a joke. That's right. I think we did that when our, when we did our, like, uh, what do you call your session? Sessions. Yeah, yeah. Sessions.

SPEAKER_37: We did our session.

SPEAKER_395: Um, right here in this room.

SPEAKER_37: Right here in that room. Oh, how, yeah. How's the new place? You're, you're all cozied up.

SPEAKER_154: And the baby, uh, she's great. She's walking, she's like, uh, she's 18 months. She's not a baby anymore. It's wild. Wait, it goes so fast.

SPEAKER_399: You too, Ben? No, no, but I got married last year.

SPEAKER_190: Ben got married. Yeah. No, I remember you got married, but. Step one. Okay. So you're practicing.

SPEAKER_37: Okay. Uh, highly recommend you do it. Um, yeah, can't practice forever. At some point, you gotta actually make the baby. So that's my standard joke. My standard dad joke was like, you know, you practice for a little while and then, you know, actually make one, uh, twist after hours.

SPEAKER_405: Oh, that's great. That's great.

SPEAKER_38: So yeah, what is the, uh, I think might be a bigger global opportunity than Twitter even. I mean, I think it's neck and neck. Cause I do think Elon's gonna figure out some things with, um, Twitter in terms

SPEAKER_41: of what he wants to do with payments. Cause he's got some DNA there. He's been pretty public about that. I think with the DMS where he's been pretty public about it being.

SPEAKER_02: Yep. Pretty good.

SPEAKER_41: Also video's gotten better on Twitter. Yeah. Video already, uh, has gotten a lot better. I find myself when I watch a video watching five. So I'll watch a next video. And it used to be like, I, I never swiped up against the next one. And now it's five next videos.

SPEAKER_63: And I'm like, oh, somebody fixed that, you know?

SPEAKER_356: And so the, the person that fixed that needs to go fix DMS. Cause it still feels like I'm in like DMS is always the forgotten.

SPEAKER_38: Yep. Feature there. And I remember when ev was running it, I remember Jack was running it.

SPEAKER_07: I was just the most valuable part. Well, the problem is for it's crazy 0.1% of Twitter DMS are the most valuable part of Twitter.

SPEAKER_38: Exactly. I had a killer idea for it and people told me I was crazy, but I thought they should have DMS built into the app, but I thought creating a DM product for Twitter. That was just, just DMS, like just a messenger. Remember when Facebook did messenger, it would give everybody.

SPEAKER_39: And I know it doesn't make sense to have two apps and to split the baby and, and be ranked twice. Facebook was incredibly successful.

SPEAKER_194: So Facebook was incredibly successful at that. So it gave them ability to get people to turn on DMS again and turn on messaging. You can only have your app.

SPEAKER_38: This is like really in the weeds, product design.

SPEAKER_287: You can only have your app ask, like, I think one time or two times to turn on certain features, like on an iPhone, like, um, notifications, et cetera. Uh, but on a system level, to be able to start everybody over and then have a product that was just like super DM and it had like some great features in it. Like maybe it could have, um, uh, it could just be like a, a modern WhatsApp competitor. Like, let's call it what it is, which is, I think what Facebook did with messenger.

SPEAKER_38: Just make a really modern signal group chat.

SPEAKER_187: I gotta dedicate, especially for an account like yours with 700,000 followers. Dude, it's crazy. I turned on, you can't like, no, it's must just be chaos.

SPEAKER_222: I turned on open DMS again. And then I also was permissive in following people. I followed 25,000 people, I think.

SPEAKER_38: So I just followed everybody. I used to have a little script. I had a tool where anytime anybody would follow all in or this week in startups, I'd follow them back. Cause I know it makes people feel good when I follow them back. So I was like, yeah, just spread the love. And I use lists for the subsequent group of people. I really need to. And now that you notice Elon set it up so you can swipe over to the second list.

SPEAKER_41: I had shown him lists early on and I was like, when we were talking about, you know, Twitter and I was like, you know, I use lists say, how do you follow? So I was like, well, I use lists. So I make everybody feel good with the follows. And then nobody really knows who I'm following. Cause I follow everybody. And then I use lists for my portfolio companies for my team, except, you know, my friends, et cetera. That's awesome.

SPEAKER_270: And then now you can slide that, right? So this is a forgotten product.

SPEAKER_170: The slide over thing predated the Elon's acquisition.

SPEAKER_270: I don't think so. Did it? Oh, maybe it did.

SPEAKER_423: Oh, I thought that was the blue feature.

SPEAKER_98: But the addition of, uh, uh, for you.

SPEAKER_41: Oh, you're, you're correct. I, he did tweet about it after we talked about it. So he talked about how you can do lists, right? So I think this and DMS will be a big focus. So I think with all those, he's cooking with oil over there now in terms of new product releases, and I think they got stability, you know, bio, I'm not over there. Uh, should people know?

SPEAKER_20: Um, but the stability looks really good, right? It's tight, stable. It hasn't gone down despite what the fake news kept saying.

SPEAKER_10: I think they were kind of rooting for it to go down, to be honest. Um, it looks like it's got the cost structure under control.

SPEAKER_66: So like, I think it's, I think it's pretty stable. Twitter was like, you know, the, what's that's the, uh, the current thing for the moment. And so I, I think whenever you have a new, a new current thing, like everyone needs to pick a side of the current thing. And then there's a certain set of people who are incredibly vocal for it. And then you sort of enter this, like kind of the worst part of the human psyche where it's like, you know what? I gotta drop everything that's important to me in life and focus on the current thing and see if my team can win the current thing.

SPEAKER_433: And it is crazy how fast, like feels like every two weeks or so there's a new one now.

SPEAKER_98: And it, it, it flies all over the place from tech to banking to war to, but there's always a current

David Friedberg: thing it's so weird. I am so out of it.

SPEAKER_38: Like I literally have started to decline everything that people want me to get involved in just to

SPEAKER_20: focus again, back to, I think the lesson of 20, 22, 23. Yeah. I mean, austerity and retrenchment focus, the year of focus, retrenchment, however you, everybody phrases slightly different.

SPEAKER_437: What's Brad Gerstner's favorite book? Uh, essentialism.

SPEAKER_140: Yeah. Yeah. Uh, what, uh, and Brad's running the, uh, the get fit. Campaign for, uh, Facebook for everybody. Yeah.

SPEAKER_98: Yeah.

SPEAKER_66: The, the, it reminds me there's this great, uh, quote in Morgan Housel's book, the psychology of money, where, uh, there's this whole chapter. He's talking about how you gotta remember that like newspapers and, and the media and all every, everything that's a publication needs content. And so they need to print something like there's a need to be a story today, but sometimes like, there's not really actually a story, but like, what are you gonna do? Take some pages out of the newspaper, run less blog posts. Like you got advertising to sell, you promise people content. And so like content gets printed. And most of the time, good news happens super slowly and bad news happens super fast. So bad news is the stuff that you print because that is like what happens quickly. And nobody cares about the things that happen slowly. And Morgan's point is like, actually what most people really should be observing is that they open the newspaper and it says today a little bit better than yesterday in most ways, worse and some go about your day and like there's, but there's not, our society has not evolved with a business model for that type of thing. But in reality, that is actually how you should start your day is like, yep, pretty much the same as yesterday, nothing to report.

SPEAKER_444: Yeah, it is.

SPEAKER_131: I mean, I think if you look at Ukraine, I realized like with David, you know, and on the podcast and

SPEAKER_287: he, it never ends for him, right? Like it, for it's, he's so passionate about it. And for me, I have an opinion on it, I guess we can talk about it, but I, I don't want to talk about it every week, like as bad as it is, as terrible war is like, there's only so much you can cognitively do and I literally just deleted off of my phone, tick tock and Twitter and I posted to Twitter and I said, I'm going to do Twitter on my desktop. Um, I'm going to check on it a couple of times a day. I have specific things I need to do.

SPEAKER_38: So I need to like talk about angel summit, you know, whatever, like I have to let the audience know.

SPEAKER_41: Um, but I, I needed a social media break from it because it was getting so toxic, especially with my tweets over the banking crisis when I was like using all caps and like,

SPEAKER_450: you know, that was a little much Jason. Well, it was, yeah, it was kind of a joke.

SPEAKER_287: See, people weren't following me for when I was doing based Cal, when I was doing like after

SPEAKER_131: midnight, I was doing base Cal and AI version of myself that would say very base things in caps. So people didn't understand the joke of it, but it was also like, you know, people were like, I, I got violent, threatening DMS, like I will kill you kind of DMS.

SPEAKER_88: And I was like, wow, this is pretty dark, man. The world is dark. Um, yeah, really weird.

SPEAKER_454: Which is why podcasts are so great because.

SPEAKER_27: We can have a real good conversation.

SPEAKER_460: I won't say that that never happens in podcast, but like, it's just not, it's not the norm.

SPEAKER_38: Well, we can have a conversation here. That's really thoughtful. We see where it goes and share it with the world. But exactly my thinking was I need to start doing less. So I'm taking this week in startups from six episodes a week to four. Um, literally turning down the money.

SPEAKER_131: Uh, and my team has it sold out until I think may. Nice.

SPEAKER_41: And then I was like, I'm going to do two news a week and two interviews a week. Cause six days a week or five days.

SPEAKER_34: Which for most mortal humans, even that is a lot.

SPEAKER_370: But so like literally, and then I was like, okay, so starting May 1st, I want to do this.

SPEAKER_31: And they're like, oh, we had all these contracts that were waiting and they all signed. So now it's, you know, it's June 1st and I'm like, okay, fine.

SPEAKER_37: June 1st. And I want to do less and put more wood behind less hours, right? Uh, arrows. So I can focus on other things. And I think that's like.

SPEAKER_66: Can you renegotiate some of those, uh, deals to basically say, like, we're going to give

SPEAKER_467: you obviously the same number of episodes, but they're just going to happen. Some of them a little bit later.

SPEAKER_31: You know, we were sold out for 10 years and at the peak six months.

SPEAKER_38: And that was incredibly frustrating for folks. And then when it was at six months, I was at four days a week and I was like, fine, we'll do five. And it filled up so quickly. Then I was like, well, it, we'll try six. And I always wanted to be like Howard Stern or like a daily talk show host.

SPEAKER_341: And then I realized, you know, like Howard Stern is miserable at times and talks about how miserable he is. It's because he has to talk every day for three hours. So literally he created a trap for himself. He wanted to be a talk show host. He got his wish. You know why Oprah quit her show? Because she was doing it every day. Oprah was a daily show. Right.

SPEAKER_121: With 40 million people tuning in. She walked away from it. Viewing.

SPEAKER_471: She walked away from a show with 40 million people listening to it.

SPEAKER_470: Ellen. Is Ellen retired now too?

SPEAKER_341: I thought Ellen was retiring, right? She was talking about her. I'm not sure. So you wonder why like certain people walk away from these things. It's because at a certain point it becomes your entire life and you have to take the rest

SPEAKER_473: of the day off just to clear your mind.

SPEAKER_66: Yeah. And then when I realized that I was like, you can't like the Colbert. I listened to Colbert talk about a day in the life. This was probably like six, seven years ago. And every single minute in the day was accounted for in creating the production. And then he needed to do it again the next day. Like when you need to do content about the news and you need to add layers on top of just reporting, like being clever, having guests, uh, creating sketch segments. It's just like you wake up to go to bed always in production mode.

SPEAKER_246: And it's like, it's done five minutes before you walk on stage.

SPEAKER_38: This is literally what I experienced. Literally. I would get to bed and then my DMS would be going crazy for tomorrow's show. And at night, you know, like what's gonna be on the show tomorrow. It just never ends.

SPEAKER_43: And we, we were after a staff of nine or something like, it's getting crazy over here. I just need to reclaim a little bit of my time.

SPEAKER_390: Reclaim it. We have.

SPEAKER_14: So hopefully, um, I always go through this thing where I'm like, I wish I could pay less attention to the news and I wish I could delete apps and, and then it ends up being incredibly

SPEAKER_66: useful for my life to know what's going on. And I think we're all sort of kidding ourselves a little bit, especially being investors.

SPEAKER_14: Like you, you early stage technology investors, you gotta know what's going on. Like you just have to. Yes.

SPEAKER_66: And I think David sort of, I'm curious your thoughts on this without really meaning to, by shifting acquired away from current episodes, like we just did Nintendo, which is 130 year old company, the narrative on Nintendo is not meaningfully changing. I literally saved the episode. I haven't watched it yet. Like hour by hour. Super excited. So we have all these people begging us, do SVB, do SVB. And I'm like, first of all, there's some amazing people covering what is happening with SVB. We are not reporters. That is so not our bag. Go read Matt Levine, go read Dan Primack.

SPEAKER_246: Uh, but like if I can interest you in, uh, a 130 year old story told over four hours

SPEAKER_66: that I took two months to prepare that will be evergreen for 10 more years. Like I'm working on that. Incredible. And I've found that like that totally helps my psyche to not for the work of acquired

SPEAKER_480: need to pay attention to the hour by hour changes.

SPEAKER_41: Yeah. There's something about timelessness versus ephemeral stuff. And that's why I wanted to get back to founder interviews more and do a little bit more founder interviews for me that really gets me inspired. Like when I can get a great founder interview going and I, I just had two of them in like the sustainability space. Like one of them was doing fabrics and one of them, one of them was recycling fabrics and the startup blew my mind. Like they're using, uh, spectrography.

SPEAKER_38: Is that the word? Like infrared, near infrared spectrography to look at clothes and then know this is wool. This is polyester and then sort it automatically and then rip it up and shred it and then make it recyclable and then make new clothes out of it. Like, wow. This is like. Science is awesome. I was like, wow, science is awesome. Somebody from Carnegie, these three founders from Carnegie Mellon were like, hey, we can put this on the line in Sri Lanka or Pakistan where we ship all these old clothes,

SPEAKER_341: resort them and then not throw them away because previously you just throw them away because you,

SPEAKER_41: the labels are wrong. Even if you look at the label and it's like polyester, it'd be like, yeah, it's probably not. It's probably something else because people lie on the labels because different things have different prices. And then I saw another one where the guy's making organic fur, not from animals, but from plants.

SPEAKER_287: So he's making plant-based faux fur for, you know, theoretically Gucci or whoever

SPEAKER_55: to have fur that will be better than real fur, but doesn't require 15 chinchillas to die for your jacket, Ben, which I was going to talk to you about when we had dinner because.

SPEAKER_467: Well, that's why I was really a little bit. I was trying to hide that part of myself.

SPEAKER_487: I was just like, who is this guy? I thought this guy cared about the world and he's killing chinch. He didn't do that. He did not kill chinchillas.

SPEAKER_31: All right, David, you gotta go. It's time to take over from the nannies. Go be a super dad. You're amazing. Everybody go back.

SPEAKER_153: Try my best. Back. David's next. Did I just call you Ben?

SPEAKER_88: No, I'm Ben. Oh, okay. Great. God. Sorry, guys. I, I did three. This is my third podcast of the day. Oh my God. Ooh.

SPEAKER_23: You need to go take a break. My podcast, the twist. Then we taped all in.

SPEAKER_31: And then I was trying to get you guys on. So, cause I missed you. Oh, were you, you came back from all in for us? Oh, thank you.

SPEAKER_495: Of course, David Rosenthal, uh, is kindergarten ventures. I'm an LP. Is the fund closed?

SPEAKER_38: Are you publicly raising or not?

SPEAKER_109: We are not publicly raising.

SPEAKER_07: The fund is closed right now, but, but, but more to come in the future. You never know. Yeah. And we greatly, greatly appreciate it.

SPEAKER_37: I'm, I'm very excited. It's, I'm just a tiny little LP and you're, you know, you know, modest fund,

SPEAKER_503: tiny funds, $12 million fund.

SPEAKER_504: Oh, is it? Did you get to 12?

SPEAKER_07: Yeah. Well, that's awesome, man. Real quick, funny story. I think I can say this. Uh, yeah, we, we were over 12 and, um, that's great.

SPEAKER_08: But one of our larger LPs was may or may not have been an entity associated with a crypto exchange that, uh, may or may not any longer be in business. So they're.

SPEAKER_506: So maybe it's a little less than it. Yeah. Yeah. Yeah.

SPEAKER_507: Yeah. Who knows? That large. No, no, no, no, no, no. Small, small. That capital call is probably not getting it. That is hilarious.

SPEAKER_27: We're not banking on that capital call, uh, coming through. Uh, yeah. I gotta go.

SPEAKER_510: I mean, unless it does, it might be coming in from Sing Sing. Okay. Good luck to you.

SPEAKER_511: It might be. Jason. Thank you so much. My pleasure.

SPEAKER_444: Take care, Dave. Hey, so, uh, Ben. All right. Should we talk about him now?

SPEAKER_512: Yeah. Let's talk about him now that he's gone.

SPEAKER_31: Um, you watch this, uh, what, let's you, I know you like me really love Amazon. I just bought more stock in Amazon.

SPEAKER_55: So they laid off 9,000 people and I bought more shares. Amazon is my worst trade for J trading. Uh, I've been buying it for the past year. Yeah, it has not. What is.

SPEAKER_514: It has not been performing well for me either.

SPEAKER_184: What is the problem? How does it get song? Do you think Bezos comes back?

SPEAKER_38: Because he's like, I need to write the ship because I'm looking at this and I'm, if I'm Bezos and I'm out there doing all this good in the world and I'm watching my baby.

SPEAKER_01: You're on the stock going down.

SPEAKER_451: I'm just thinking, you know what, if he comes back to get back in the game, what does the stock jump in one day? If he does. Okay.

SPEAKER_341: Well, let's say it's trading at 90. It's currently at $98. Yep. I would say in one day, it goes to 150.

SPEAKER_523: And it's all time high. It looks like somewhere around 180.

SPEAKER_341: I think I, I would not be surprised if the day they announce it goes to 130 and within a week it hits 150. Now I'm not sure it stays there, but I think 150. What do you think?

SPEAKER_119: Oh, I think that's, I think that's about right. Yeah.

SPEAKER_525: I don't think he's coming back.

SPEAKER_66: I think he really trusts Andy Jassy. I think Andy Jassy is the correct, um, the correct type of day two CEO. Like, I think it's day two at Amazon. I think everyone just needs to admit that. And then I think the shareholder base needs to get on board with, um, you know, there's probably not a next AWS and Amazon really wants there to be a next day AWS. But it seems unlikely to me.

SPEAKER_334: And so maybe less focus on another pillar like hell and more focus on just the growth

David Friedberg: of the current pillars. And they've got a ton of running room in e-commerce and cloud.

SPEAKER_66: Like these are two of the biggest markets in the world. They're, uh, dominant in e-commerce, but they're still lagging Walmart in overall retail. Walmart just crossed 600 billion in annual sales and is growing really fast in e-commerce.

SPEAKER_98: So like they have a formidable competitor there, but you know, really, really potentially large industry, um, or, or really large industry with like way more running room ahead of it. Cloud. I think they have a hundred billion dollar revenue backlog committed on top of their 80 billion dollar annual run rate for cloud. So like, that's a fricking juggernaut where they're in first place. It's theirs to lose. So I do think it's like it's day two time, which means scaling back on things like

SPEAKER_66: Alexa. Like, I don't think there's a pot of gold there. That's funny. Mine just turned on, uh, you know,

SPEAKER_38: well, if they had invested heavily in language learning models, you would say yes. But to ask that certain assistant for help right now is not a great experience.

SPEAKER_98: Um, and I mean, and it wasn't a platform. I mean, there are zero successful apps. The things people do isn't even shopping. So it doesn't really fuel the core business at set timers.

SPEAKER_66: So it's this thing that sucks up, I don't know, two, 3 billion a year. It's a, it's a done a quarter of, of meta's metaverse bet per year for something that we kind of now know is not a successful business. Whereas at least like Zuckerberg might will the metaverse into existence might.

SPEAKER_38: Yeah. I think it's time to cut that bet. That's an easy bet to cut. I think really starting to think, do they want to be in prime video?

SPEAKER_501: Is that an essential business for them to be in? Is music an essential? Is media an essential business? I don't know.

SPEAKER_61: Will they actually compete? I'm not sure. I think the advertising business, they're crushing it.

SPEAKER_270: But they don't consider that like a business line because it doesn't touch consumers.

SPEAKER_170: Isn't it like a 30 or 40 billion dollar run rate business now? It's all free money. Like it all just drops right to the bottom line because there's no cards in advertising.

SPEAKER_37: It's literally airdropped. It's like airdrop of money. And you got to think if they just made the everything store even more. Yep. Uh, I, I would, I think a really bold acquisition for them would be lift door dash or Uber.

SPEAKER_178: Ooh, and I'm not just talking my own book here, but.

SPEAKER_86: And I don't want to see them by lip. That'd be scary for me. But if they bought Uber or door dash and they just said, you know what? What would it cost? I don't know right now.

SPEAKER_170: Lift is 20% premium over a market cap of 3.7 billion. Amazon could drop 5 billion and drop and buy lift. I don't really want to accept that.

SPEAKER_370: But I mean, if they did that and then they made it part of the delivery network, I think it would be better for them to buy. Door dash.

SPEAKER_19: Uber or door dash. Because Uber is a global footprint and they don't have a global footprint Amazon.

SPEAKER_116: So it'd be really cool if it was Amazon's Uber. Now, what would they have to pay to get Uber? They'd probably have to pay a lot.

SPEAKER_549: 80, 90 billion. Yeah, it'd be a lot. It's a big number. The interesting thing about. That'd be incredible.

SPEAKER_170: Door dash and Uber eats is like Amazon tried three times in this local food delivery market and

SPEAKER_66: couldn't crack it. So they clearly are extremely interested and they feel like it's a perfect compliment. Frequent purchase. I mean, door dash is expensive. It's a market cap. 23 billion dollars as we're recording. Yeah. So that's an expensive. I mean, that's like to take it out is probably over two whole foods of, uh, of cash. You got to drop on that. Crazy.

SPEAKER_38: But they, you know, they're still so innovative. Uh, Amazon. Did you see their Palm scanning, um, product? You haven't seen your, yeah. I haven't seen it in person yet, but it keeps coming up in the news and I keep seeing it. So I think it's getting more popular. I think they're going to make it available at other stores. So it's at all the whole foods. This, uh, Amazon one. And then I haven't seen that whole foods. Yeah. Have you done Amazon checkout yet? Like on another person's website, kind of like, uh, or something.

SPEAKER_88: So I, I was just on a website and it was like, Amazon checkout came up.

SPEAKER_38: And I was like, okay, you know, normally I just use my credit card auto fill from Chrome to fill my credit card in or whatever.

SPEAKER_190: And I was like, oh, Amazon. And they did it.

SPEAKER_38: And I was like, oh, look in my orders tab at Amazon, I now have that purchase. Mm-hmm. That's convenient for me. Now I can put it in one place. Interesting. Um, and then this Amazon one, you just, your palm, I guess, is unique. And you literally. Like a fingerprint or is it like the lines? Like a fingerprint. Huh? I think it's the size, the lines, it's all of it. So you put your palm over, you don't have to touch it. So you're not putting your palm on like. Ah, very COVID safe. You hover it. So it's not like it's COVID safe.

SPEAKER_163: You just put your hand over it, boop, and you walk out of the store.

SPEAKER_17: COVID is transmitted by touching, but yeah. No, sorry.

SPEAKER_163: We're not, we don't want to spread misinformation here.

SPEAKER_55: So anyway, I just thought Amazon is just, it's, it's time for Bezos to come back.

SPEAKER_131: I did see the 9,000 people that are laying off and the inside line is, um, the sense of urgency inside of Amazon since work from home. Uh, is, and since no Bezos is, there's not, this is what I'm hearing from insiders.

SPEAKER_42: Hmm. There's not a dogged cutthroat sense of urgency like there used to be. And it's a date on company. That sounds right. But I think it has to do with work from home. I believe that I think it's not, doesn't have the intensity that it used to have.

SPEAKER_66: When there was a there, there for what it's worth living in Seattle. Most of the people I know and, and all, you know, these things are. Vast over generalizations. Yeah. That's anecdotal. Because Amazon does seem to be a more hard driving place to work even today after COVID, after work from home, all this stuff, then Microsoft, Google, Meta, all the other companies that have enormous presences here. Uh, I think the trope about Amazon being a hard place to work is still, still true. So I think there's a lot of fat to cut, but I, I don't, um, compared to their peers, they're not as fat and happy. Hmm.

SPEAKER_18: Weird story came out. Apple is going to spend $1 billion per year to produce movies to be released in theaters. Their goal, get more subscribers to its screaming service and raise its profile in Hollywood. Two major motion pictures coming out next year. Martin Scorsese's Killers of the Flower Moon with Leo.

SPEAKER_37: Apple co-financing and co-distributing with Paramount budget $200 million. And Ridley Scott's, my favorite director,

SPEAKER_158: Napoleon starring one of my favorite actors of all time, Joaquin Phoenix. Also in gladiator.

SPEAKER_461: Uh, pretty amazing to me. It's a very weird, but I, what does this have to do with? I don't know.

SPEAKER_98: I think it has to do with, uh, Apple needs to find the next growth avenue.

SPEAKER_66: And they're hoping that Apple TV more meaningfully adds to the services arm. And while they're like, it's weird. So doing the studio release, let's do some quick math. So if you drop a hundred million in budget per picture, which is typically what, I mean, unless you're making Avatar, which I think is 250 million. Yeah, it's a lot of million per picture. Uh, you there, how do you get it to pay back if you're releasing it in the theaters rather than driving new subs to your streaming service?

Chamath Palihapitiya: Well, I think the idea is to get the patina of Oscar patina, Oscar buzzy kind of situation.

SPEAKER_287: Um, it's just a cost of entry to like that.

SPEAKER_131: Yeah, and you know, you put it in there for six, eight weeks and then you just shift it over. But to have Apple winning Oscars, to have Apple doing tentpole,

SPEAKER_38: culturally relevant stuff. I think if you were to think about it, half marketing and half ROI,

SPEAKER_66: maybe you get there pretty easily. 200 million is nothing. I mean, they have, what is it? 5,000 people working on a car that has, was gonna ship five years ago. And what happened to Titan? Is that gonna ever happen? It just keeps getting decapitated. So I, the, the person leading in has changed three times. Um, and I, you know, I don't know anything. I'm just reading the rumor sites. Yeah. But the, that's happened a bunch. The ambitions get scaled way down. So originally it was full autonomous, full EV. Now it's EV, but not autonomous. Um, you know, they still have let that like test track and they're constantly testing concepts at the test track in camera somewhere in the Southwest. Uh, and there's a ton of people working on it, but I think it, it's been. It, uh, they keep sort of killing it before it gets too far in the process.

SPEAKER_38: I guess they really, um, I guess they really want to build something extremely special. That's category changing like the iPhone was. Yep. And it's kind of hard to do something category changing when you're up against,

SPEAKER_303: you know, Elon and Rivian.

SPEAKER_66: And I guess it's a category that's already recently been changed. It's not like, uh, the smartphone market where they were able to come in with something that looked super different than all the competitors that, um, was literally 10 times better than all the other crap out there. Like in the last five years, all cars got way, way better, uh, largely thanks to Tesla finally pushing the industry into some innovation. I will say I am shocked at how fast, particularly the American automakers were able to catch up or, or sort of adopt a lot of the, the, you know, uh, long, like I would have thought, oh, four will come out with something. It'll be like a short battery and like, none of the stuff will work together nicely. But like all the reviews of the Maki and the Genesis, the, the Hyundai one reasonable are like, yeah, battery life is great. It's super reliable, no moving parts, just as promised. Now they're like using Bosch and a bunch of other, um, component made makers to like, make all the guts. And then the car companies are just kind of assembling it. Unlike Tesla, which is vertically integrated. But like the way it ends up showing up to consumers is that all these other companies were able to observe the very difficult path that Tesla blazed and create compelling products quickly. And I, I, I think that probably has sort of been a big thing changing Apple strategy here, which is like, we thought we were making something 10 times better. And then the market caught up and now we're only making something 50% better. Like, what do we do? We'll scrap it again, start over. And I, and maybe it'll never launch if they don't feel convinced that they are really head and shoulders above.

SPEAKER_25: Yeah. I mean, Volkswagen's ID four seems to be getting decent reviews. I see a bunch around my neighborhood. Yeah. I see them once in a while.

SPEAKER_86: It's not for me, but it seems like it's a reasonable car. The model Y is crazy. I mean, that thing is selling. Like I, I, I, my daily driver is a model Y and my wife has a perfect product market fit.

SPEAKER_592: It's, it's like the perfect car.

SPEAKER_37: I, I told them I like, this is the perfect car. And, uh, my wife who loves proclaims her love for the X jumps into the Y and gets out of there

SPEAKER_38: real quick and likes the nimbleness, you know, and the sporty feel to it.

SPEAKER_287: Cause the X is obviously a much bigger car. So like the S and the X are better cars. Yes. There's something about like a fun zippy smaller car when you're running errands and stuff that I

SPEAKER_158: just like much. I think it's like the perfect, I could drive the model Y for the rest of my life and be happy. Yeah. Um, all right. It's been an amazing episode.

SPEAKER_495: Uh, anything you've invested in recently that you want to give a plug to, or that you really, uh, really excited about.

SPEAKER_66: I actually just, uh, so from, from PSL, we just doubled down in a big way, uh, on this space investment we've made a couple of years ago called starfish space. Oh, this company is like, it is so cool to work with the founders. Cause what they're doing is like real hard science breakthrough technology with like a phenomenal business model behind it. And it's, it's, um, you know, I see a lot of board meetings of like. SAS dashboards and stuff. And when you go here about, uh, people repositioning satellites, it's crazy. So here's, here's the pitch. Satellites generate a bunch of money when you, you use them for like taking images of the earth or communications like millions and millions of dollars per year per satellite. It's why Starlink is a great, a great business. Uh, they fall out of orbit. Yes. Over time their orbits decay and you need to decommission them or you need to nudge them back into place so they can keep generating revenue for years and years and years after that. How do you do that? How do you nudge them back into place? This is crazy. Cool. The founders of starfish figured out a way, uh, a super low cost way and a super lightweight way to make a, uh, a satellite about the size of a mini fridge, launch it on spacex rideshare, go up and then slowly approach. Oh my God. I'm watching the video. Use static electricity to dock to the satellite so they can attach to any satellite on any surface without needing some specialized docking thing. So everybody could be a customer and then slowly apply, get this electric propulsion

SPEAKER_323: to nudge it in back into the correct orbit.

SPEAKER_39: Wait, electric propulsion, which means it's not physically touching it. Something, uh, so that it's docked with static electricity on the front and then on the back, it's got an electric propulsion engine. Ah, I got it. I understand now. So it gives it a nudge and then does it stay on it forever or detaches and then?

SPEAKER_170: It can, but it, it, it detaches and then goes into a graveyard orbit itself or it sort of spins off or it can go down and burn up in the earth's atmosphere.

SPEAKER_116: Oh my Lord. This video is next level. If you're not watching the video. Isn't that cool?

SPEAKER_66: Oh my God. They just announced. So they're on a, um, a summer rocket, um, heading up on the Falcon nine. And then the, the mission, the, the initial demo mission will be later this year.

SPEAKER_608: Hmm. So this is a big bet for you, huh?

SPEAKER_66: It's, it's exciting. It's, uh, yeah, they, they raised the last round was around 8 million. And then this round, I don't remember the exact number. I think it's around 14 million. Um, and like they're doing this whole demo mission. I think the all in costs are seven ish million to build this first version. And like, thanks to Elon and everyone that sort of transformed the space industry over the last 20 years, like it's crazy to be able to do something like this on seed venture capital money, not on like, you know, uh, a hundred million dollar, 500 million dollar investment from the government

SPEAKER_39: lab in this. That is extraordinary.

SPEAKER_41: So this is when people ask, like, why is it important that the cost of going to space has gone down? I don't know what it's gone down. Is it 50%? 80%?

SPEAKER_246: Almost a hundred X since the beginning of the shuttle program at the end in the late eighties. Wow.

SPEAKER_41: So it has gotten completely possible to put up something like this without you bankrupting the company because moving the satellite with this thing just might not have been financially viable, but if it's piggybacking and it's somebody else's flight and they can fit a couple extra of these up there to do a mission, more power to them. Genius. Yeah. And you know what they could build also something to clean up space. So they just put these up there and just have them float around and look for debris and then

SPEAKER_20: try to intercept debris because that's because that space garbage thing is becoming a bit of an issue. I understand.

SPEAKER_501: Yep. Absolutely.

SPEAKER_20: Put a magnet on it.

SPEAKER_501: All right. Listen, great to see you. Thanks for taking the time. Everybody stop what you're doing. Type acquired FM into this very podcast player that you're listening to or YouTube and, um, just type in acquired FM. Listen to the four hour Nintendo opus.

SPEAKER_38: What, what, what's going to happen with these things? Do you have anybody ever said like, Hey, we want to take your Nintendo thing and make it into a movie.

SPEAKER_63: Has anybody done that?

SPEAKER_466: We've had a few discussions like that. There's a lot of people that want to do book stuff with us. Um, Book would be interesting.

SPEAKER_461: I would do book. Yeah. Book makes sense. Yeah. You could do a 50,000 word book, uh, get a great writer.

SPEAKER_38: Oh, you know what you should do? Oral history. So you take your bones and then you find five people, you interview them, and then you slot them in. So these oral history books, there's an oral history of CAA.

SPEAKER_287: Amazing. So it's, it's so good. Listen to it. Absolutely. It's so great. Cause you, you read who is my Govitz. Yep. And then you read, uh, ride of a lifetime by Iger. Yep. And then you put the CAA in between it.

SPEAKER_38: And now you got the entire story of that era and all the characters interweaving. That's a really good idea. You know, who you should talk to is my guy, Bill Simmons, uh, from the ringer. He might be really jazzed about what you're doing. Um, cause he's doing, you know, he's done, he did the HBO stuff and he did 30 for 30. I feel like you're the 30 for 30 kind of right.

David Friedberg: That was one of your inspirations in the beginning. Yeah.

SPEAKER_246: It's always been hardcore history and 30 for 30 for tech and business is sort of the idea.

SPEAKER_287: All right, brother. I'll, oh, and, uh, everybody follow as easy as it is Gilbert. He's not in the first name club.

SPEAKER_37: He's in the last name club. Follow Jason, follow Gilbert and follow DJ Rosent, DJ, R O S E N T. You know, David just got in that way. He didn't get Rosenthal. He didn't get David.

SPEAKER_622: Not an early adopter.

SPEAKER_37: He was slacking, you know, you and I were baller, uh, and acquired FM. That's all you need to know. Pioneer square labs.

SPEAKER_623: And when are you raising the next fund? Maybe I need to put a little, maybe put a little bed in there.

David Friedberg: Not, not, not for a while. Fortunately, we'll put me on the potential LP list. Okay. Thank you.

SPEAKER_625: All right. We'll see you next time on this week. It starts. Bye. Bye.