SPEAKER_00: hey everybody it's friday we got a lot of news to cover today we're going to talk about peter tail's billion dollar roth ira or i should say multi-billion dollar black creators are striking on tick tock buzzfeed is spacking and going public and microsoft just just completely dunked

SPEAKER_01: on apple and we're going to do a couple of ask jason questions some really good ones about

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SPEAKER_00: at calm.com slash twist okay first up peter thiel's billion dollar roth ira is become a bit of an issue on twitter and in the larger press pro publica as you know somehow acquired a bunch of information from the irs that's actually under investigation i understand and people are a little concerned about how is all this information leaking but we do have this great reckoning happening right now we have massive polarization of wealth in the country the top couple people in the country own as much as the bottom x percent you hear this all the time from bernie sanders elizabeth warren and the left and what this is resulting in in is a very valid review of all the tax law now roth iras are part of that and pro publica did a story uh on june 24th yesterday thursday if you're listening to this on friday about peter thiel uh his massive roth ira account they say his roth ira is something in the range of five billion dollars now the fortune or four blissed had him at like 2.4 billion dollars in net worth so i think he's been pretty quiet about his wealth but we do have some information on this and it's a it's a a worthwhile subject peter did nothing wrong in using his roth ira to invest in private companies that's allowed now most people civilians in the united states because we have a two-class system in the united states affluent people who are part of accredited investor the accredited accredited investor class and we have everybody else at the poker table the suckers but me for most of my life the 95 of the country who are not allowed to invest in private companies private companies are the direct path to massive wealth creation if you hit an uber if you hit a paypal if you hit a facebook man the the returns are in the 100 200 x 500 x maybe even 5000 x you know very similar to maybe uh bitcoin we're hitting the lottery literally that's what these things feel like in terms of wealth creation and uh i believe the key issue in all of this is that every american should be able to invest in private companies every american is allowed to buy crypto every american's allowed to buy stonks and meme stonks every american is allowed to go to vegas and gamble like a maniac on black or red so why not invest in startups that is the core issue at all of this but let's talk about uh this specific issue of what a roth ira is and how it works okay they were established in 1997 by delaware senator william roth if you would withdraw from your roth ira before the age of 60 you are penalized with taxes if you withdraw after it's tax-free your cap though at putting in only six thousand dollars a year and americans earning more than 125k can contribute reduced amounts in other words uh this is for people to save for their retirement and the average roth ira was worth 39 000 at the end of 2018 but they are capped the people who are making over 125k a year can contribute only 2 000 and so according uh to the article of the last 20 years there's a quote teal has quietly turned his roth ira into a gargantuan tax-exempt piggy bank confidential irs shows now this language is i think a little um biased you can see that there by using gargantuan uh tax-exempt and piggy bank like you don't need to say it that way he has built a fortune uh he's built it to 5 billion i think pro public should just state the facts here and not try to uh sway the witnesses i.e the readers but he took this uh retirement account that was worth less than 2000 in 1999 and made it worth 5 billion in 2021 by using the money in there to purchase shares in startups like facebook so uh facebook's rise was the biggest contributor to teal's roth ira which was worth 870 million at the end of 2008 when facebook was worth over 15 billion facebook is now worth almost a trillion dollars 970 billion so as long as teal waits to withdraw this money until april of 2027 six months shy of his 60th birthday he'll never have to pay tax on these billions so how did he do this he basically followed the rules when he uh had a stake in a startup uh paypal he was able to put i believe his paypal shares into that uh roth ira those shares when you are the founder of the company are worth pennies right think about it when i invest in a company and it's worth 5 million dollars or 10 million dollars and i'm getting preferred shares as an investor preferred shares are shares that have additional rights to the common shares the founders get common investors get preferred what that means is the preferred shares if i were to buy them at a dollar like let's say we'll just make an example here a five million dollar valuation company and they have five million shares i bought a million of those shares for a dollar each so i put a million dollars into the company my shares are worth a dollar but if that company fails and it's an 80 to 90 chance that the company does statistically what are the common shares that come behind that million dollars worth they're worth less than the dollar typically they're worth a penny or a fraction of a penny because most of them fail that's totally a legitimate way to value those shares additionally there would probably be something like i don't know 25 million shares when you start the company in other words the shares would be worth a two cents each four cents each one penny each and so

SPEAKER_17: when all of those gains happened he basically hit a home run with paypal peter is an exceptional investor a visionary genius uh there's just no two two ways about it you can disagree with the support of trump you might not like his politics on the margins but the truth is on a financial basis he's a genius full stop period financial genius so he puts his paypal stock in there an incredible thing for somebody at the age of probably 30 or something like that to do

David Friedberg: then he meets zuckerberg and he says you know what i'll invest the money out of my roth why not

SPEAKER_17: most people don't know you can do a self-directed in you do a self-directed roth ira you need not only invest in public entities well public entities you know they tend to go you know they double their revenue if they're growing at 20 every three or four years they double their revenue maybe a high hot growth company is going to double its stock price every two or three years you know putting stonks aside and crypto aside and that kind of nonsense in reality this is uh somebody who hit

SPEAKER_00: two bullseyes in a row that's the way to look at this literally he shot a bullseye he took another

SPEAKER_17: arrow out of his quiver and he literally split the arrow that's what we're seeing here that is something that we want to have in america and in the world it's totally reasonable that we reward somebody

SPEAKER_00: who who hits the bullseye twice and that's all that happened here so i don't think you can blame

SPEAKER_17: peter teal for this it is just the nature of how the roth ira works so there might be a solution here

SPEAKER_00: because this is a valid point we are looking at the tax lens saying how is this unfair there's one way that this is unfair it's that you if you're listening to this and you make under 200 000 a year like i did for the majority of my life let's be honest um i've only gotten lucky in the last you know whatever 20 years 15 20 years the first 30 i was kind of i wouldn't say a loser but i was trying to make my way in the world and i would not have qualified as an accredited investor for much

SPEAKER_17: of that time so if anybody could do this then you could have invested in uber paypal facebook linkedin whatever company it was and you could have put that into your author right and people are

SPEAKER_00: doing that today on sites like republic seed invest etc they are literally buying private companies because there is equity crowdfunding which is a path to all people being able to invest in all companies and so when we get there that will solve this problem because you two as an individual who put six thousand dollars in this when you're 25 or 30 years old would be able to bet that six thousand let's say you had thirty thousand in there you put six thousand in for five years okay now you've got five uh five times six thirty thousand dollars let's say you put three thousand dollars into each of ten startups and you hit an uber and it pays two thousand x now you got a six million dollar hit then you take that six million and you put i don't know a million dollars five hundred thousand dollars six hundred thousand dollars into ten different venture funds and they all return you know 3x on average and maybe you have one or two that return 20x like a or a hundred x like i did in my sequoia

SPEAKER_01: scouts fund or chris saka did in his fund his famous eight million dollar fund that had instagram and

SPEAKER_00: uber in it i believe that's really the solution here if we want to think about uh these uh retirement cap on them i got a little bit of heat for that even saying that you know even having a cap would be ridiculous i think we need to start thinking about some caps so here's an interesting cap the roth which has a cap of six thousand dollars and you put it in why not put a tax-free cap of i don't

SPEAKER_17: know 50 million a hundred million so then anybody who does this strategy gets the benefit all the way up to 50 million but you can't get the benefit up to a billion or five billion in other words we

SPEAKER_00: throttle it because the intent of this law and this program was not to have somebody get five billion dollars tax-free obviously so if that's the case we can have a discussion we don't have to retroactivate this there's no reason to penalize peter thiel for playing by the rules or anybody but in the future if we want to say broths are now capped at a billion dollars at 500 million 50 million tax-free and then after that you got to pay your taxes that would be a completely reasonable discussion to have i mean i think we need to have production productive discussions like that about these issues so in a way even though pro publica i think is you know kind of got an axe to grind here and they're they've been a little unfair in this coverage it is good that we have this discussion so that all americans feel like the system isn't rigged but let's fight the real enemy the real enemy here is not peter thiel just being amazing and exceptional as a an investor the real enemy here is that you are not allowed to invest in private companies and that needs to change

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SPEAKER_31: that's i-n-d-o-c-h-i-n-o.com okay according to my bestie and friend of the pod taylor

SPEAKER_00: lorenz from the new york times a 21 year old content creator and dancer posted a fake out dance on tick tock his name is eric louise or lewis i'm not sure how he pronounces it and in the video he looks like he's about to dance to uh megan the stallion one of my favorites uh new single uh thought i'll just leave it at that and when the beat drops he basically flips the bird and says to the camera psych if you don't know what psych means that means like uh i tricked you in uh slang from the 80s and uh he basically um puts a caption up that says this app would be nothing without blk people black people the videos racked up over 128 000 likes on tick tock uh and it went viral on twitter according to lorenz and i'm going to quote here some tweets suggest that black creators on tick tock had seemingly agreed not to choreograph a dance to the song which would force non-black users to come up with dances on their own and prove how essential black creators are to the platform in a later tick tock eric uh the the person who promoted this uh video said black folks have always had to galvanize and riot and protest to get their voices heard that same dynamic is displayed on tick tock he said we're being forced to collectively protest a user deja on twitter said that black creators are telling each other to not make a dance to the new megan the stallion song to prove they are the backbone of the app another quote we are being exploited and that's the core issue black folks have had in terms of labor mr luis or luis sorry if i'm pronouncing incorrectly these millions of likes that should all translate to something how do we get real money power and proper compensation we deserve and a tweet from taylor uh today to frame this as an issue around dance credits misses the point it's about so much more and speaks to broader issues of labor in the creator economy we are being exploited and that's the core issue black folks have always had in terms of labor

SPEAKER_31: eric said this couldn't be more dead on twitter built by black culture instagram built by black culture

SPEAKER_00: clubhouse built by black culture and now tick tock being built by black culture and all of those built by white guys uh or in the case of tick tock chinese guys or the chinese state and what makes this even more uh pernicious i think is that the venture industrial complex is largely white so you have the venture industrial complex uh backing white guys generally speaking to build social apps where black individuals don't have ownership to clubhouses credit they did include a lot of people of color on their cap table and that is a step in the right direction so you got to give them some credit for

SPEAKER_11: this what i think really people should take from this is um and there are a lot of stories i could go

SPEAKER_00: into like i've told before on the podcast vine uh king bach was the number one vine person when i met him at art basil in uh miami at the paper magazine party he told me he didn't know anybody at twitter nobody at twitter which owned vine at the time had ever reached out to him if you look at twitter in the early days all of the trending topics at times were based on black culture and somebody at twitter

SPEAKER_17: told me this inside story that they then created localized and customized um trending topics which you

David Friedberg: still have to this day because non-black people couldn't understand what was going on on twitter and they were afraid that people white people primarily would not understand what twitter was and leave so they basically throttled black culture on twitter this is a story i was told

SPEAKER_00: by somebody who worked at twitter and uh then you look at something like clubhouse my goodness the whole thing was built off of black culture you'd open up clubhouse and it was all kinds of black creators comedians artists thinkers uh journalists writers hip-hop artists athletes basically building that product what i would say to all of this and i tweeted is if the top 20 black creators left tick

SPEAKER_17: tock and started their own they would need only find a great app team to work with which isn't easy but it's not actually that hard and if the top 20 uh black creators instead of protesting found a great app team hire them uh find some great backers and there are a lot of black vcs now we've had many of them on the program here they could build a tick tock competitor that i believe would be worth a billion dollars within a year because those top 20 30 uh creators they are super super accretive to a

SPEAKER_00: platform in other words getting the first hundred thousand people on a platform that's the hard part really even the first thousand is really hard the next ten thousand it's hard getting to a hundred thousand is difficult it's really the first thousand to ten thousand that i would say is the

SPEAKER_39: hardest part those first thousand to ten thousand daily users well lebron james kevin durant carmelo

SPEAKER_00: anthony oprah winfrey plus all the venture firms out there they could easily fund this to build a world class app today takes about 10 people two or three ios developers any more than that you're kind of working against your own interests because there's just basically too many cooks in the kitchen maybe one or two android folks i'd say two so you have redundancy a great designer or two now you're up to six seven people and then you have customer support back end uh and a product manager does not i already mentioned the designer i think it's about 10 people those people tend to get paid 150 thousand dollars a year let's say you want to get the best people in the world you go to 200 000 a year that's two million dollars a year that's all it takes folks i trust me i know this i'm the first investor in com also fitbod also steezy robin hood building a world-class app is a 10-person company that's it and that's what instagram was when they sold to facebook i think there were 15 people any more than that it's not it's it's it works against you because you have too many meetings you just need the world-class best people and you put them on a slack room in other words if those 20 creators the top 20 creators were able to figure out how to get but a hundred thousand dollars uh each to invest and they are creators who get compensated in a lot of cases they have major deals or they were able to convince a group of black investors or other investors i'd love to be included in this um to put in money let's say five million dollars ten million dollars something in that range they could take a swing at this and it would work and i think actually for national security tick tock is owned by another country an authoritarian one uh in my view the influence of china is obviously there and china might actually be promoting white people more than black people with their algorithm i know they say algorithm i think they're actually human curating the algorithm or doing a combination of that and there were some um claims early on from people that maybe they were steering uh the app towards young people wearing less clothes who are white i don't actually find that hard to believe and if we want to really build this conspiracy theory what would uh china like to see happen what would russia like to see happen in the united states more strife around race you know what's a great anecdote for that is we kick tick tock out of this country and we have a black owned tick tock that would be a great statement and that is what somebody needs to do and if somebody does that i'm there for it you will get a very quick uh check from me if these 20 creators or any 20 creators out of the top 100 got together and you syndicate something like that if i sent that to my syndicate i think two or three million dollars shows up all you need is that killer uh ios development team you don't even have to worry about android to start everybody starts with one platform so just start with ios to start and then you add you know android in the you know second year or you know month seven so let's get to it folks go ahead and build it all you need is the creators the creators are driving this does that mean it's guaranteed to succeed no but if those creators owned you know 20 of them you know just took the ownership outside of the investors and chopped it up five percent each and they invested it over five years for just consistently producing two videos a week my lord that would work amazing and then they could say hey we're going to give the revenue split for the first thousand creators who join the platform first thousand creators to join the platform and do 10 videos if they do 10 videos if they join and they get over whatever number of views or they bring this many users we'll give them free we'll give them 100 of the revenue split for the first i don't know five years so there's all kinds of incentives you can create here it just starts with a group of people getting on a zoom call getting into a you know slack or a discord and saying enough let's stop giving the chinese a hundred billion dollars 250 billion dollars in value with tick tock and let's take that and let's give that to black americans and let's invest in them and let's have them own something that they

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SPEAKER_00: talk a little bit about buzzfeed going public buzzfeed is merging with 890 fifth avenue partners and adam rothstein the spac lead will be joining their board uh that spac trades under the ticker symbol enfa and buzzfeed will trade under the ticker bzfd once the merger is complete buzzfeed is also acquiring complex for 300 million as part of the deal 200 million cash 100 million in stock uh for the complex

SPEAKER_28: shareholders they're gonna go public at a 1.5 billion dollar valuation which is a huge terrible disappointment in one way because guess what buzzfeed was worth in their series g led by strategic nbc

SPEAKER_00: universal 1.7 billion uh so this is means no value was created in five years or nbc universal as a strategic investor massively overpaid in other words um this isn't a huge uh 10x 100x return for anybody but the fact that a media company has been able to go public again is a huge win because the media business has been so challenging and so difficult in the age of the google facebook duopoly where advertisers pour money into those two platforms the revenue in 2020 was 321 million so this is five times uh their top line revenue approximately uh 2021 cash flow with adjusted ebitda uh you know who

SPEAKER_28: knows what that means exactly is uh 31 million and recent harowitz uh also taking a bath on this one uh they invested in 2014 at an 850 million valuation so here we are seven years later just the 2x it's it's not a disaster but man that's not why we're in the venture business this is why venture capitalists

SPEAKER_00: never invest in media companies but subscription companies are slightly different what this means is they have 1500 employees at the start of 2020 it's probably much less now they acquired huffington post in a fire sale and uh but two weeks ago they won their first pulitzer prize for their investigative journalism uh by covering the uyghurs a topic i talk about all the time here on this pod so uh congratulations to uh the buzzfeed team if you were a journalist there you probably got five bips maybe 10 bips if you were a senior person i'm taking a guess here somebody can slide into my dms and tell me but journalists who are getting paid pretty well over there probably 60 000 to 100 thousand dollars depending on seniority you know now if they got 10 bips uh that would be 1.5 million you know one percent would be 15 million 10 bips 10 of one percent 10 bips as we call in the business would be 1.5 million or maybe if you had five bips 750 so that's a pretty uh a great take for a journalist who never ever have any kind of upside like this so if you stayed there for four or five

SPEAKER_28: years you probably got that one of buzzfeed's uh former employees dunked and just basically said fu to the management there because they didn't execute their stock options which were obviously uh probably

SPEAKER_00: on a short window when you have options in a company and you're an employee in the old days when i was coming up he had no choice but you gave people 30 days to execute their options this meant when you left a company if you had a thousand options they were worth a dollar each had to give a thousand dollars or if you had a hundred thousand and they were 50 cents each you had to get fifty thousand dollars so this was crazy you know an employee making sixty thousand dollars has to pay fifty thousand dollars or even a thousand dollars that's significant now companies are giving a five-year window to execute and that keeps you from having all these crazy bad uh feelings when a company does

SPEAKER_52: go public and people didn't execute their options what happens to those options when they don't get executed they go back into the employee stock option pool they get given to the next employee i would estimate somewhere in the range of 50 or more of those options get recycled

SPEAKER_00: if somebody leaves not all of them because people tend to stay but of the people who leave i'm gonna guess half give them back oh and if you want to learn more about stock options we did a stock options basic uh with becky from wilson cincini you can go check that out this week in startups.com

SPEAKER_52: slash basics look for the stock options episode it's really important to understand your stock options

SPEAKER_53: fam it's a really difficult business and the fact that they got here is

SPEAKER_00: just absolutely amazing they are shifting to doing more and more uh e-commerce i understand and um you know i don't know if they have any subscription products over there yet but i do think um they're looking to diversify that revenue mix a whole bunch so congratulations to them i think

SPEAKER_28: you'll see uh vox go next my friendship bank off who bought my previous company weblogs inc then took the team from weblogs inc and gadget and created the verge uh no bad feelings there uh you know he's he's

SPEAKER_53: entitled to go uh take i was out of the blog business for a long time by then but uh he did take the playbook that i created and then built on it to build vox and uh he's taking it to a whole nother level with the acquisitions and he was you know i'll give you a bank off credit he was visionary enough to buy weblogs inc for me uh and brian alvey and peter rojas uh and ryan block and the team uh sean gold back in yeah 2006 7 a time frame when nobody really knew what blogs were for for a pretty penny so i think vox goes next and then you will see uh the great when they have those public

SPEAKER_28: currencies my prediction is they're going to go buy a bunch of things okay uh let's get on to the rest of today's show healthy and happy employees create successful companies and that's a fact we all know it and calm for business can help your employees be their best selves at work you can partner with the number one mental fitness app to provide support and tools for all your employees now calm can help kickstart mental well-being initiatives by empowering employees to stress less to rest better and to build their resiliency calm has an entire library of content specifically designed for the workplace which includes lo-fi music playlists quick breathing breaks guided meditations and hundreds of soothing sleep stories don't i know it i always take a breathing break during the day before i even do this podcast and i go to sleep with a sleep story more nights than i don't is what i'll say they even have programs tailored for mental health and productivity like their mindfulness at work series millions of employees at over 600 companies like lincoln iterable and universal studios use calm for business i love calm obviously i was lucky enough to be an early investor and they always said they were going to get to this and now it's here and people love it calm is offering a free well-being ebook for hr and benefit leaders and one month free after you attend a free demo just go to calm.com slash twist that's right get your free book no cost get one month for free after attending a free demo and they'll give you that free demo as well at calm.com twist that's calm.com twist namaste everybody in other news microsoft is dunking on apple

SPEAKER_00: they have slashed their app store fees to 0.0 dollars and they allow any seller to use their own payment system this is the most disruptive thing we've seen in a long time from microsoft a company that's doing actually fabulously but they're not known for maybe being too disruptive these days this is hugely disruptive in windows 11 uh they are cutting developer fees to zero this means when you sell your software on apple you pay 30 carriage fees and when you sell them on microsoft you pay zero does this mean everybody's going to throw out their iphones does this mean everybody's going to throw out uh their um ipads and mac minis and and imax of course not but it does mean that some developers might launch on microsoft first eventually maybe they'll slightly prioritize it uh people i'm thinking of people like epic games and fortnite um and this also is going to create massive pressure on google and uh amazon and apple primarily to rethink their app store fees and it's going to create a lot of tension in uh washington dc where people say we'll start saying well if microsoft can charge zero why are you charging 30 and so this is part of the sharp elbow nature of big tech you have apple going after facebook and google saying your privacy is yours and their whole marketing campaign is based on privacy and now you got satya nadell uh satya nadell who i'd love to have on this pod can somebody send this clip to him and say hey get on the pod i'd love to talk to him because he's kicking butt and this is

SPEAKER_17: a great way uh for consumers to win these big companies now on this you know 3d chess board are

SPEAKER_00: looking at each other's weaknesses and then making those their strength okay privacy is and collect and being creepy is google and facebook's weakness apple's going to make that a strength oh apple being closed is a weakness google is going to make android open source and open and you can change it and fork it and do whatever you want oh okay the 30 percent that google and apple and amazon are charging is their weak spot microsoft's going to make that their strength here's a 90-second clip from nadella

SPEAKER_68: throughout its history windows has been a democratizing force for the world windows has always stood for sovereignty for creators and agency for consumers with windows 11 we have a renewed sense of windows's role in the world as i look ahead i see three clear opportunities first windows recognizes that there is no personal computing without personal agency we need to be empowered to choose the applications we run the content we consume the people we connect to and even how we allocate our own attention operating systems and devices should mold to our needs not the other way around second windows is the stage for the world's creation as a creator every time you pick up a windows device it becomes a stage for your inspiration so you can dream big and create something profound and lasting we want to empower you to produce and inspire you to create and finally windows isn't just an operating system it's a platform for platform creators windows is a platform where things that are bigger than windows can be born like the web a platform can only serve society if its rules allow for this

SPEAKER_72: foundational innovation and category creation this is the first version of a new era of windows all

SPEAKER_00: right that obviously is a giant subtweet to apple who will not allow platforms on their platform so this is kind of meta let's just pause for a second and talk about what this is if you own a platform an operating system like ios or google's with android or windows you do not want somebody building a platform on top of you because that platform could then threaten yours this is why facebook google apple are generally closed ecosystems wherever they're making money google doesn't make money from android they make money from search therefore search is closed right you don't know how the algorithm works it's all a black box it's all opaque then you look at something like facebook they deprecated the graph you can't take your graph with you it's not portable or easily portable the apis have all been truncated and deprecated so facebook makes its money from advertising the graph and your data and you cannot opt out of that and it's closed and they did have a platform like hey build any game you want on top of facebook when's the last time you play games on facebook you haven't they got rid of that business because they realized by being a closed ecosystem they would make more money if they controlled it so what santi is saying here is if you want to build something that could disrupt windows itself or you want to make your own app store your fortnite your spotify if spotify wants to have an app store on top of spotify they could do that on windows if spotify wanted to have an app store inside of ios they probably would get stopped and if they said hey putting your own uh billing information they would get stopped so this is a great rallying cry um and who really is supposed to be supporting creators and app developers well that's always been apple's position is that we're the crew for creators i can tell you that a lot of the creators i know are moving to windows why are they moving to windows because apple products are too expensive and they're closed and you can't add memory and you can't add hard drive space easily you can't open the box up and do what you want from it and so you know the fact that you have to jailbreak your iphone and basically void it and get any support is their weakness at apple it's also their strength because if you don't want to deal with viruses and you want to have everything reviewed maybe you want your kids to be a little more protected that is a pro for apple so it's great to see microsoft mixing it up again now uh it's very clear we talked about this on episode 36 of the all in podcast lena khan a biden's choice for the ftc chair was sworn in last week with a 69 to 28 vote including a bunch of republicans in there she's 32 years old and she is uh an antitrust hawk i guess would be the best way to say it although i think she's a lot of her ideas are common sense she's got a specific axe to grind with amazon because she doesn't like the idea of them having their own products although you can debate that a bit if that is in the interest of consumers or not and then on episode 37 of all in we talked about the six proposed antitrust bills being discussed by the u.s house judiciary one of those would call for apple to allow third-party app stores and provide iphone technologies to third-party software makers and nancy pelosi has since confirmed that tim cook reached out to her to ask her to please pump the brakes on this i think the train has left the station and this is adding more fuel to the fire this is kind of how big tech works when somebody trips the other players in the game give them a little push in the back so apple is getting tripped up in this man then microsoft pushes them right in the back facebook pushes them right in the back they want to see them just totally face plant and then when facebook was getting grilled because of cambridge uh analytica and you know the election interference what did apple do they pushed them and said yeah well let's see you hit the curb this is the the the sharp elbow nature of big tech and uh will this really actually make a difference i think the overlying lesson here and you know apple does have a lot of revenue now in services people previously were reporting that uh the app store was 10 percent of apple's revenue but cnbc uh just made a note that it was 64 billion uh for the app store in 2020 which would be more like 25 of their revenue it is significant and so this is the princess layer versus the empire situation i've talked about this before but i'll play the quick fair use five second clip of it

SPEAKER_82: the more you tighten your grip talk the more star systems will slip through your fingers yeah and

SPEAKER_53: that's obviously princess leia to uh tarkin who is about to blow up alderaan this is what happens if

SPEAKER_00: you squeeze users too tight if you squeeze your partners too tight people can argue if 30 is too tight um but clearly facebook did that and made a lot of enemies in the valley amazon is doing that with knocking off people's products with amazon basics they're creating a lot of enemies and one thing i've learned the hard way enemies accumulate try not to have a bunch of enemies in your business try to

SPEAKER_28: be a mensch try to spread the wealth do a little splashy cashy facebook now finally you know uh after a decade of me telling them to is starting to share revenue with users and allow them to make money on their platforms my god did it take a while for them to even consider that you can avoid a lot of these problems by just being good to your partners microsoft was known as being vicious to their partners in the 80s you know lotus one two three and word perfect obviously replaced by excel and microsoft word

SPEAKER_00: and they obviously tried to and pretty much successfully um kneecapped netscape when they used to charge 50 bucks for a browser back in the days so uh it's going to be an all-out fight and i love to see it i love to see it this is what makes america great we're out here fighting it out on the battlefield and what's happening in china and people disappear sadly that's how china runs their country that's their operating

SPEAKER_63: system authoritarian where's jack ma jack ma making a public statement where's the guy who founded

SPEAKER_28: bite dance what's happening with apple the newspaper uh in hong kong oh they just published their last issue and the ceo is going to jail that's why america is going to beat china uh and democracy will beat authoritarianism if we stay vigilant okay we got an ask jason coming up next okay let's do an ask

SPEAKER_00: jason from pierre on our slack should a startup pitch a vc who has invested in a similar company well time matters if it was a similar company 10 years ago and the vc is no longer on the board and that company was sold and shut down you should pitch that vc why because they have scar tissue they have wisdom and they might have an axe to grind or unfinished business so if somebody invested in instagram or they invested in google search and it's now 20 years or 10 years later and they're no longer involved in it that's a pretty good company to invest in and in fact they saw sequoia this week invested in a search engine from somebody who worked previously at google and obviously famously sequoia was the original investor in google you should not pitch them if they're actively on the board so if andreessen horowitz is in clubhouse and you have a clubhouse competitor of course you're not going to meet with them not a chance now that doesn't mean that they're going to take that information and give it to the founder but it doesn't mean that they're not going to say to the founder are you aware of this other company and the other founder might not be aware of it so in my experience i've never had a vc uh come to me and say hey uh you know when i was a founder we found this information out but i have had investors forward me a news story and say here's a company that you may want to be aware of and that's public information but i was not aware of it i have also had founders say to me have you met with this company can you get me their deck and i was like that's only happened like once or twice you know it hasn't happened recently and i was like no even if i did meet with them or had their deck i could never send it to you it's typically a first

SPEAKER_28: time founder asking for that um so if you want competitive intelligence there's better ways to do it

SPEAKER_00: than going to your vc and if vcs wanted to get competitive intelligence you know we're really not in the business of of doing that it's kind of um would be the ultimate career killer if you did that it kind of is the risk of ruin it would be the equivalent of you know a chef serving you knowingly you know um you know some counterfeit food or food that was spoiled like you would just never do it it's like it'd be crazy for me to know that like this chicken was rotten and i'm gonna serve it to you like immediately you lose all your credibility as a chef sorry to use a really gross analogy

SPEAKER_28: but people tend to overthink these things great question next question is from james via email

SPEAKER_00: what kind of products businesses get your unicorn spidey sense tingling great question when i see really beautiful products well designed when i see users who will not shut up and stop using that product and when i see a founder who is absolutely obsessed about that customer and product and their team members spidey sense but you really see it in the uptick and the beauty of the product when you use robin hood for the first time thumbtack com or uber you had this magical moment where you said this is so transformative i can get a car or i can get food anytime i want by pressing a button oh uh robin hood i can trade a stock for free and i'm onboarding in seconds those give you that kind of vibe and so you know i could tell you that steezy or grin in our portfolio now or blockable or lead iq all gave me that feeling in the last five years now those companies are all i won't say their exact valuations but let's say there are nine figure companies i would i would i would guess uh and so you know they're they're not quite unicorns yet but i do get them soul savvy comes

SPEAKER_28: to mind as well um which is a cool slack community for sneaker heads uh maybe blush which is a canva like tool for um designers uh and that i just get that sense from so it happens and you know when it does uh we just keep plowing money into the company gigster is another one uh which is kind of like airbnb but for locations i get these senses uh frequently actually that doesn't mean i'm right uh but i have had a pretty good track record i think because i don't have a problem placing a lot of bets

SPEAKER_00: and living with a lot of failure what i learned somewhere you know four or five years into the experience and listen you're we're all the product of our experiences and the experience i had with uber thumbtack data stacks and com breaking out led me to realize well if i hit one of those every hundred times and they pay off 200 to one or five thousand to one or two thousand to one why am i not investing in more companies and why am i not writing bigger checks so i started writing bigger checks and i started investing in more companies i think we're going to invest in i think we're going to syndicate 12 companies in this month june to give you an idea it probably took me a year to get to the first 12 companies

SPEAKER_52: when i was on angelus when we moved to the syndicate.com we now have 8 000 members i literally syndicated 12 deals this month i couldn't believe it and i was talking to my wife about it just this morning and i was like i think i did more deals this month through the syndicate than i did in my whole first two years of investing as a sequoia scout and certainly much more money because i was

SPEAKER_00: running 25 or 50k checks back then so be bold as an investor but only invest what you can afford to

SPEAKER_28: lose and hit some amount of diversification you want to invest in companies that are on the other side of getting their products to market that's like the advice i give people at angel university

SPEAKER_63: angel.university although i don't give any investing advice but i will talk to you about the advice i

SPEAKER_28: would give to a family member uh no i mean we talked about the theories of investing you have to make your own decisions i mean be grown-ups out there it's been a great episode we'll see you all next time bye-bye