SPEAKER_00: hey everybody we've got a great show for you today it's a jam-packed it's a long one producer rachel joins me and we do a quick hit on aoc's first tiktok where she defends tiktok and then speaking of china we go into alibaba is going to split into six business units think about that

Chamath Palihapitiya: that would be like breaking amazon or google into six business units what does that say about what's happening in china with entrepreneurs and entrepreneurship writ large then we discuss

SPEAKER_02: the news that substack is doing an equity crowdfunding of two million dollars on we funder is it a good bet or not i go through their deal memo and i tell you if you should invest or not but it's not investment advice i just tell you how i would look at their round and why are they doing this now and how much money are they making and is it a good business or not we basically break down the business it's a great product but is it a good business and then we dive in to the announcement that lyft has had a a bloodletting the top two executives are gone founders are done and they've brought in a new ceo from the board is that a sign that they're going to rebound or is it a sign that lyft is for sale and who would the likely buyer be at the end of the show we discuss uh twitter's new product and that they're going to be retiring all their blue check marks and finally producer nick comes on to discuss if i should do my first short in history i've never shorted a stock in my life but i'm wondering with all of this anti-crypto choke point uh stuff happening

SPEAKER_07: should i short coinbase we discussed that as well it's going to be a great show so stick with us this week in startups is brought to you by element is a tasty electrolyte drink mix with everything you need and nothing you don't that means lots of salt with no sugar get a free sample pack with any purchase at drink lmnt.com slash twist mercury where innovation meets peace of mind now more than ever startups need a safe place to put their cash mercury offers a simple way to manage bank risk and protect every dollar with up to five million dollars in fdic insurance and a money market fund visit mercury.com to apply in minutes and crowdbotics great ideas can change the world and crowdbotics is the fastest way to turn those ideas into code get a free scoping session for your next big app idea at crowdbotics.com slash twist all right everybody it's tuesday i'm in tahoe rachel braun is here

SPEAKER_10: she's in new york and it is a blizzard behind me but there is so much news i'm hoping i don't lose my power or internet here in the mountains how are you doing rachel good obviously not as good as you

SPEAKER_02: that looks a lot cooler than my background uh yeah the uh i got out i took the girls out in the

SPEAKER_10: mountain at spring break they got uh some runs in it was quite nice it's empty up here but we have so much snow what you see behind you is a 20 foot wall of snow against my house i'm on the second floor of the house and that's how high the snow was so you're not like getting out right your car's like stuff well luckily um where i live they have a service that plows your driveway and around your house you know on some regular basis and so we are in like a community that does all that and so we're good okay good i can get out grocery shopping and everything easily easily okay and also the ski resorts make a point of having access so they are on top of it and the access road in and out of ski

SPEAKER_23: mountains tends to have like some hospitality stuff like a supermarket so thanks for thinking of me but we're good and i got the four-wheel drive car with the tires and i got starlink i don't have a generator that's going to get put in the summer the generators were backed up for two years because of the um covet and the supply chains yeah so it seems like everybody's in the market for powerwalls and generators so i'll probably get some combination of that in the near future and be totally off the grid you can see people skiing by me though so it's going to be a nice day out there

SPEAKER_10: if i can get out there so you know i wanted to ask you what's the vibes so to speak on tiktok we i covered the tiktok bad it seems like i was yelling out the window like a gen x or like a boomer

SPEAKER_31: saying you know shaking my fist saying like wake up people this thing is a security risk we don't have reciprocity with china we really need to have them divest and or just you know have them have the risk of ruin and sure enough democrats and republicans seem to be absolutely in on this

SPEAKER_34: bipartisan dunk fest i want to ask you amongst millennials gen z's and younger and on tiktok

SPEAKER_37: what's the vibe yeah so obviously shochu was just grilled in front of the house but um a lot of people are really making fun of the people that were grilling him not only obviously are there things that are really funny going around um they're called fan cams i don't know if you know what a fan cam is but it'll be like a photo of somebody i think i tweeted one that was my favorite i've showed you but it'll be like music to somebody almost like normally for k-pop singers and stuff but they i've been seeing a lot of like memes kind of like stuff like that around but i think like the lack of um understanding about tiktok really showed through with some of the people asking questions and it didn't seem like a crazy good use of time and the interrupting was something that was also uh i know not a super good thing that was happening according to a ton of people on tiktok it seems like people love the

SPEAKER_10: product obviously they're addicted to it they're spending whatever 90 minutes a day on and on average

SPEAKER_36: young folks so i did see a really interesting tiktok that somebody was saying like it was a really interesting tiktok where the user was like please take this app away like i'm addicted to it like i

SPEAKER_37: spend so many hours a day i will never get off this app unless it's like literally taken off the app store and in the comment section people are actually agreeing like very heavily i think jules terpak actually tweeted the tiktok um that i'm talking about if we want to add it later but that was a

SPEAKER_43: really interesting take that i saw i think that's right and i think that's the wider discussion um we

SPEAKER_10: have like five discussions going on here concurrently one of them is around addiction and the impact on young kids uh specifically young women and what we saw with instagram that should apply to all of these uh products and there's even in utah some laws coming out that you know you have to get parental approval uh for using these apps now parents have to have controls over them and time limits and all this stuff so i think the noose is tightening on all of these but specifically china i did notice

SPEAKER_46: trending that aoc who has you know a very high degree of social media aptitude she's you know

SPEAKER_05: incredibly dominant on twitter and she actually just joined tiktok and now she posted her first tiktok

SPEAKER_10: surprisingly she's in support of tiktok and used it as an opportunity i think to go after

SPEAKER_05: the other platforms in zuckerberg and you know maybe pivot the discussion to privacy

SPEAKER_50: hey everyone this is rep aoc alexandria ocasio cortez and this is my first tiktok now this is not only my

SPEAKER_52: first tiktok but it is a tiktok about tiktok now this week the ceo of tiktok came and testified before congress as there is growing rumblings and discussion over a nationwide ban on the app do i believe tiktok should be banned no why should tiktok not be banned first of all i think it's important to discuss how unprecedented of a move this would be the united states has never before banned a social media company from existence from operating in our borders and this is an app that has over 150 million americans

SPEAKER_10: on it what do we think of that argument rachel uh it's never been done before and a lot of people use

SPEAKER_12: it i do think a lot of people use it um i think there's like another argument there about cracking

SPEAKER_37: down on all social media platforms and i think that's true like you kind of mentioned already with instagram coming into play we've already seen china kind of regulate um social media apps for kids putting things in yeah in their own country um maybe not having something where like the kid has to have share their id or something like that as strict as like china does it but having something across all social media platforms where parental controls maybe are more heavily incentivized

SPEAKER_13: should i in my opinion should definitely be the case like tiktok or not uh tiktok's definitely

SPEAKER_43: being put on blast a lot more here what's particularly disturbing about this clip and

SPEAKER_10: she's super smart so she cannot go unnoticed to her when she says this is unprecedented

SPEAKER_31: it may be unprecedented here in the united states uh we could maybe have that argument a social network in the united states but social networks like tiktok are banned in india and other countries because they see the threat and china itself bans all social media from the united states iran and other uh authoritarian countries so she's saying it's unprecedented that social networks are banned but she must know or is her argument so weak and the people preparing the script or if she's not doing it herself does she not realize that social networks are banned everywhere across the world and they're typically banned in authoritarian countries and it's typically the american companies that are facing the ban this is you know uh this under unprecedented in the us as a qualifier i think

SPEAKER_05: is a little bit of uh subterfuge there like trying to distract us from the reality which is other countries see these as national security threats why wouldn't we so um you know feels like she might be gaslighting us all anyway let's continue listening to her argument another 38 seconds we broke it up

SPEAKER_62: it's three minutes long so we don't play oh my gosh yeah it's long isn't long for tiktok yeah it's a

SPEAKER_52: longer longer one major social media companies are allowed to collect troves of deeply personal data about you that you don't know about without really any significant regulation whatsoever in fact the united states is one of the only developed nations in the world that has no significant data or privacy protection laws on the books to me the solution here is not to ban an individual company but to actually protect americans from this kind of egregious data harvesting that companies can do without your

SPEAKER_00: significant ability to say no well this is also weird because she's saying again with the qualifiers

SPEAKER_10: this is why i feel like her argument is filled with qualifiers there's no significant regulations what california has the privacy act um there is the hipaa privacy act there is one for children there's a lot of privacy acts here in the us and then she's saying americans don't know

SPEAKER_46: that's also false americans know their privacy is and they're all the time being told in different pop-ups and accepting cookies people americans are very well aware that their content is being uh their privacy is being compromised by all this stuff i i don't know what do you do by that argument

SPEAKER_12: as well um i think there's one kind of what you were saying like how there's pop-ups and things like that and like one's less tiny you've actually read thoroughly through one of those pop-ups like i've definitely accepted things like in full transparency like i have a tick tock account

SPEAKER_31: um but do you know that they're using your private information to target ads to you i would assume

SPEAKER_12: that they are but that doesn't mean that it's it's right and i think like there does need to be more

SPEAKER_37: regulations maybe that are stronger more strongly like put in place uh around that issue um but i

SPEAKER_72: can't say that i didn't know that it was happening i mean we have the california consumer privacy act

SPEAKER_05: we have copa that's the children's we have hipaa i mean we have a lot of privacy regulations here in the united states i think it's a little bit disingenuous of her but i guess she's building to

SPEAKER_52: this final point here 29 seconds and usually when the united states is proposing a very major move that has something to do with significant risk to national security one of the first things that happens is that congress receives a classified briefing and i can tell you that congress has not received a classified briefing around the allegations of national security risks regarding tick tock so why would we be proposing a ban regarding such a significant issue without being clued in on this

SPEAKER_45: at all it just doesn't feel right to me i think this is based on the potential national security risk

SPEAKER_10: so this is a very strong defense of tick tock i'm sorry it's a weak defense of tick tock but she's saying in a very strong way and she's going out of her way to say it it screams of like maybe they

SPEAKER_46: got to her i don't know i hate to be cynical but i see people talking about maybe she's part of packs or something that have had donations from people which is the nature of our political system it's not unique to aoc but i i didn't think this is a particularly strong one she didn't bring up the fact that the chinese do not allow our social networks there the chinese have different uh rules

SPEAKER_10: for their tick tock she didn't bring up the fact that india and other countries have banned it she didn't bring up the fact that they have information data on all of these um they have used information and data previously that they track their own citizens and that just tiny influence that we saw with tick tock and facebook in previous i'm sorry twitter and facebook in previous elections would be even more powerful on tick tock it's like to not even steal man some of the other

SPEAKER_46: arguments makes this a very weak defense in my mind in order to be intellectually correct i would have liked her see her take on those five six seven facts i just brought up element is a super

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SPEAKER_12: like what would you want the outcome of this whole thing to be like do you think tick tock needs to be banned outright do you think an american company needs to go and like buy up yeah um like the american

SPEAKER_88: branch so what what do let me ask you two questions or three questions here these are just simple questions uh remember you're under oath rachel um number one why do venture capitalists

SPEAKER_91: invest in startup companies like tick tock why do they invest because they know it'll make money

SPEAKER_55: oh it's a social app so i don't know do social make money yeah yeah they do twitter is worth a lot

SPEAKER_91: of money facebook's worth a lot of money snapchat they do it for returns you got it immediately so

SPEAKER_23: venture capitalists invest for returns uh this is a venture-backed company we've got many well-known venture capitalists in it um this company would do do let me ask you a second question do people consider do young people use this more than facebook tick tock oh i would say so yes do they use it more than twitter i think so still yeah of course uh the numbers show that do they use it uh more than uh uh snapchat linkedin yeah okay do they use it more than instagram yes okay so we just went

SPEAKER_99: through all the apps out there those apps are worth hundreds of billions of dollars and trillions of

SPEAKER_23: dollars collectively so question number one uh the answer to is vcs invest for a return number two this thing has beaten the field so number three uh would there be an appetite for an ipo for this company

SPEAKER_103: here in the united states yes or no yes of course so why wouldn't they take the company public the vcs who control it vcs and the founders who control it why wouldn't they take it public get their return

SPEAKER_99: and then resolve the issue it's it's a clear path why wouldn't they just do that immediately so

SPEAKER_104: there's some issue right there's some somebody's making a decision to block this ipo 100 of the people who have investments in this would love to cash in their chips and own stock in a public company and have the option to sell it or not which they they don't really have a free-flowing market for it to value it and to let it trade so who is blocking the ip of tick tock is really the only

SPEAKER_108: question gotcha if you had to take a guess is it the vcs nope probably china it's of course china

SPEAKER_82: there's no other person who can block so it's being blocked from going public and resolving this whole issue so why would china the ccpa the chinese communist party why would the communist party not allow this to ipo why would they be blocking and they're on the board of the company according to

SPEAKER_12: reports why would they block it is this where the data comes into play that you were talking about

SPEAKER_104: previously that's a good theory this is too powerful of an asset so uh i think when you look at any company in china whatever behavior they do is going to be first through the lens of what does the chain what is in the best interest of the chinese communist party the second lens is what's in the best interest of shareholders whereas here in the united states we don't say like hey should uh airbnb or uber go public well what's in the best interest of the biden or trump administration whenever they went public what's in the best interest of the current president or the congress we just say well what's in the best interest of the shareholders the employees the stakeholders go public okay great market wants let's go public that's all you need to know and uh i think there's another china story breaking today

SPEAKER_46: that will give you even more evidence of that so maybe you could do that one yeah so alibaba announced

SPEAKER_37: it will spin itself out into six different independently run companies and the stock is up 13 on the news and this is coming at a super interesting time because the alibaba co-founder

SPEAKER_116: jack ma was just seen in china for the first time in over a year earlier this week and do you remember what happened to jack ma we talked about it earlier yeah it was and financial was going to ipo i remember

SPEAKER_108: this because it was during the pandemic and i happened to be in uh vegas and a bunch of besties and i were doing a covid bubble trip where we're going to play some uh tv poker on poker go and so

SPEAKER_104: we were there when this news broke and i remember talking to my friend bill gurley about it and uh jack ma had been critical of when and financial which was like uh gonna go public uh he criticized chinese banking regulators and how they were holding back innovation and then he disappeared and then they said he was pursuing non-profit pursuits and oil painting and then he was in hong kong up on that hill uh which i forgot the name of but there's a beautiful hike up there on that hill that looks

SPEAKER_120: out on the hong kong bay somebody will remind me in the chat of the of the of the beautiful victoria

SPEAKER_104: peak maybe i've hiked it many times but anyway he disappeared so he's back and they're breaking the company up so this is the equivalent of breaking up a company like amazon i guess yeah yeah it would

SPEAKER_12: be like an amazon breakup but that's a really really good uh good description so according to the wall

SPEAKER_37: street journal it's actually splitting up into the following six like sectors as companies uh cloud computing chinese e-commerce global e-commerce digital mapping and food delivery logistics and media and entertainment and all six of these will have their own ceo reporting alibaba ceo daniel zhang and alibaba will basically become like the holding company of all six of these and these six new

SPEAKER_111: companies could all seek separate ipos and could raise external capital so uh they are going to break up

SPEAKER_108: into netflix uber doordash amazon the e-commerce company amazon primash amazon web services logistics

SPEAKER_05: maybe that's like kind of uberish uh as well and uh their chinese e-commerce uh their global e-commerce

SPEAKER_132: brand which yeah well i mean it's obvious why this is happening xi jinping uh as we know became ruler

SPEAKER_05: for life he's the god king of china now until he passes on and he's uh secured power and large

SPEAKER_104: companies conglomerates as we've seen here in the united states can challenge political power so while our government can try to take action against facebook as we see lina khan had done she can also lose uh and those companies can then uh file lawsuits they can defend themselves and we have a justice system here for american companies and the government has to um essentially for better or worse uh deal with these large conglomerates and the power they have china xi jinping can just say break it up or i shut it down and these will all spin out and they will be worth more than the sum of the parts will be worth more uh than them put together and it will create more competition and they'll run better uh which is what would happen with amazon if you broke amazon up into two companies or if you

SPEAKER_88: brought if you broke google up into three companies they would perform better youtube would be a stronger company if it wasn't part of youtube at this point yeah i believe and like imagine if this

SPEAKER_37: did happen to amazon you could split amazon up into like online commerce third-party sellers advertising and prime um which all generated 126.5 billion revenue in q4 so you already said before like this crazy if it happened to amazon it it totally would be aws alone like generated 21.3 billion

SPEAKER_05: revenue in q4 yeah they could be their own companies uh the same joke is made about apple because the

SPEAKER_104: airpods business is like like tens of billions of dollars on its own so it could be like its own standalone business and still be huge you know being a conglomerate gives you a lot of ways to to not explain what you're doing and to do anti-competitive things or things that are on the margin or sharp elbowed for example amazon can for some period of time uh show a lot of amazon basics and get people addicted to basics uh or they could show and rank slightly better people who uh give a larger percentage of their sales to amazon and so they can obscure all kinds of things uh they could lose money on a product which is you know product dumping dumping of products you could have a company like google give the pixel the google pixel is a fantastic phone i've owned a couple of them they could sell those for 200 each and they could really be worth 600 or they could be selling them now i think for five or six hundred and they could be worth seven or eight hundred they could lose hundreds of dollars per phone and make it up in the long term with android market share because they have the app store uh google play and they have ads on there and just the increased reach of youtube as well so there's all kinds of bundling things you can do you can kickstart a new business uh when

SPEAKER_108: amazon launches a new product or service like the fire stick or you know kindles or whatever they can use their own ad network to blast them out uh when bard came out just recently google was able to

SPEAKER_23: ship bard to people who have gmail accounts etc and they can use youtube to do that they can use all

SPEAKER_02: their channels to they can make it the default they can make it one of the search defaults use google search use default of google bard so um it'll be a better for startups too but that's not why this is

SPEAKER_23: happening this is happening because of command and control he jack ma was a god king as well and he challenged xi jinping and xi jinping cut him off at the knees and now you'll have six warlords and six warlords is a better better for xi jinping than one god king to compete against yeah and that's my take

SPEAKER_37: on it for context like alibaba alibaba generated around 35.9 billion in revenue in the quarter ending in december which was up two percent year over year and had a 6.6 billion dollars of net income in december

SPEAKER_152: uh in the december quarter which was up 138 percent year over year jack ma made being a chinese

SPEAKER_37: founder and a billionaire super cool and he became famous which was super unusual compared to a lot of

SPEAKER_108: other people coming out of there yeah tall poppy syndrome is a real thing uh you become too successful

SPEAKER_104: you become too famous it's going to somebody might want to cut you down uh and they might want to discredit you uh or you know reduce your power and jack ma was the tallest poppy ever in the history

SPEAKER_108: of china he was more popular in xi jinping certainly uh you know and in the west that's internally in china and it's certainly in the west people really thought he was a genius they thought he was the next

SPEAKER_05: bill gates you know steve jobs and uh that was a major threat to uh somebody like xi jinping so obviously what's that it's obvious what's happening here any company there you're going to look through the lens of the ccp and then shareholder value and it might even be ccp societal value then

SPEAKER_108: shareholder value i i if you're an expert on china feel free to email producers at this week and

SPEAKER_104: startups we'll all see your analysis of it but i think it's probably in that order that they would actually care less about shareholders and more about citizens so it's xi jinping citizens shareholders

SPEAKER_105: whereas here it'd be shareholders shareholders and then maybe society after that maybe customers

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SPEAKER_104: members fdic well speaking of big companies and layoffs uh since we last talk yeah talked i saw

SPEAKER_161: was it um i think nine thousand people are being laid off no no nine thousand more at amazon then there

SPEAKER_105: was uh one of the big anderson or one of the big consulting firms decided to lay off a ton of people

SPEAKER_104: but disney also laying people off yeah ten thousand at microsoft i mean this this layoff train is

SPEAKER_165: continuing and uh i think that means we're for sure in for a recession more layoffs though of course the

SPEAKER_166: faster we get through the recession and the quicker we take the medicine so explain what's happening at

SPEAKER_37: disney yep so disney fired its entire metaverse team so remember back in february we talked about how disney was cutting around 7 000 jobs and reorganizing into three divisions disney is estimating these layoffs will cut around 5.5 billion in costs and a part of those cuts the wall street journal just reported that disney terminated its entire division that was responsible for developing metaverse strategies and this consisted of uh 50 members and was led by mike white a former disney uh consumer

SPEAKER_132: products executive yeah it's interesting they've taken a couple of swings at that they had um toontown

SPEAKER_104: online i think was their massively multiplayer game uh they have star wars games that are massively multiplayer they license these games there is something it's not web 3 obviously i think it's not nfts i think it's not the metaverse it's the wrong name for it but i do think virtual massively online games with their character base um obviously could make money but they have businesses that already make a ton of money like theme store like the theme parks like merch like espn like movies uh and now of course disney plus so sounds like they're just in the words of brad gerstner getting fit and doing something super experimental even if it's just 50 people it's probably those 50 people would or the salaries of those 50 people reducing those salaries would shore up the company more so maybe put more effort into the parks and optimizing those more effort into merchandise more effort into disney plus and showing a

SPEAKER_05: profit right and servicing their debt so this is just good hygiene i think in a down market

SPEAKER_116: well was the metaverse a zero interest rate policy distortion i think people hiring uh tons of folks

SPEAKER_104: and being very experimental and pursuing a lot of innovative opportunities was indicative of the low interest rate market because you could take out debt you tried a lot of different things but what the stock market is going to want is if you have headwinds and people are canceling their disney plus on the margins like there might be some people who say hey you know i gotta cut spending uh or hey i'm not gonna go to the theme park for five days i'm gonna go for three or i'm gonna i know this sounds silly but i'm not gonna spend any money on merchandise when i'm there we'll go to the beach for two days and we're gonna pack our lunches and not do fast pass those kind of uh discussions are happening inside of every family right now it could be you know rich families are saying hey you know we're not

SPEAKER_108: going to italy we're gonna go you know to hawaii and then people who are going to go to hawaii say you're not going to go why we're going to go to disney or we're going to go to you know uh san diego whatever it is and so all of those austerity measures which i've been talking about for the

SPEAKER_104: past years are now they're hitting home now consumers have spent their money consumers are

SPEAKER_05: going into debt and if you look at consumer spending with all these layoffs where do consumers

SPEAKER_02: spend their money entertainment food you know going out hospitality it's a big portion of it they

SPEAKER_180: also spend it on things like clothes and um consumables groceries uh and stuff like that so

SPEAKER_105: yeah they just could be preparing for uh cutting costs in relation to spending from consumers going

SPEAKER_104: down the one thing i don't like about this was um that mike white was also involved in their amazon prime something i've been advocating with for a long time and so they are he was trying to integrate according to that story i read it um data across the multiple platforms disney plus retail smartphone apps theme park visitors food merch all that other stuff uh that is a really good idea and if that effort's been abandoned that's a huge mistake um they should be looking at disney plus and immediately going to merch and then disney plus plus merch should then go over into the theme parks now how would you do that you just got to keep it simple stupid it's the you know kiss methodology keep it

SPEAKER_108: simple stupid if you're watching disney plus i watched the bad batch last night with my girls they love star wars right now i should be getting bad batch merch there's a you know a wookie jedi in it i should be getting upsold the wookie jedi merch at the end of every episode at the end of the episode it should show me related merchandise it has my credit card it has my address i should have one

SPEAKER_104: click just buy it i'm going to be price insensitive to when baby yoga yoda's on there for 50 bucks

SPEAKER_108: and then obviously if you buy your pass you've already got the disney plus app if you have disney plus you should get priority at the parks you should get a 10 discount so disney plus should be the name of the product disney if you are a disney plus member you have a subscription

SPEAKER_23: each of those people has a profile uh so we have multiple profiles my daughters have their profiles plus my wife so there's five of us with profiles they even made profiles for the dogs because they thought it was funny so we have five profiles on disney plus those five profiles should have five

SPEAKER_02: different emails they should record what uh rides i went on and all of that they should sort of trend towards and that would let them know that our household is big on star wars right now and was previously big on uh marvel movies but now is you know team star wars for now and they should be trying

SPEAKER_05: to i've never got an upsell on going to the new five thousand dollar star wars adventure thing experience but i bet you if we got upsold on that they played us a trailer after bad batch my daughter's like hey i want to go to that so just low hanging fruit keep it simple just upsell me on merch and

SPEAKER_36: theme park stuff after i watch related shows yeah i like that idea also it made me think of like uh be real which i don't know if anybody uses anymore had a calendar and it like exit out like

SPEAKER_37: the days that you be real it would be cool to have an app where it had like all the different star wars movies and stuff like that and and the riots that would like kind of tick off each one so yeah people

SPEAKER_82: love to do gamification so yeah you take the basic your knowledge of apps is very strong rachel so like

SPEAKER_104: if you take any gamification and then you go to a lazy big company that has money printing machines they're probably not even hip to that that the idea that collect them all or to have all of them on

SPEAKER_108: your profile would be really cool so you know if you bought the baby grogu doll and whatever this

SPEAKER_104: you know wookie jedi kid is if you could put those on your profile page or if i went on all the star wars

SPEAKER_108: rides it would tell me i've gone to seven of ten and i have three more to do to get this you know star wars you know jedi master badge people would actually do that and if when you were in the parks it was

SPEAKER_104: upselling you the problem inside of a big company in my experience is who gets credit for this and then who pays for it and then who's responsible for the execution and who gets fired if it doesn't

SPEAKER_46: work so here we see who gets fired if it doesn't work probably because they were tied to web 3 and web 3 is toxic and it kills anything it touches we'll talk more about that in the show

SPEAKER_05: um you know and that's just the nature of it so if you were working at disney and you said hey i

SPEAKER_104: want to connect these things well then you have to go fight with the disney plus person you got to fight with the merch person just to make that one connection who gets credit for the sale whose p l is it on whose developers build it who's responsible for the execution of who approves it and then you need somebody like eiger to come in and say hey you two uh get in a room i'm taking this is what i would do you i'm eiger i'd say this is a priority uh i want you you and you susan bob jennifer from three different divisions merch theme parks and disney plus you're all in this room uh this conference room which is next to my office because you know eiger's got like three conference rooms and seven assistants i'd like this is your war room sitting here um and i'm going to come by randomly and i want

SPEAKER_108: to see your progress and i just want you to give me ideas and themes and i'll give you the thumbs up

SPEAKER_104: which one to execute on and in what order and i would just have them show me stuff every day uh and tell them they're collectively responsible for the that solving that problem but you know in the management theory you would want each group to be doggedly fighting it out to solve their own problems and instead of having one app have a theme park app that's best of breed disney plus app that's best of breed and a merchandise app that's best of breed i know they have a theme park app

SPEAKER_05: i don't know if there's a disney merch app um and this is where apis inside of big companies come in if they had apis between these things it would be really easy to do because the people building disney plus could just upsell you on the api when you buy disney theme park tickets you could say would you like us to ship you merch because you bought this for 30 days from now do you want us to ship you your your clothes to wear when you're at the theme parks right so i'm going to be there in 30 days yeah send me my stuff ahead of time i get a discount yeah i'll order it now but they do have shop disney is the name of the app so uh it's it's not easy big companies are hard big companies

SPEAKER_23: are hard you need to have speaking of a god king and god queen we were talking about with a jack monster right rachel you need to have somebody who's the god king and god queen to say this is how

SPEAKER_05: we're doing it this is the vision execute all right probably the most challenging thing i hear from founders is related to building either they aren't technical and they're searching for a technical co-founder or they can code but they're just spread way too thin this is one of the first major obstacles you're going to face as a founder and it can be discouraging right we all know that and when you're spread thin and you can't get the product velocity it's very frustrating you know what to

SPEAKER_02: do but you're just stuck in the execution phase so here's the solution let crowdbotics be your cto as a service and boom just like that you can focus on building awesome products and delighting your customers rather than wasting your time on infrastructure planning architecture compliance

SPEAKER_199: and the boring stuff crowdbotics also offers professional scoping to help you flesh out your project at the mvp stage and beyond so cut out the hassle and get back to building that perfect product when you think about crowdbotics i want you to think getting time back to focus on your product and customers product drives everything so let the folks at crowdbotics show you how it works schedule a free scoping session and get your detailed bill plan at crowdbotics.com twist that's crowd b-o-t-i-c-s dot com slash twist i think we can we can transition to some startup news i feel

SPEAKER_12: like we've been talking a lot about about the big companies yes um so substack is raising two million

SPEAKER_37: dollars of equity crowdfunding with a minimum investment of 100 to give its writers the opportunity for some upside in the platform and they're using we funder to raise the money with a goal of raising two million at a 585 million pre-money valuation um and it's calling this an extension to its 2021 series b uh they actually tried to raise a series c last year but the round was cancelled due to the

SPEAKER_05: funding environment okay so back of the envelope math um this is an equity crowdfunding by the way we funder is a platform for doing equity crowdfunding what this means is you don't have to be an accredited investor so if you want to invest on angel list or my platform the syndicate.com it's basically my deal flow about half the companies we invest in from our fund will ask us to syndicate them out to our 11 000 accredited investors and qualified purchasers these are basically people who make over 200 000 a year so when you do equity crowdfunding on republic or we

SPEAKER_104: funder those are the top two platforms and i'm seeing more and more companies do this i actually did it for um inside.com it's a way to get your existing users to really root for you and to be involved in your product or service so um i don't see this necessarily as a sign of weakness i see it as an engagement and he locks the big criticism of sub stack is hey if you make a million dollars on sub stack why would you give them a hundred thousand that's a big number if you make two or three million in subscriptions which the top 10 folks there do why would you give them 200 000 or 250 000 you could use any of these other platforms there's a bunch of free sub stack platforms you can use you could use squarespace or there are a bunch of platforms that don't charge you that 10 vig that 10 um commission and this is a way to get those writers to have upside so if you're a writer and you put 25k in this and you expect it to 10x well you got you know 250 000 in gains and you're more tied to the platform

SPEAKER_23: so i think it's a savvy move on their part now is it a good investment that's a totally different

SPEAKER_37: question and they're already like pretty far along with us too by the way they've raised 785 000 as of

SPEAKER_12: 10 a.m pacific the 785 000 out of 2 million so that's already like 40 raised um and i don't know if i said this before but they're going to prioritize investments from its own writers um non-substack

SPEAKER_37: writers like are still allowed to participate but this means that if they do exceed that 2 million

SPEAKER_111: threshold sub stack writers are more likely to be included looking at the page right now and maybe

SPEAKER_105: it's because the news broke today it says almost sold out 2.3 million reserved for 1700 investors on

SPEAKER_212: the we funder page what am i missing so it was 10 a.m when we got that was like an app that's like the

David Friedberg: last hour they got over a million dollars in investment oh okay that's interesting well here's the

SPEAKER_05: other thing um and there's a lot of great charts on here so if we can bring up the page we can scroll

SPEAKER_104: through it it shows the writers get 86 percent of revenue and sub stack takes 10 and payment fees eat up four um and then you can see the monthly active subscribers they're growing like a weed and you can see writers are earning money on sub stack cumulative money paid to writers a cumulative chart always goes up and to the right so that's one as a savvy investor i can walk you through this as i would as an angel investor or if i was making an investment decision here so right there um you have a business that has very low margins so when you look at a stub stack business it's a low margin

SPEAKER_108: business normally you would want those margins to flip it's a low take rate business what's the take

SPEAKER_55: rate of the app store rachel um uh is that how much percentage i don't remember the take rate of the

SPEAKER_02: app store apple gets i think it's 30 it's 30 percent 30 percent yeah what's the take rate of uh other

SPEAKER_05: producers of airbnb uh real world app ubers 25 doordash 25 um so 10 is a very very low rate it's anemic it's a disastrous percentage to get uh this is why patreon is a hard business to invest in and if you

SPEAKER_99: were an angel in patreon you're very happy but later stage you start to see this thing has to get very

SPEAKER_05: large and in fact um and then they use a cumulative chart so let's scroll down here i'll look at some other charts um if you blow up that chart the green one there this is monthly active subscriptions so and this is done quarterly so quarterly numbers always are a little bit smoother right you don't have monthly spikes you know somebody joins the platform somebody quits the platform but this is

SPEAKER_104: a nice growth rate obviously and um then if you look at the next chart writers earning money on sub stack i think this is the number of writers who've turned on monetization interesting you see in the last year a major spike that's probably because people are being laid off and you know a lot of people who are laid off from big media are going and starting sub stacks right so and then says readers have cumulatively paid writers more than 300 million through sub stack that means in its lifetime sub stack if they got the full 10 percent has made 30 million dollars how many employees does sub stack have and then

SPEAKER_05: i'll tell you what their profitability is we'll get that number in just a second um and then if we go down uh there's a nice graphic when you see nice graphics in there that's always a

SPEAKER_105: waste of time um i hate those kind of things um fluff in a deal memo like this more fluff

SPEAKER_104: that's all the charts so now the other thing that happens uh when you do an equity crowdfunding is you're responsible to give backup documents so there's an offering document somewhere on this page that will have a lot of terms on it so now what's going to happen is we're all going to see right

SPEAKER_108: through there's gonna be a lot of transparency as to how this company is doing and if you make an investment in here if you make an investment in this company you are going to uh get updates and

SPEAKER_104: we're going to know a lot more about the results every quarter and every year uh so this is um would i would i invest in this business at this valuation if they could raise from venture capitalists at the same valuation they would have so that tells you something and they

SPEAKER_05: supposedly have two million paid subscribers if we give them a lot of credit we say it's ten dollars a month but i think it's probably more like seven but i'll round it up to ten that's 20 million dollars a month that's 240 million dollars a year that means they make two million dollars a month they make 24 million dollars a year right now it's probably less it's probably more like half that if they were making five dollars per paid subscriber which i think is probably more realistic so i'd say they're making between one and two million a month now they have 500 writers i'm sorry 500 employees according to linkedin the 500 employees on linkedin probably not all full time if you have a sub stack you're probably putting it there as like your job pitchbook says they have 94 employees i'm guessing it's more than that number that's probably not a real number but just take each employee and times it by 10 000. i'm going to say they have 200 employees i'm going to take the

SPEAKER_23: two numbers 508 and 94 i'm going to go with 200 i can't see them having less than 200 employees

SPEAKER_05: 200 employees times 10 000 each is two million dollars a month in costs for this business so they might be close to break even i don't know what else they're spending on servers email servers etc it could be another 20 million 10 million a year but it shouldn't ultimately be that expensive

SPEAKER_225: a company so i think they're probably if they are making 15 million a year then 10 times 15 million

SPEAKER_05: is 150 20 is 300 40 so they're getting 40 times their top line revenue for a business that could be

SPEAKER_23: break even or maybe losing a little bit 40x is if it was a public company would trade at 10 or 15 so this is probably three times overvalued as a private market company is what i would say

SPEAKER_94: i guess all the people too by the time the show comes out they'll be far exceeding this 2 million

SPEAKER_37: of equity crowdfunding too so what do you have any advice for people that did already invest in this

SPEAKER_23: well you typically one of the interesting facets of this equity crowdfunding is i think they close it

SPEAKER_05: and then you show interest and i think you have a 30-day period uh you can look it up in the in the fine print but it used to be that you had a 30-day i'll call it like a cooling off period yeah so in order to protect consumers the regulations say like you have 30 days to consider and back out of your

SPEAKER_99: investment uh so i'm not trying to nag the company i think it's overvalued by at least 2x but probably

SPEAKER_05: more like 3 or 4x versus a public market comp which are admittedly low and sometimes you probably companies so it's not that far off i don't think you will make more money on this investment than

SPEAKER_104: investing in you know a publicly traded a high-growth company like airbnb uber google netflix microsoft

SPEAKER_05: you probably do just as well to have liquid stock and this is a challenge business now they they might have another business that comes along that'll be a better business that's a high gross margin business but there's a low gross margin business and they need five ten times as many paid subscribers and revenue in order to get there and they're not sharing their revenue in this so that's weird i

SPEAKER_104: would think in an equity crowdfunding offering like this you would have to share your revenue

SPEAKER_110: more specifically and granularly so i'm surprised i don't have quarterly revenue on here

SPEAKER_132: so anyway anybody who's in the equity crowdfunding space explain to me if this is in fact an equity

SPEAKER_104: crowdfunding and if you have to be accredited etc uh let's see here in the fine print i know they said

SPEAKER_37: previously when they were trying to raise one of the reasons um it didn't go through um excuse me not when they were trying to do this two years ago so 2021 during the last time they raised they wanted to have people that were writers like help invest there but they couldn't navigate people who weren't accredited investors especially because of like that 2021 ruling by the sec that made it a

SPEAKER_132: lot harder i believe yeah so this is in fact not accredited investors you can be anybody you

SPEAKER_104: invest as little as 100 and um you know if you were going to go spend if you're going to gamble your money if you're going to play poker or blackjack i think this is a much better bet if you were to invest in public market high growth tech stocks i think this would be a similar bet i think you might get a similar return you might grow you know seven percent this company might grow 20 but it might be overvalued a little bit so we'll catch up so i don't think it's a bad investment i don't think it's a great investment um and we don't know if they're existing of how much cash they have on hand they might have a ton of cash on hand already and they're just topping off here which would be a powerful move to do and listen it's got us talking about it and that's what i think equity crowdfunding at its best is i wish this option existed for you know ubers and airbnbs and linkedins earlier so more people could participate and i really think the accreditation laws in the united states i've said this over and over again should move from being about how much money you to make to how much intelligence you have so if you're willing to get a license to invest in private companies you're willing to take a course like my angel university course or any other course on it and they had a 50 question

SPEAKER_108: test that had you know four times as many questions as like a gun test or a driver's license like

SPEAKER_104: equivalent make it like as hard as getting a driver's license getting a driver's license is no

SPEAKER_108: cakewalk right you got to take a course you got to do a practical so i would say you have to take a written test and then you know how you go on a driver's test why not have like you pay 100 bucks

SPEAKER_104: to take a test and you have a proctor and they interview you and they ask you 10 questions and you answer the 10 questions you get certified as an accredited investor that will solve the entire

SPEAKER_05: problem by the way rachel that would solve a lot of the crypto problems because then crypto people could do crazy stuff and you could say well i understand they're doing crazy stuff because i have my accredited investor certificate i took it i understand that this is a wildly speculative um investment because their product's not in market and they don't have customers and i've reviewed the

SPEAKER_108: balance sheet and they're losing money so i know when i invest in a money losing company with no customers that has not released their product yet i've checked off those boxes and i put it in the high risk category or the highest risk category and then somebody with subscription remember that's

SPEAKER_180: predictable like netflix i've put that in a much um more trackable lower risk investment

SPEAKER_248: jason can i ask you a question about sub stack value sorry rachel okay can i ask you a question

SPEAKER_249: about the valuation yeah yeah how much uh i think public companies call it goodwill how much goodwill would you assign to the fact that sub stack has kind of become a noun like a sub stack journalist

David Friedberg: has become a thing do you think that's like an actual valuable tangible thing yeah of course just

SPEAKER_104: like taking an uber or getting an airbnb or googling something the brand has some value yeah um non-tangible value of sub stacks brand if you are a writer and i say to you you should go independent uh and make money direct from your customers how would you do that what are three or four options a writer or an artist or a podcaster a podcaster would say first patreon and definitely a writer would

SPEAKER_05: say sub stack first so if you look at those two i would say that's non-zero 100 million just pick a number 100 million in value they've built up to get to that point um it means they don't have to convince people to try their platform people just sign up for it in fact i moved all of our newsletters over there because we were getting charged a subscription fee every month i was like wait a second i can get this for free and then the network effects are there and so i parked all of our mailing lists over there and then once in a while i think you're using it for this week in startups email every week the editors picks founder university is using it once in a while ticker the ticker uses it every day and so we went from having to pay i think we're paying two thousand dollars a month for our email service provider and now we pay zero but in addition to that we're getting the network effect of people signing up and i see my personal sub stack is recommended by like 50 people now and um i don't know if any of those are super creative but you can track it so

SPEAKER_104: i'd say 100 200 million so you take the 600 million down to four now you got 400 million the value is 10x 15 million that's 150 so maybe there's 250 million so you're paying 3x that almost makes up the

SPEAKER_105: difference right that you were saying makes up some of it yeah it's a good point um it's a great point

SPEAKER_132: actually nice a nice uh nice punch up there so yeah go ahead and invest i give you permission i'm telling you to invest right now i'm not telling you not investment advice but if you were to i don't invest

SPEAKER_104: late i like to invest early and i can but you don't have access if you're a non if you're not accredited if you're a writer on stub stack sure i put a thousand bucks in why not i think you'll get your

SPEAKER_05: money back times two or three in the next 10 years it will do as well as your 401k in my professional

SPEAKER_105: opinion but this is not investment advice but i am a professional i'm an email newsletter writer for 30 years and i invest in startups for a living and i've traded i've j traded 15 times so based on that

SPEAKER_103: i am not not telling you not to for sure invest in substack we're gonna have to have like a pop-up

SPEAKER_263: with like alarms being like not investment advice yeah i mean if i was a writer on sub stack i would

SPEAKER_108: put a thousand dollars in just to have the ability to say to them i'm a shareholder you know when i want to get product updates or i need customer support because now you can flex like if you're a customer support you're like i'm a shareholder this is unacceptable customer support and this is why i think companies like uber airbnb and linkedin and coinbase if they had the ability to have done this they could have had 10 000 drivers 10 000 hosts 10 000 crypto projects rooting for them and fighting

SPEAKER_23: for them in a in a very vibrant way and benefiting from their success and being more loyal to the platforms but speaking of uber ouch lyft yeah let's talk about lyft so in a turn of events lyft co-founders

SPEAKER_37: are stepping back from their executive positions and yesterday lyft ceo logan green and president john zimmer announced they would each be stepping down and this was expected um the board has been searching for a new ceo after green said he wanted to take a step back like last year um and lyft has basically been on a downward trend since going public in 2019 it's a disaster yeah like their stock is down 88

SPEAKER_268: percent uh since its ipo uh what do we call the zero interest rate environment policy zerp this is the

SPEAKER_108: this is your zerp right here the the zero interest rate policy resulted in too much funding

SPEAKER_104: um and the subsidizing of lyft doordash postmates and uber most of all on a global basis too much money they zerped it up and then the tide goes out and now you got to make a profit okay now you are paying

SPEAKER_108: driver spiffs driver incentives do 20 rides get an extra hundred dollars do another 20 rides this week

SPEAKER_104: get another get 150 they were doing all this gamification and that would push top line growth but it would ruin the bottom line the market wants to see the bottom line and they want to see profits literally to this day even though uber is starting to show free cash flow profits yada yada everybody's like you're lying it's not true you're still not profitable even on cnbc they're telling

SPEAKER_161: them they're not profitable and now they're down to like the little granular debates okay well we have

SPEAKER_104: more cash than we did last quarter okay yes but stock-based comp and we're literally just trying to get to a point where uber can say we are a profitable company period end of story no accounting explanation necessary no stock comp necessary um but lyft because they don't have the network effect of uber and they don't have the dual business when you stay home and order in we make a bit we make we can

SPEAKER_05: service you and when you go out to dinner we can service you you're drinking a little bit of wine you don't want to get ding with the dui take an uber so yeah and the weird thing is who did they pick about this story that's the big tell here they had to make a change because the stock is just absolutely disastrously going down and i'm not saying this just because i'm team uber and i have an uber position a significant uber position it's just the nature of it you know the the network

SPEAKER_37: effects here are obvious to everybody so yeah they picked um someone named david risher to replace ceo logan green and risher was a former amazon retail executive the former ceo of a non-profit called world reader and he's a member of lyft's board of directors and green in a blog post wrote quote as i passed the baton to david i want to share this we continue to have an incredible opportunity to push the boundaries and how transportation can help connect people and and build a better future and new ceo risher gave the following quote when i look at the 800-pound gorilla i see a company that i think is very business model driven but we're going to be customer driven so yeah former amazon

SPEAKER_161: executive vibes over here that is a bunch of word salad and yeah when you when you hear word salad and

SPEAKER_108: you have somebody being put in from the non-profit space i know previously worked at amazon but he's been out of amazon for a long time and it's an insider that's exactly what you don't want um what you want is an outsider who can be absolutely critical of the business and has no sacred cows

SPEAKER_02: has no allegiance by the way that was dara coming into uber he did not care about travis's positions

SPEAKER_104: he was not loyal to the previous regime he did not care about anything other than looking forward uh

SPEAKER_05: for better or worse now i think if travis was running uber right now it'd be a hundred dollar share and you know i'd be retired probably i'm joking not really um and so i would rather have seen my guy

SPEAKER_104: keep going if i'm being totally honest but referring to like uber as the 800-pound gorilla and then he was like i don't want to smell pizza in my car was his quote like of them not going into the uber eats business or doordash business this sounds to me like complete capitulation the founders are have been ousted basically probably by shareholders who are fed up with it just absolutely plummeting in value down to three billion dollars i mean it was five billion as a private company and they were gaining market share for some period of time against uber in the united states in some markets uh they had beaten uber in a couple of markets so they're running out of cash they're losing money and uber is becoming profitable and so that just means like this thing is roadkill and i think

SPEAKER_215: this signals a sale so you want to make their goal going forward like the sale i think that is their

SPEAKER_108: goal i think it's such a disaster that the board said get max value for this before we run out of money so who can we sell it to and he's a former amazon executive so who would amazon be allowed to buy it for i think the thing's going to keep going down in value so if it goes down to two billion then amazon comes in and says we'll give you three and a half billion for it would lena

SPEAKER_05: con allow it to go through i think so um they probably have enough hatred for uber and that seems to be how they make their decisions now is they're quite vindic uh vindictive so i think

SPEAKER_108: they probably would be like yeah we should shore up lyft um and now they'd have to decide if we shore

SPEAKER_05: up lyft does that mean we're hurting uber or making lyft more amazon more powerful it's like a really hard thing to decide but you know most markets it's winner take most or winner take all does the world need lyft as a competitor i'm not sure i'm not sure the world needs it it is nice that there's doordash and uber eats and uh grubhub but i'm not sure like there's an the world needs another lyft to compete against uber's ride sharing business which is but a portion of their business right yeah so i think it's like lyft was a feature the company was mismanaged whatever um they were up against a crazy competitor

SPEAKER_103: i would not want to ever be up against travis that's a yeah he's that's like going up against

SPEAKER_165: i don't know i'm trying to think of the analogy in like the superhero universe but it's not a good situation i mean he's thanos i don't know if he's thanos as much as he's like

SPEAKER_99: captain america or you know iron man like this is not some it's like kind of going against the hulk like hulk 3.0 you know when hulk became bruce banner and you had the intellect of bruce banner but the power of hulk and he had control both those things travis is like the hulk like he is

SPEAKER_269: incredible strategist and he is also a berserker who will not lose in a market couldn't you say that the

SPEAKER_297: infinity stones are like him gathering eats and then him gathering freight and then him saying i want to do self-driving sure no you could do that meme they could mean i would just say the

SPEAKER_299: good meme i mean maybe cloud kitchen should buy lyft i hate to say that because uh people are

SPEAKER_05: going to say i have some inside information but that would be interesting and yeah i don't know how

SPEAKER_08: i don't know if just travis have a non-compete and for how long that's a good question too

SPEAKER_305: that would be fate loves irony he's completely divested he immediately sold every share yeah i mean

SPEAKER_104: he's hard like i said it's kind of like the hulk if you don't want me i'm selling every share

SPEAKER_133: bye-bye and cloud kitchens by all accounts is crushing it so i don't have any inside information

SPEAKER_104: keep me out of it um but yeah i mean the world does not care if lyft is around and uh i would

SPEAKER_105: like to see i hate to say this but i bought facebook based on the layoffs amazon i bought based on the layoffs and i might buy more disney based on these layoffs now i hate to say that's cynical but i think it is is more pragmatic if people are willing to take the medicine i would buy more uber shares if he did another riff if he made the company a little more fit um and he readjusted the stock based comp or whatever and just showed everybody that he was as serious as zuckerberg zuckerberg

SPEAKER_104: did all that and he two and a half extra stock i think if dara you know just cut some unnecessary projects uh which he's done consistently but i think in this people need to see him in 2023

SPEAKER_225: make a statement about stock based comp and the size of the team can he do more with less

SPEAKER_104: and i he doesn't have to so i understand that as well and he has beaten lyft into a pulp he has competed well against doordash so the question is if he doesn't have to should he it's a hard question

SPEAKER_05: but i think the stock if he wants the stock to double all he's got to do is just lay off a thousand

SPEAKER_180: people and two thousand people people like oh okay he's serious about profitability yeah well

SPEAKER_12: let's really quick let's touch on um twitter's recent oh my god the third rail going yeah let's

SPEAKER_312: come up we're already talking disclaimer disclaimer i have no inside information yeah so let's keep up

SPEAKER_314: the spicy no insider information no inside information but i will comment i guess on this one specific

SPEAKER_55: one going straight from uber now to twitter so it's your it's a it's a day uh so i'm not sure i'm

SPEAKER_315: not a shareholder in twitter by the way i'm not a shareholder currently in twitter everybody here

SPEAKER_37: here i'm loud and clear uh twitter's going to sunset all legacy verification badges on april 1st including celebrities spicy so they're no longer going to feature these like non-verified accounts on its for you tab um and this basically means that if you want to go viral you have to pay and also verified users will be the only ones that can participate in polls to limit the impact of bots and this new business model also includes enterprise verification which gives you a gold check mark this will cost a thousand dollars per month per company with an extra fifty dollars a month to charge for each like affiliate account so for example the new york times has to pay to have like the new york times opinion page or top writer linked on its account listed as affiliate accounts and the badge appears next to each affiliates account uh each affiliates account's name you can already

SPEAKER_80: see this actually on the all in podcast twitter account right now yeah david sachs um was a was

SPEAKER_272: a lot of fingerprints on this product uh and if it drives uh viewers uh then it would be worth it so

SPEAKER_104: a thousand dollars is a considered purchase for a company uh and fifty dollars an account is a

SPEAKER_108: considered purchase so you have to think okay will we get more views and that will be how people will decide this and i think it's uh worth it for companies to do it now is it worth a thousand or ten thousand i think it depends on the size of the organization so i have no inside information but it seems like a

SPEAKER_104: decent starting point because any serious organization would want to have their accounts verified and so to pay fifty thousand dollars a year to twitter if you're disney or apple to have additional metrics

SPEAKER_108: and to have more people following all the different apple accounts apple podcasting apple music etc or

SPEAKER_05: disney plus disney theme parks etc all of that seems like what you would pay for your linkedin recruiting

SPEAKER_104: account right so there is precedent here for businesses to pay for this stuff there are also a lot of companies out there that provide or previously provided third party tools to monitor facebook twitter instagram so companies like sprinkler which we sold a company to back in the day we have a tiny uh investment i guess we have it we're tiny shareholders like when i say tiny i mean super tiny uh shareholders in sprinkler radiant six was another one there's a bunch of these other tools out there that charge similar prices i think so should you pay a third party person to get information and data and verification on twitter um and you can't pay for the last part of verification but you can pay for data or should you pay directly to twitter so we'll see what this offering is i suppose this is the beginning of the offering i know it's kind of controversial to make celebrities pay and i guess you could argue back and forth on that uh and the for you tab that's also a spicy take i think um you know if you want to trend you got to be verified but i do think i've always wanted to see a paid social network so i'm glad that he's trying is he going to succeed it's going to take time this is a

SPEAKER_05: pretty new concept but zuckerberg thinks it's going to work he's brought in verification so i think this will be the future and by the way there is precedent for this in korea to open an account on social media

SPEAKER_104: you need to use your social security number uh in china you have to use your basically your social

SPEAKER_108: security number and so in america probably not going to have government intervention we would we would probably feel bad about that but having an offer an option to pay and get you know less ads

SPEAKER_05: less data tracking more features makes total sense to me but i see why people whenever you have a free service that people get a lot of value from and then you charge for it that's going to be hard that's

SPEAKER_23: going to be a lot of people are going to complain so we have to just watch people's behavior

SPEAKER_85: and why have you always wanted to see a paid social media network i just feel the quality of the

SPEAKER_02: conversations would go up and then the tracking of user data would go down and it would be more pure

SPEAKER_104: just like we're seeing in journalism sub stacks patreons if i could do it all over again i would love would love for this podcast to have been a subscription service the problem was my mission was to spread this information as wide as possible but to not have to worry about selling ads and

SPEAKER_147: reading ads would have been as the host of the show a lot easier now of course we were very lucky to become a top 10 tech podcast and have you know all these users so no regrets i don't i love reading the

SPEAKER_104: ads we were sold out for typically months and you know this we've on average probably been sold out

SPEAKER_105: for three or four months in some cases we were sold out at one point at six months so we probably have

SPEAKER_104: to raise prices but it's just nice to not have to have the audience pay for it the problem is do you want reach or do you want the security of subscription so sam harris reaches a fraction of the people with this podcast pre-pahar's best podcast cafe insider nobody hears and it's his best work and but it keeps

SPEAKER_108: the lights on so it's kind of a bummer for me uh that pre-pahar red scare uh sam harris doesn't get a wider listenership right so it's a double-edged sword but i think it will be more sustainable

SPEAKER_104: you're you're less of the product and then you can get more features so i i like it as an idea i realize it's going to be a bumpy road it's it's obviously a very controversial and brave crazy interesting thing to do so i think he's going to pull it off but i do think some people are going to be very upset it's it's been quite nice to be a blue check mark person and have hundreds of thousands of followers and i've generated i would say millions of dollars in value from twitter easily easily

SPEAKER_05: millions of dollars in value from twitter between my podcast and investing so you know for me to pay 10 000 a year to twitter is probably makes sense i'll probably pay for this week in startups yeah i would pay for this week in startups and my affiliate account so i'll pay and uh yeah i only have to get as a small organization we'll probably have 20 affiliates or something maybe 10 so my bill is

SPEAKER_225: going to be 1500 a month 18 000 a year if i get one advertiser a year i get one investment a year

SPEAKER_05: it pays for itself now i do have to figure out and make that connection so that's how people are going to have to decide to do this or not and then you'd have to look at competing platforms just spending 18 000 for me on twitter get me one investment a year or one advertiser a year obviously it will

SPEAKER_99: but that 18 000 spent on linkedin or instagram or tick tock or i don't know doing a live event or

SPEAKER_05: something buying ads promoting a sub stack people will then have to make that decision i think that's

SPEAKER_23: how they'll make the decision and it's an easy one for me to make but it might be harder for other

SPEAKER_12: people to make yeah definitely i think it's going to be bumpy seeing the next few weeks um i'm interested to

SPEAKER_37: see how this like roll out goes with everyone i know for me um it's like one of the first things that i if somebody has a blue check mark now i've noticed that i if and they like send me a dm one of the first things is go to their page click the check mark and i see if it's a legacy account or not um to see if the person yeah to see if the person's like if it's somebody saying they're a journalist reaching out like being able to like have that as verification so i don't have to leave the twitter app and go over to like linkedin to verify that the person is talking to me is saying like you know you know it's going to be interesting to see this roll out it's going to be a bumpy road but speaking of a bumpy road um let's talk about coinbase quickly with producer nick i'm going to

SPEAKER_166: toss over to him nick you know i've never shorted a stock welcome producer nick looking sharp i'm curious

SPEAKER_104: coinbase got this wells notice um and they have not been doing well crypto is absolutely going through this operation choke point that's clear it seems to be getting worse i think the rails are going to come off the crypto space in 2023 which i think that means the leading uh publicly traded company that

SPEAKER_166: would be impacted by that would be coinbase should what's the argument for me shorting coinbase

SPEAKER_104: which i'm not doing but i want to talk about it because i've never shorted a stock and somebody told me who i trust like you're not going to be a great j trader you can go check out my trades at jtrading.com i talk about them here on the show and i tell you about them when i do them so you'll always know my position um should i short coinbase what is the origin of that shorting you

SPEAKER_257: disclose who told you that you need to short stocks to be a great trader uh it was people who do it for

SPEAKER_02: a living i don't want to say okay um but i've never done it because i just feel like it's a very

SPEAKER_108: negative thing to do and i feel i'm a super positive person but now that i've made so much money on the facebook trade going against my morals uh and backing suck i feel like maybe i as a trader need to learn at least the fundamentals of this so this is i'm still going to be majority

SPEAKER_147: long but i'm just considering it and i wanted one stock one time so i'm no expert either but yes

SPEAKER_351: how did it work out for you it was lit so oh okay that worked out well i think the first thing you

SPEAKER_249: should probably do is just lay out the state of coinbase right now right they're trading at a 14 billion dollar market cap ish i think it's like 14.3 it's almost down 80 percent from a covet peak of 78

SPEAKER_358: billion dollars in november 2021 which means nothing by the way because that was a period of

SPEAKER_108: insane hype not only in the market not only for new issuances but also for crypto so i never would look at how much what percent they're down from that because we knew it was ludicrous they're trading

SPEAKER_249: close to where they were right before they went public their last private valuation i think was in like a 10 billion dollar range okay quarterly revenue peaked at 2.5 billion dollars in q4 2021 so last q4 this past quarter q4 2022 a year later net revenue dropped 75 605 million obviously that was due to the transaction volume dropping like crazy they've had negative revenue growth in three out of four of the last quarters and what's wild about coinbase is unlike robin hood they charge a one percent transaction fee right so when transaction volume spikes profit spikes like crazy so they were like wildly profitable throughout 2021 because transaction volume is super high that has dropped like crazy now they're losing money their cash position as of last quarter was 5.5 billion and they call it usd resources which they define as cash cash equivalents usdc and custodial account

SPEAKER_364: overfunding that last part sounds pretty fugazi to me not exactly sure total account overfunding

SPEAKER_366: what do you do that sound like is that a way of saying depositors put too much money in here and we have access to it yeah any debt do they have debt or is that 5.5 billion that's always hard to

SPEAKER_369: figure out i've heard that they have debt before but i didn't look up when we were i will look up

SPEAKER_347: debt we'll do that offline because we're going to talk about this thursday and the crypto roundtable

SPEAKER_249: yeah my crypto guys yeah their transaction-based revenue was hit even harder than their net revenue right obviously it dropped 85 year over year in q4 it's going to keep dropping then is it dropping

SPEAKER_163: quarter over quarter is the next question too so year over year we know i think it was flat quarter

SPEAKER_260: over quarter okay so there are some true believers who believe in crypto who are still trading

SPEAKER_249: and then um their transaction revenue obviously has it's dropped it's made up less and less of a

SPEAKER_373: percentage of its total overall revenue so right now it's just over 50 percent custodian is the other

SPEAKER_108: big part of their business so institutional custodians keep an eye on your bitcoin for

SPEAKER_104: you so if you put your treasury in bitcoin which would seem like a crazy thing to do right now

SPEAKER_105: unless you're obology who is going to lose two million dollars on his million dollar bet it seems

SPEAKER_170: okay so crypto overall is crippled therefore coinbase's revenue has been decimated yep and then when you

SPEAKER_249: consider you know the case for shorting coinbase i would i would put the bull case out and i would put the bear case out right okay in my opinion what coinbase's bull case is has nothing to do with transaction revenue because i think that's low quality revenue it's completely spiky it's completely dependent on interest rates on how much retail interest there is in the market i would say their biggest bull case is the product they just recently launched i forget the name of it but basically they're trying to become the aws of crypto right they're doing cloud computing for blockchain projects but for this to happen people actually have to want to be crypto developers and the regulatory environment has to be either or both lenient and clear right now certainly not lenient now it's certainly not clear and it's not clear it used to be lenient and not very clear right that's what every coinbase has been asking for hey can you just give us clear guides and the sec has been basically saying no you make it up your you um interpret it as you will and then we'll adjust on

SPEAKER_00: the fly good place to pause the regulatory environment seems to be the major driver here

SPEAKER_104: mm-hmm i have not seen the sec move quickly ever i've been sitting here for a decade hearing that accredited investor laws are going to change they haven't i've been sitting here for a decade saying crypto regulation is going to be super clear and it hasn't they move slow they prosecute as but one example the floyd mayweathers and paris hiltons or kim kardashians whoever's doing some crypto promotion those things took years for them to circle back around so if there was going to be clarity i don't see that measured in quarters i see it measured in years i don't see there being like

SPEAKER_273: clarity on this for at least two or three years right and i think that has a massive downstream

SPEAKER_249: effect with the people that actually provide the value to the ecosystem which are the developers right right so if you have this crazy ecosystem why was crypto why were people why were there so many developers in crypto in 2020 and 2021 money was it because the tech was amazing was it because there was a bunch of consumer interest no it was because you could spin up a coin and you could liquidate it in like six hours right and nobody bothered you at that point yep that's where the developers were so i don't even know if that's a bull case anymore i don't know if there is a market there for them to

SPEAKER_161: become some sort of aws size business of crypto so even the bull case that they layered on aws and had exactly what happened with amazon it feels like an unlikely bull case to me yeah i could be completely

SPEAKER_249: wrong i would agree but okay if you're making the argument yeah i don't know that would be my full case that's what i would say and then i said it in my head and i'm like wait how would that actually happen and then everything that's happening now seems like the antithesis of what you would need for

SPEAKER_399: this to be a reality and then the bear case is basically everything that's going on right now you

SPEAKER_249: know the sec considers everything except bitcoin is security coinbase has to delist most or all of its tokens transaction review and then if that happens then is there custodial business

SPEAKER_161: existing anymore well i think if you have if you're doing custodian right now you have to be thinking

SPEAKER_104: is this the best place for me to keep my money if gary gensler has said everything but bitcoin is a security they're still pursuing xrp they won't settle that they're going to go to the mat on that

SPEAKER_05: uh and coinbase removed xrp and some other ethereum classic i think or bitcoin classic ethereum something

SPEAKER_104: they took a couple of coins off which they said was because of low trading volume but i also read that as like low trading volume plus why take risk yeah i think it's over for crypto in america i think it's an offshore we we're going to seed it to offshore uh like the kid uh nick said who is very

SPEAKER_105: well spoken by the way i'd like to have him on the pod he seemed very smart by the way another podcast um and uh just don't call him a kid oh did i say that kid nick oh god when i say kid i'm just

SPEAKER_161: a guy from brooklyn anybody who's 10 years younger than me as a kid that's just how i was treated that's

SPEAKER_104: how it goes uh anyway this uh astute capital allocator nick uh got his last name wrote that choke

SPEAKER_00: point which when the andreason horowitz former crypto had basically rewrote for the wall street journalist seems the next day oh katie hahn katie hahn uh seemed to have rewritten his sub stack

SPEAKER_104: uh the next day so i'll give nick credit for that this operation choke point as he calls it i call it

SPEAKER_161: operation around find out believe that but it's all the same thing the united states is done with this they're like too many people lost money and i predicted that from the beginning too many

SPEAKER_104: civilians lose money just there's too much agita going to the sec too many people complain to their representatives too many district attorneys uh get complaints and then what happens well you effed around

SPEAKER_00: and then you find out you effed around on a level not seven of ten you went to ten ftx took it to ten

SPEAKER_104: you know nfts took it to seven or eight you know painting the tape front running the market at

SPEAKER_105: coinbase there were people fronting the market i believe uh at openc i believe there were people who were doing shenanigans front running the market so if everybody's playing games even at the big

SPEAKER_161: companies and i know they're isolated instances and they took action it could happen anywhere it's just

Chamath Palihapitiya: that cumulative f a f o fafo is that how we pronounce it this is called fafo from now on fafo yeah the

SPEAKER_225: fafo is so strong in this industry that there is no turning back now therefore it seems to me

SPEAKER_02: what's the multiple of this company like when do they and how much cash are they losing those would be the next two questions so let's let's let everybody debate this on twitter debate it on twitter

SPEAKER_05: the twitter handles twi startups debate it in the uh community we have on twitter this is this week

SPEAKER_104: in startups community and uh you can email your best case should we short coinbase or not producers at thisweekinstartups.com let's have an open discussion about it and then on the thursday show i'll just ask sunny and vinnie will present the case to them i'll present it as best we can and if you should short it and i think how much cash is left and when do they run out of cash would be an interesting

SPEAKER_416: thing to look at and do we think the regulatory environment changes by that by that and i would i

SPEAKER_351: would also add the final thing is you know when you are shorting coinbase what do they say bet

SPEAKER_297: the jockey brian's smart brian is really smart and yeah i don't want to bet against brian and he i he

SPEAKER_421: seems like someone that is like on the uh you know elon level where if you bet against them they are coming for your neck and they will fight to prove you wrong so and also what's the short position

SPEAKER_104: currently on the stock and then are there yolo investors on reddit that'll find out i'm going to

SPEAKER_308: short the stock and be like oh you know be funny is to watch shake out lose a bunch of money

SPEAKER_427: let's all talk about it on all in then and then talk about it they'd invite brian on all in and

SPEAKER_428: you have to face him yeah i have to face him here's why i shorted your company this i like talking the

SPEAKER_00: book and being transparent about it other people maybe they're not as transparent about it it's up to it's up to the individual you know i'm always going to do it but i think it's an intellectual exercise i think it's interesting because those are two really significant factors you have to take into

SPEAKER_104: account one putting the short on is going to wake up all those orcs you know like when the dwarfs and the the the in the remember in lord of the rings when they're traveling through the they take the

SPEAKER_00: shortcut through the mines and then one of the hobbits knocks the uh thing over and it like rattles and then all the goblins and orcs and the balrock are like you could you could wake the balrock and the

SPEAKER_308: balrock is wall street bets so please nobody post this clip to wall street bets because they will

SPEAKER_00: literally would love to see me lose this ski house oh they love it they would love to see me liquidate the ski house and to see me on off-mounted skiing they would love to see that they would love to see

SPEAKER_440: me driving to hunter mountain at 7 30 in the morning on a saturday waiting in three and a half hours

SPEAKER_441: everybody crying yeah that's what they want to see so that is an interesting

SPEAKER_00: yeah rub to this is if you do put a short position which i guess hindenburg has to deal with and then the guy from herbalife right bill ackman had to deal with that he put the short on herbalife he he got

SPEAKER_442: walloped because yeah but um who is hindenburg putting the short on they put hindenburg put the

SPEAKER_443: short on uh jack dorsey where is that's not wise is it not wise uh is he showing up for work

SPEAKER_161: i think so i think for square like i would say put in the short on square i'm oh and i'm a square

SPEAKER_46: shareholder i uh was an adventure fund that had square share so i have exposure but it's not crazy

SPEAKER_161: exposure uh i would not place a bet against him because i think he's a product genius yeah definitely and i think brian armstrong is a strategic genius i don't know he's a product genius but i think he's a strategic genius so when people this will be like i think something interesting to think about who would

SPEAKER_02: you want to place a short against incompetent management somebody who's been a perennial loser jack has not been a perennial loser you could say what you want about his quirky personality but he he's an incredible inventor who built two multi two companies worth tens of billions of

SPEAKER_449: dollars in one decade i would not go up against him you have to have a pretty good conviction to go up

SPEAKER_351: against him and how is that square short doing anyone i guess he was down 12 on the day but i

SPEAKER_00: haven't checked on it since yeah so anyway we're learning here together it's part of our j trading.com

SPEAKER_105: exercise we look for one year yeah it's the short has made i think a little difference trading right now in the 64 and i think the short went on when they were at 73 or something maybe 60s we have to see

SPEAKER_104: when the short went on but it hasn't been it hasn't collapsed it's been trading basically in the 60s and

SPEAKER_105: 70s for the basically it's been trading 65 for the last year nick carter by the way was the name of the crypto nick carter shout out to nick carter he's a good blogger too by the way i want to give him a

SPEAKER_104: shout out to nick carter pirate wires he's actually a good writer so you know me i'm a writing snob he's he's a concise writer and i that means a lot to me when somebody is concise and he's a i think

SPEAKER_161: he's a good podcast guest he's like apology just goes crazy on a podcast like nick actually has a dialogue so i'd like to have nick on the podcast to talk about it so open invite to nick carter of

SPEAKER_406: pirate wires search for pirate wires oh it's pirate wires.com yeah that's mike solana's oh i think he

SPEAKER_459: was writing as a guest writer got it oh it looks like it's a sub stack yes a sub stack oh they have

Chamath Palihapitiya: their own domain i didn't know you could do that oh i should do that for our thanks you can actually route your domain to your sub stack interesting all right we'll see everybody tomorrow on this week in

SPEAKER_341: startups bye-bye