SPEAKER_00: All right, everybody. Welcome back to This Week in Startups. I'm Jason Calacanis, x.com slash Jason. He's Alex Wilhelm. And we do news about three times a week. We're still doing the liquidity pod. We're doing another episode of AI with Sandeep, who's been very busy, you know, summer traveling, all that good stuff. But we're dialed in now and you're going to get the news from us three times a week. This week, maybe twice because we have a holiday. But how was your weekend, Alex? I don't know that anything eventful occurred in the last couple of days as we started. July and the slow summer season.

SPEAKER_04: No, I mean, I feel like the world is calm. Trade is flowing. Politics is normal. Everyone's relaxed. No one is up in arms at all. Everything's chill. Perfect.

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SPEAKER_13: I saw Elon, uh, this weekend and he said record traffic on Twitter. So there's your, on x.com had a record number of minutes the last couple of days because we had a debate on Thursday.

SPEAKER_15: You and I, I think I could speak for both of us. Maybe Trump's not our ideal candidate. Uh, but I have had concerns about Biden's age for a while as I think 70% of Americans have. So, uh, the debate was, I don't know. I'm curious your take, Alex. My takes been pretty well known cause I've been talking about the hot swap theory for months.

SPEAKER_19: Yeah, I actually, I, I wrote about this a little bit and I had to say in that piece that I was like, well, you know, Jason has been talking about the hot swap and I thought there was just enough institutional momentum that that was not going to happen.

SPEAKER_20: Then the debate happens. People, I would say there was a broad consensus that Biden's performance wasn't so good.

SPEAKER_19: And in the wake of that, I was like, okay, there does seem to be a lot of pressure now from various editorial boards, from politicians, et cetera, to swap out the democratic candidate for someone a little bit younger and more spry.

SPEAKER_20: And then since then seems to have kind of gently gone back the other way towards keeping them on the ticket. I'll just be totally honest.

SPEAKER_27: I, I, I, I was incredibly diplomatic of you. I like how you, uh, framed it very diplomatic.

SPEAKER_21: Well, no, well, look, we have a nice wide audience here and I want to make sure that I'm hitting everyone's objectives and viewpoints as, as fairly as possible.

SPEAKER_19: I will say that when you say Trump is not my preferred candidate, given how important to me, a separation of state and church is church and state and his recent, uh, viewpoints on the Louisiana rule and so forth, uh, means that he's pretty much off my list entirely for good. Yeah. So I'm still going to support Biden over him because Biden is boring and does believe in a separation of church and state. Uh, but my opinion is one vote. So it's not super important. What matters is what's going to happen at the national level and so forth. And so I'm, I'm just curious, Jason, just to give us your current confidence interval in the chance that Biden gets removed voluntarily or not and replaced.

SPEAKER_30: I'm 100% certain he's not running 100% certain.

SPEAKER_32: And I've been saying this for a pretty long time. Now, uh, I've been very vocal about the fact that I believe he's in significant cognitive decline. Um, and I, I take zero, zero pleasure in describing, you know, what we saw on Thursday, but he, he basically, you know, he lost his train of thought multiple times. Was trailing off and you could just tell that, you know, there are some significant cognitive decline that's occurred. S and this is not the person we voted for in 2020. And, um, you know, I know people want to do weekend at Bernie's and make fun of it, make light of it. We're all sadly going to go through a decline in health unless like we get some miracle AI super intelligence that cures Alzheimer's dementia and, and, you know, just physical decline.

SPEAKER_15: So, you know, I, I have such great compassion for people who families who are going through this and it's just perplexing to me that they would pursue this, uh, as opposed to something like saying, Hey, you know what? He did a great job vice president twice, Senator, president once, like it's time for somebody else to take the mantle. I think this is like some crazy, weird strategic decision, but if we get to just raw strategy, right, putting aside what we saw, and I think there's consensus in what we saw.

SPEAKER_32: So I think there's two ways for us to go through this one is strategy going forward. And then one is you and I, me as a former journalist from, you know, you know, whatever web 1.0, the nineties and into the early two thousands, but then kind of not being a full-time journalist. And then you coming out of being a full-time journalist and, and starting your own enterprise with your newsletter, um, for a long time. I don't think we should talk about the media angle, like what's going on here in the media that, you know, in terms of the flip flopping of the New York times. And, and that was like a very strange thing that occurred. So let's start with strategy. Um, and I hate to be tinfoil hack conspiracy theorist. I do think that they pushed up the debate. I'm talking about like the democratic machine. Uh, I think they pushed up this debate in order to get a heat check on where, you know, this race stood in order to have the optionality of swapping out the team that they're going to put on the field.

SPEAKER_00: Uh, this seems like a crazy conspiracy theorist, but there's a lot at stake. These parties are very sophisticated. So I think they pushed for June in order to just see how he did in the debates. And I said, before the debate occurred, if he doesn't do well, then I think they're going to do the hot swap. And this was beyond not doing well. This was just disastrous. I mean, 72 or 74% of Americans think he's in, he's not fit to serve according to a CBS poll.

SPEAKER_15: This isn't according to some weird. What's that one? Ramson or something like some weird, like, you know, Republican. Yeah. Rasmussen. Right. That's like some edgy pole on the side, you know, that's got some inherent bias into it. It's like a CBS poll, you know?

SPEAKER_00: Like, yeah, I think we can, we can trust it directionally. So I think strategically the Trump administration, the Republicans made perhaps the worst tactical error they could ever make, which is instead of saying, no, we want to do a September debates. Like always. They sped up the June debate.

SPEAKER_35: I think that was a trap that was laid for them. I know I'm sounding like a little bit tinfoil hat here.

SPEAKER_21: They've now given. The only reason I, I pushed back generally against your conspiracy theory.

SPEAKER_19: And I say that with, with joviality is that it, it implies a lot of confidence in the DNC. The, you know, when people are like, well, the government has a secret plan.

SPEAKER_46: They, they hid the aliens. And I'm like, do you really think that the government could build a conspiracy of that size?

SPEAKER_36: So like, I, I, but I, that's why I'm giving it the disclaimer. I know I sound tinfoil hat. I'm like, I know this sounds a little crazy, but if I was a strategist and I said, you know what, we have this, you know, there, there are political machines on each side.

SPEAKER_32: We, we kind of know that. So if you're part of the political machine, you say, Hey, let's do this early.

SPEAKER_13: And then if it's as bad as we think it could be, and it turned out to be, you know, as cataclysmic as possible with the New York Times editorial board saying he needs to bow out.

SPEAKER_15: I mean, the New York times and MSNBC and joy read, and we'll get to the media thing in a second. Our knives out saying, Hey, you're done. That's as bad as it gets.

SPEAKER_13: So now they have a free option.

SPEAKER_00: How often does that happen that you get to say, what is Trump's positions right now? He's revealed all his cards are on the table. What two Democrats can we totally refresh here and put as the countermeasures to that based on where the country is with a hundred day window. And then that just Royals the entire race.

SPEAKER_13: It's like, okay, who's going to be in the NBA finals this year? Okay. It's going to be Boston. Okay. How do you counter Boston? What's the super team that needs Boston? Okay. You need wings, right? You need two or three really good defensive, free and D wings to counter them. Essentially, you know, what you're up against. Right.

SPEAKER_15: And so I think that the series of events and listening, I know I sound crazy, but if you look at my clips from the all in pod, when I predicted all this, I think he resigns before the end of the term.

SPEAKER_13: Crazy, right? Kamala becomes president. She's the first female president ever. Then she says, you know what? I was the first female president.

SPEAKER_15: I'm not going to be the vice president or the president. Good luck. I'll support anybody. She gets either a Supreme court nomination, who knows what, some, you know, victory lap kind of situation. Um, and she served her country and then they feel two new candidates who are young, dynamic, and who don't have a 30% chance or 20% chance of winning. Anyway, that's as best as I can figure out what's going on there.

SPEAKER_21: Um, you know, I had a moment of clarity over the weekend in that there's so little that you ever feel like just kind of like you're flowing in the ebbs and flows of history. And you're kind of just looking around going like, this is some wild stuff, but then you realize that your paddle is the size of a matchstick.

SPEAKER_19: And no matter how much you paddle, like you back to my point of having one vote, what's my, what's my thought process worth? I will see. I mean, at a minimum, you feel very confident in this and I talked to you a lot and I think you're smart. So I, I appreciate the overall perspective. I don't have a firm of a view because I feel like we're so far outside of the bounds of, of like historical normalcy that I struggled to kind of chart a path forward.

SPEAKER_21: But one thing that I keep stuck on, I keep getting stuck on is Biden's 81, Trump's 78, if Trump's elected again, he's going to end up being older in office than Biden is going to be, or roughly the same age when he exits, if he loses. So we're, we're, we're kind of like saying that's too old. And your other option is a guy who's going to be that old if he's president again, which to me, isn't much of a solution to the issue of age and so forth.

SPEAKER_19: So the thing I wanted to ask is term limits, age caps, what do you think is the right way to approach?

SPEAKER_32: Test, I think a physical and a cognitive test is because, you know, listen, uh, 81 is not the same for all people.

SPEAKER_35: Like I know people who are skiing in their seventies.

SPEAKER_15: And then I know people who are in wheelchairs in their seventies, like, and who can't walk a half a block without, you know, oxygen, uh, et cetera. And then there, you know, there are other people who are vibrant, so it doesn't, you know, hit us all equally. And I think, you know, there's that expression, how did you go bankrupt? And it was like slowly then all at once, this is what happens with cognitive decline.

SPEAKER_32: It's like a very slow thing. And, and, you know, I, I don't like the piling on with the videos on Twitter and, and, you know, Instagram or whatever.

SPEAKER_70: Here's Biden four years ago, here he is today.

SPEAKER_32: But I do think you have to look at them and be like, wow, this is like a really serious decline because he was so, I was watching some of those 2016 and 2020 videos.

SPEAKER_72: He was so crisp, he was so there, so present.

SPEAKER_32: And then just a small number of years later, boom. So I, I think you could either do an age limit on the back end of 80 years old, 75 years old, or you could just say there should be a cognitive test as part of the physical. And you have to do that and you have to disclose your finances, whatever the basic set of disclosures as a cognitive test could be one of them at the back end of Reagan's second term. It's been disclosed that he had Alzheimer's. Um, and so who knows who was running the country for that last year, right?

SPEAKER_13: It's pretty scary to think about. There probably needs to be some sort of cognitive test every two years. So even if you're in office, we need to check because, Hey, you got the nuclear codes. What if you have a senior moment? I'm just being gentle here with terminology.

SPEAKER_15: What if you have a senior moment during all this, what he's clearly suffering from, I think is, and I'm not a doctor, but there's something called sundowning where like at the end of the day, people who are in this decline. And I tweeted about it. They start to just become either agitated out of it, slurring words, weaker.

SPEAKER_35: And, and the, they've kind of come out and said, listen, he's sharp as a tack from 10 to 4. PM. So let me ask you, what do you think of the media right now in terms of this crazy flip from like being all in on Biden and then being all out on Biden?

SPEAKER_19: Well, the editorial, you're talking about the editorial boards because the, uh, the times article that really stirred up the pot over the weekend was the New York times editorial board coming out and saying, all right, Biden, your time's up. And, uh, there's, for people who don't know, there's the editorial part of newspapers and then there's the new side. This is why the reporters at the wall street journal are not responsible for the editorial page any more than the folks of the times are responsible for their own edit report. But they are seen as pools of powerful opinions and people who are kind of in the know. And that's why it's great that we have a different political views at our newspapers, because we get different elite perspectives, if you will, and not elite in quality terms. I mean elite in terms of access, so the times coming out and saying, Hey, come on, this is, this is not looking good, I think is a big statement. Uh, there has been a lot of hand wringing, I think, amongst people who are very concerned about a second Trump administration. And I know we're going to get to Supreme court cases later, but to me, it seems to be a relatively reasonable perspective to take that. All right, as you said, well, this will happen. We'll see. We saw they took a, they took a stance.

SPEAKER_21: It doesn't seem to be too shocking given where you and I think the median opinion is on the overall performance in the debate. So I wasn't that shocked by it.

SPEAKER_19: I was a little shocked by how fast they got their act together and published it because that means they had to sit down and write it. They do agree on it. It had to get edited, blah, blah, blah, blah, blah.

SPEAKER_21: That takes some time and it came out not that far after the debate, which means they probably thought this relatively quickly.

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SPEAKER_35: What else is on the docket today? Alex, let's get to it. Let's just jump into the first story.

SPEAKER_19: Okay. So skipping the rundown, we're going to jump in. This is a, a Jason edition. There was a weekend conversation about DEI, MEI, and a TechCrunch article.

SPEAKER_27: And you wanted to put this on the show. I witnessed it, but you know, I know you were at TechCrunch previously.

SPEAKER_95: You might know some of the principles here.

SPEAKER_31: Um, yeah, yeah, yeah.

SPEAKER_15: And I do think this is perhaps the end game of the DEI merit discussion in Silicon Valley, in terms of how CEOs and the media are doing their, you know, little dance over this issue.

SPEAKER_19: So yeah, yeah. Okay, so over the weekend, a TechCrunch newsletter that was also published on the website, we have a image of it up on the video. And if you're watching that got a lot of attention and a lot of pushback, and we've excerpted the segment that got the most attention. It was a two paragraph clip. Jason, why don't I just read this? And with your permission, I'll read it verbatim. Okay.

SPEAKER_20: So scale AI's Alexander Wang has decided that diversity, equity, and inclusion, DEI are POSA, and replaced them with his shiny new acronym, MEI. Merit, excellence, and intelligence. I cringed so hard that I'm going to need a chiropractor. Very high a line. He likes to put some pizazz on things. Yes.

SPEAKER_19: And then this is the, the bit that people got peevish about. I would invite him and those supporting him to all the way off. You misunderstand me. You thought I wanted you to partially the way off. Please read my lips. I was perfectly clear off you all the way, remove head from ignorant ass, then all the way off. Okay. That is the segment.

SPEAKER_20: And then there was a blow up and then the piece got edited and then Connie lords us. Okay.

David Friedberg: Connie is formally of Strictly VC, which was purchased by Yahoo, your alma mater, TechCrunch. And she's the editor in chief now. Yes.

SPEAKER_20: My former boss, my friend. Yeah. Hi all, an opinion piece that ran on our site yesterday did not go through our standard review process and was unfair to both our readers and our staff. That post has since been updated to reflect our standards and will ensure that this doesn't happen again in the future. Okay. That brings us to today.

SPEAKER_32: I believe. Yeah. All right. Uh, so this is interesting for people who don't know the long history of TechCrunch. It has always been spicy, has always been unfiltered and has always had room for publish first and, you know, deal with the ramifications light later, like all blogs. And, you know, listen, I was part of the start of the blog movement within gadget worked with Mike, uh, on the conferences of the early days of TechCrunch and they had a concept of process journalism, which is kind of like shoot aim and then, you know, deal with the

SPEAKER_13: ramifications. In other words, it's more like a conversation in this, by the way, blogging as a conversation predates Twitter.

SPEAKER_15: Um, and it would be like, I'm just gonna give you my raw opinion here unfiltered and then we can all react to it. Um, but here, you know, we, we just talked about how there's an editorial page at the New York times without bylines with a lot of thoughtfulness behind it and a group of people who sit in a room and say, Hey, okay, we're gonna, we're gonna put this opinion out here. It might be spicy and blogs and Twitter. And this feels like a tweet, you know, to this gentleman who wrote, you know, told everybody

SPEAKER_00: to F off, it feels like on his Twitter handle, nobody would care, but in TechCrunch in 2024, owned by, you know, Yahoo and a private equity firm trying to coexist with the technology industry, which buys tickets to events, sponsors the site and might, you know, Connie's view of this, I'm taking a guess, you know, based on her, uh, previous, uh, startup that was purchased. Strictly VC is I think she's a little bit more buttoned up and wants a little bit more thoughtfulness and less of the, Hey, I'm just gonna start spouting off here, my personal opinion. And then I think maybe I thought it was very telling. It didn't go through our typical vetting process. I think actually the TechCrunch vetting process exactly is yeah, go for it, let the chips fall where they may, and maybe she's reinstituting something new here, but I do think this signals

SPEAKER_32: something for me about the standoff between the tech press. Okay. And the tech industry that's covered. Um, and so I'm just curious your take, cause in, you know, you might know the individuals, you obviously know Connie involved, but what's your take on what we saw here?

SPEAKER_111: So higher who wrote this is a human that is amongst one of the nicest that I know.

SPEAKER_19: Um, and so to me, when all this popped off, it was very humorous to see people talk about him as if he was some sort of evil person. Uh, higher also, by the way, has been a founder and a VC. So he's not someone who only has been a scribbler and he's someone who has experience on, I think every side of the table possible in this conversation. He also, that's helpful context, by the way.

SPEAKER_04: Yeah. Yeah. He also, um, is very much his own person and roles, his own style.

SPEAKER_19: And there was direct your point about blogging more space in the old days to go about, um, writing on the internet. In fact, uh, we have a article from old tech wrench here from the Mike Arrington days that John's gonna pull up for us, um, entitled. So a blogger walks into a bar, which I believe is Michael Arrington showing up to a private meeting of angel investors back in 2010 and accusing them of fraud, price fixing. People have been saying on Twitter in the last couple of days, oh, we need to bring back the Mike Arrington days and I don't think you want to do that because if this higher thing was spicy, don't forget that Michael Arrington was a lawyer and he acted like it. And yeah, you know what? That was an era of tech wrench. I was going to tech wrench events when you and him were hosting them back when I was in like high school, um, so I've been a fan of the, of the blog forever. That said, Connie is definitely changing up the way I would say tech wrench approaches the market. And I think the whole internet has moved away and this has been going on before she took over. This is not a one 80 about face with Connie. I think she's continuing a process of professionalizing tech wrench, making it less of a freewheeling blogging space and much more of a standard media company. Which is why I think in this case, she didn't say, well, we have a lot of voices on TC. Some of them that you're going to agree with some of them. You're not, uh, instead she responded that she did by editing the story, publicly apologizing. And, um, I think trying to circle the wagons around her team, which to be clear as a leader is a great thing to do. Uh, but I do think this is illustrative. I think the era in which you could go hog wild on the internet is pretty far behind us. The thing that I, I'm a, I'm a little bit annoyed by in all of this, apart from the fact that I think people were unnecessarily focused on one paragraph of one story, but whatever. It it's the people that have been telling me that cancel culture has run a mock and that people's employment shouldn't be impacted by their views were the very people who were

SPEAKER_129: standing on their soapbox and screaming, to cancel this person, to cancel this person because they didn't agree with his culture.

SPEAKER_133: I think he has been canceled. I think it says formally contributor to, or people were kind of dunking on him. So maybe he's a former contributor, I think that's public via his LinkedIn.

SPEAKER_21: I'm not gonna, I talked to Haya about this after it all went down, but, um, because he and I've talked for years and years and years and I think he's great. He's a colleague. Yeah. Well, former, but like still someone that I just adore. Like if he was in town, I would run across town to get lunch with them because he's so pleasant.

SPEAKER_136: The point is though, like, you know, the Andreessen Horowitz folks are, are, are like, you know, oh, you gotta fire this person, fire them.

SPEAKER_46: Shame, shame, shame. Right. And they're the same ones who are, don't cancel people. Yeah. Wait a minute.

SPEAKER_19: So I think that this showed that media has changed and that the current tech run under Connie is going to be a more of a buttoned up operation. Maybe that's how it needs to be to survive. Hell yeah. I, I, I, I like Connie. I love TC. I like, I, I love them both. I don't want me to, they need to grade them differently there, but I do think that the

SPEAKER_20: era in which you can pop off on the internet has gone away. And everyone, everyone is being censorious towards views they don't agree with. And I just think that we need to understand that everyone's doing this and that it's not one particular group or the other. Uh, also there's a huge power imbalance when the billionaires jump on you and they have staff and you don't.

SPEAKER_15: Well, and then here's, you know, when having been the tech press myself and then being on the other side of the table as an investor in these companies, you know, have the unique perspective here and still doing random acts and journalism in this podcast.

SPEAKER_13: There used to be a tech press that was very tightly connected to, uh, the technology creators in the bill Gates, Steve jobs era. People who wrote about tech in that era were fans of technology like Walt Mossberg and yeah, sometimes what would say this isn't a good product, but it was kind of jovial and, and what Mossberg would go for walks with Steve jobs, Steve jobs would play the press and it was, um, collegial maybe to use a word. Uh, then, uh, it became adversarial and then we, you know, there was a little bit of access journalism.

SPEAKER_32: So some people who hosted conferences where these folks spoke who were getting paid a million dollars or $2 million a year as the most elite commenter journalists in the world would kind of use kid gloves a little bit because they needed to make sure that those people showed up. Now those people don't host conferences anymore and they go super ham. And like, you have this, like, you know, group of journalists who are like, I hate tech people, but I'm spending my career covering tech people. It's like, okay, that's super interesting. You hate tech people and you cover them. Okay. Fine. Fair enough. You're disappointed in them, whatever. And then you had the two collegial era. And I think what we're kind of weaving towards is a more balanced, objective moment, which is going to be, Hey, I cover this stuff.

SPEAKER_13: If this had been an editorial page, you know, article, it would be totally fine. If you said, Hey, we have editorial, it's marked editorial. And if you're on the other side of it injuries and Horowitz, and you want to have this person fire, you don't want to have the person canceled, write a counter piece, and we will publish it next to it.

SPEAKER_00: That's actually how all this should work, which is why I wanted to bring it up with you today here. We should be able to have a vibrant debate about DEI versus MEI. That's what's interesting.

SPEAKER_13: And here we are, you and I are talking about this for close to 10 minutes without even getting to the subject material. So before we cancel people like this kid, who's, uh, you know, wrote the spicy thing that you don't agree with. Why don't you just write a counter piece and it was tech crunch to publish an email comment and say, here's my counter or put it on your blog or put it on your sub stack.

SPEAKER_00: That's actually a healthier debate it. I agree. Cause there is an interesting discussion here between MEI and DEI, which we'll get to next.

SPEAKER_148: And we're just one second. The thing I'll throw in is the blogging era was a greater focus.

SPEAKER_19: I think on individual voices versus publications, so design by design. And that was part of its charm in its early days. And it was very disruptive. Oh, it was massively disruptive because suddenly people have personality, a little zip. They had their own style, their own cadence, and they can go micro down on topics.

SPEAKER_27: They cared a lot about. And no editor.

SPEAKER_32: So, you know, Peter Rojas, you know, and in gadget, just going direct and not having an editor. Oh, Malik going direct, not having an editor. What that meant to the audience was, whoa, I'm getting something unfiltered here and spicy, right?

SPEAKER_13: And edgy. And that's why it, you know, in gadget, uh, and then the other collection of tech blogs, tech crunch, uh, after in gadget.

SPEAKER_104: And all these other ones beat the New York times, beat the wall street journal. In fact, beat Walt Mossberg in terms of influence, uh, was because it was more spicy and felt more unfiltered to the audience. So you're correct.

SPEAKER_19: But the, the era though, of that has, there used to be room. It seemed for another option. And now it seems that the blogs are getting much more professionalized.

SPEAKER_04: It sounds like I'm, I'm saying it's a net positive or an unvarnished good. It, they're changing. And I think that's also why we've seen a lot of subsects out there.

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SPEAKER_19: You want to get to the DEI in the eye part of this. So let's put the media aside and talk about that.

SPEAKER_31: Yes. So, you know, if you look at the original, uh, tweet, you know, the person saying,

SPEAKER_13: listen, I'm running my organization. Here we are in America. We hope is a free country where people can pursue, you know, their visions. I'm running my organization. I think the person happens to be Asian based on merit. I'm just merit.

SPEAKER_32: I think it's merit excellence. And I don't know what his eye is in his thing, but I remember the first word merit and excellence. You know, there's an anti DEI movement, you know, uh, hysterical and ridiculous at sometimes

SPEAKER_70: being like the reason planes from Boeing are falling out of the sky is because of DEI.

SPEAKER_32: And they're not the case, which is not the case. I mean, there's other screwed up things they're doing. They're like trying to save money and cut corners by not training pilots and how to use the map system

SPEAKER_13: because they're a capitalist and they don't want to spend money and they want to hit earnings. It has nothing to do with trying to have a female African-American pilot. Like that's not what's going on here. It's more, you have people who are deranged and think, well, you know what? Let's build a really complex system and train pilots to save a couple of shekels over here. That's what's at work.

SPEAKER_19: Here's the, uh, here's the Alexander wing tweet. And, uh, if we scroll down just a little bit, we can see the actual note, which is that MEI for them stands for merit, excellence, and intelligence. Perfect. And do those seem like overlapping.

SPEAKER_167: Points to you slightly.

SPEAKER_32: Slightly. You know, listen, um, if you're running a, I don't know what his company is, but, um, okay. So they're running an AI company. You probably need some pretty smart people. Okay. Check. Um, everybody wants excellence. I picked you to be co-host because of your excellence and because of your intelligence and merit. Okay. By the way, I also picked you based on merit because you have a track record. You did, you know, crunch base. You did that crunch. You have your own newsletter and you did podcasts. Okay. Great. And I saw that merit. I saw that excellence in my own eyes. I saw that intelligence and I picked you, uh, and pursued you for years for that reason. And the same reason I pursued Molly. She also had that cohort did not pick Molly for diversity. I did not say, you know, I need to have a female, male, whatever. So, uh, or, you know, whatever, uh, co-host I have thought actually though, about co-host

SPEAKER_13: and thinking about, uh, generations and have generational perspective. So I don't know if that makes me racist or not to think, you know what? You're, you know, younger than me. That adds a perspective, uh, and somebody younger than me, but I think you can hold both of these ideas in your head. When I came into the venture industry, less than like two or 3%, maybe less than 2% or 3% of investors were non white males, or let's just say non male were female. And then maybe less than 20% would be described as a classic minority. Now in Silicon Valley, Indians and Asians have been taken out of the minorities, even though they are true minorities because they're so successful. So it's like, as Sam Harris once told me like this identity politics becomes like a cul-de-sac because it's like the oppression Olympics and who is more, you know, uh, who, who has the least amount of power in all this. And you just start talking yourself into circles. So I appreciate that he wants to run his company based on merit excellence.

SPEAKER_00: Who doesn't and intelligence.

SPEAKER_19: The thing that's missing from this though, is that people always love to say, you know, let's just do merit and as a capitalist that tickles me in all the right places. The problem is it's not, I've never actually seen a meritocratic system that stuck to it. I've never seen a system in which favoritism, legacy status,

SPEAKER_47: friends, hiring friends, which is how most people get jobs in the world today. A hundred percent. To be honest. Yes. Your, it's called your network.

SPEAKER_27: Is how it goes about it. Right. Hiring within your network. It's a technique. And, and you know what? Sometimes it works great. I've seen a very effective technique.

SPEAKER_182: Yeah. Can go both ways. Yeah.

SPEAKER_19: So if this had said, we're going to uphold meritocracy and we're not going to let people hire their friends and we're going to, then it would have more heft to it. But to me, it's, it's, it's declaring where they're going without telling me how they're going to get there. And so to me, it just, it seemed a little bit 10 year and clearly when they wrote this and shared it publicly, they knew what kind of reaction they were hoping to get back to your people and they got it doing and they got it.

SPEAKER_21: They got plotted from the people they wanted to get plaudits from. And honestly, here's me being cynical. I think they got criticism from the people they expected to be because in this current moment, if you want to virtue signal as a venture capitalist, the best thing to do is to one, be a Trump supporter and then two crap on the media. And if you can do those two things, then you are part of the cool kit in crowd right now. So here we are. People are teeing up softballs for themselves to pat themselves on the back. And you know, who ends up getting fired? One dude from tech wrench.

SPEAKER_36: Congratulations. By the way, though, going after those two things would mean you would get canceled just six, seven years ago. And God forbid you went after DEI or a journalist, you would be piled on the opposite ways.

SPEAKER_167: Journalists have been unpopular since the invention of print. I think.

SPEAKER_31: I mean, but you, you certainly didn't want, it certainly was an unwise technique,

SPEAKER_32: but five to 10 years ago, they would literally tell you do not fight with people who have ink

SPEAKER_195: by the barrel, like buy their ink by the barrel. Yeah.

SPEAKER_36: And that was not untrue. Yeah, that has changed, which is good. I think there's more of a balance. You know, when it comes to DEI, it's in fact, illegal to hire based on it. And now we're getting all these lawsuits. So you do have to be thoughtful about, you know, if you do have a DEI program, or you do care about

SPEAKER_15: that, which by the way, I did when I came in, you know, to my point earlier, I was like, wow, these, like the number of people getting funded, the number of people, um, who get to

SPEAKER_13: write checks, it isn't really a diverse group. And I said to myself, it'd be great if it was more diverse.

SPEAKER_35: And we started something called founder university, and we would do one of these two day programs. We call it startup tune up. Now, um, we would do these two day programs and we would say, this one is for underrepresented founders. Now we did originally for female founders, but then let me say, you know, let's do underrepresented founders. You know how we let people determine that. They just self-selected. So they were underrepresented.

SPEAKER_15: So we had a little brouhaha back to that, like identity politics called the sack. Like somebody was like, why are Asians? And I was like, I don't know. Uh, we have a form. You fill it out. If you feel you're underrepresented, you can pick that. And like, I, you know, a little finger waving that I didn't get my DEI exactly right.

SPEAKER_32: But I wanted to see, I wanted to increase the number of diverse founders that we saw as a firm, um, just because I thought maybe the world would be better. And if there was a little more diversity here. And so I chose to do that, but I don't do my hiring or investing based on that. So this is a very nuanced discussion. I think this is the way they should have been handled is, uh, Connie should create an editorial page. She should challenge people to debate stuff in good faith in the editorial page, but as full contact as they want. And then they should have a regular one.

SPEAKER_199: And then I agree with you. You shouldn't be trying to fire the person. You should be trying to engage them based on the merits.

SPEAKER_201: Yeah.

SPEAKER_36: And I think his style was, I don't wanna say childish, but he's obviously going for like, okay, you want to brawl, we'll brawl. Right. And I'm just gonna tell you the F off. It wasn't a very sophisticated response. I would have actually liked to hear after the F off, like something more subtle, like you

SPEAKER_13: asked for something more subtle from the MEI guy. I would like to hear something subtle from Q side as well. Like, can we have a more granular discussion here about what we're talking about?

SPEAKER_21: I mean, I, no, is the answer. Well, we are. Well, well, I, I generally speaking, you, this is, this is our little clubhouse that we just

SPEAKER_19: let everyone come in and listen to. Um, one last point on the diversity and investments thing, because, you know, I think a lot about the, just the sticking with gender for a second. Um, the lack of women investors did lead a blind spot in venture investments on a number of

SPEAKER_21: categories and some firms missed out on deals because they didn't have female perspectives on their, uh, investment boards and so forth. They missed some really big companies. So there is a strictly in very easy to reach economic argument that having their diversity perspective experiences should point about generations, uh, in an investment committee. And like, I've learned so much from founders who are black, uh, and from other underrepresented

SPEAKER_19: groups in the world of venture. I love the founders over at Rebundle that are doing hair extensions in a more sustainable fashion manufacturing in the U S et cetera. And you know, if all of your people on your investment company doesn't board look like me, you're not going to think much about hair extensions because observe my head, you know? And so I think there's, there's something good to be said about having lots of voices, lots of people around the table.

SPEAKER_21: Um, and to me, like I I'll take diversity and I'll take merit.

SPEAKER_19: And I don't like the idea that there is an inherent tension between the two. And I know that Alexander Wang in his thing said, we don't think that our merit focus is anti-diversity, but everyone who wanted it to be read that way did read it that way. So I have a suspicion, Jason, we're going to have this chat roughly every six months until the heat death of the universe.

SPEAKER_20: And that's probably pretty critical because there are ebbs and flows and you and I've been around long enough to have seen the pendulum go back and forth.

SPEAKER_207: I just hope that we're all kind.

SPEAKER_104: Yeah. I mean, it's very popular to be anti DER right now. I get it.

SPEAKER_32: Um, because you know, I think some people felt like if you were a white male, uh, you know, there were in some cases, these situations where you couldn't advance. When I was at AOL, I always tell this story. They said to me straight up, we're giving you SVP. You can't be EVP. I said, why can't I be EVP this to check out? Just take it down a notch. We're going to pay you. We're going to give you a bonus like EVP. You obviously have total autonomy more than an EVP even over the web log sync unit.

SPEAKER_13: It's all white males in the EVP ranks. We have to get some women in EVP. So we're going to just hire only women for the next year or two, or else we're going to get

SPEAKER_32: killed by time Warner, which had, you know, they had merged with, this was literally what I was told straight up that my title couldn't be that because of it's all white men.

SPEAKER_164: And you know what I said? I, I'm going to be here for a year. People. I don't care.

SPEAKER_211: I don't complain. Whatever game would throw. Juwan janitor here.

SPEAKER_19: I'll, I'll just say this on that point. People hear stories like that and they presume that there's this massive conspiracy out there to control the, the working environment. Um, what you just described was internal corporate policies that were set up to prevent the company from being criticized and therefore maintaining its PR image to allow it to sell more.

SPEAKER_21: So the company was taking a business decision that ended up making your life bad, but that doesn't mean that the nanny state is going to AOL and saying, Hey, Hey, no, you can't give Jason the title, you know, like you're not doing that. Sorry. That was a horrible example.

SPEAKER_70: And the best part of it all was they had figured out how to game it. Right.

SPEAKER_32: So in all of this, like, I remember when this venture conversation came up, somebody told me like, oh, we totally have all the journalists off our back. Listen to this one. They changed every single person's name on their website to partner. Yep. I remember this. There was like an HR person. There was a comms person of very high note. There was another person who was operations. And they just said, you know what? We'll take the operations, PR and HR person who all happen to be diverse females.

SPEAKER_13: And we'll just call them partners. And I met them one time and I was like, oh, you're a partner. Uh, oh, what are you investing in? And she, oh, I'm not, I'm not an investor. I said, but they get you have the title partners. Oh yeah, because I have carry.

SPEAKER_15: And I was like, oh, and so they submitted their diversity. Data. Data. Data.

SPEAKER_27: Scared it.

SPEAKER_19: It's so, it's like, come on people. So on the point about the, everyone's now a partner thing.

SPEAKER_221: People noticed like, you know, suddenly everyone's an operating partner, but at the same time, it does give partner titles to more people, which is lovely.

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SPEAKER_136: On the subject of people and personnel. Amazon has done a deal that I think is very much worth our time, Jason.

SPEAKER_19: So have you heard about the adept AI Amazon transaction? Okay.

SPEAKER_233: I have not. I need you to fill me in on this because this seems a little complex.

SPEAKER_19: Okay. So Amazon recently snapped up essentially the talent and licensed technology from a company called adept AI. Company is working in the AI powered agents space. And it has now been essentially, I think subsumed into the Amazon corporate machine.

SPEAKER_20: The company had raised 415 million to date, including a $350 million series B led by general catalyst and spark capital.

SPEAKER_19: And Jason, here's where I need you to come in because the company is saying that it's not dead because while its co-founders are going to Amazon and its tech is being licensed, they're moving the head of engineering into the new CEO spot.

SPEAKER_20: But if your investment seeded its founders in technology to a major tech company, would you write that investment off to zero?

SPEAKER_32: Yes, of course. Yeah. So this is the, yeah, I, this is the second time this has happened. Microsoft did something similar. So what we have now is speaking of gaming, any system, one of the great things about capitalists, uh, capitalism or any game is that you can figure out a hack. And so, you know, three pointers are worth 15% more than twos.

SPEAKER_13: Maybe everybody on the team goes to three pointing summer camp and gets 5% better at it. And then you win a championship and you have Steph Curry, you have clay. You figured out a cheat code, right?

SPEAKER_35: So Lena Khan, it was selected, uh, in order to, you know, really clamp down on the, the scale of Amazon specifically.

SPEAKER_00: And Amazon comes up in her, she had written some papers. I don't know if she went to Yale or where she went, but she had written some seminal papers, and, and Amazon comes up a lot in it because of the fact that they have a third party seller system and they have primary and they have Amazon prime and they invest in companies or they buy a company like rain, but then they have ring competitors selling and then they're selling things direct that they make. And then they also have third parties selling things.

SPEAKER_32: It's all very convoluted. And so what she started looking at was, well, future competition, we want to protect against future competition. As if, you know, somewhere in the government, uh, the justice department or the FTC, they could create precogs like in the minority report and predict what would happen if they added third party sellers or if Instagram got bought by Facebook or YouTube got bought by a company or

SPEAKER_70: other things got bought that failed and went to zero.

SPEAKER_32: So now companies are like, okay, we want, we don't want to pass scrutiny. Venture capitalists are saying, Hey, this company is going to be a dud. We're not going to go public with it. We put 300 million into it. We put a billion into it. How do we get out from under this investment? Well, if they ship you a bunch of money to be a customer of the product or, or, and then you distribute that to the investors and you shut the company down, the investors get a save. They have to pay some tax, I guess.

SPEAKER_13: And we'll see when the IRS unpacks these companies and how that money flowed, because when you sell a company, you need to sell the shares so that you get capital gains treatment. And then there's something called an asset purchase. Okay. So when I saw Weblogs Inc to AOL, they wanted it to be an asset purchase. So they raised the price a little bit, knowing I would have to pay a certain, uh, type of tax.

SPEAKER_32: And then the shell company sold the assets of Weblogs Inc and gadget, et cetera, to AOL. AOL didn't have to deal with a bunch of buying a company issues with the justice department or other people because they bought an asset. So since it was such a small $30 million tuck in acquisition, they did an asset sell.

SPEAKER_13: And that was the only way they were willing to do it. But we had an LLC, which meant we had a certain tax treatment as the owners. Mark Cuban, as our only investor who had put 300,000 in, I think for 15% and turned it into

SPEAKER_239: 6 million, like in 18 months, another great trade. Well done, Mark.

SPEAKER_32: Yeah. He's pretty good at this. Um, if you have been paying attention and so how the taxes and all that flows through the devil's in the details, but that's what we're seeing here. Now, if Trump wins, which I think is still the likely scenario, this is why we talk about politics circus. It has a big impact. The FTC, uh, will change over. They'll allow these tuck in acquisitions. I predict they'll probably say any acquisition under a hundred billion or under 50 billion or by a company who's not over $2 trillion in or over a trillion dollars. They'll set up some framework that brings back mid market M and a, but all of this weirdness that we are trying to understand is because that company was probably going to fail in some way that the investors want to save. It's a great asset. And it would have been a tuck in acquisition. It would have been a 50 to $1 billion acquisition, not 10 billion, not whole foods, not, you know, uh, Uber eats buying postmates or door dash buying Instacart. It's not something that's not going to cut, you know, mustard with, with the regulators, especially in the UK and EU now who are pretty tight.

SPEAKER_35: So that's all we're seeing is just weird hacks in the system that will be over come January 6th,

SPEAKER_32: 7th day at the end.

SPEAKER_04: Well, we have a tweet from, uh, Mike Noop, the, uh, co-founder of Zapier. Zapier makes you happier. Yeah. Zapier. Yes. Exactly. And, um, I just have to go through that little moon knock. They taught me every time.

SPEAKER_19: So here is Mike saying the same thing that Jason and I are saying, and I bring this up, not just to underscore that we are correct, but to point out that this perspective is

SPEAKER_21: pretty widely held. And that means that the regulators aren't stupid to it. They're smart to it. The question is, do they get busy before the election and with concern that they might lose their, uh, seat at the table if the election goes the other way or not. I wonder if Lena Khan's actually going to try to dig too far into these two deals because there's not a lot of time left before the election. No time. Jason. So they might just. She's done.

SPEAKER_249: Skate on through.

SPEAKER_70: Yep. These are going to go through. Um, and, uh, in, in less Biden, you know, pulls off a miracle or the, the hot swap theory

SPEAKER_32: that I've been saying, you know, results in a win, which I think right now, you know, the Biden chances of winning are 20 or 30%, which doesn't mean it's impossible, right? Because remember there was a point in time where Trump and Hillary, he was 35 or 40%. So yeah. Yeah. Yeah. Long odds happen. If you play cards, you can hit a two outer, you can hit a four outer. You could be 80% with your races and still lose to somebody's Kings putting all that aside.

SPEAKER_35: I think that many percent chance we're sitting here with the Trump administration, uh, you know, six months from now. And M and a is going to be like a backlog of M and a there'll be all kinds of tax cuts that occur market rips M and a rips. So there's probably a backlog of M and a that is going to rip.

SPEAKER_251: If Trump, if Trump wins and he gets his tariffs in place.

SPEAKER_58: That's not gonna, I think the tariff thing is like a trial balloon. Um, he always does these weird trial balloons things, you know, and I don't think it's actually

SPEAKER_254: happening, but maybe he controls his, uh, his policy.

SPEAKER_35: Let me show you something here that I ran into in Amazon. And I want you to open your Amazon app. Cause this could be a breaking news story. I opened my Amazon up, um, shipping some beautiful anchor power base stations that I love. I love my anchor stuff. Shout out to anchor, not a sponsor of the show yet. And so I opened up Amazon and in the bottom, bottom right is an AI button. You see it there on the screen, the orange and blue one.

SPEAKER_00: And, uh, it says Rufus. And you can ask Rufus, not Alexa, but Rufus a question. Hi, I'm Rufus. You can ask me all your shopping questions. My answers are powered by AI. So I may not always get things right. Learn more. Keep shopping for coffee makers that I've been looking for a new coffee machine. And you can just ask the questions.

SPEAKER_32: What's the highest quality, um, USB C cable maker. I'll zip, zip, zip this and it's doing, you know, Rufus is at work. USB C cable market is flooded with options, making it challenging to identify the best brands. However, some brands stand out for their commitment to quality, durability and performance. Here are some great options. Sure enough, anchor USB C cables. And then the second one cable matters. Third, Amazon basics for Belkin. Um, and then the fourth is something I've never heard of you green, but the first four I have heard of, and it understood my question and gave me a great answer. So here we go shopping assistance on Amazon starting now.

SPEAKER_21: Yeah. And this is the thing that's been, um, relatively long coming. I don't actually use the Amazon app that often. I'm more of a web guy, but they announced Rufus back in February.

SPEAKER_19: So I think this must mean that they announced it, worked on it, shipped it. And now we're seeing it in the market. That's big companies take a while to get things done. Do you have it in your app?

SPEAKER_61: I'm curious, or you don't have the app on your phone.

SPEAKER_47: I have a bandaid on my thumb. And so I'm not going to unwrap that, use my phone and check live. Cause that would be a mistake. Okay. Um, I got into a avocado slicing competition with my, my thumb. Oh, okay. Yeah. As one does. Yeah.

SPEAKER_259: Use a spoon next time.

SPEAKER_261: Gosh. One last note on the. Helpful information for you. Also, you write ones in a spoon.

SPEAKER_263: Look, when you, the, the baby puts a whole half avocado in her mouth at a time. I, I, there's a lot of chopping that I, that I do more.

SPEAKER_21: I feel like a sous chef now to this child. So anyways, this deal with Amazon is the second time we have seen a major venture back company essentially gets subsumed into a big tech company. Microsoft inflection AI had raised even more money. So a billion dollars in capital race is not a, a, a, an end to this type of transaction. And I do think if we do have a new administration, as Jason says, there'll be a change in the playing field, if you will. And we'll have to see how this all plays out. But I want to talk about another acquisition that came out just a couple of days ago.

SPEAKER_19: Chime is buying salt labs and I love fintech. I love fintech M and a, and I had never heard of salt labs.

SPEAKER_21: So when this actually came down, I was a little bit plus and I had to go backwards in time to do some research, but Jason, you know, chime, the massive neobank that everyone's heard of. Sure. Of course.

SPEAKER_133: Yeah. Great company. It's a really great company. Yeah.

SPEAKER_266: So labs is, uh, what this is.

SPEAKER_13: Sorry. I don't know. So labs, but, um, I'm looking at the website right now.

SPEAKER_00: Why would your employees act like owners? If you don't give them something to own salt labs has created the first ownership asset

SPEAKER_35: that frontline workers earn with each hour. They were rooted in behavioral science and tested over hundreds of thousands of workers. So it radically changes employee behavior through an asset that is universally understood

SPEAKER_32: by workers or seamlessly enables by technology. Uh, okay. Are you talking about shares in a company? Cause you cannot give shares in a company on an hourly basis. You can invest it. I think monthly, but you it's very hard to give, um, equity to all employees, obviously. So what is this?

SPEAKER_21: Yeah, that was exactly my question because I saw this deal announced and much like yourself, I was like salt labs.

SPEAKER_19: Mm-hmm Is that like salt and straw, the San Francisco ice cream company? No. So what they do is they tie essentially an airline style points system to your hourly work and then

SPEAKER_21: Okay. I want to dig into that. Why is that your first reaction?

SPEAKER_269: Well, because equity is very complicated and unless you're an affluent person who lives in

SPEAKER_13: Silicon Valley and has like you and I seen some dip hit the employee stock lottery and some smart people

SPEAKER_36: say, you know what? I worked at Google. I saw Facebook. I was fully vested. I went to Facebook, got more equity. And then I saw Facebook and I went to Airbnb and then, uh, I got some equity there. And then I went to Uber and they hit it four times in a row. And there are developers, sales executives.

SPEAKER_13: They know how to do this perfectly in Silicon Valley. That's 1% of society.

SPEAKER_36: Other 99% of society is like, you want to scam me how? And they hear stock options or they hear carrying a venture fund and they're like, that's a scam. But those same people will get a credit card because it gets them 10,000 bonus miles for signing up for it.

SPEAKER_35: In other words, 90, 100% of people understand airline miles.

SPEAKER_00: 1% of people understand the value of equity.

SPEAKER_21: This is brilliant. Yes. And I agree with all of that. And it is translating essentially a thing that they have to get via credit into something they

SPEAKER_19: can get via labor, which is cool because it means they don't have to have an unsecured credit line to get these points. Now, the points are redeemable for a number of things. I think they mentioned vacations for one and also investments. So you can convert them into savings, which is when I went from to I love it. One thing that I have learned reading personal financial coverage for a really long time

SPEAKER_21: is that if you automatically opt your employees into a 401k plan, even at one or two or 3% of

SPEAKER_19: their salary, most will be like, oh, hell no, I need that money.

SPEAKER_136: And so their point is people who are making hourly wages, saving is pretty hard. Inflation has been hot.

SPEAKER_32: Everyone's they won't act in their own best interest. Let's just call it what it is. You're not. And I think the last time I went through this, which was a while ago in a board meeting, you're not allowed to auto opt people into 401ks. They have to be given the choice. And that's my thinking.

SPEAKER_00: Now I could be wrong and that could be outdated. I'll ask the producers to look that up. Can you automatically force an employee into a 401k? Or can you even default them into a 401k?

SPEAKER_13: Yeah. Because defaults always matter to your point. It's one of these very dicey issues in America. Now in Australia, they have something called super annotation or yeah. They're called super funds. You are required instead of like having, um, what do we call it here in America?

SPEAKER_239: For, uh, no, um, social security. Instead of paying into social security, you are essentially being forced into a 401k.

SPEAKER_13: I think in Australia might be as high as like 10 or 12% of your salary is forced into that.

SPEAKER_35: Australians are so happy. You know why they're all happy because they put their money in equity over the last 30, 40 years. And they are in Amazon and they're in Nvidia and whatever, you know, mutual funds. Sure.

SPEAKER_13: And instead of relying on the government to manage the, the, these portfolios, they have like six or seven companies.

SPEAKER_35: I think you can switch between if you don't like them and you just pick your low index fund fee.

SPEAKER_15: Anyway, continue.

SPEAKER_47: Uh, we just got the note for the producers, by the way, uh, according to the secure 2.0 act,

SPEAKER_19: that means in 2025, most new 401k plans must automatically enroll. But prior rules say that you cannot force participation.

SPEAKER_21: So it does seem that you can auto enroll, but people can be like, I'm out. And that's what they do. That's where salt comes in. Um, going back to the deal really quickly.

SPEAKER_19: Salt had raised, uh, $18 million. It's last round in December, 2023 transaction. Very recent was 8 million on a 60 million pre according to pitch book.

SPEAKER_21: And the total value of this transaction, including earnouts is 173. So almost a three X, if the full earnouts are done for money invested in December, it's July.

SPEAKER_19: That's very IRR positive, but not probably the, the exact level of return they were hoping with, with this company.

SPEAKER_32: We call this a single in the business, single double. Uh, um, you know, if you're an investor, it's absolutely delightful to get a save once in a while. So the previous acquisition by Amazon probably would be a save. You're getting back 0.5 to 1.5. What you put in, you put in a million dollars, you got back 500 to 1.5.

SPEAKER_00: All it does is let you recycle that capital. So in a venture fund, typically the paperwork says the first 10% back can be reinvested. So let's say you were my LP. I had a $10 million fund.

SPEAKER_13: You're the LP. I'm the GP. You gave me 10 million. Let's say one of our companies. We, you know, we put in a hundred, we put in a million dollars into a company. It returned 2 million. Instead of me sending that 2 million to you.

SPEAKER_35: To, you know, take the 10 million that we've invested and cut it down to 8 million. So the hurdles now is Kate before I start getting carried as the GP, that 2 million. I can say, you know what? I have the ability in our documents to recycle 10%. So I'm going to distribute 1 million. I'm going to take the million. I'm going to invest it in the next best company in our portfolio. Oh, we have Robin hood or Uber or calm in our portfolio. Let's call the CEO and see if we can slide that million in there.

SPEAKER_00: So the, and then that's how you goose performance in a totally legit, great way in, you know, your venture fund. And, and, and when LP sign up, they do that. That's what that first acquisition probably will happen with it. And then this one, yeah, maybe it's nice to get a little single or double because your

SPEAKER_35: LP is on the other side. When they get that, they're like, oh, this GP is good at their job. And I got some of my money back. So three acts a million dollars in a $50 million fund. Hey, you're getting back 6% of the fund. It just shows that you're good. And this is why the Lena Kahn discussion is so important.

SPEAKER_00: We have to move on from that. If we're going to have a viable venture ecosystem and, you know, listen, I don't want to make this political, but this administration killed the mid-market M&A. And that has been terrible for capitalism. And it's been terrible for returns for LPs, which is putting ice cold water on the venture capital space, which then is putting ice cold water on company formation, because less will be invested if we don't have a mid-market.

SPEAKER_32: It's my way of saying to the Democrats, um, this strategy that you're pursuing is going to be profoundly unpopular over time with people who make donations to presidential candidates. And it's probably why people showed up in a major way for Trump in Silicon Valley.

SPEAKER_293: This one issue.

SPEAKER_167: Is there a way to not or avoid allowing the most wealthy technology companies to become immortal

SPEAKER_21: while preserving the ability for major companies to buy smaller companies? Is there a way? Wait, say one more time. Yeah. So right now, Lina Khan doesn't want Google, Microsoft, Amazon, and Apple, and Meta to just buy every company that challenges them. And therefore they never die.

SPEAKER_299: They never actually have to fight. Oh yeah.

SPEAKER_298: So this is a great, this is the key question.

SPEAKER_32: Alex, we're only like a month into this and already you are asking the exact perfect question. What you need to understand here is there is a very simple proposal that I've made no less than a hundred times. There should be one set of rules for companies who are at scale. There's a very simple way to determine who is at scale. The number of users or the amount of revenue. Okay. If a company has more than a billion customers,

SPEAKER_301: or a company has more than, I don't know, a hundred billion in revenue a year.

SPEAKER_302: Okay.

SPEAKER_32: Big 250 billion. I mean, we're talking big Amazon or better, you know, you know, Tesla might not even fall into this. So, you know, under three, 400 billion. No. So, you know, companies coming up coin base, drop box, Instacart read it. All of those would be excluded from this because they are the ones who might challenge. Amazon, right? So an Uber, you don't want bought by Amazon. You don't want door dash or Instacart bought by Amazon.

SPEAKER_00: Obviously they consolidate the market. Then they can do things against consumers. Like raise the prices, uh, and reduce choice.

SPEAKER_13: But if Uber could buy Instacart or door dash and Uber could merge, this would create a stronger company against Amazon. We would want that. If target and Uber could merge, if door dash and whole foods could have merged. I mean, now I'm starting to get frisky. Yeah. Yeah. You start seeing those. Now you've actually got a competitor to those.

SPEAKER_35: So who makes great smartphones today? That's not Apple. Who's the leading handset vendor? Samsung. Okay.

SPEAKER_00: Samsung. Yeah. Okay. Take Samsung, Huawei. They spin out. They make a handset company.

SPEAKER_72: Who could they merge with? Uh, that would make an interesting combination. Let's just think out loud here for a second. Let's pick five companies.

SPEAKER_32: Five companies that if they started merging and acquiring, and it could happen either way, but let's just say Samsung spins out. The handset department. It's worth a hundred billion dollars. They buy Uber and DoorDash. Two great amazing companies on demand that are connected to smartphones. Okay. Now you got something.

SPEAKER_13: Maybe now you have a Samsung one membership that gets you everything for free. If you have a Samsung headset, right? Handset.

SPEAKER_269: Who else could they buy? That would be super interesting.

SPEAKER_13: Oh, Coinbase or PayPal Venmo. Okay. Now you got PayPal and Samsung and Uber. You put these three things together. Hey, now I'm going to go buy an Apple phone. Or there's a Samsung phone. Right.

SPEAKER_35: That comes with a Coinbase, PayPal, Uber, DoorDash, Instacart, exclusive offering. That's kick ass. Now you created some competition. So let it be a free for all under, I'm going to pick a number here.

SPEAKER_314: Yeah. Under 300 billion. In. Go nuts. Value or revenue.

SPEAKER_00: I was, I was thinking market cap. Market cap. So under 300 billion in market cap. Now over a trillion, no more buying companies. Right. Same scrutiny they're under right now.

SPEAKER_19: Okay. So you just want to take, take the bar and don't lower it or delete it. You just want to raise it up. I'm actually pretty fine with that, but let's, let's put this to the, the, the test because there was a deal that I was very, very skeptical of, which was Adobe buying Figma.

SPEAKER_21: I was like, guys, this is such a clearly anti-competitive deal. They're scared of Figma.

SPEAKER_19: They're going to drop two exits value to take it off the table. This is an anti-competitive transaction, but I just pulled it up. Adobe today is worth 244 billion. So it's right at that edge of 250. So the question is under a J cal administration, under this regime of, of regulation and rules for acquisitions, do you let Adobe buy Figma?

SPEAKER_72: I probably would, but it would be one of those. It would be to your point. It would be pushing the ceiling.

SPEAKER_32: So it would be one of those ones that you would put a decent amount of scrutiny on. And you'd say, Hey, let's just take a look at this. So you I'll steal a man, your argument.

SPEAKER_13: Absolutely. You know, it's, it overlaps 50% in user base, but there's still Canva out there. Sure. And what would it cost to make a Canva or Figma or Photoshop competitor? And who else is capable of that? Certainly Microsoft could build it in their sleep.

SPEAKER_32: If they chose to, uh, not a big deal. Google has created the whole Google office suite. Salesforce has created all kinds of suites of, you know, corporate SaaS products. It's not that complicated. All due respect to Figma and Dylan's done an amazing job with it. Yeah. It's actually not the most complicated software to build. Let's be honest. No, no corporate software is. So it's not. And I do think in letting that one happen. Now you might have Adobe challenge Microsoft. Uh huh. Cause they could come out with a word processor. They could come out with a spreadsheet. And then the Adobe suite could include Slack and Zoom. Okay. And what if Zoom and Slack had merged with, you know, Adobe? Now you've got a really at scale competitor and you can see your clock spinning. You're kind of picking it up when I'm dropping here. You know, how do you build a competitor against Google and Microsoft's office suites and Gmail? Okay. Buy superhuman. It worked out for me. I'm an investor.

SPEAKER_12: I was one of the first two investors, me and, uh, Darmesh from HubSpot.

SPEAKER_58: You know, if he's incredible, I've got to get him back on the program. Superhuman. Boom. And, you know, Figma.

SPEAKER_13: Boom. You got an email client. Now let's get an office suite gone. Oh, there's none available. Well, effort. We'll build it. So this is what I'm talking about. Like, let's let the, let's let the up and comers have at it. And let's restrict the big ones. Now, you know, this does exist in Korea. In Korea, they have, um, a monopolistic rule that I think is, and my knowledge might be 20 years old at this point, but I do remember, um, SK Telecom, South Korean Telecom had an upper bound.

SPEAKER_35: I believe it was 70%. And when you hit a certain market share, then a bunch of rules kicked in.

SPEAKER_13: And one of those rules was you couldn't add more users. Sure. You couldn't, you know, and so it sounds a little bit weird. And these rules are hard to do.

SPEAKER_00: It's kind of like the hand checking rules in basketball. You and I like basketball. You need to come up with rules to try to make the game seem more fair. You come up with an upper apron. Now they got a two apron system. It's a hard cap in basketball, essentially.

SPEAKER_35: So they're constantly tweaking those rules to try to make more parody in the league. Well, that's what you're trying to do is make more parody in entrepreneurship, right?

SPEAKER_00: In capitalism and keep a Yankees type team from occurring where they just outspend everybody. And I think this could work.

SPEAKER_331: We had a cost cap and formula one get put in and it's worked out medium.

SPEAKER_21: In the case of South Korean conglomerates, it's a small country by population. And so I think having national champions is a different conversation than here in the United States, for example, of course, one more, um, data point on the, on the J Cal future FTC regulations, visa currently worth 530.

SPEAKER_19: So basically a half trillion under, under your rules, the visa plaid. No, well, I think you said 250.

SPEAKER_236: I was gonna say 300, but yeah, I was, I was thinking something like, you know,

SPEAKER_32: that obviously trillion and above is one set of rules. I think 300 and less is another set of rules.

Chamath Palihapitiya: And then you have that, that middle where I have to really think it through, but okay,

SPEAKER_132: sure visa plaid feels like maybe too overreaching.

SPEAKER_19: Right. So then basically we would allow the Adobe figma deal and then the visa plaid one would be not allowed.

SPEAKER_21: And that would be kind of the, the line at which we draw between the two. I don't, I don't hate that. The only thing that I'll throw in is that when, uh, the, uh, over in the EU with the DMA, the digital markets act, they set thresholds based on user count and so forth. Okay. And people have criticized those as being essentially targeted at the American tech. Yes, yes. For a reason.

SPEAKER_206: Right.

SPEAKER_21: And so I'm just got, you know, I, I still think if you could get everything you wanted, you would still be in certain Silicon Valley circles viewed as a, a big government bureaucrat coming to bring down the regulatory hammer on hardworking entrepreneurs and founders.

SPEAKER_20: But I'm being ironic here because I think you're being incredibly generous and I would lower the bar more than you just because of my personal, you know, views about competition. But I, I do think that a recalibration wouldn't be entirely poor, but we are seeing deals go through. So this is 175 million dollar deal. And I don't think we expect the FTC to show up and, and throw, throw dirt on it. But I would like to see 10 more of these, you know, within the next month versus two.

SPEAKER_32: So it's, um, I can tell you in, um, in the LP space, the endowments of, you know, Harvard and et cetera, uh, Duke, et cetera, in the, uh, high net worth individual space in the family, which is like family offices sometimes referred to, uh, you know, people with, I think, you know, family office starts a hundred million or more, 500 million or more in assets. Um, and in fund to funds and in all number of LP sovereigns, um, pensions and retirement funds like CalPERS, the, one of the big discussions is if we don't have MNA, maybe we stop investing in,

SPEAKER_35: uh, venture and private equity, or we pull back the percentage. If we don't think we can get exits, we still love it. But maybe it's not our focus and we'll do more corporate credit. Corporate credit is like, you know, like, uh, Amazon back to Amazon, you know, you'll see them

SPEAKER_00: like they, they get a billion dollar loan for 2% or something, or 5% or some other company gets an 8%

SPEAKER_35: loan or, you know, even as high as 10%. Who does that help? It helps the incumbents just to be very, very thoughtful about what you're doing here, because there's second and third order. Um, uh, what do they call them downstream? In fact, second and third order events that occur when you put your scale on capitalism,

SPEAKER_00: your thumb on the scale of capitalism. And then just one of the things we have to be wary of. This is a really good, it's a really important conversation, by the way. And this is why we talk about politics on this show.

SPEAKER_45: We have to talk about politics because these things matter.

SPEAKER_19: I could not agree more. I, I have people on my little newsletter have been like, well, you know, we didn't expect you to write about politics. And I'm like, look guys, big questions are being answered right now about what the regulatory market is going to look like, what the stock market is going to look like, what the economic landscape, the geopolitical landscape, like this stuff matters. Um, I'm going to show you how to nail timing when it comes to corporate debt. Here is a release from, um, March of March 13th.

SPEAKER_350: Yeah, March. Right.

SPEAKER_19: But look at what's going on here with the, the amount of money that Coinbase was able to raise at an incredibly low interest rate. So if you are a large company, especially back in the days of Zurb, you could really raise almost unlimited amounts of money and you could pay essentially nothing for it. And that is a weapon that you can use to buy stuff. So hopefully we see more of this. Um, I just wanted to show off the, uh, 0.25%.

SPEAKER_354: Try to get, try to get money for yourself. I think I had bad interest rate.

SPEAKER_355: I mean, how about a middle class, you know, construction worker, teacher,

SPEAKER_165: firefighter, trying to get a loan for their car and having to pay eight, 12%, like credit card rates. This is it's, it's crazy.

SPEAKER_35: Well, it's just one of the very frustrating things for me, you know, in capitalism is because I, I lived it myself.

SPEAKER_15: You know, I, I, I, I talk about, I came from like a blue collar ish background. My mom, a nurse, my dad, a bartender. Now my dad in fairness owned his bar.

SPEAKER_35: But you know, it's like owning a small business. Yeah.

SPEAKER_00: Makes you basically just have to work two more days a week for the same amount of money as working for somebody else. So it's not really that glamorous from being honest. We were lower middle class. We owned our brownstone, they had a mortgage for all that kind of jazz.

SPEAKER_35: But you know, they, they bought one new car in, in our lives. They, they bought a van for the business essentially for us to ride in, but you know, it, and then I, you know, I start doing well in my career. And then I watch what happens to me. As I go up the ladder of success,

SPEAKER_269: everything I do gets cheaper, easier, and freer. Yes. And I'm like, by the way, I don't need free stuff. I don't need complimentary upgrades. You want to give me a margin loan against equity for 1%.

SPEAKER_35: I mean, the amount of offers you get, as you climb the scale of society, it becomes easier to do everything.

SPEAKER_292: Yes.

SPEAKER_101: And easier, safer, healthier, faster, just everything's better.

SPEAKER_32: Everything becomes better. And it just feels profoundly unfair to me. And I'm, you know, I don't mind being able to buy clear for $99 and, you know, zip through a little bit faster.

SPEAKER_269: But, you know, I do think like some shared experiences, i.e.

SPEAKER_32: a credit card. Like if a credit card up to a certain amount, everybody paid the same amount. Or I just don't know why, you know, people who are coming up get so squeezed so often. So squeezed. I have family members who, you know, got mortgages and these sharks just destroyed them. I looked into the details of their mortgage.

SPEAKER_301: I'm like, oh my God, you're getting screwed here. This inception fee, this closing fee, like you're getting annihilated. Yeah.

SPEAKER_58: And then I do stuff and they're just like, oh, by the way, we waived this, we waived that, we got you this, we got you that.

SPEAKER_13: I was able to get a mortgage, you know, during Pixar. I think when I went to ski house and I was just going to buy it. And it's not a flex or anything. I was making an economic decision. They're like, you can get you to a 2.2%. Uh, as much as you want to check out, blah, blah, blah, blah, blah.

SPEAKER_239: You know, Oh, yeah.

SPEAKER_370: Basically. And they're like, look at the 2.25, 2.2. And I was like, okay, but I don't want to buy.

SPEAKER_13: They're like, oh, how about we lock it in for a year for you? I'm like, what? They're like, yeah, I'll just do it.

SPEAKER_00: We locked it in for a year as a courtesy. So they lock in 2.2. I go when I buy interest rates were at four and a half percent or four, four and a half. The guy said, you got a sick deal.

SPEAKER_104: Congratulations. I'm like, well, you set it up for me.

SPEAKER_35: And this is what happens, you know? And then the penalties on your credit cards, all this stuff stacks up. And it just, it is a little bit unfair, I think.

SPEAKER_373: And you see it in corporate America as well.

SPEAKER_19: Oh yeah. My favorite example of my mistake here. I was talking to my friends.

SPEAKER_20: My friend groups stretch the economic spectrum from student loan heavy to very wealthy. And I was talking to some of my friends and I was like, oh yeah, Spouse and I, we don't use credit because we don't really have a need for it. And they were like, oh, that's privilege.

SPEAKER_19: And I was like, oh, you're right. That's true. This is a question from YouTube from Hawking 1969. Why are ed tech companies faring so badly? Seems that they are going the way of fintech. I am in education and wish we could leverage tech to help our kids. I wonder, Jason, if this is a question really about ed tech companies or about the patchwork way we fund schools and run them around the nation.

SPEAKER_32: You know, once again, you, you cut me off at the pass here. Um, we have a company called brilliant.org. We invested in myself and Chamath. It was originally all tuition. It won, uh, like tech crunch 50 back in the day, great company. Um, and Sue is awesome. Who, uh, runs it and they pivoted from like helping people apply to colleges to brilliant.org. And they teach people math and all this stuff. What they learned over time is selling into a school system takes years. There's a, you know, and this is just what I've learned writ large. It's incredibly slow sales cycle. So when we evaluate companies, one of the reasons to not invest is incumbents, slow sales cycle. And so, you know, if you try to go into education or, you know, uh, healthcare or probably two of the slower areas, um, because there's a lot of state children and health. Uh, but when you go direct, you do really well. So brilliant is an example of going direct to parents and you go in there and you can learn anything there. Uh, and it's gamified and the apps incredible and you have it here up on the screen and, you know, here's your, you know, thing. And I want to do, um, helping my child learn and it just goes through and teaches you stuff. And then you pay a monthly fee. Um, and you can pick what you want to learn. They did incredibly well going direct to parents. Why? Because parents will pay any amount of money to help their kids, um, become sustainable in the world. And so here we can start learning basic, uh, you know, arithmetic. You see, I'm doing it in a couple of clicks and this will just make you learn smarter. And so their true north as a company is parents and kids.

SPEAKER_35: They just have to please parents. They just have to please kids. They don't have to please the school system to your point.

SPEAKER_380: Yeah.

SPEAKER_35: And they don't have to deal with politics. They don't have to deal with all this nine, you know, stuff. Um, we have another company in healthcare called calm.com meditation.

SPEAKER_13: They sell direct to consumers, mindfulness, sleep.

SPEAKER_35: Now they're in, you know, year 10 and they are also selling into healthcare, but that takes time and money and resources and a very refined product. There's no doubt in my mind.

SPEAKER_15: Brilliant. Well, I'm, I'm, I'm, I don't even know if they're doing it now, but I'm sure schools

SPEAKER_92: would buy brilliant for their students. Maybe some are doing it already. Or so. Yeah. You nailed it. That's why ed tech is hard.

SPEAKER_19: But the, the argument then is that ed tech startups should always start by selling to the people who are with the most willing wallet.

SPEAKER_21: And then as they go up market, the enterprise jump as SAS companies do then go after the schools, but build your base, build a faster, um, sales motion velocity, then go.

SPEAKER_27: Right.

SPEAKER_387: I, I like that.

SPEAKER_27: Also, it gets you closer to the customer.

SPEAKER_32: Right. Right. If you're selling to a teacher and then the teacher is selling it to the parents and the parents are selling it to the student or, you know, some combination thereof, or you're selling it to

SPEAKER_35: an educational PhD who works in a bureaucracy, you know, in a state or in the federal government

SPEAKER_32: who then sends this piece of software down to a principal who sends it down to a, you know, administrator who sends it down to a teacher who sends it down. So you're, when you're trying to please the supervisor of a district, it might be you're trying to please them on price or some other criteria.

SPEAKER_35: And then that person leaves, and then you got to sell somebody else on it. The person you want to sell is the student. Can the student get smarter, faster, and then on a secondary basis, the parent. So you, you could have that debate all day. You know, is it the parent you're selling to the students?

SPEAKER_19: It's both, you know, I think it depends on which anxiety you're attacking. Because if you're, if you're attacking the, at the safety or my child will fail long-term, I think that's a sale on the parent. If you're selling, you're falling behind and you're ugly and people don't like you, then it's the student. Um, because that's, I think all the insecurities we have at a younger age and then at an older age. Um, but let's leave it there. Uh, friends, we will have an awesome segment over on YouTube and the main show coming out

SPEAKER_136: later today. We will be back with tons more from this week in startups. We have more companies to cover. We have twist 500 this week. Stay tuned. We'll see you soon. Goodbye.