This episode explores the dynamics of early-stage startup investing through the lens of Clubhouse's $100M pre-launch valuation and Andreessen Horowitz's controversial $2M secondary share purchase, examining how venture capital psychology, product-market fit, and founder-investor alignment influence investment decisions in consumer technology companies.
Tech News Roundtable: Clubhouse Valuation, Joe Rogan, and Uber Eats Strategy
Added:Introduction to Startup Valuation: Understanding how pre-revenue tech startups are valued using metrics like user growth, engagement, and venture capital funding rounds.
Platform Economics and Network Effects: Mastery of how digital platforms create value by facilitating exchanges between two or more interdependent groups (e.g., creators and listeners, or diners and restaurants).
Digital Media Licensing and Distribution Models: Basic knowledge of exclusive content licensing agreements, subscription-based business models, and the economics of the podcasting industry.
Corporate Strategy and Horizontal Integration: Understanding how mature tech companies expand their service offerings (such as Uber transitioning from ridesharing to food delivery) to capture new market share.
Analyzing the Startup Hype Cycle: Evaluating the long-term sustainability of high valuations for trend-based platforms like Clubhouse, and studying post-hype consolidation.
Unit Economics of the Gig Economy: Delving into the profitability metrics of delivery platforms, including customer acquisition costs, delivery margins, and algorithmic dispatching.
Antitrust and Competition in Digital Media: Examining the regulatory scrutiny surrounding exclusive content acquisition deals (e.g., Spotify's podcast network consolidation) and its impact on market competition.
Strategic Mergers and Acquisitions (M&A): Studying subsequent consolidation in the food delivery market (such as Uber's acquisition of Postmates) and its implications for market power.
27.4K views76likes1:57:06Original Release: 2020-05-20
[Music] this week in startups is brought to you by Squarespace turn your idea into a new website go to squarespace.com for a free trial and when you're ready to launch use offer code twist to save 10% off your first purchase of a website or domain and Fiverr find the perfect freelance services for your business go to fiverr.com and use code twist to receive 10% off your first order alright everybody welcome to this week in startups it's our news roundtable you guys love to talk about the news you like to get my unvarnished opinion on the news I recently had somebody call me and it Mohnish me because I was talking about the news on Twitter and I said have you not been paying attention they said I don't understand why do you share your opinion and I thought about that for a second I was like well that's what I've always done it's like but how does this serve you and I was like never really thought about that but thank you for the candid feedback we are now in well into month two of quarantine shelter-in-place if you're watching this as a historical document it is May 19th 2020 and we are deep in the coronavirus Cove at nineteen pandemic and it's an absolute unmitigated disaster we won't get into that today we're going to talk about the news and try to give you a break from talking about politics and the pandemic of course it will come up I'm sure with me today too really just great podcasters who I discovered who have a great podcast quote acquired dot FM and I was recently on it and they are the cofounders of Pioneer Square labs which is like a start-up studio VC fund in Seattle and I'll have them explain what startup studio means in this context or if they're mainly just investing but I was recently on their podcast and we did two hours and it just had great chemistry so I said hey let's see if we can recreate this interview on the roundtable Ben Gilbert is with us he is Gilbert on Twitter Ben how are you doing thanks for having me Jason tuned well and Ben you are the co-founder and co-host of acquired fm how long have you are with you giving the background on acquired FM how long you been doing the pod can asked what is it done for your business what's the goal of the podcast the mission yeah we're coming up on five years it's been five years a side project through two different companies that I've been at two different companies that David's been at the goal has been two wonderful years yeah yeah well my wife gets jealous sometimes she says they text with Ben more than I text with her and she would be right and David Rosenthal is your partner of course Ben and he's got the radio voice he's got us both beat Ben with that soothing real David Rosenthal public radio voice David won I am the voice guy Ben's the intellect yes exactly you know you said it not me tell me it what is Pioneer Square Labs are you a startup studio like science and beta works or are you more of a VC or a little bit of both yeah a little bit of both is the right way to describe it we started purely as a startup studio which means we Co found companies with entrepreneurs big dev design data science team come up with ideas and sometimes you know there are ideas sometimes other people bring us ideas but the thing that's common among all xx vc-backed companies we've spun out is is that we sort of co-create them co-found them with entrepreneurs and that we've got an early-stage venture fund that we use to invest in all the Pacific Northwest companies that we don't start David when you start a company with Ben and some founders how does that economics work broadly speaking the criticism I've heard of you know the science or the beta works is that they take a very large portion of the equity and then they give a small portion to the founders and then they try to raise money and so they get basically hired gun founders how would that economically work work out if I were to join you and work on an idea you had how would that work well there's a better question for Ben although Ben and I have started multiple companies together I am not part of pioneer square labs I'm just faster got it so I've been actually ok so David you're just drafting off that and got it but yeah exactly you explains that's that's been my plan all along and it's working so bad how does that work app table math was just for being listening who might want to become CEO of one of your companies or maybe you want to come work with you yeah totally well certainly every situation is different but the commonality is that we look like a co-founder on the cap table so obviously a meaningful amount of equity all in common so that we sort of participate and get diluted down the same way the founder does over time and the bet that you're making by starting a company with us is that that sort of massive amount of acceleration early building out a great team validating a product not feeling around in the dark for a long time is worth sort of that co-founder amount of equity got it and then you might also put in money of the 20 company who've done this which which one would objectively an outsider say hey that's the most successful raise the most money largest number employers large amount of revenue any of those vectors yeah a few bit that people might have heard of one is jet closing in the the title and escrow business just did a twenty million dollar series a from tiro price Wow another might be boundless which did a series a from foundry group helping people immigrate with confidence so there's a there's a few out there that are maybe well-known by consumers how did downstream investors think about you do they look at this co-founding thing as an asset on the cap table to have you there or do they look at and go home we got to buy some of those shares out because that's what I've heard is kind of what happens with some of these startups to do companies is in order to keep their funds evergreen or keep the money coming in their structured sort of as evergreen funds so if you were to take the company to tiro you might sell them ten percent of your shares get more money to start the next company and to balance out the cap table is that what actually happens in your case I could see that happening later hasn't been a big driver for us to date the way that the downstream investors that we've sort of chosen to work with look at it as as they know us they know that we're sort of valuable as as cofounders of the company you know we the the reason why we raised from 14 venture firms when we put together the initial capitalization for the studio was to basically say hey who select in if you're interested in sort of funding companies that we start and obviously now there's dozens of companies that have been involved in raising raising from external VCS that had nothing to do with capitalizing the studio itself but initially we did start with a core group of VCS just you know for that reason of knowing that we had a group that was sort of bought in on the model alright so let's get into the news Clubhouse is a audio phone it's I would describe it as social audio social audio that's a great way to describe it yeah you basically open up the app you see a bunch of Talking Heads you see folders basically in the folders our conversations in those conversations you will have you know maybe two to ten people talking simultaneously like on a conference call so it's a little bit of bedlam but people tend to figure that out pretty quickly a mute themselves or direct the conversation to the next person like with a handoff like I would say like I'm doing here in the podcast hey bad what do you think of this kind of thing and then below it is an audience and you can upgrade people from the audience like in turntable FM or some of these other services where they get to become speakers and the founders of that company did an amazing job having venture capitalists and founders use the product it's not available yet it's not yet in the App Store I got an invite to it started using it I was like hey this could be an interesting investment reached out to the founders and then lo and behold news broke I think on May 15th so a couple days ago that I think I might even bid Friday andreessen horowitz had invested ten million dollars at around a hundred million dollar valuation in a series a for a company that likely when I've been in it has two hundred people maximum but typically more like fifty people using it and the reason I'm kind of laughing is this is just an extraordinarily ridiculous valuation obviously happy for the founders with that and that Horowitz came on the app I interviewed him actually on the app and asked him some questions about it and a benchmark had an offer around 75 to 80 million for this and the reason stated in a story I think in fortune or Forbes for why andreessen horowitz got the deal was that cat he Marc Andreessen called Kevin Hart who you know is basically in all these internet circles seems to have his hands and every circus in the poker circles as well to come on the app and make jokes and the founders were blown away by that and then sold and this was the controversial part two million dollars in secondary shares 1 million for each founder to injuries in Horowitz so Ben what are your thoughts on this you know clearly an outlier in funding and have you been on class I have firsts I just want to clarify the Kevin Hart thing in the Forbes piece you know I think that was one of the sort of sweeteners that they pointed out may have won the deal just in conversations with the founders in the a bit doesn't strike me that they're the type of people that oh my god Kevin Hart gave us a phone call therefore we're going with this VC firm I have to imagine there was a lot more than yeah it definitely wasn't like Kevin Hart to come on for five minutes yeah but I think they wanted to see who could hustle and the the founders have said I've been in the I've been in the sort of conversations where Paul says I really think stand-up comedians will do well in here and they could have like a paid version where you could kind of do a stand-up set or a test new material so he seems to be obsessed with that concept yeah well I think there's a few very interesting trends going on here I mean on the valuation front and on the 10 million dollars invested in a not a pre-revenue but a pre-launch pre app store product yet pre-approval it's really rehab store products there you go that's a good point that what we're seeing here in the funding environment I think is this bifurcation where you know the the prices haven't come down for the hottest companies so the deals that were definitely gonna get done are still definitely going to get done and kind of at the same valuations it's more of those ones that were they going to be able to raise around or where they going to follow up those are the ones that are having sort of the the problem raising the round and so it's no surprise that the the very hottest company in consumer social raises ten million at a hundred million dollar valuation if you had asked me two weeks ago what's their round gonna look like I probably would have thought it was something like that I'm not sure I would have realized that the two million dollar second area would be in there as well explain to me where what the two million dollar second area is and why that is so notable yeah David you've been a venture investor longer than I have so you may be a bullet yeah better articulate the mechanics well you know it's just it's super controversial because it just gets back to like the big question is psychology and motivation like it's pretty simple you know on the surface which is like they the founders you know had presumably somewhere around how 2% of the equity of the company before they sold if it's a hundred million dollar valuation they sold an extra 2% 1% each of them at a million dollars they still own a bunch of the equity why shouldn't they be motivated but it's just not something that you I can't think of a case where this has happened early maybe you guys can and the company ended up working out in the long run Jason you value C well secret was the big one that had a very similar pattern so that gave people a lot of pattern recognition secret was an app that allowed you to basically slander anyone anonymously put a statement like a tweet out and it would share with everybody in your phonebook but he wouldn't you would know that they were in your orbit but not and so people were just started posting like all these salacious things about people anyway the founders in that case I think so three million dollars each and these [ __ ] bought Ferraris drove them to work that's right that's right anything obviously like presumably that's not gonna happen here but I think Italy you know if Nassim to leave were here he would be all about skin in the game here and I think that's kind of what it comes down to it does and usually if somebody is selling in the series B when the company is at you know a hundred million or two hundred million valuation has ten million dollars in investment what you're saying is I'm gonna reward that founder with a million dollars or two million dollars buying their shares they they have to give up the shares so there's Elling something but it'll keep them in the game longer because now they can take the idiot insurance a down payment on apartment or buy a dope house in any other city but San Francisco in New York and maybe takes the edge off but you know we don't know everybody's individual circumstances here somebody pointed out one of the founders has a very sick child and so you know this could be other dynamics at work but it does signal I think to other founders and I saw some founders bring up hey I am a underrepresented founder and these you know white founders get this craziness I'm not sure if that's actually valid here but it does in fact the I don't know that that's valid I can understand people having that feeling but the other thing that was interesting is it does trigger in other founders well I have a million dollars in revenue and I'm having a hard time raising at a ten million dollar or fifteen million dollar valuation this is not fair and what people that need to understand is what these founders did better than anybody is they got VC as I call it VC product fit and when you get VC product fit where V C's become addicted to a product well then they just it set something off inside of them a spark where they ecology yeah it's a psychology thing and uber had this as well where who took Lincoln Town Cars VCS and VCS were like this is better than my assistant calling and getting me $150 card because it's only $90 and I could watch it come and I don't have to talk to anybody so I think that's what they had is VC product fit luxe the valet for Tesla's in San Francisco also had this but you can pull up any VC product market infinite VC product fit and when you have that VCS will do irrational and this is irrational in terms of a bat let me say let me do the other side of this go ahead yet please so telling national so no Enterprise company in this sort of era of technology in the last 15 18 years has become as big and as successful as consumer companies consumer Internet companies have you know zero distribution cost zero marginal cost they don't have to pay for the content if their Facebook or Instagram these companies have all the characteristics of a successful viral loop for a long time they don't have to do any paid customer acquisition either totally and the network effects are unbelievable in these businesses and so we haven't seen you know there's only been a handful there's been Facebook there's been Twitter or whatever to grab a toad a little bit Instagram snap tik-tok myspace Friendster yeah totally having a moment by the way that's true but to the extent that that you can by you know win the lottery ticket to be in the next one of those like the upside potential is so high two hundred billion three hundred billion four hundred billion dollars of potential future market cap that to be a material early investor for the low low price of a hundred million dollar valuation like I get it I if if something's already showing the signs that it candy risk some of that then I don't know all right after this commercial break I'm gonna explain why Ben's wrong on this being startups stick with us if you have a great idea do you want to turn it into a beautiful website this way you can reach out to your customers and partners and basically change the world why just think any other day wow you know we're doing so much remote now and there's all these demo days that can't occur in person what if we had a remote demo day and I check to see if the domain was available in remote demo day com was available and then I said hey let's put up a Squarespace site and my team rallied in a couple of 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called wave Capital but but now I am best on my own great ok so low investment legen so Ben your position I think is understandable right if if this is in fact an outlier and do we have enough evidence here that this has the viral loops that would result in you know a ten billion dollar outcome a ten billion dollar outcome if you invest it at a hundred is a hundred X a hundred times you know 10 million if there was no dilution or you kept up with your pro rata could be a yum-yum investment for a VC firm in the case of an injury Cyn Horowitz it would return probably that entire fund I think they do like 750 million to billion dollar funds I'm not sure which one this came out of but if it was the 750 million to billion dollar fund this one investment could get the fund to the hurdle right to the actual breaking point so that there's it's not illogical but the number of people who've made it to a ten billion dollar market cap in social is four or five companies right now right LinkedIn Facebook Twitter Instagram didn't make it snapchat did I think that might be it so if you didn't have other deal flow this deal would make sense however in recent Horowitz has exceptional deal flow some might argue I would argue they're like somewhere between the 6th and 10th best venture capital firm and maybe in terms of profile top 5 but in terms of track record they're you know probably like second tier and that's just math and statistics maybe they'll become first year later they're not the Jason Calacanis Empire no I mean listen I I've got lucky you know if you if you take out the top six investments you know it's a different story ok that's any at your firm I know that was kind of a joke thanks for getting it but anyway my IRR is easier to have higher because I do smaller dollar amounts harder when you have larger ones obviously but in their case if they could invest in five companies two million dollars each at a twenty million dollar valuation who have more traction they would be investing further down the line in five companies that's why I think this investment does not make sense and was an emotional and a competition that got out of control because there's a lot of bad blood between the benchmark team and the increasing team and this founder did a better job of manipulating and creating a marketplace that any founder I've seen for a long time what's that create he created flashpoint what does it mean flashpoint just is there well Lakey I've been too given his given his story this particular company the nature of the company yes background being a benchmark Gir the nature of that bad boy Oh Paulie I are perfectly yeah he was in the IR a benchmark before he started high light which was his previous company oh and he gave the deal to IND recent Horowitz Wow what do you think about that David that's kind of dirty isn't it haha well this is zero point about this psychological competition that happened I want to come back to it real quick to psychology and the second day Paul also sell a company to a 16 or had a previous car well Pinterest acquired highlight I think okay maybe interest was an AC company or something so he's probably but a but we should point about the secondary oh my point was you know it all gets back to psychology like this is you know 2.8 and this is there is something in too sting and potentially special hereabout clubhouse but this like the national anthem hasn't even played yet like there are not even in the first inning right like there's a long slight like on our show on acquired we tell the histories of you know companies that have made it to an Exeter near and exit there's so many ups and downs like it is a frickin roller coaster as you know and so like getting this huge valuation getting all this capital getting this secondary before the national anthem is played it just let me it is super weird things to your psychology as a company and as founders o to them internally I want to unpack that in a minute but let me ask you this you heard been take the side of hey this is a good deal I think I don't speak for you Ben but Ben you think it's a good deal and you would have done it suffice it to say if you had the opportunity yep okay and I think I would rather go with five bets now that doesn't mean if the founder calls me now and says hey we got a slice for you I'm not taking it there's the real answer because now there's so much motivation here slippin in a hundred K just to be on the cap table and take a flyer could be worth it for me cuz this one pack that that what do you be doing that is the exact same psychology that a 750 million dollar adventure should be taking on something that has this kind of potential our outlier returns yeah for me what I would look at here is now that in recent her I would never if they said to me we're doing an angel round at a hundred million and we want you to be one of ten angels I would say no you want a momentum trade it I would momentum traded on in dreesen Horowitz is now all in and literally Ben Horowitz his wife and they're like entire network of celebrities on it last yeah so now it's like this is going to become for Ben Horowitz and injuries and since they've been mocked by the crazy evaluation it's gonna be a point for them to bring this over the finish line or really work hard to do that so there's that like it's gonna be like when the sports writers were telling Jordan or was saying that the Bulls were gonna be out in you know in four and five and six and he does that took care you it you yes Jim Carrey it's basically like now they've given them the fire in their belly so now injury so harness is gonna pour money into this and get every they gonna pull out all the stops which is great that's the job eventually happens I love it but let me make sure I got the straighter David you would do what I said wait till they're in the second inning third inning and make five bets or make ten first inning bets or five third inning bets right if you have a same attica I would never do differently I would say for the stage at which this company is at that valuation and with these dynamics I would have dropped out of the bidding well sure it reached this point wow I would you have dropped out because of this because like there's there's just so much still unknown like we don't know we don't know their attention to these users we don't know the actual like nature of the network effect and and how strong it is in like yes how this works outside of kovat right does this work outside I mean we can only make a long list of reasons why things don't work I'm not saying this to say like this is awesome like these experiments should be run these things should be happening this should be built these founders should raise this money but like there's just there's so much unknown that is unknowable right now now 2 to 3 years they've been from now they've been operating they've started to figure this out they know what they what the user lifetime is they know there's there's more of a view on the intensity of a network effect like do it right now again I been complete you guys can say more than me I've spent very well no time in the app you care about who's speaking do you also is there any reason to care about who else is in there who's not speaking right ok so we I think we got through the why the investment is notable I wanna be intrinsic yeah let's go to the intrinsic value but that I want to ask you one question about the secondary what's the most charitable view of the secondary what's the most cynical view of the secondary and then where do you land so what would be when you're talking to people in the background and you know you were very connected and candid guy that's why I like having in the pod and I like being on your pod what would be the least charitable and the most positive but the most cynical yeah most charitable version of giving two million dollars to founders in a company that has two thousand users let's say yeah so the most cynical is is just saying look it's not a bribe because it is a transaction you know providing shares in exchange for cash but it is to say look those other guys aren't gonna give you cash right now I'm gonna give you cash right now so do the deal with me so basically a bribe a pot sweetener that a cynical person might say you're basically paying off the founders to get the deal which is what people said about the secret deal and again it's a it's a transaction you know the shares are worth that because that the the fund is purchasing those shares for this price but yeah the the charitable one and this is pretty much where I come down is okay I don't I don't blame anyone for doing this if you look at each actor in the equation here you look at the the venture fund of why they would do this it's it's to win the deal I'm but and then you say well that's only bad if it's bad for other people could it be bad for the LPS or bad for the founders for the founders I think it's perfectly reasonable I mean this this really for for oh if I'm a founder of a company that hasn't launched it and you can buy 1% of my shares for a million dollars let's go I mean so much risk ahead yeah obviously spray for them but I think I think it's reasonable for the VCS to give them that because I think you know the the the situation that you described before it's an opportunity to put a down payment on a house or you know pay some medical bills or do something that basically puts you at ease so that oh my gosh you can go and focus all of your attention now on running and scaling this company where you know you're not your incentives are with the VCS to go make it as big as it possibly can be rather than being you know try and do a small exit or something so that you get your cash even though the VCS didn't get there multiple and so I like the incentive alignment there so that's why it makes sense for the VCS for the founders and then I kind of talked about the VCS again well I think it actually makes sense for LPS yes it will give the venture capital firm their buddy to invest like an endowment so now an endowment like Harvard let's say or a retirement fund like CalPERS let's take a retirement fund a retirement just gave paid 20% to invest 10 million dollars they have two million dollars to invest 10 million this company yep so let's suppose that this company can go and be a half trillion dollar company at some point then what you're doing there is paying for asset for access to an investment vehicle that no one else has access to lots of people do that it's very common in the finance industry and it takes many forms but this idea what would it be out of percentage typically and what's an example of that access to something that's not available and the finder's fee like management fees yeah like when you pay a hedge fund - and 22% management fee and 20% carried interest or 3 and 30 in a lot of like great venture firms cases or great hedge funds cases then yeah it's it's they're paying that already so let's assume they're paying the 3 and 30 - any recent Horowitz now they're paying another 20% which will be in the fee bucket essentially so they're paying 23% fees and 30 sitting carry so yeah so you could effectively look at it as a higher fee the other thing to note is like the the venture fund does get to hold those shares so there's a panel into the company that's gonna help them grow but now andreessen horowitz does get to own another 2% of this company which their LPS hold so you know okay so David where do you fall on the cynical or charitable on the cynical to charitable spectrum where do you fall I fall pretty far on the cynical side now I'd be clear I don't blame I don't blame the founders at all like you said this is a no-brainer proposition today we all agree yeah founders get the best deal they can to me I felt much more on the cynical side for two reasons one like I was saying earlier like I think a lot of people have justified this kind of stuff very rarely as early as this but still like this has been creeping earlier in companies over the last 10 years that this is happening with the oh it aligns incentives like it takes some it takes the pressure off of founders allows them to go for the big win I actually think this sounds harsh to say but I'm a big believer that like when your back is against the wall and you have to make something work like you have no secondary options you have no exit plan you have no 401k that is often when you know you are forced to make things right and especially this early in a company where as you say Jason you have VC market fit very unclear if you have product market fit way more even unclear if you have you know an advertising model a business model let alone defensibility in that industry there's a long road to go yeah see that's an interesting point I think is this is why people were against secondary period and it was like well if the companies are gonna have if you want the companies to go for a 10 year IPO you know IPO and your 10 11 12 like Airbnb and uber are giving some secondary opportunities in the 5 to 10 year window so people who are fully vested have something and they don't leave the company makes sense right but even then you want them selling 10 percent or 20 percent of their shares and you want to mitigate this well and in that case I think so that that's that's my gets into my second point which is you touched on Jason capital going to the company Ben you did to capital going to the company versus capital going to the fact like the point of raising an early stage financing if you're a founder if you like a purely rational founder it's like you are taking on capital you are selling equity which is painful to you to get resources that you need to build the company and grow it so that the value is greater in the future that you own that's not what's happening here and like this use of capital if anything is neutral to the business and potentially long term detrimental to the business double upside that an investor gets by investing they get the upside of now I get to own a material amount of this company and this company just became more valuable because now it's capitalized and in this situation it only has the one benefit of now I get to own shares in the company yeah and you know this is one thing that I think we can't you can't discount is that wedding dreesen Horowitz his name or sequoias or benchmarks on a company it does get more valuable I would I would say generally speaking those companies become twice as valuable with those names on it but having one you lose a Sequoia founder right yeah and what happens is after you raise that money your phone rings off the hooks from all the Series B folks like there are companies there are firms I think dag is one and others that were known in the valley as you know looking at the top tier firms and then providing the Series B and you know they were kind of constructed that way to be the follow-on capital before those funds actually had follow-on funds before anybody realized put that all under one roof but the problem is and having raised a hundred million dollars for Mahalo right before we launched so I was in the exact situations you have to then go a little evaluation I added me to flex it's not ad mentis of flex but I did the same thing I raised our Series B before so what are you hating on this floor I'm not hating on it I'm bringing up as a topic of discussion right and that's why how did how did that impact the company doing that raising that much money basically gives you five years of runway yeah which is dangerous and amazing I think it did take a little my focus off because I worked on too many concurrent things right and so having less capital might have increased the amount of success but it did give me the ability to take three swings at bat and try three different businesses the third of which is inside that I'm still on we we basically did the web startup we did the YouTube video stuff and both of those didn't really work out one we got clobbered by the search engine changes that Google made the second one YouTube just didn't seem like a great business to be in and then inside is still going and it's doing moderately ok so we'll see but it is a dangerous thing to do in terms of you have to fill in the valuation so if you're confident that that's not really super dangerous for the founder it just requires a lot of discipline which they seem to have these these are not first-time founders so no giving them ten million dollars doesn't mean they're gonna go buy a huge office space and you know Ferraris with their secondary I get the sense these are much more mature folks who will put that to good use all right when we get back from this final break we'll talk about Facebook buying gift Banks ginormous loss and ubers layoffs and the GrubHub acquisition as well as Twitter and square saying the jack collection of companies the jack cohort saying work from home forever and maybe AMC's gonna buy a movie there chain that's an interesting idea when we get back on the City Times all right if you're a business owner and chances you are since you are listening to this week and start I'm sure re-evaluating the way you do business right now establishing your online presence is no longer optional it's necessary and pivoting quickly is hard enough finding the people to make it happen well I can feel like a full-time job and fiberous freelancing platform helps you find the right talent to build your online presence fast you can evolve adapt and grow your business with Fiverr they'll connect businesses with freelancers offering hundreds of different types of digital services from graphic design to copywriting but programming film editing voiceover music and more and you know what one of the things that's great about working with these 500 freelancers is that you learn a lot working 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your first order using the code twist it's fi ve RR dot com two hours at the end Fiverr fi ve are are calm and you'll find all those great digital services that you need at Fiverr calm music o twist for 10% off your first order it's a really great service we use it here and you're gonna love it okay let's get back to this music episode all right breaking news as we're sitting here Joe Rogan's podcast has become a Spotify exclusive which is a massive gain reading from the verge here Joe Rogan comedian hosted one of most popular podcasts in the world and is taking a show to Spotify Joe Rogan experience will soon be a Spotify exclusive meaning episodes full audio and video will only be available through the platform starting later the Shiar betrayed our rugged show has been has never been available on Spotify let alone exclusively to any platform the show will become available on Spotify globally starting on September 1st and it will become an exclusive sometime after that point listeners won't have to pay for access images but they will have to become a Spotify user Spotify setup press raise that Rogen retains creative control of a show it didn't disclose how much is spent on the deal the company will also work with an ad agency to jointly sell ads against the programmer and said last year his show reached 190 million downloads a month Rogen's YouTube channel will remain live but it won't contain full episodes there might be clips and other stuff wow that's a big loss for YouTube the Met this is a massive gift for Spotify quite this is huge it's huge yeah this is not gonna be in the youtube recommendation algorithm anymore or it's not gonna sort of bubble to people who are watching other kind of tomatoes will be there's Clips the value if you just clips that's the value of it and that I'll just drive more people to the long-form episodes but I'm gonna guess if we had to guess this deal it will come out eventually cuz Spotify is public I am going to everybody start thinking about a number pre gear in value there have been public reports of 30 million or so somebody did like a back-of-the-envelope and said the podcast was making 50 million which should be a million a week which would be like a quarter million per episode I don't buy that I would say if he was doing if he was doing a hundred K an episode is that even possible mm-hm I think the ads are probably twenty five thousand maybe he's got four ads the ads are still happening ray said you said yes so the answer could happen here though they'll be sold I'm gonna say this is a well maybe they're paying him a guarantee on the ads so maybe they took whatever his advertising isn't doubled it so if his advertising was in that 30 40 million year range I'm gonna guess they giving him 75 million a year for five years so put the total deal value at 350 thousand for five years and I we don't have the duration of it but I can't see them doing this for less than five years so I'm gonna save live here which is what Stern's deal with I think it was a I think it was two hundred million a year at the peak and then he two three days a week and so they lowered it so I'm kind of using that also as a possibility so I'm going to go ahead and just say I put this at 75 million a year which is three hundred seventy five thousand over five years so I'm gonna put the duration at five I'm gonna put it at 375 for the total value of the deal you guys want to take over surrenders or make your own speculation of the value of the deal I'm gonna go under my original thought when I saw the news flash was that it's in this 200 million category along with the rigor which is bought and owned out right now exactly yeah this is an exclusive partnership I think it's less than three years I think your price per year is a little high I think it's 60 million a year and I think it's a three year exclusive deal so it totally depends on how the deal was structured but I bet it's I bet there's a guaranteed cash payment of we'll probably do it probably a cash payment on top of everything else I bet in me ten to thirty million a year range just for like being well that's what I'm thinking million now they're taking that over now we have the thirty million dollar well yeah so then I think on me on the add up side well there's two interesting things here so on the hat upside I bet they're they're doing revenue share on the ads and the promise is they're gonna pour a lot more resources into it and Spotify has this is what they've been building for the last couple years with their podcasting strategy is an actual coherent ad platform for advertisers my [ __ ] phone call was Spotify has been doing this with podcasts of all size like even tiny podcasts they're taking yeah they're taking them exclusive yep it's my show and I still control so that's the thing is they don't want to I think the reason they did this podcast this way and they bought out the ringer is the ringer is controllable and it's pg-13 and it doesn't have it's also network of shows it's a network of shows it's a platform you know it's more than just a single individual but in this case the single individual could be so polarizing the gas could be so polarizing and you're not controlling Joe Rogan right and he's gonna say things at some point in a comedy show that'll make people try to cancel him on Spotify well there'll be a moment where Spotify will they'll try to cancel Spotify because he has Alex Jones on right and so that's only gonna be good for Spotify though have anything to say huge headache like the same way Sirius XM had to manage the stern relationship and maybe stir and actually Tony I don't know if he toned it up or down ultimately I think he's definitely become more enlightened over the years well yeah I mean I think he that's that's his personal journey I wonder if that is because serious wouldn't want to have the ad backlash but they're subscription-based so that doesn't make sense well okay so wait here though here's the I don't know if this happened I'd be super curious I wonder if there's a part of this deal that is tied to incremental Spotify subscriptions that are yes what Stern probably had right happy that attribution though that's very simple if the person listens to more than five hours of Joe Rogan and then subscribes but they weren't previously subscriber you give him the first month or two months of that subscription there's just so much money I mean the subscription business like this is at some points but like Ben and I know one of the companies we've started together is glow with with PSL and the team there and we run our LP show on it subscription business is a subscription business model and the podcasting is a media model go together like you know peanut butter jelly like shocking that podcasters have not done this yet yeah I don't know if Joe Rogan would work as a subscription-based product but I do think they could you know I do what we do on the LP so it's like pass one half page I don't think that really works that well I think you have to be majority oh you're half and half yeah I think it has to be majority like I don't know if you watched Sam Harris but he's at I think he does thirty minutes free and then the next whatever he's typically you know over an hour's podcast you get sent to the paid feed and he controls it all himself he's not on patreon anymore he's his own subscription of dedicated he's a personal friend of mine and I actually pushed him into podcasting long story but yeah didn't he come on your show as like very first yeah I mean I basically like how do you we were having dinner one night and Sam was like what do you think about me doing a pockets they say you're built for it like you're an incredible conversation so you and I and other folks have sat there until 2:00 in the morning talking about like really heady topics like you know we have the same book agent Jon Brockman so that myself Sam Harris and some other folks or I'll kind of run in that same circle it's like a bunch of like really smart scientists and then [ __ ] like me it's take long anyway long story short I wonder if they're gonna make a run at Sam Harris and those people next and then and we got to see if they if how Spotify is gonna handle the boundary sent they already have yeah they're probably doing this through CIA CIA represents a lot I talked to the CIA guys about wrapping me and you know I don't really do enough I think to make it interesting but we're sold out as a podcast so I mean we're we're low millions of dollars as a podcast what I do you all advertising all advertising we did a patreon but you know what we produce so much content typically to do it I just tested it you know and I'm thinking about shutting it down we did like an ad-free version and I like what you're doing but for me I want to make my money by finding the next uber not off the podcast so I keep putting I think we spend 10% of whatever we make promoting the show so we've been doing advertising of the clips on LinkedIn and Instagram and other places just to get more people into the show so I'm looking at this long term but I already made my nuts you know I made my bones like I think Joe Rogan like this is like his big score this is his uber like this is I mean this this is this is very much like ninja going exclusive with mixer it's basically yeah it's it's Joe Rogan's exit where he's taking soft exit right pocket did this with Adam Corolla they gave Adam Corolla I think 20 million a year for his huge those five it is so big for the industry day of Spotify is so much better position than any other podcast player and they because the business model is total but a Apple this is like Apple's biggest strategic mistake of all time second to firing Steve Jobs well they controlled the whole ecosystem it's called podcast because of the iPod yeah an apple controlled everything and they just refuse to show any interest in it we're a hardware company this is not core to what we do and we like music sitting right there like they could have bought companies they bought a cup a podcasting company I was an investor in called swell which was like the best podcast app of a time and you know I think we doubled our money in like a year and I begged the founders not they shut it down right after they they shut it down yeah swell was just brilliant they they would list they would they use the card metaphor sort of like tinder on your app and you would swipe forward it would just show you a podcast you'd start listening to it and then you'd swipe forward at some point and get the next one that was the next most interesting to you and if you were on Joe Rogan can you got two minutes in and you went for it but then you were acquired and you went to you know the end of the episode well they're not gonna give you another Joe Rogan mm eh whatever general interest podcasts they might send you to this week in startups right as the next one in that stack and then if you listen to that one for a long time they might send you to 20-minute VC or whatever you know they they would take you down the rabbit hole and and what a mistake and this is why Apple is gonna fell on TV as well is because they don't want to ever be associated with controversial content and this is where I think Spotify can actually hold the line because they're independent if people don't like it and they don't like Joe Rock its content Spotify was real like yeah don't buy our service just like Sirius XM like it don't listen don't usually I think it's different the the problem in podcasting everybody kind of like smell thought it was a breaker and lots of other folks thought the problem in podcasting was a discovery model there's no discovery problem in podcasts like how many people do you know that I like oh man I wish I like I knew why I listen to more podcasts we have to listen to is I've heard from nobody nobody knows is monetization like there's no good interface for advertisers other than email and you guys making it sustainable as a model and this is YouTube's like this is a stupid move on YouTube YouTube should have just said you know here's some Google affairs permission and made it work they should have just made it work but here's the prompt for YouTube and any of these big things this is why startups have a much startups in independent companies have such an edge over the big conglomerates if your Apple or Google and Alex Jones as the best example he's been banned on YouTube and then he comes on Joe Rogan's podcast now you've got Senators Congressmen presidents and politicians as well as advertisers and nonprofits going to Ivory soap and saying don't buy on YouTube and then you might have if you're Apple a bunch of right-wing folks saying Apple ban Joe Rogan don't buy iPhones go Android right and it's just not worth the adjective for a big company with bigger revenue streams now for Spotify this is the revenue stream so Joe Rogan increases that revenue stream so they can just say mission accomplished when people start coming at you oh rogon yeah and controversial we should talk about for just a little brief side moment here what a better business model podcasts are for Spotify than music is because they get no operating leverage on music so you know if I gets a dollar in for music and then they have to pay whatever amount of cents out to the the the labels they never get any sort of additional upside with podcasts you know first of all most of the ones on there are free so people who are joining to listen to content you know is only upside the ones that they own outright that they don't have any any sort of variable cost with like they should promote the crap out of the shows because they get all the upside on top of the fixed costs that they paid the pipe master so yes it's like they're switching from one of the worst business models ever that they've sort of made work because god the product was just needed to and they executed really well there to actually finding a really really good business model here so there's a person the our official number one acquired superhero who deserves probably the lion's share of the credit for this year and that's Barry McCarthy who is now the former CFO of Spotify he just retired and is now just a board member but he was the CFO of Netflix and do all the run of like the the transition well I think from the very beginning right lady you know transition so it's fingerprint streaming and then the transistor new original con you know what the other really interesting insight here is Spotify going public doing that direct listening and having this currency and being independent makes them so able to withstand this and make bold moves and you look at a company like uber now which will segue to in a moment being able to potentially make a run at GrubHub or you know uber could buy Domino's Pizza like I don't know why we're talking about grub but if I'm Noopur I'm Tamas 450 billion you know like I'm not kidding called I don't I'm not kidding you know I mean this is make a clip here hi Dora you don't know me we ran into each other than the Warriors games in the courtside club anyway interests you know drop that there for a second and I introduced myself to you and you really seemed like you were completely not interested in fact that was the third investor in uber totally reasonable I'm not your problem now however forget about grandpa at six million we're Savin or we're everyone we need to buy as much of Domino's and do a hostile takeover Domino's now they're at a fifteen billion dollar market cap they have a clunky app but if you make pizza that if you eat it when it's hot that thin crust damn tasty and I hate it when it's cold and I hate the regular one but that thin crust can work and people like the 24 hours already got a footprint let's buy that and have its poor drivers making the delivery times even shorter in 2018 slightly over 50% of pocketless podcast listens came from Apple podcast app don't know what it is today because Spotify I think started to you don't gain ground after that what are we thinking 21:22 latest estimated it's about if I just passed Apple they did so let's go to 2022 what does Spotify x' percentage of podcast listenings equal what do you think if it's 50% now let's say it's not 50% now it's not know it may it's it's past 50% in lots of countries but it's definitely not 50% the US delivery Fred 18 19 percent of you okay so let's say if it's 1890 in the US what is it in five years from now twenty twenty-five five years from now you got this aggressive positioning five years from now I think they're over 50% yeah I think that the Google Chrome yeah I didn't know chrome their Android today is the landmark deal this is their turning point the first was buying gimlet and anchor this is dinkles but the simps that bill simmons was like the landmark deal that just got surpassed and this is the actual landmark deal right we'd agree on that this is more important than bill simmons oh yeah this is vicious landmark this is like I don't think understand how important how big and how just like what a behemoth audience Joe Rogan has it's it's almost unfathomable that it's assumed he's probably bigger than stone he copied the Howard Stern playbook I mean he literally runs the podcast like Howard Stern runs the show which is I'm gonna go three hours and I'm just gonna talk about every topic and I there's no sacred cows and the more controversial it is the more we're gonna lean into it nailed the clips to nailed clips for ice cubes or so we'll bill Simmons then move exclusive because Bill Simmons has they never brought up the exclusivity thing with Bill Simmons but why wouldn't they make Bill Simmons exclusive and does this mean if I have the RSS feed of a show they're gonna just take down the RSS feeds of the show so I can't use it an overwatch either I'm an overcast they have done this in cases see there's this interesting nuance here though I'm curious to see what they'll do because they still because of the way podcasts work like they still win if they let some content out there in the outfit right cuz they're if they own it then they're still monetizing it on other platforms and its customer ammunition right exactly they need it they need a front door and for people to come in and be like oh hey you can listen to this on overcast but if you want to hear rogon and all these other great podcast money just to empowerment listen on Spotify to I think what they'll do is this is how I would execute it I would just copy Sam's model Sam Harris's model the RSS feeds have the first half-hour of every show and at the end of that they'd say to listen to the rest of the show go to Spotify can you imagine how infrequently Apple will feature Bill Simmons podcasts and I mean to literally be like I released a feature like Apple is asleep at the switch I really like it is a this is one of the confounding leaks about Apple as a company and I said this last year when I was like this and I think Tim Cook did a great job of managing I said this NCMEC he did a great job of managing Apple through the transition but they need to get somebody in there with a bolder vision who will buy stuff because they have the cash the iPhone business franchise is now having challenges they don't report the number of iPhones sold anymore for a reason and they are leaning into like talking about services revenue like App Store revenue for a reason because people do not see the need to upgrade their phone as much and it's just not as like it's not as a lowering of a business it's a deprecating business now so they should buy this would have been big this would have been the crown jewel in the services narrative of Corbin subscriptions and advertising from I guess the problem is they can't do it they can they'll never be able to compete with Netflix or HBO doing racy content nor will they be able to compete with Sirius XM or Spotify now doing edgy content let's just put it as edgy you're not gonna have edgy content on an Apple device they're not going to compete with Disney doing family-friendly content no and this is why Disney passed on buying Twitter I don't if you read Bob iger's book or yeah yeah so good and they're like he just called Jackie so yeah you know what we're gonna buy Twitter but sorry no I just my gut says I don't want to deal with hate speech I don't want to deal with policing any speech right or misinformation Jack was on the Twitter on the Disney board yeah I mean it's got to be kind of a bummer for him just going quickly through this let's go with to go to go to Auburn great so note I know Rosenthal's got some good dirt okay so everybody knows we've talked about this and you've read about it uber is laying off 3,000 people closing 45 offices those are massive cuts stock it's very sad stock went way up obviously people want to see these things become more sustainable rides are down 80% which is what people thought would happen but uber eats is up 52% and obviously there said you know they've been seeing green shoots and last three weeks things have been going up and in Hong Kong and other places where the pandemic kind of there on the other side of it hopefully they see things rebounding but the potential GrubHub acquisition has been a lot of talk they've been negotiating a OC and Elizabeth Warren came out very publicly swinging saying we can't for any reason a lot of these companies to merge there hasn't even been proposed deal yet like their exact idea on terms this is like so much anti capitalism is crazy let's put a pin in that for a second overall what do you think of the deal David should they do it should ever do it any on the head this whole thing is a quagmire this is like this is like a land war in Russia like you know you're dealing with regulators you're dealing with the covers like for what for no broader in here threatening for a business model that is very challenged like super challenged super challenged us to like think about it like consumers don't want to pay more than five or ten bucks more than the price of food to get it delivered to their door right for the price of the food plus five or ten bucks now you got to do all of this stuff you got to get somebody you know 45 minutes to an hour their time plus transportation to go drive to the restaurant when the order comes in sit there wait for their order to be ready mob the restaurant so like if you've got a dine in business that's going on and now you've got 50 you know door - and ubereats orders you know drivers sitting outside good luck retaining your dine in customers not to mention now you got two employees somebody else at the restaurant to deal with all this the business model doesn't make sense restaurant to Domino's makes sense yes but for a restaurant to do it themselves I've been getting pitched I'm sure you guys have said well on companies that are building software white label white label and I looked at that and I'm going to invest in one of these I think if you have one of these companies email me please because I would like to invest in one I think that this is going to be the backstop and people are gonna have roll-your-own app and if you have more than ten stores or you have a loved store people will download your app and they'll want to use it I think it's gonna be a good business and they'll make five hundred bucks a month or whatever it is you know it's a SAS fee yeah but for everybody else their business is not gonna be able to sustain rolling their own app enterprise software etc they should and they and they probably appreciate paying thirty percent this is what this is what girl of him seamless were before all this craziness happened like people don't remember Jason you probably remember seeing us back in New York it was it was this it was just an online ordering platform they didn't do any of the delivery like that was all up to the restaurants to figure out the right way did they had runners at the restaurant so what they would use is they would first use they might have one dedicated because I was given the restaurant business and I'm from New York typically the way a small restaurant would do this is they would have somebody who would sit at the bar who would do deliveries for you know five bucks plus Tim and they would just hang out there they were kind of like the original gig workers and it would you it was typically he's like somebody who was kind of out of work they just got paid under the table cash so the restaurant the bartender would give him five bucks to make the delivery if they made an extra three or four bucks another beer made eight bucks and then they would probably spend another bar having a beer maybe just hang out there and it was just like sigh cash it was a side hustle then you would go to the dishwasher or the busboy the waiter or the owner if that person was out making a delivery that's how deliveries kind of worked you had your own like mini gig economy going on at the bar and yeah now uh it's really interesting that had the founder of the slice he has a service that's super competitive and what I thought was ridiculous about this trying to stop this deal is if you look at the market capsules companies it doesn't include pizza it doesn't include Domino's or slice so they're talking about these four companies and the market cap of these four companies as if that's the TAM this is why like people like AOC or Elizabeth Warren trying to opine and come up with a rule book for capitalism is so insane they think that these they're so uneducated on topics of business that they think the tam is those four players so they're like we can't have those four players go to three it's like only 30% of people probably everyone use these apps yeah so there's an issue here where not only is and this is the same argument that Zillow made when they got to merge with Trulia it was it was hey the the the world is not online lead generation for real estate agents the world is lead generation for real estate agents of which we are this tiny little percentage of yes and so for restaurants you know it's not app based food delivery it's all food delivery yes the the the issue with this whole app based food delivery concept is David you're exactly right what's seamless and GrubHub were doing before the money rushed in seemed to be a sustainable business model I mean these companies were profitable they went public but sense Softbank has rushed into doordash and cents uber has done their uber thing and raised the money they raised and launched uber eats like we now have a product in market where we don't know if it has product market fit because it has never been available at the price where the business can continue and cover their costs and so like the experiment has not been run in the last five years of do consumers actually want app based food delivery in this way because of gross did well so GrubHub the GrubHub CEO in q3 of last year they can't I think they cancelled their earnings call it he wrote a letter to shareholders instead and he laid all this out and he says in there he says like look we've been doing this for over ten years the the we've always concluded that the logistics portion of this like what would ruin and doordash brought in and married on the logistics is a commodity it is not possible to operate profitably while doing that we are going to do it because we must source right the competition that's an and then at the same time you've got Domino's sitting over there which is architected soup-to-nuts to be a deliverance we yeah I invested in this company called private chef club that came out of earlier folks that is this it is architected ceramic club it is it's like good eggs for groceries private chef club is for dinner and it's exactly what it sounds like they have some of the best chefs in San Francisco they have their own kitchens they have a hub-and-spoke model they order they get all the orders come in in advance there's no food spoilage and the delivery instead of you know the grub Harbor the ubereats driver they go to the restaurant they wait they pick it up it all it all happens in a line so it's like you go to the spoke you pick up ten meals and you drop job job job job yeah and it works yeah we had a company like that bento didn't work they were trying to do the on-time delivery but then they try to do scheduling and isn't you know there's been a ton of swings at bat here people try and there were also what were the other like single meal delivery ones they were like three or four other ones Sprague rim Oh what was the other one Rock'em it's it's it's worth calling out and davidon is his research for this last night pinged me and was like if this was acquire and acquired episode I would totally talk about how uber eats actually started as a sprig clone do you remember that Jason arrived around yeah that's right if you put a certain number of meals in the trunk and they would drop them off tomorrow captain warm and dropped them off yes I do remember that yes that was Travis's original experiment could you enjoy - arrived on the scene and they were like oh no we can grow way faster if we just do delivery from restaurants I mean it's pretty clear people will pay for this you might lose the bottom 10% if you charge what it costs but wait I want to dive into that though this I think that our whole industry has has a problem where it's not product market fit its product market price fit and Radek market price fed ok yeah unit economics work is basically you're saying right and that is not being tested right now we are testing product market fit without the third missing component well I mean if a restaurant made it work and GrubHub made it work there's a way to make it work the question is how many consumers have access to it might be a little expensive it might be ten dollars to deliver your food in which case picking it up makes more sense right right I get to my argument market then like yes yeah it's a different it's a different product it's just like ride-sharing right like if if there's only one company it's not nubret and lyft well then prices are gonna go way up what's that gonna do to demand we we don't know right and it might be actually the the experiment here to your point might be uber pool and lyft line sharing the car just might not work as businesses it was a worthy experiment to try for a while but it actually may not work right then yeah exactly but we know the ride-sharing does and we obviously know Lincoln Town Cars do so for high end people doing delivery and paying 10 20 bucks in fees it doesn't matter but I have to say I look at the fees and we have a cloud kitchen across from our office and I walk over and get my Bell Campo burger myself and I just pick it up from a locker because doesn't make sense for a car to drive around the corner well this is having Chavez figured this out you know yeah years ago - right which is that like the the eats door - model is not the rate not the most evolved food delivery model you need to have a hub yeah you need to have hub and spoke and he got in on the real estate side of things but like they're gonna be ton I think I think actually Sequoia wrote a big piece about this there gonna be tons of new companies started that are restaurants built on top of this infrastructure my prep chef Club is that are that are their own companies and brands that are just architected super to nuts to do this and this is why it's so idiotic for a bunch of politicians to come in and say let us put our thumb on the scale let us try to pick winners let's put some regulation on this when the free market is so cutthroat and hyperactive that consumers are getting services below cost for five to ten years to then make these systems so efficient that they can actually exist in the world because they're at scale if politicians had their way they would have stopped Amazon Prime they would have said we are gonna stop anybody from having two-day delivery and we're gonna stop Costco from not charging a profit and just having a membership fee because those things are anti-competitive with local stores do you want consumers to live in a world where they don't have access to Amazon Prime at Costco I don't the reason we have much more food security in the world exclusive company like Costco can provide massive amount of calories and I think they sell their food at a break-even right and they make money off the membership isn't that the business model I'm ninety percent would argue that it's like you know we make money in a bunch of different places but if you look at their 10k like roughly subscription revenue equals net income basically yeah I mean this is why the we have to really think as Americans I was on CNBC row this week and I kind of went off and I was like as Americans we have to decide or shocks Jason well I was like listen we have to decide do we want to have a free market and let all these entrepreneurs creatively battle it out and see what's left after a decade-long dogfight or do we want have a bunch of socialist maniacs who've never worked a day in their lives to find the rules of capitalism from the bleachers they never been on the field they've never done this they've never built these companies they've never innovated and now they're gonna say let's come up with a new form of capitalism where nobody can be capitalist anymore and there'll be no more free market for people to battle it out this is a vibrant amazing market let these companies consolidate and be sustainable look what happened when San Francisco said you they were gonna cap fees or whatever and Hoover's like yeah we're not going to Treasure Island anymore not profitable got refugee I saw that did you guys see that they put a concert yeah they put it was like when they were in Austin they were like if people are gonna be driving ride-sharing we're going to make it impossible for you to do that you have to go through all these hurdles and Austin lost ride-sharing from lyft and uber alike okay we opted out and they made this is gonna be your Timnath moment on see now you know honestly I mean you take a little micro viral or whatever but I think I don't want to the easiest way to go viral is to do what your mom's doing and he does actually believe this which is if you just champion the poor and you champion the downtrodden you'll just go viral but this is a much more nuanced conversation that capitalism ultimately leads to gains for everybody I believe that if you don't believe capitalism ultimately gain provides a better result for the human species well that's a different conversation but I think all of us here agree that capitalism as flawed as it can be on the edges ultimately results in products and services that are cheaper better and more accessible I think the problem is a lot it's so tempting even if you seasoned entrepreneurs follow the new mistake its attempting to look at markets and feel like the way things are is the way things will be like no there's always gonna be changed like and as long as there's always change whatever you know like it wasn't the DOJ they killed Microsoft it was the web that can bind at Microsoft specially never like you know it was mobile yeah and they missed I mean look we started the whole first half of the show talking about this crazy outlier funding of a start-up that's not even launched yet to the public and then here we are on the back end like we have to create rule sets like this is a vibrant crazy market that takes insane risk to change the world that's why we punch above our weight as America is and that's why we're super innovative that's why we're not getting demolished by other countries that's why most of the country come companies that change the world come from America because we run the most experiments we take the boldest action we tried the craziest idea and we're not afraid of family and we don't create a game with so many rules that the second you get on the court you get a ticket right like you ever watch a basketball game and they're calling fouls every two seconds and you're like guys just let them play and the announcers are like they just got to let them play like that's not a foul like let let the entrepreneurs play the game let them play the goddamn game and the magic will happen well I think what we need is is though we haven't to a certain extent but we need more of a kind of safety net ironic given you know what we were talking about what's the secondary earlier but kind of safety net underneath like how many companies have you started Jason four or five yeah yeah your successes right now like two or three yeah right I've been saying for you know been at me yeah like but that that's the way the the clubhouse guys like they started to highlight highlight wasn't a success you know but they're back at it yeah that's keep going that's what you need absolutely you don't die if you fail who's gonna win if we had to pick a winner five years from now give me the ranking let's just I'm gonna wait we have four major players GrubHub doordash ubereats and post minutes those are the big four which one is most likely to not exist to get subsumed and then rank the other three well post mates will get subsumed that's ignore continue as a small business like right that's at some point someone will make them a takeout offer that they're interested in sure member eats will win because I don't believe the three-sided marketplace of restaurant writer I'm sorry restaurant driver and food orderer can work without the sort of like available spike capacity on the driver side that uber can offer you think about door dashes model if a whole crap ton of people suddenly want food at once but then for many hours nobody wants food at all like they don't have any way to absorb that cushion in the same way that sort of Amazon uses ups for cushion but uber conveniently has this other set of drivers that are sitting around willing to go from point A to point B so I think Hoover has the superior business model so over door - and then post mates and grab maybe get acquired as you're thinking I think so okay I think it probably all consolidates down to one especially because most of yeah well I mean one of the other topics with Softbank right like I believe Softbank is the largest shareholder in door - no then we're pushing like a ten billion dollar merger right with ruber endure - which for a nursing post on the last round so ridiculously a haircut yeah so assuming that there's no more no more funding of that scale available there is not door - yeah that seems like a given that's again right and to continue operating on the status quo their runway is you know measured in single digit low single digit years that's not sustainable so no door - has got to make a move now so what do you think who wins ultimately who's number one who's number two which brand at the end of the day is left standing number one and number two I think it's probably you bur unless for some reason they decide that actually it's better to sell consolidate under door - but that doesn't make sense to Ben's point of like you have a supply so ruber door - is yours your order oh no I think toy - I think they all that everybody gets quite grab my post mates maybe do pivots or does something else here's what I think happens uber GrubHub number one then I think lift and door - number two that makes sense and then you have two players with both because lyft is learning a hard lesson right now about having a single dependency as a revenue stream and lift and hundreds and thousands of other companies are at the u.s. yeah of course right yeah like the world well you know we always say focus right stay focused and then you realize like oh [ __ ] you know I'm so focused on advertised BuzzFeed was focused on advertising New York Times has focused on subscriptions and advertising and now BuzzFeed is going to I don't know I think they're gonna lay off half the company in the coming weeks that's my best guess is that they'll be half as many people working at BuzzFeed by King q4 then there are at the q4 last year half as many maximum because they're in an based model I can tell you just looking at the ads you know across the board if if Facebook and Google Ads are 30% off right now I don't know if you're hearing that from your portfolio companies yeah but there isn't as much demand so they're maybe 20 30 percent off if that's happening to the top two players with the best aid the best platform the best tools etc the ability scale what is happening at BuzzFeed what's happening at Vox like those places are not subscription-based they don't have content that's I'm not saying this to be mean or anything but it's not content that people would pay for it's it's not architected in the right way it's not so the whole architecture of the best advice I would put in that as well like I think vice Vox and BuzzFeed will be half the size at the end of this year than they were at the end of last year to survive I think they'll survive but man there's got to be some consolidation there what happens there do you think in those at scale media companies continue I think consolidations the right way to put it there's a chasm I mean there's just a chasm in the media business model or either you're kind of indie shop or you make it to to New York Times you know I'm not saying it to be that big but the other side of the chasm and there's no room in the middle I think Vox has the best chance I think vice has the least chance so I say Vox dude I think Fox and YouTube but yeah I know Jim Bankoff you bought web blogs Inc for that's right and so Jim is just a good deal maker and like I think a good steward of capital so I could see Jim Bankoff we should get him on the pot by the way let's do that Nick let's invite you in Bangkok on the pot I think it'd be a good steward of capital and I think he's been able to manage multiple brands which is what he basically learned for web logs Inc because we just have a lot of conversations about this is how do you keep the Engadget team the joystick team the blogging baby team the tois team you know all these different teams producing great content even if there's overlap and I was like just do what Conde Nast did you give them their own floor on the building like they have their own culture and Vanity Fair might have a take on George Clooney that you know Vogue has a different take in The New Yorker has a different take and they might all want George Clooney for an article and they might all get him three different times of the year but you don't want one person writing the George Clooney article and syndicating it to all three brands because they all have different takes and it was like ah you know we stab these like long conversations yeah I don't know how vice gets out of this that seems to be done well I mean like everything all the trends are just accelerating and like how many consumers are going directly to web properties to consume content anymore it's really tough I mean I'm moving inside more into the research side so you know we're like the idea behind the newsletter is that inside we're always to be very focused not a lot of span a lot of data and worth paying for and we really have been leaning into getting people to pay for it and then I'm just like you know what journalists whole want to write like all the journalists now this like previous to Gen X they all want to do it like um what do they call advocacy journalism right they want to pick a position and then they want to just work at MSNBC to take down Trump or they want to work at Fox or some right-wing Breitbart to take down Hillary right like they all have this very you know pick an angle and then go at it hard and you know facts whatever you know like anything else you're gonna build your case and none of them want to actually do hard research none of them want to do like the middle-of-the-road stuff and so I'm like you know what I'm just gonna stop hiring journalists because this next generation of journalists they care more about who they're attacking or who they're taking down or who they're pumping up then they do about the search for truth and knowledge and understanding yeah I mean there's some that there's a generalization in there that Sharik is totally fair but no I'm packet then please well okay so here's what I think is going to happen to all the talent in journalism best people at all these publications that are not on the crossed side of the chasm that are in sort of this like oh we raise money or we grew our headcount and crap we're not gonna make it the very best people are gonna get offers from the New York Times they're gonna get cherry picked until these companies whose value is really based on what's the future stream of content that's going to come out and without those writers it's not going to be high so you'll have people getting picked off the same way that Axios picked off some of the best people to just to build that institution yeah although I do think Axios is in the middle to I just think they're better run than some of these others well if you look at them like they're they're definitely not trying to do opinion if you look at Vox they have a very like strong opinion based advocacy I would put Vox and advocacy journalism I put access in how call truth journalism like let's report the truth as opposed to or middle middle yeah what would you call it like just people who want to report the truth or knowledge based journalism and light I don't know journalism that makes you smarter like I think the other ones Vox like they have a position they want to take BuzzFeed feels like position journalism at times to me yeah and then I think the other thing that's gonna happen is that you're gonna see more and more these people who've built a personal brand go indie yet so you look at polina from fortune who wrote term sheet for a while like start at her own email newsletter chatter it's like back yeah and I think that's gonna start happening more and more and more where you're gonna get this bifurcation of the best people are either gonna flip to Indy if they have the personal credibility and the the runway personally to be able to pull that off over the course of the next year otherwise they're going to get picked off and then you're gonna have you know B and C players that are left and not all B and C players that's a sort of broad generalization but in general that the talents gonna wither it's non branded right non branded town unbranded talent right so that it's sort of like the podcasting space if you want to do a podcast from your you know bedroom or whatever and you don't care about making money great go for it but you know it's going to become a hit space business and and the you don't need to have 50 people's take on I don't know the tech industry in China or you know you don't need 50 strategies you need a really good strategy and you know maybe second right but if you look the information Axios hopefully what I'll get done with inside we're just higher researchers and teach them to write if they need help with writing but no more writers and teach them to research because the problem I've had is I find journalists and they haven't read any books about business you know you and I would be like if I just listed top ten business books right now if I said what did you guys read Lean Startup bad blood [Music] degrade it's like yes yes Almanac you like all of them ours yeah send ours yeah I tried to I literally asked a journalist they've all been on her show and they're like will you literally I asked journalists to read like Lean Startup and they're like will you pay me to read it and I was just like holy [ __ ] like you're a journalist who have read that like I bet if we call up Brad stone right I'm done with this next generation they literally are anti-business and they don't read business books and they hate business the thing is like you know the end up with what makes your show what makes our show work is like we're the journalists now but we're also the practitioners yes the experts it's sort of like Balaji was sort of pointing out about what we do is an expert having their own medium and unpacking for 90 minutes like Sam Harris is doing or Joe Rogan does for comedy MUFC like it's not citizen journalists because citizen journalists connotes it's a citizen who does acts of journalism this is expert journalist expert yeah and it's an expert saying I'll learn how to be a host I might not be the best journalist I might not be the best host of a podcast I may talk over the gas whatever I may be rough on the edges but I do this for this is my day job so I have better access and better insights then Tim Ferriss has done this better than anyone yeah and there's a and there's a cycle like then they do it for a while they get better at it then they don't talk over the guest then they're able to weave narrative in and they become an imaginative storyteller like these things can be learned on top of a base of domain knowledge learning the domain knowledge much harder than learning the skills of a journalist or a host of a podcast basically and you know what we said this was Jason Ponton was running mi t--'s technology review said he gave up hiring journalists and trying to teach them science and hired science graduates and taught them how to be journalists and that's why he was able to cover nanotechnology or biotechnology is because usually it's just too hard to teach a writer to do you know to know some vertical okay going around the horn really quick any thoughts on Facebook buying gif or 400 million it's got a story nice bailout okay explain I just think I don't think this is a super hot take it's not this like data acquisition that is this amazing Silver Bullet that oh my god now Facebook has these deep data hooks into all these organizations if you really dig into what they got there the data wasn't really anything they didn't already have but gif he provided a valuable service tenor was really only the other competitor out there Facebook had effectively taken a dependency on giffy and has had many other services so if it it went away that would have been bad they didn't have a sustainable business model even though you know they've done a lot of work trying to do sort of licensed content promoted content and you know when I think they were either raising the next investment round or in talks with Facebook about whatever their normal partnership discussions are I think it just sort of became something where Facebook figured probably a good thing for us to own this so it doesn't die or get owned by someone that we don't like yeah and they had raised their has post was at a 600 so it was a haircut for the last round investors and there somebody was tweeting they had been part of a crowdfunding site that was like an angel s competitor that went under so Matt Hoggy I think is how you pronounce his name anyway gif he was bought by Facebook I was surprised since I participate in the early investing experiment through alpha works which was like a I think an angel is competitor but never got any emails about this in July 2014 I invested the minimum of twenty five hundred and giffy I want to show you how this investment panned out congratulations you're now an investor in give me gif he did another round in 2015 and in total they raised seventy two million but sold to Facebook for 400 million tech investing is like Hollywood accounting because something could sell for ten times or 50 times what investors put in investors can barely break even the top 5x the 5x multiplier means I make it a little back I know someone that put a few grand into the friends and family investment in a company that raised an angel single-digit millions but sold for half a billion dollars I thought it would net them at least a million out of such an incredible return but they only got 5x what they put in alpha works changed their name in late 2015 and the twitter account associated and updated so anyway they got acquired and it's a long tweet stream that we'll put in the show notes what do you guys thoughts on this and explain to a lay person who might be on AngelList or the syndicate what happened here and why the early investors got ghosted never got any information and then in all likelihood got hosts but we'll see what the eventual outcome is preferred stock so explain it in layman's terms so the its market price at least in the early stage investment is 1x which means that the liquidation preference on any of the first money out we'll go to the investors up to the exactly the amount hence the 1x that they put in supposing that they decide not to convert to common which basically means if the deal is for less than the amount that they previously raised at then the investors are going to get their money back first their last round was a 72 million dollar raise that that valued them at that 600 million I don't know the total amount that they raise maybe in the hundred which men means that if this early investor didn't see anything then there was multiple on the liquidation preference somewhere along the line likely in that last round which meant that those investors would have gotten their money back over earlier investors and especially in this case it would have had to be in a 5x or something right because if they bought it for as a million curious depends on its total capital they raised if they raised a hundred million and that last round was 72 if they had a 3x liquidation on the last round which would be incredible right but I'll say that you know 400 to the reported price you know maybe there's an ER now maybe there's a carve out for the founders maybe that you know right now if there was an earnest cash 200 million earn out and they had a 3x liquidation preference the last investors we get all of it then we get all the money and then maybe somebody if there was an earn out we got that this is why it's important for you to number one trust the person who's the syndicate manager and I think in this case there is no manager they sold the company twice and I think a sure fund management which were investors in which was the back end for angellist for a long time and a lot of other platforms like seed invest they do the sPB's that company I think became the stewards of these investments that doesn't mean they were actively managing them like a manager like us but that's the active managers job is to make sure that the capital gets preserved as best I can we did two things to avoid this type of tweet storm which this could have happened to me for an early investment or two in my syndicate we had a company video pixie that like refused to send updates it was like a YC company so they were super entitled and they wouldn't send I shouldn't really talk in to school about comedies but this one was such a disaster I had like these fights with the founders over and over again because they wouldn't tell the investors how much revenue they were making they wouldn't tell me unless I would meet with them in person and they're like what we talked to ycs lawyers and they said we don't have to give you information I'm like you might need more money Hadippa do but yeah do you want me in your glory you don't have to I guess I'm like learning the documents as well it's like one of my first five investments as a syndicate I was like yeah but I gave you money like a quarter million dollars why wouldn't you want to tell me how my investments doing and these guys were such idiots they like wouldn't give basic information then the company when I business they were like oh this is why Y Combinator's like me they're like I breathe down these guys throats like you damn right I breath breathe fire down their throats like they wouldn't tell the investors how their investment was doing that's why we put into our documents a side letter that says you will give us monthly updates as part of this investing now kill would we sue a founder and do we get 12 updates from them no we probably get on average six seven eight updates a year it's a lot more than zero and if they hit three months without sending us one and I called them and said we haven't got one in three months I can point to the side letter and say you know you did agree to monthly it's been three months can you try to hit monthly for the rest of the year right I can be reasonable button and the reason we want the monthly update from you is so that we can invest more then I said if we own over 5% we have the option of a board seat and we're 10% is what we used to do now I say 5% want me on their board but that's an aggressive term that I started putting in I said listen if you want do you personally sit on the board what I do is I do a team approach so I'll have Ashley who was one of our managing directors we have twenty boards that were on collectively and one of the two or three of us will go to that so crash and Jackie are starting to come to with me now so the four people in the investment team some combination of them will be at the board meeting some people only want me there I'll have a discussion with the founder about like that might be unrealistic but okay and then we don't take the option every time but at least you have that then you have the protection of knowing that a deal is coming and you have a seat at the table to protect against something like this and you can communicate because if these investors had a chance to be in that round and said no that would have been great then they could say like listen you had the opportunity to be in this round you passed it was pay-for-play if you had if Matt had put twenty five hundred in that round he would have got triple his money and his first investment wouldn't have gotten money but his last one would have so those are the protections just for people who are wondering well we'll take a deeper dive into this something else but what do you think do you do you know the other previous interesting other previous cap table thing after they raised the 17 million at an eighty million dollar valuation huh I'm sorry just before that Facebook actually tried to acquire them this was back in oh my lord late 2014 so there's a second go-around with Facebook so Facebook had bought them for 80 million that first group of investors who invested at 10 million would have either with an ax or something which I would have felt great about nice investments 7x in five years so anyway buyer beware these are high-risk investments the later stage investors do beat up on the earlier stage investors and that's why you have to have a strong manager to be able to mitigate against and that's where I've spent the last basically five years doing is building in triggers for me to protect the investors you can't do it every time a big investor can come over the top like you need only watch billions or any other sharp elbows show about you know Joe you know if you watch billions like yes people are doing nasty swinging elbow [ __ ] but if you got somebody who can swing elbows like me to on your team I've had to swing elbows at people like I've had this happen have you guys had this happen where people try to cram you down or block you after you've made an initial investment and screw you out these I was involved in a mate like a total recap scenario once and that was yeah I mean like if there were any you know quote-unquote passive folks in that situation like they not only were they just getting run over like nobody was even thinking about that like it was only even informed them that they were about to be washed or did they tell them retroactively yeah yeah they got informed you know but it was like it was after the the recap was already structured and agreed upon yeah I've seen a handful of peda plays and everybody gets the notice that you're gonna have to pay to play and it sucks to see that but like at least they told you yeah pay to play is I always tell my founders like when you do that pay to play stuff just understand that now you've ruined your relationship with all those previous investors you're never gonna be able to raise money from them again because they're gonna feel screwed unless you've really communicated to them and you could say listen I talked to 40 investors they all said no the forty-first said yes if we bring the company from a 50 million dollar market cap down to a 20 million dollar valuation which means that we're gonna recap and in order for you to have shares you've got to put more money and I'm sorry that it came to this we tried everything we could here's a list of everybody we you know reached out to but you know very few people do it that way but I've told people if you if you choose to do that stuff with us you know I had one founder who just as part of a down round reuptake some you know massive amount of equity and they said well the person doing the investment forced me to take more shares and I was like hahaha oh that's a good one yeah and I asked I kinda had that reaction I laughed I said well what about all of us who put money in can did you did you push back on that $1 I push back on it tremendously don't know like you're at your your question to them whether I said like okay well you know we put all this money and do we get if you want us to continue do we get more shares or whatever and you know they were like well no I had no choice and you know and then I was just i disengaged from the company I said you know we'll monitor our investment here we'll consider every round I said but after you gave if after you gave yourself a massive reward for failing to grow the company that makes it hard for me to tell my LPS and my syndicate to invest more money right and I had this like very candid discussion with may still didn't understand it like but I had no choice was it a was it a pivot to a new business or isn't it continuing with the down round you know they got a couple bad beats that happens yeah but I said he said well how would you have done it I would said to the existing investor I would have said I can't take this but I'm willing to discuss it in a year if I hit these targets getting a new grant if the board approves it like no the new investor would never do that it's like okay I'll talk to the new investor and he wouldn't let me talk to the new investor you think I think he'll kill the deal and I was like okay you know it's only so much I can do and the winds are so big I don't want to be up in a founders grill about this stuff but founders do need to know and that's why I talked about it and I'm creating a composite here nobody would able to be able to figure out the company but I talk about these composites on the podcast so the founders know what's gonna happen if you screw previous investors there is a there are two scenarios you have one is like the way you're talking about is is definitely bad like you're continuing the business the other is like you're you're like the business didn't work you're shutting it down and you're pivoting to a new business that is a little bit of a different scenario and actually the best thing to do in those cases I've found it's exceptionally brain damages just just kill the company yes less bad feelings bless but Fred Wilson has like an amazing blog post on this that Jason I'll send you so you can put in the shownotes of like why it's better the company in that situation yeah I mean the thing I've seen is giving warrants to people so you keep the valuation where it was but you give people ten more if the company became worth one tenth the price the new investors buy a share at the last price and they get nine warrants they can buy any time in the future at this so if it does work you essentially keep the valuation where it is there's all kinds of creative things to do but always think about your investors what big lecture what a quick point here I want to make on on giffy before we move on I know we have killed lightning around here but in switching from deal to intrinsic we like to go long out acquired yeah what one reason why if he didn't have any negotiating leverage here is they didn't material business they weren't obviously sustainable business but why didn't they you know they're this they have a crap ton of daily active users I don't know what it is hi million hi hundred millions and so what's the deal well they don't actually have a strong relationship with those daily active users most people I think more than 50% of the giffy traffic actually comes from Facebook through api's which means if you think about slacks API and all these other ApS most people are not going to get comm so if they were gonna have an ad based business model they don't really have an opportunity to sort of say hey what about this gif you know they really are at the mercy of who's calling the API and unless they're just gonna like load sponsored images into there or you know it's they don't have a big canvas to work with there and so I guess the moral of what I'm saying here is and this really ties it all the way back to the clubhouse thing is think about if you're one of these consumer companies who kind of has a tiger by the tail but you need to think about business model at some point you kind of need to think about like okay what type of relationship do I have with the user how strong is it actually how much time do they spend with me how much do they remember the name of my brand how much are they coming directly to me not through another tool and then make sure that your canvas is broad enough that whatever your business model is at or asking for money or whatever it is like make sure you can actually do that because in gifties case there really wasn't a way to do it yeah there was no business model there I mean that is really challenged I what do you think the business model would be for clubhouse we were teased that a little bit early on we would wrap a clubhouse what do you think the eventual of the product we all like the 1.0 of the product what do you think that product ultimately is to consumers at scale in terms of business model well one thing I would try if I were them is promoted clubhouses so right now the UI is literally just like here's the clubhouse here's the clubhouse here our room and you know you each room sort of as just a set of people and that's not gonna scale right that's gonna become a really tall list really fast and so discovering your rooms is going to become either rooms where your friends are in it or rooms where someone notable isn't it and you want to discover one of those two paths so you open up the app it shows you the two rooms your friends are hosting and the third room is a talk show or you know a Q VC talk show type thing or a promotion exactly what's going on right now or you've got some celebrities hanging out but assuming that lots of celebrities are gonna want to do that you could open up a sort of event style model where you pay for placement and say hey like if you want to reach this huge audience that's in club house we'll put you know I'm gonna do a clubhouse with them like cool well we'll build you a stage here and we're gonna charge you for it so if your Star Wars Moomin DeLoreans coming out you have you know the director or Jon Favreau comes on and does a fireside chat and Disney pays for that and gets a link to Disney Plus to sign up for it and it is a promotional thing yeah I would try it I think there's lots of other other you know advertising David what do you think we used what's your favorite model for it oh well I mean I'm biased but you know the LP shows works pretty well for us and like you know I could imagine running that on Clubhouse you know you've got some influencer has following and it's a subscription service or I think that's right therefore I'm with you behind the scenes I think it'll become like remember fan clubs people would pay to be in the Britney's fan club or you know whatever the Grateful Dead were kind of like this giant fan club but people used to have like a paid fan club and you get a newsletter I guess was you we get like every month a newsletter but then it kind of became a phone call like you would call into a phone number and you would get some artists so imagine you're Tim Ferriss and you have Tim Ferriss clubhouse and Tim says I'm gonna just go on there you know five times a month and you can be a member for 10 bucks a month or 5 bucks a month and it's sort of like a patreon model and you know have you guys what do you think the previous best iteration of Clubhouse was and then have you seen anybody kind of pivoting towards Clubhouse as we often see in this kind of space house party I guess was sort of like Clubhouse for video yeah I mean the closest thing is actually the thing that that the founders also started inside of their little incubator that was their shell entity for this called talk show it was live podcasts I think like Samuel Shaw I've been on a bunch of them but you can kind of see how they jumped from this sort of like tune into someone talking now to tune in and maybe we can all talk to them now right so I think yeah that the serendipity is kind of the strength of it right now I'm interested to see if this thing wears off like I I got a little bit of clubhouse fatigue the last couple days because when I went on I noticed is that cuz he didn't get into the deal no I can't notice it even before the deal was announced that when there's somebody notable in there running it or a couple of friends it's really interesting so when I was on there I was interviewing Adam from Chora and I interviewed Alexis from reddit and initialised they just happened to be on there and I just did a mini interview and then Ben Horwitz came on and I just took over the microphone because there were 20 people had the microphone but I said Oh Ben Horus is here let's do a mini interview Ben and I started asking question I just took the thing over and in both of those cases the rooms just grew and grew and grew because you had some professional moderation other times they come in and people are just like screaming and talking and they get these lols and they're like what next and like I don't know this will change our avatars and it's like really boring right like God some people are doing they were changing their avatars and then saying 3 2 1 refresh and I was like that's kind of interesting but I do think you could have just like there's YouTube stars for podcasting stars there could be clubhouse moderator stars like mods who are just like this and it's I will try it it's a different skill set when I thought my podcaster skill set would translate but like the thing that makes acquired grade is David and I go do a crap ton of research crawl down an Internet rabbit hole and then turn a narrative and you know pull it turn it into a narrative and pull out key themes and like in Clubhouse the skill is you have about half a second to come up with like the wittiest most clever novel thing you can do the last person that someone said and it's a totally different skill set and if I think there's gonna be new new creators in there that thrive in that new format it's like a salon for it's like you have to be good at the salon format of the news roundtable format which is you have to state well know it's you and think about what we did today in a noose round table you know I've got two really smart guests with a lot of experience and put stuff up I put myself out there and I to be vulnerable in like my here's my opinion and I'm showing you that I'm gonna be totally candid and honest hope to get you candid honest and then when you say something interesting I try to loop the other person in and you'll see me say oh that's great David Ben what do you think of that or Ben where do you fall on the cynicism - yeah you're who's gonna cover it but you know that took time to do and you know yeah and probably a third of them are roundtables or 25% it's called passing the ball and so when you're on CNBC if you really want to be good at that we have to do is at the end of what you're saying like they bring me on as an expert mouth on a certain bird but what's really good is if there's a sentence to be another person on or passing it back and saying well Karl you know what do you think I mean are you up are you gonna upgrade to an iPhone 11 or are you fine with your iPhone 10 I mean just look at yourself look at your family what is your pattern do you line up would you even think about going the next day to get the iPhone where are you gonna wait that's a fair point yeah you know we we actually we wait now we do it every other time that's when you can pass the ball like that and get an assist it's kind of like LeBron who you know or like Michael Jordan passing to Steve Kerr or LeBron passing to somebody and like they hit the three-pointer it makes them just an even more dynamic player yeah so the people that have compared themselves to Michael Jordan in the last two days include massa sown and Jason Calacanis and Chris Sacca no III compared myself to LeBron so be clear but ya know III do think passing the ball is like really the yeah that's a great point it is you guys dance by the way I I can't watch it because of the PTSD from the Knicks I was adding on those games but now that is it done and how many parts is it that's ten I'm on Episode six right now I think nine in 10 just came out yeah my plan was to wait and then I am ten parts just finished yeah I am so exhausted from this goddamn coronavirus shelter-in-place Jason you're gonna love this I've decided I've decided to make an announcement today that I'm going to take a month off whoa nice yeah when I say take a month off I'm taking a [ __ ] month off because my brain is fried now I don't know if I'll make it ten days but my intention is to rent a beach or a lake house somewhere and I am going to reset my brain for 30 days the summer or over Christmas or sometime in the next six months because I mean how are you guys doing through this I love it I just tried to do this and actually ended up being successful but it's hard I had like two false starts ok bracele and you did two weeks right yeah - two weeks yep and I wasn't totally off but like the first time I tried to do it first and second times I tried to do it I'll be like okay yep I'm taking a break but then nothing changes it's like you know like oh I'm still do it gum still do it I'm still doing I'm still doing my idea is to find something to do with the family that's off the grid and that takes like attention every day so I think it may be what a rafting trip or maybe driving across the country you know yeah check my email at the end of the day or whatever but I'm thinking about like doing something like that where I do like a two-week or something you know maybe a month and that yeah I look I'll probably phone in for the accelerator probably the only exception I'll just book eight episodes of the podcast ahead of time do eight great interviews and then you know and bag them which I could do in a week but yes ok brains how are your brains right now through coronavirus this is impacting you guys like psychologically how this is weird it's it's weird and you know there's like such a there's such a quest for certainty right now because it's uncertain but the end of the day is like nobody actually knows what the [ __ ] is gonna happen you have to surrender to it like it's a really scary thing to think this thing could mutate and the next wave could kill children instead of all people why in it's night or any other partner tation right the the craziest thing is we're actually very lucky that either the viral coefficient wasn't higher or that the fatality rate wasn't higher like if what if this thing had been as fatal as SARS and like the next thing could it's it's it's wild to wrap the mind around that actually we're luckier that it wasn't worse yeah to see 30 whatever percent the unemployment is gonna wind about 20% thirty five million people whatever it is like to see all of this happen concurrently and then still not know disease basis exactly what's going on because you know again it's not a political show but when you look at execution and leadership it really does matter like your ability to have great leadership to have people in office who can execute and from top to bottom I mean this is not a political show listeners it's not a bring up Elizabeth Warren in AOC but I kind of it kind of proves my point like they shouldn't be involved in entrepreneurship and then when you look at their job they're doing I mean the job that's been done here has been done executed so poorly we can't even get people to wear a goddamn desk like this is the most the most basic request that from top down top to bottom every single political person should walk up to the goddamn podium wearing a mask and say I'm now going to lower my mask to speak to you for 30 seconds because everybody is 10 feet away from me and we know that when you were thin six feet if I were to COFF on this microphone it would need to be sterilized da da da da da and we need to have everybody comply and just wear a mask and we need you to wash your hands and we have masks and Clorox wipes that will be delivered by the US Postal Service to every mailbox every month and the government's paying for it so you do not have to worry about your Clorox wipes or your hand sanitizer or your masks and if you have them please give them to your neighbor or keep them for the next pandemic these three basic things washing your hands using the antibacterial wearing the mask is your national duty I'm Jason Calacanis you know Presidents Day it's like why can't the [ __ ] president say something that simple why can't every leader say something that simple and why can we still fly on packed planes but not work at a factory why can you go to Barton Trader Joe's but not build a test and then this makes sense and no nobody can seem to explain it in plain English to everybody like what's your explanation been like how would you explain to people they can go out a packed united flight with 300 people in a canister for five [ __ ] hours I see that assist there that's nice that was nice I mean well look III think how do you know part of the reason I think that we're in sort of this like it's confusing you can do one thing but not the other right now is you know the the the purpose of shelter-in-place when it started was not everybody stay in your house till there's a vaccine it was everybody stay in your house so we don't overwhelm the hospital system now that with the exception of a few cities we didn't overwhelm the hospital system or at least maybe we did but we're sort of like that even New York they had every single place has had extra beds nobody in some places there was like there were lots of places in New York they were actively doing triage on which life to save and that sucks yeah um but is that correct at the peak they were they were like that I thought they didn't run out of beds but okay or at the very least they had enough beds but like there was no constraints maybe not enough there were doctors and nurses yeah and so now we're in this interesting place where like we are starting to open things because the purpose is not to stay in our houses until there's a vaccine however some people totally can stay in their houses till there's a vaccine like I'm one of those people and you know my life is adversely affected in lots of ways but like could I tough it out totally and so you're seeing some people who are like well I may as well just do that or I may as well only break a couple rules but everyone else is saying look the floodgates are open we did it we crushed the curve now we're out and so you have this like wild do you feel because your job is not impacted in a dramatic way you can still work you know you haven't been furloughed obviously do you feel that you have more empathy or less empathy for the person who has no revenue and needs to actually go to a place to get work done that they can't work on a keyboard well I think there aren't natural there's not natural empathy created there but like you got to find ways to think of it like my life is so different than that person's life like do you think they should stay home or do you think they should go be a gardener or go be a waiter or go be a bartender or whatever it is or go I think I think everybody should do the thing that they need to do to make ends meet and take care of their family and do these things and simultaneously I think that if you don't have to go to work you shouldn't go to work yet so now the way you just said that is so plain English and easy why can't a politician say just the way you did it was beautifully stated we you do not hear that narrative from any politician politician it's hard I said two things that conflict so what's the policy out of that the policy is it's very simple I'm about to tell you something that sometimes in life you will have conflicting thoughts and conflicting instructions just like we can wear this is a lose-lose situation the pandemic is deadly for certain groups of people we know that that's confirmed and it spreads like wildfire if you don't take precaution and we know that people die if they're unemployed and opioid abuse and suicide and we understand it to feed your family don't want to starve these are two lose-lose situations if you can stay home and if you can see less people that's helpful for everybody because it keeps the coefficient down and if you have to go to work we understand please take these precautions and it's very important to take this person and you don't interface with people who are risk it these are conflicting but these are complex nuanced issues and I don't know why the goddamn politicians and the media that are so polarized can't just tell it straight to the American people all right Jason bring us home David what do you got you have any thoughts on that no just say I realized I didn't pass the ball to him so he got thrown out on that one so just want to make sure no what I you know I don't know the only thought I have is is the old charlie munger ISM by way of Ben Franklin which is if you had persuade appeal to interest and not to reason like you actually want people to do stuff you gotta figure out some way to like create an alignment up incentives that it's in their interest to do stuff otherwise yeah here's a very simple one don't kill your grandmother by not wearing a goddamn mask [ __ ] yeah that's good I mean do you do you love your grandma then wear a goddamn mask and wash your hands it's that simple all right this has been a great episode thanks for tuning into this week and syrups hey thanks Ben and David if you guys don't get the aquired FM podcast it's absolutely fantastic and you can subscribe to they have their LP show which is really fantastic and I did a two-parter with them recently you go by that give it a shot it's well worth it I think we charge like 100 bucks a year right yeah but the main shows free come check it out shows comprehensive history of every company you care about lessons learned along the way in any podcast player all right then thanks to my team working really hard remote thanks to the investment team Jackie presh and Ashley doing a great job thanks to the sales and operations teams Marine Charles and Nick and thanks to Laura and Heidi also on operations and to my sales and business development team Luke and Matt keeping the lights on and it's not easy to sell right now but you guys are doing a bang-up job did they miss anybody on that Nick I think I got everybody right I think I got everybody if I left you out it was not intentional but really one of the great great things great joys of my life has built in building this team at launch and also at inside and wow what a great job the launch team has done stepping up during this time of crises when our founders really need us to step up so I appreciate all the hard work people are working 23% harder than I think they do on average so and we already are a hard-working company if you want to chop it up and talk about it some more acquired FM has the slack room which I got inspired to turn ours back on ours is at this week in startups calm slash slack is the acquired one do you have to be a paid member to get in the slack or is it for everybody nope but almost everything we do is free it's just the how do you get in the slack is it acquired that FM slash slack yep that's it okay on our website all right yeah so go join both of those slacks and I I'm in the acquired slack once in awhile we'll see you next time when this week starts bye-bye
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