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Remyx AI 8

### Human: According to the Wall Street Journal, search fund managers typically hold the businesses for six to 10 years before exiting. It noted that many of them exit to private equity firms. So most likely they're buying mom and pop businesses for cheap, putting, you know, Stanford GSB grad on third base here. Yep. And then they increase operational efficiency and exit to PE.### Assistant: This is fascinating stuff. It seems like it's fascinating. Uh, they're now looking to buy, I'm just recording from a Berkeley, uh, cause it seems like maybe this is a device that they teach in MBA programs, uh, to encourage people to maybe not go to work at like some consulting firm. I'm just quoting, they're now looking to buy a company with a minimum of 1.5 million in earnings before interest taxes, depreciation, blah, blah, blah, EBITDA. So they're looking for 1.5 million in profits on revenue of up to 50 million and a clear path of repetitive businesses from existing customers. Our job is to find companies that aren't actively for sale, and figure out where they are financially before it gets to the point where they want to be more formal. Greenberg said, so I think this is the key, you go find businesses, and then you try to find the owner, you say, Hey, I'm a graduate student, I'm looking to buy a business, wondering what your business does. So you're looking for these diamonds in the rough. One of those was Survey Monkey. Survey Monkey was being run by like 20 people was doing was massively profitable. And my friend Dave Goldberg, rest in peace, had bought it. And, you know, it's kind of like MailChimp in a way, kind of funny that they both were primate based naming conventions. But the folks who are running MailChimp decided, we're not going to sell this to a private equity fund, we're just going to take it all the way and sell it whenever they sold it for billions of dollars. But there are little software companies out there that people make. Well, you know, you have to have a lot of energy to do this, too, because you're buying, you have to find the business, then you have to clean the business up. You know, what are the chances the business is being run at a high level. So what the arbitrage here, I believe is mom and pop business got product market fit. It was growing nicely. But if you brought in professional management, quote unquote, with a great skill set and a young person with, you know, crazy energy who wants to prove themselves. I think that's the bet that these investors are making a crazy because crazy and I hate to say the word young because it is ageist. But Energy in investors mind fades over time for most people, they become rich, they become 50, 60 years old, they say, hey, I want to ski 40 days, you know, this year, or whatever, they come up with some stupid metric that, you know, they want to live some epic life. And, you know, at 50 years old, they decide that's the time they need to hit 40 days of skiing for some godforsaken reason. It's the circle of life. It is a circle of life. Yeah, I have I hit 37 just for folks uh and then you're so close mark pink is then dm'd me when i said 36 days the other day and he was like 59 what a monster mark pink is monster he's my guy but come on mark he's like 59 for you

### Human: So yeah, that kind of explains why everybody I've ever met from GB. Let's say has some has some swagger. Um, let's say so what Okay, so from the founder perspective, great advice, what should it mean? What should what signal should I take from it as an investor?### Assistant: No, I don't think that's a downturn. I think sometimes. And sometimes an executive team needs to see something exist in the world to help the core business, but they want to use entrepreneurs to make it happen quicker. Yeah, and they'll use their balance sheet to do that. Famously, Google wanted, and this didn't come out of Google Ventures, which is called GV and GV runs like a venture firm independent a different office, I think totally different office. That's why they call it GV. They have a different and they and they really don't have to go clear investments with the mothership. They don't have to go to Sundar and say, Hey, is this okay? So they act autonomously. I think it's pretty well known in Silicon Valley, they act autonomously like this, which doesn't mean they can't get you a meeting at Google. But it does mean you can feel pretty good about those investments. Google, though, additionally, wanted to see renewable energy because they wanted to get to zero carbon emissions for their data centers. And they invested in, I believe, a large number of solar farms, or residential solar, they became, I believe, at one point, the biggest investor in solar projects in the US, we can have the producer look that up or whatever, but they got big into using their balance sheet to invest in this stuff. Now, that wasn't venture investing, it was kind of investing in partners to go build this capacity. They have some upside as an equity owner, and they were a customer, right. So if you want to see something in the world, like, you know, more solar energy or clean energy, you can jumpstart it with your balance sheet, kind of tangentially related to corporate venture. it's great that exists in the world. Go in eyes wide open. And you probably want to see the here's the other problem I see with these. The person who did the deal is not going to be there. You know, for the whole lifespan of your company. So just be prepared. You took money from Qualcomm, let's say, yeah, and the partner who did the deal know, they probably the tenure of partners that these are half the tenure of venture partners or a third. They typically use it as a stepping stone, somebody from corporate, you know, they were a VP, they went to the venture unit for four years, they did a tour of duty, and they left because they don't get paid. venture capitalists get paid, they typically don't get the same carry structures, they kind of just get paid salaries, they might get a little upside. Google Ventures has run purely like I think they get a billion dollars from my understanding back in the day was they were getting a billion dollars from Google every year to invest. And they just got paid like a yearly fund. So it was incredible to be a GV partner is dang. Yeah. It was like you have one LP. I don't know if they have more LPs now. But back in the day, it was like you have one LP, Larry gives you a billion bucks, you deploy it. Every year the fund closes. Good luck. And so man, it was a pretty sweet job. And they paid them carry like a normal fund.

### Human: You did it, right? And so that worked out poorly for Facebook. Facebook managed to find a face-saving solution. But in terms of declaring both Google and Facebook monopolies and starting to regulate them as monopoly entities, Australia has now done this. First real national jurisdiction in the world to do that. Do we see the very biggest, the trillion dollar tech firms come under an entirely new international, national, local regime of regulation in this decade?### Assistant: Yes. And I think, you know, it's very hard to parse what's happening through the lens of existing legislation, because all existing legislation was focused on consumer harm. The problem with these companies is they make their living by delighting customers and lowering prices. And there's no harm quite the opposite to somebody having Facebook for free or Instagram for free or gmail for free, or gmail increasing the amount of storage they give you or Google photos. I mean, they're in a competition to see who can be more generous. So if you put them through the lens of consumer harm, there is none. I mean, even Amazon, they allow third parties on the platform to sell and compete against them. So if you can make better, you know, USB C cables, you can compete heads up and that if you were going to come up with a sanction against Amazon, it would be allow third parties to put on your platform. Right? That's what you do. But there are all these other things that are making people nervous about them. And then there's an overlay here in the United States that we have to deal with, which is we're in a competition with China. And if China picks And it's in it. And I would say humanities in an existential crisis with them. So the United States is in a competition for supremacy of the planet. And then humanities, you know, in terms of picking freedom and democracy versus authoritarian, you know, as a paradigm. So we have to win versus those companies. If we let Baidu and Alibaba and tick tock and 10 cent, do whatever the heck they want and be picked as the winner, and then we break up our tech companies, we're basically saying China, you win. it's really, it's really hard to argue that Facebook hasn't had some bad, you know, effects on democracy, it obviously has. And so there's a downside to the social media stuff. And, yeah, and I think the social media stuff has poisoned the well for a lot of people. If not for Facebook and Zuckerberg, I don't think tech would have such a bad reputation in the United States. I think that was the one company that just took it too far in terms of removing friction and always thinking about themselves. Facebook has never had a partnership with any content producers never shared, shared any money. And they have not only that they've killed all their partners like game companies, etc. And people remember pages, you know, and building up your following there. And So they've been a bad actor in my mind if they would have just shared revenue from the beginning and been generous like Google does with AdSense and YouTube, right, they give 55% of a dollar or Apple does with the app store only taking 30% give me 70%. Zuckerberg doesn't think that way. He thinks everything for me. complete control, I own your data, I get 100% of the money. And that greed has made him the most hated person on the planet, I think, and rightfully so. And so when you get that great power, you really want to spread it around and share it and build up a group of people, you know, like Airbnb hosts, or Etsy sellers who will be like, Oh, I love this. This is great.

### Human: It's about five thousand a year for that content What do you guys not it is it is the low low price of a hundred dollars a year jason? I just have to say that ridiculous. It should literally be a thousand I don't want to mislead people to like think that it's this thing They shouldn't go listen to the main show we do tons of work We do deep dives on companies like we tell the two and a half hour epic story of epic games like that's totally free and available to everyone for people who are actively like building companies and want to go deep into things like How does a VC firm work and rise decisions there and what do titles mean and all that stuff?### Assistant: That's what we do a lot of basics, but it also deals deeper dives. Anyway, it's it's literally honestly, if it was $100 a month, I would still think it was underpriced. It get it now because I really think they should raise the price acquire.fm. Our first story is Apple fighting Epic Games. For those of you who don't know, Epic Games is a publisher and software developer. They make Fortnite, which is I believe, like the most successful game One of the most successful games in the history of video gaming. But importantly, they make the Unreal Engine, which is a video game engine that powers other games. The founder is Tim Sweeney. He's the founder and CEO, and he owns over 50% of the company. Tencent owns like 40% of the holding company. They got a $17 billion valuation. And in June, Epic CEO Tim Sweeney sent emails to Apple saying, Hey, listen, Fortnite makes a lot of money, 30% heck of a take. Can we get a discount? Can we, you know, not pay for or change the take rate of the in-app purchases, which also happened to be the subject of uh... the uh... was it the senate hearings uh... antitrust hearings in uh... the house antitrust hearings and so this is front and center for everybody our boys over at jason fried and david hannemeyer hansen both have been on the program in the last year with hey dot com they also got in a big fight uh... with apple and apple is getting horrible p r about this And, uh, then Epic, from what I understand, decided, screw it, we're gonna jump the fence. We're jumping the fence when you ask to buy something inside of Fortnite, we're sending you to a website which is Ixnay on the rulesnay, according to Apple. And, uh... Apple is like we don't ever change the rules for anybody except when I think they do Except they do like where they do had any you gave Amazon a better deal and then now they're in court all of the developers are slowly lining up behind epic and and quietly quietly because you obviously it's quietly because you don't want to poke the tiger that would feature you and you don't want to mix it up with apple which goes to show that apple has too much power if people if your partners are that scared of you they're afraid to talk to you and the only person who's not afraid is a maniac like david hammer hansen whose pastime is starting fights or epic who's you know 50 control by a or jason calacanis or jason calacanis like if the only people who are willing to fight with you are crazy people that's one thing but if all who have control of their companies and have control their companies but if you're scared of them that says something else so uh let me just drop it to you david what is your take on what is happening right now and the insertion of epic Into the fight as opposed to this being a fight with this little hey calm thing on the side Which people can I think dismiss but epic? dropping this bomb after those hearings seems to me to be a Double punch that I don't think Apple is gonna recover from what do you think David?

### Human: Yeah. And then don't hang it up until you resolve the person's problem. Exactly. Yeah. Or when they say what the problem is, take the rulebook that they gave you, throw it in the garbage. Yeah. And then listen with empathy to the customer, and then try to make them happy. So they come and give you more money and tell their friends to give you more money. I don't know who is training customer service these days. And now with AI, it's like, oh, we don't need customer service. Like, that's not customer service. That's customer loyalty.### Assistant: The reason the reason is that loyalty is slow to measure, and therefore gets discounted. So we have this problem, which is not only does all big data come from the same place in the past, but But we vastly prefer fast, highly attributable data to slow, hard-to-attribute data. Now, obviously, slower data is harder to attribute directly because more other things have happened in between. I don't know if you're familiar with the work of Ian McGilchrist, a kind of British neuroscientist and philosopher, really, who basically claims that we're at a cultural point where the left brain, and he believes this literally, by the way, that's separated by the corpus callosum, the right brain hemisphere does the same thing as the left brain does, but it does it in different ways. The left brain only knows what it knows. The right brain is sensitive to context and will ask questions and so on. And I think there's a huge danger that in our love of winning, and I met him a couple of days ago, and I said, I think a large part of this left brain problem is because in order to get anything done nowadays, you've got to win an argument. And we've come to assume that quality of reasoning correlates perfectly with quality of decision and quality of outcome. I don't think it does i think in a lot of cases actually quality of reasoning or the ability to reason a possible hypothesis for something working maybe not a bad kind of filter. The idea of the person person with the best argument therefore has the best solution. Is not safe because it is cards crazy possibilities by the shed load. Once you demand that things make sense in advance and that you can only do things the effect of which you can measure down to the last penny. Large numbers of solutions basically disappear from your solution space they come off the table because a lot of things only work in time. I think there's a huge value to a business being famous. But it's impossible to predict how that value will manifest itself in advance, simply because the point of being famous is that people you've never heard of come to you with demands you never anticipated. So one value of being famous is that if you want to perform very highly targeted precision marketing, where you only pay to communicate to people who are in the market for your product, You are limited by your own imagination and conception of what your market is and what need states your product may satisfy. Now if you become famous you may discover in fact that there are whole incremental unanticipated markets for your product and that your product satisfies need states you never even imagined for a second. This is so true. Okay and so You have to have enormous faith in the capacity of your own imagination being better than the imagination of 20 million other people to determine what the value is. I think there's something really interesting in that I've made this point about online estate agents. I think it applies to online dating as well, okay, which is realtor, sorry for Americans, real estate agents. Yes okay now what used to happen with the state agent was when you went to the state agent you would have an idea of what kind of house you wanted now the state agent will tell you that. Actually in the majority of cases people end up buying houses that meet none of their initial criteria.

### Human: Yeah, no, I kind of like it though. Yeah, it happens. I thought you put a little Vaseline on it to get that more Hollywood... Exactly, I know, to give that kind of misty romantic look. Yeah, absolutely. It's Casablanca. So Casey asks, what's your favorite behavioral study slash experiment or one that you found the results to be very surprising, i.e. the Milgram experiment or the Stanford prison study? We both know those are experiments in sadistic nature of human behavior.### Assistant: Yeah, I wouldn't I wouldn't choose either of those. I mean, there are there was another another interesting Milgram experiment where he went around asking people to effectively asked complete strangers to give up their seats on the subway. And what interested him about that result was that most of the people he'd asked to do that just asked to be excused after the first day because they found it painful doing something which broke a kind of social norm. And so I'm always interested in the extent to which economics does not capture a multidimensional view of human motivation. What would be the ones that would really... That's a great one to mention. Actually, one thing I'm a huge fan of, which I think is just very beautiful, Shlomo Benazzi and Richard Thaler and their experiment with the Save More Tomorrow pension, which is simply designing a pension so that you never get poorer, you get less richer, because the pension only kicks in every time you get a pay rise. I think that's ingenious. Explain how that works. Yeah, explain how that works. So the standard way in which someone sells you a pension is you sign up. And from the moment you sign up to a pension, from that day onwards, immediately, you become $300 a month poorer. And you're 27 or 34, whatever you may be. And they designed it so you signed up to a set percentage amount. And the way it worked was that You paid nothing, you signed up to this pension, nothing happened, okay? But every time you got a pay increase, 20% if you'd chosen 20, 20% of the incremental amount was automatically diverted into your pension. So you never feel pain? You never felt pain, you only felt less gain. And that was a beautiful bit of behavioral design, which, by the way, without going into this in huge detail, there's a whole field in mathematics called, it originally comes from statistical mechanics and physics, ergodicity. And the question of ergodicity, I don't know if you've come across this debate. But it's essentially the idea that economics and probability doesn't understand the fact that an ensemble outcome isn't the same as a time series outcome. And quite a lot of what appears to be human irrationality isn't irrational at all once you consider the fact that we've evolved to live in a world where we're trying to avoid extinction more actively than we're trying to obtain perfection. So I'm always split as to whether I recommend people Google ergodicity. because it's one of those mathematical concepts. But one of the things I would argue, for example, is that economics wouldn't understand is Amazon Prime. Because what I think Bezos spotted there is that to an economist, you pay three pounds to have your book delivered because it gives you three pounds worth of utility or three dollars worth of utility. And what Bezos realized is that there's a big difference between 10 people buying one thing a month and one person buying 10 things a month. 10 people buying one thing a month don't really mind paying three bucks a month to have the thing delivered. One person buying 10 things a month, even if he's kind of pretty rich, goes, Jesus, I'm spending 30 bucks on bloody delivery.

### Human: Do you think, last question, as this moves toward passage, that this also just becomes the kind of economic argument that can get lots of different constituents behind it? Because it clearly we see this as a big, you know, climate is the biggest human story, but also the biggest business story on the planet. And it seems to me that the economic benefit in terms of, you know, US innovation, entrepreneurship, investment in a future where like, most of us make it through this, which is good for keeping our country strong, all of these benefits that are sort of fundamentally pretty mainstream, everybody would agree that those economic benefits are strong. Does that start to create enough, do you think, pressure to keep this from being like, I mean, yes, I'm dancing around the issue of when are Republicans going to realize that this is actually just a good economic argument, but does it make it harder to walk away from a bill like this when it's like, look, it's going to lower prices, it's a great investment, it's going to push a lot of investment in private equity money? At what point does it just get too hard to say no to?### Assistant: Well, I think what's interesting about the way that... those two thematic changes have played out in the bill is that I think it makes it more compelling and more relevant. It's one thing to say, oh, solar and wind is really important, and electric vehicles are going to be great for everybody, and there'll be a better investment climate, and we'll have entrepreneurship and technology development, and that's all great. What this is also saying is, okay, we know people are getting hurt right now by fire, by floods, by storms, living in coastal communities, living on farms, and we're going to actually direct meaningful chunks of funding towards those areas, because that's part of how climate is really going to be experienced by humans, by people that actually care about these things. That's a constituency that's beyond technologists only focused on solar energy or wind energy. I think the other piece of it is by creating kind of a clear pathway and momentum over kind of durations. It's not like just this year we're going to do this. It's saying what programmatically we're going to deploy, you know, $369 billion over a number of years in the early stage supporting more technology right now and buying things that actually embed this technology and the middle by creating incentives. What that also tells you is that if you're, you know, in high school and you want a good job, Or if you are working in the fossil fuel industry and you're trying to figure out what happens next, or you're trying to advise your kids like, hey, this is not something that is a questionable trajectory in the way that it was before. This is an industry shift. That means good jobs can be created in these places. If we deploy a ton of offshore wind, that set of wind farms is going to have to be maintained by people going out on boats for 20, 25 years and making sure that transmission lines work and that the wind turbines are spinning, electricity is being generated. And those are great long-term commitments to communities that can provide good jobs, good employment, a pathway that isn't kind of a speculative, well, maybe that'll happen to me that won't. Right. So, you know, the idea that a good job in the automotive sector could be, you know, being the EV sector was, again, like in 2009, like, really? Maybe. And today seems a lot clearer. And I think going forward, other parts of the economy are going to look clear or clearly along this pathway. So I would say the human focus, right, on people being affected right now and how that's going to happen across many different communities. communities, agriculture, forestry, coastal communities, disadvantaged populations. And then the fact that now you've created and reinforced, as you said, the trajectory or the acceleration here means that you can really think about this as a clearer future for people to get good long-term jobs. And I think that is always a pretty persuasive constituency supportive mechanism is to make people think, look, this is this is a real future. It's not a future for a small bunch of people that, you know, would like to do something that's good for the world. It's like, this is part of a real reinforced transition that's going forward.

### Human: There have been some indie games. But there there hasn't been anything really high profile. That's fair.### Assistant: Listen, everybody stop what you're doing intercom as an awesome new product and I need to tell you about it. Basically, it's a connected inbox for your customer support team. And it integrates everything intercom messenger, email, any channel that people are contacting your support team. It's a total game changer. It's layout is beautiful. It's super efficient. And they're thinking about making your team bionic, right? They want to turn everybody on your team into a superhero. So they got all these quick keys and all those great functions, you're never going to lose a customer and your team is going to be happier because it's a better product. It's that simple, folks. And if you're an early stage, high growth startup, you get access to intercoms early stage Academy today, right now, and a 95% discount. I'm not kidding. Five cents on the dollar is what they're going to charge you as a startup. Why? Because intercom wants to grow with you. And they want to teach you how to build your startup with their tools. And you can apply for their program today at bit.ly slash early stage 22. So it's bitly, you know how bitly works bit.ly slash early stage to two, or you can email them at startups at intercom.io. And just say, Hey, I want to be in the early stage Academy. And just be honest with them about what your goals are what you're struggling with. It's such a great team over there. They really care about startups. I've been working with them for a decade, basically. And on July 20, intercom is hosting another hybrid event in its CX for growth series. The event is called localize your customer support experience. And we all know what that's about, right? people are starting to use products on a global basis. And, you know, you got to meet your customers where they are, and it might not be in your language. And it might not be using your team from one specific location to service another, you may need to localize that to get the best customer support. They're gonna teach you how to do this at this great hybrid event. So you can go to intercom.com slash webinars, you can check out all their webinars, the team over there, Des trainer and everybody, you've heard them speak on this program before. They're just experts. They're experts at taking care of customers and reducing churn, increasing lifetime value. And I think like 90% of my startups use intercom for me to read the ads is really super easy because everybody knows intercom and everybody gets great value from it. So make sure you use intercom and go to their webinars and check out their new product. Congratulations to the team over there for intercom messenger. What a great idea. So as a startup, you chose to do this as a startup, you raised money from a Korean internet company. Is it cacao? You've got it. Cacao. Yeah. Cacao. So you obviously Starcraft being popular in Korea. I'm sure the Koreans are chomping on the bet to have essentially, you know, some new RTS IP. There hasn't really been new RTS IP, has there?

### Human: It's a legitimate, I mean, you're stressed out about us and your company and your team too. Like everybody is terrified of that exact thing happening. And so, it is only love and sympathy for those to whom it is already happening. Because any of us, you know, there but for the grace of God.### Assistant: It's brutal. Yeah. And we're going to see this over and over. And she said, she's also burnt out. So take care of yourself first and foremost, you know, uh, Arlen. And when you come up for air, happy to have coffee and talk strategy. Anytime you have my number. Um, and I am 100% certain she will remain an incredible force in the industry. And sometimes you take a step back or two steps back and then you come back and you just lap the whole pack and all it takes is one. All it takes is one. So she's got 200 companies, one of those is going to pop. And the whole narrative changes. And you know what, maybe it's the 200 first company. And that's what that's how I think about this. Because I mean, looking back, like, did I know, I had a feeling about comment feeling about density. But if you told me like, a cab app, and a stock trading app that was free, and an email competitor Gmail, that was $1 a day, a meditation app, these were going to be my big winners, I couldn't figure that out. Right. So I think this is the time, you know, be resilient, and just keep doing the work and keep placing those bets, man, that the combat is the one that comes to mind for me, that was a $376,000 bet. I mean, $376,000 not a lot of money in venture. Yeah, it's a nine figure position. It's over $100 million in value. You hit one of those the world cannot deny you, you know, forget about the ubers, you know, you hit one of those 250k slugs becomes a unicorn, my Rome, you know, this is a big deal. It can become a big deal. And then you know what, You don't need anybody i'm putting up two fingers here i'm pointing with my pointy fingers you don't need anybody this that's one of the great things about this industry just need those hundred lps. And she's got a syndicate so everybody should join her syndicate just do a google search for backstage capital syndicate join her syndicate subscribe and i wish you the best of luck. It's gonna be a hard time. A lot of people are going to go through hard stuff right now. This is another public service necessary to say right now. I know it's easy to dunk. I am a super critical, candid person. I am very judicious with the dunks. I do not dunk on people just because they failed. If I'm going to dunk on somebody, it's like Elizabeth Holmes, because they did something abhorrent or tether, because I feel like they're doing something, you know, that is unnecessarily opaque. You don't see me or I might dunk on crypto bros saying have fun being poor and being gnarly. But just be careful dunking, you know, it's like a really dark time right now. And this is people's real lives, you know? Yeah, 100%. Yeah. Anyway, I'm sorry, I'm getting a little emotional myself about this. I have strong feelings about it, you know.

### Human: free to the day, the movie with like Kevin Costner. It's like you stay alive. I will find you.### Assistant: It's that it's literally that it literally is. I'll come back for you. Oh my god. And that's where we are. So, you know, to the end, what's going to happen now, you know, is just giving some people some advice on this was you know, we had a little bit of an out of control, employment market, not enough people, you know, competing offers, Google, Facebook, Apple, know, Uber, Airbnb, they just hire everybody. It was like, just keep hiring. If you find somebody talented, hire them, we'll figure out what to have them work on. Because this thing is just going up into the right. And when you're going up into the right stock price, raising money, revenue, consumers, everything's up to the right. You're like, we need to staff this place. For two years from now, we need to be thinking about our revenue growing 35% a year. we're growing 36% a year, we're going to have double the amount of revenue in two years. So people just said, whatever our model, whatever our financial performance will look like in two years, let's build for now, right. So it's like on this podcast, like, hey, want to build another podcast, let's hire another person, let's hire another video editor. Now people can take the opposite approach. We're not going to do another podcast, we're not going to, you know, add another day of the week, we're going to contract, we're going to go to four days a week, they're just going to take a very conservative approach. I think in this kind of market, if you're smart, you can take an aggressive approach. It's got to be thoughtful about it. And so if you're planning on hiring four people, maybe you tell people we're hiring to everybody's got to work a little harder, be a little more efficient, I need to hire the best people. And because all these people are getting laid off. Now, instead of one person having five, five job offers, and you're in a competition, you might have five people going for your one job offer. And then you're picking the best person out of the five, not having the employee pick the highest offer of the five. And that is the another silver lining in all of this, if you are listening and you are a founder. need to think like, and this is super cutthroat, Molly, but you might be like, well, I hired this person during these boom days. Did I overpay them? And are they as good as the other options out here? That's when you know, this is going to get really crazy is when people start negotiating, giving people pay cuts, or they start hiring other people for positions and laying off high priced people. This happened at the New York Times many times where yeah, people who were there for like 30 years, they got these like guaranteed union base buyout raises. And then they were like, we got to buy you out because, you know, this 35 year old is filing more interesting stories twice as many, you're getting paid three times as much as them, and you're filing one third of the time.

### Human: I know. Here we go. Okay, we can do it. Here's topic one. Start your timers Alibaba and Tencent. reportedly will be laying off tens of thousands of employees combined this year. This is, of course, after the Chinese government has been cracking down on its tech industry saying, you guys seem to be controlling a lot of finance and access to customers and information and data. And we do not care for that. This Reuters article notes that the recent policy changes have reduced profits and impacted these companies' ability to raise capital. Alibaba is considering cutting something like 40,000 employees, almost 15%. Their stock, of course, down 68%, as you might imagine, from a peak of $309 a share in October 2020. The market cap is compressed from over $800 billion to $275 billion. And then Tencent, its stock is down 50% from a peak of $99 a share in February 2021. Market cap from just under a trillion to $556 billion. I think, Jason, you may have predicted all of this. Yeah.### Assistant: Well, you know, I certainly I predicted it was a possibility that the Chinese government would operate capitalism slightly differently than a democracy. So what we've seen over the last couple of years, or I should say decades, is this engagement between China and the West we started building our phones there. And we, you know, exports and imports, all this, all this great stuff, engagement seem to be trending in a good direction. Maybe if we engage with authoritarian communist countries, the chances of going to war with them go down. And there was a famous Thomas Friedman quote, like, yeah, two countries with McDonald's never go to war. Obviously, that's out the window now with Russia and Ukraine, but there is something to engagement. So we'll put aside the political issues there. On a very practical and pragmatic view, investment in an authoritarian country has a level of risk that a democracy does not if you feel that you have been wronged in a democracy, you go to the court system, we can all complain the court system is expensive, it's slow, but it exists. And then, and it's generally trends towards fairness. And it's probably the best in the world that humanity has created. In China, you have a dictator for life, who decided I don't want to compete with the Jeff Bezos, you know, or the Mark Zuckerberg of this country. So therefore, I will neuter them, I'm going to I'm going to cut them down, remove their power. And this is the downstream effect of it. If you invested in Alibaba 10 years ago, you made no money. And so this incredible run up, and I tweeted the chart the other day, and I just called it Alibaba's last decade. You know, this is their version of what we're going through in the hand wringing that we talked about every week, or every two weeks or so, with our, you know, antitrust laws. So you get to see this right and start comparison, antitrust laws here in the United States, we debate them. It takes decades, a lot of hand wringing, what's appropriate, what's best for society. That's the great thing about a democracy is we have this dialogue. And then you go to a country like this, and they're like, well, they have, I don't want them to have power. Therefore, Jack Ma is going to go paint oil paintings, and his company is going to have to lay people off. And, you know, I'm sure there's people in the United States who wish we did this to big companies here. I think that's what you know, some of the far Bernie, you know, the people who are left of Bernie, you know, who hate capitalism, there shouldn't be billionaires, there shouldn't be this companies with this much influence. And we'll see what's better for the economy. And for people, ultimately, I think, for China, it's going to be more control, but less opportunity for people and people are going to want to work in the government, they're not going to work want to work for startups, and their startups are not going to have global reach. And ultimately, that's good for democracy. This is an unforced error on China's part.

### Human: No, it's also add your own voice and add your own music, which I didn't do. I just ran through this relatively quickly. You can go through this process and you can basically, uh, add your own voice. Now who's going to use this? Well, one, if you're a one man show or one woman show, and you're trying to one person show, let's say a person, one person show, and you're trying to put something together and you don't have the resources that the great resources that twist does. Uh, And you know you basically you do your research you find things that are interesting you prop it up here and you can basically get a podcast going, you know quickly and you can use that as maybe not your primary so what i've seen people start to do is people that are publishing newsletters, who are you doing the work are using this to create a podcast just as another media for them. And then you can imagine if you're an enterprise, you got something interesting you want to talk about, you can do that in there. So I'll pause there because this one probably strikes closer to home for you guys. So I'll let you react.### Assistant: I mean, like many things, uh, you know, you want the humans actual reaction. We talked about. Um, Rick Rubin and his reaction to stuff and his taste. So what this doesn't have is taste. It doesn't have comedic impact. It doesn't have the surprise, the banter that you and I would have now, how much of people tuning into this is for the banter and the personality? I would argue significant. How much of is it for the news value and the information? Well, podcasts are entertainment, therefore, and information, right? So this week and startups all in are giving you information, and they're entertaining you. It's going to be very hard for this to be entertaining, authentic, and informative. But I could see this working really well, if it was just reading you stock quotes, headlines, etc. So for something, but you know, if I listen to it, And I didn't know. And then I found out I would feel dirty. I would feel like I'd been tricked. So maybe that's just a short term thing. Maybe an AI personality is the future. And there'll be some version where this Joe Rogan, and we talked about this before, you know, if I could have, I don't know, I'm trying to pick somebody who's no longer with us, Johnny Carson, and I can have Johnny Carson interview Jesus Christ, or Johnny Carson interview, I don't know, somebody who's died recently, who was an incredible artist, but You know, um, Hollister and live on forever. Right. Or Biggie Smalls, you know, like, so now you've got Johnny Carson interviewing, you know, Biggie Smalls. It's like, well, that's fascinating. So there, there are kind of permutations here that you can't get. Yep. Um, but I do wonder, uh, how soon it would be, how soon it will be before these are witty and entertaining. Can an AI entertain you and do you authentically want to be entertained by an AI is I think where we're going to get to. So if the AI made you laugh, know, there's like a, there's a level of, can it provide information that's accurate? And we all agree it's on the road to being accurate. Right. But it's still delusional sometimes and hallucinations and you know, whatever. So, but, and then the next step is, can it actually be entertaining and can you bond with the personality? And I think that's what the movie horror was about is can you cross that uncanny valley in which you could fall in love with And listen, people fall in love with podcast hosts. They love listening to the show. They use that word love. Could you fall in love with this artificial podcast host? Of course you could. And so will that happen? Of course. And will we be competing against, you know, I don't know, of the top 110 years, will five or 10 of them be virtual? Sure. Why not? Completely possible. I actually don't feel, I feel like there's an artist out there who can make, there'll be an auto GPT or what they call a baby GPT.

### Human: You'd be like, which is, which is of course just the stereotype. But what's, what's so useful to my, again, I always try to look at these crises and we're like, no, what can we learn here? And what's the mirror. And I look at this crisis and I go like, holy, Canada is not that different from France or Austria, Denmark. If it took this little, in my opinion, again, little is all relative, it's relative to burning buildings and rioting and looting and all these other things. You shouldn't minimize it either, right? This was a serious protest that caused all sorts of things. But if this is what it takes to go that far, how thin is this veneer we call civilization? How quickly does it break down in countries and Western democracies where I went, I thought they were stronger than this. Are we that weak? Does it take that little for us to give up all these rights that it literally took hundreds of years for us to win from the Magna Carta forward? That we did not just have these despots who just set out decrees and directives, and you would not have due process, and you would not have any of these other things? Is this what it takes? That is scary. And if so, holy shit, I should take another look at Bitcoin.### Assistant: Yeah, I mean, if you if you if people get scared, when people are fearful, they are more than willing to give up rights or suspend, you know, this these basic premises. And the thing that I found so crazy about this was going back to our original discussion of a how are things different in Denmark versus California, you know, we still got kids in masks here. And, you know, if you were if you were to say in California, like, hey, maybe kids don't need the vaccine, like, is it actually necessary? Let's look at the death rates, like you'd be canceled, like, that would that would be a Twitter mob, like you would not believe if you said that at a school, you know, meeting, you might get dragged out. Where we started was, hey, the information has changed. So when I saw this protest, I was like, okay, we're in the Omicron era. truckers are in their cars alone. For most of the trip, if they stop at a truck stop, the truck stop is a private restaurant, they could require a vaccine card and they could turn people down. It seems like there's, there's no issue here. So now what is the actual issue? The issue is fear. The issue is there are a group of people who are scared to go back to reality and live with the fact that, yes, some people who choose not to get the vaccine are going to die. But I've come to the conclusion, even in America, where we have two or 3000 deaths a day right now, 94 95% of which are people who just choose not to get vaccinated. And I'm like, you know what, if that's their choice, and everybody else can move on, we can't hold them down. That's not American to hold somebody down and put a needle in their arm. And it's not an issue for the people who are vaccinated. So sorry for the immunocompromised. But they've already had this issue before COVID. of, you know, getting caught in a cold. So the rat that where is the rationality to this and the proportion was crazy. And then if you look my tweet, literally, you wrote your thing. And I do my tweet, we're like, exactly had the same observation, as I just said, Trudeau freezing bank accounts of truckers is going to do more for Bitcoin adoption than McDonald's accepting it. Like I looked at and was like, I need to have some Bitcoin for when my account gets frozen. Maybe, you know, I'm whatever small percentage of Bitcoin right now I do have a seven low seven figure Bitcoin position. I'm like, Maybe I need to double it. Or maybe I need to find another cup, a basket of cryptocurrencies, maybe some stable coins. I'm like, I literally was like, what's the most anonymous, hard to seize crypto. And I think that that is the case here. If you think if you just take this three steps forward, what else could the government do with programmable money that they controlled? Because they do control our money. We just have lived, like you said, with this veneer that they can't seize our money, but they actually can.

### Human: And so we're figuring out or it's the models for good things about language that we just maybe haven't been looking for. And we, as humans with language as the pinnacle of our existence, whether it's poetry, or science, or, you know, any number of arts or debates, it's kind of how we mitigate the entire world. It's how we make decisions, these debates that occur, presidential debates, Congress, Senate, you're at your dinner table, who you're going to vote for, how are you going to raise your kids, we maybe have valued this as something super magical, but with the corpus being actually kept somewhere the internet, and then the ability to process it so quickly with these new GPUs may have just figured out, hey, this actually isn't all that complicated.### Assistant: But I think what we learn is that sort of the the essence of meaning is something that is which is the thing that we represent with language, as sort of a calculus, in a sense, a formal structure of how meaning works. Now, the fact is, some aspects of that... Well, somebody like me, or perhaps me in particular, my lifelong project, basically, has been figuring out how to make things computational. And one of the things that is my long-term project is to make a computational language, a language that can represent things in the world in a precise, formal, computational way. And that's what the thing we call Wolfram Language is. It's a It started off as Mathematica and evolved into Wolfenlanguage over the last 35 years. But the idea there is to take things in the world like, I don't know, two cities, and you're asking, what's the distance between them, or these kinds of things, and have a precise, formal representation of those things that is both writable by humans, readable by humans, readable by computers, executable by computers. And the fact that... It's been my last 40 years, basically, I've spent building up this kind of language to represent things computationally. And in a sense that the language represents a lot of kinds of things that are very useful to talk about in the world. It doesn't happen to represent everyday chitchat type conversation. But And ChatGPT has sort of added that as another element of something that we can see how it fits together with language. But… You go ahead. You were going to say… No, you were going to say… No, I mean, the thing that… People ask, for example, does ChatGPT understand what it's talking about? Well, it just has these rules that say how the next word goes in. It doesn't... You could... I mean, that's how we work too, probably. And you can ask, do we understand what we're talking about, so to speak? And there isn't... But it is, in a sense, doing a very shallow computation. kind of the idea of computational language is once you have something represented in computational language, you can kind of go all the way and compute whatever you want with it. You can do irreducible computations, you can do all sorts of things. And so the thing we did a dozen years ago with Wolfram Alpha was natural language understanding where you go from small fragments of human language to computational language. And once you can do that, That's a sense in which you have true understanding. You've got natural language, you turn it into computational language. Once it's computational language, you can compute anything you want from it. So that, in a sense, is true computational understanding, so to speak. that's a different thing from what sort of a raw LLM deals with. And that's, by the way, what the plugin that we just worked on with OpenAI, the Wolfram plugin for chat GPT, that's what it's achieving, is being able to connect this kind of LLM layer to this sort of what we might think of as kind of computational bedrock of what one can compute from, and there's all sorts of implications of that.

### Human: I feel like we're going to get off this call and you're going to start whiteboarding it like actually come to think of it this hotel thing is awesome.### Assistant: One of the parts of that, you mentioned D2C brand. Well, I mean, we're not really a D2C brand anymore. In fact, you can't even buy Liquid Death off our website anymore. We just link you right to Amazon to buy it. I think that's the problem with a lot. Most beverages have never been successful D2C because it's really expensive to ship a 14-pound case of water. If you try to just go to the FedEx and ship a case of Liquid Death, they charge you $20. What's someone willing to pay for a case of water and everyone wants free shipping. So it's kind of like the economics of trying to ship heavy water yourself never really work out, but it helps build the brand before you have retail. exposure. And then now the fact that with the Facebook or the Apple privacy stuff, you can't target people on social the way you used to or as cheaply or efficiently. So a lot of D2C brands are struggling where they were really depending on those customer acquisition costs being super efficient. Now they're not. Retail, it's like you're millions of people walking through stores or seeing your product. You don't have to target them on Facebook to bring awareness. So I think that was something that's really helped us is knowing early on that water is something that ultimately needs to be a retail brand. Yeah. It's not something that people just want to order on the internet. And I think that definitely helped us. And yeah, I think we're building a brand. And brands can sell lots of things. And we sell merch and apparel. Last year, we did almost $3 million just in t-shirts and hooded sweatshirts from our site. And we take that part of the business really seriously, just like a band, like Metallica or Taylor Swift, the amount of money they make on apparel, it's a huge part of their business. They work with cool artists. They take it very seriously. We're no different. It's a very serious part of our brand. We don't want to just throw our logo on a shirt like swag. It's like, no, we want to create a fashion brand, something people want to wear and that when we drop something, it sells out in 2 hours. And then that has evolved into things beyond apparel, like candles with Martha Stewart, or we did a crazy metal vintage lunchbox that went crazy. We did a collab with Nixon Watches. We did an all gold watch that had two axe hands as the hands on the watch. Sold out of that in a week at a $225 watch. So I think once you build a brand that stands for something way more than the liquid that's in your product, you have a reason that people want to participate in the brand, to broadcast the brand to other people, to covet it in terms of all different kinds of things. So yeah, I think we'll continue to do all kinds of things. As a brand, you can imagine there being... We're not doing this, but it's like, Liquid death could literally have a hotel and people would probably go to it because it would be the most insane hotel experience, you know, or funny thing that you could imagine.

### Human: What? Seriously? The longest I've ever seen is like 30 minutes. They do them at the Coliseum now.### Assistant: Luckily, when you're on the playa, I'm wearing ski goggles, essentially, and a bandana, or a mask. But when I take it off, people do recognize me. A lot of people say, hi, Molly. Fans of yours said hi to me, and fans of This Week in Startups and All In, everything else. So I probably got recognized no less than 25 times in three days. And I have my mask on even with 80% 80% of the mask on, sometimes the sandstorms will come down. And you know, you take it, you take a message, but just an amazing event, as always, as I tell people, if you're into art, if you're into music, if you're into community, it's absolutely, I believe, the spirit of America, in terms of, if you look at the principles, I encourage people to go type in the Burning Man principles and just spend a little time thinking about if the world worked like that. Now, I'm not some hippie dippy guy. I'm a kid from Brooklyn who is totally cynical about all of this. I know like what, but radical acceptance of people is part of it, radical inclusion. And then the other principle that hits with me is this radical self reliance. And so, you know, I was lucky enough to have a trailer. And when you have an RV slash trailer, you know, which I would say, 25% of people there do. And so what you'll do is you'll make a camp with other people, you might rent two trailers, which are not cheap, it might be I don't know, a couple $1,000 a week, $5,000 to rent an RV in this country. And they probably charge you an extra 1000 or 2000. If you take it to Burning Man, because there's a special cleaning, right, you have to do because the playa dust is nuts, like, and when it kicks up, every aspect of your car is going to be covered. And so you have to clean the engine block, you got to clean the tranny, you got you got to really do a deep cleaning on these things. Long story short, You know, you'll have enough gasoline, electricity generators, etc, on your camp to have air conditioning, let's say in two trailers, and then 10 tents or something like that. So it was glamping for me, it was easier than my trip whitewater rafting in July that I went on. And so, you know, I'm drinking coconut water, and fresh fruit, I stocked the fridge with like a ton of watermelon fruit. So it was not that hard. But when you're out in the desert, you can hear my voice. You're breathing in lungs of dust. The one thing I'll say is super notable and we can find it on the internet. I did retweet it and you can find videos of it right now and we'll show it here. We'll throw it in post. Drones. They are now doing drone shows that include hundreds of drones in the middle of the desert. And they're sustained for hours. They'll do a drone show for an hour or two, Molly, now.

### Human: So if you're rich, I want to be clear, you're specifically talking about a b five, right, California, okay.### Assistant: The the really the industry police itself, I talk about this on the podcast all the time, if you want to, you know, have great success, you should have great responsibility. And you should try to do more than what the law is asking of you, right? The problem is, the law is so politicized, with one side wanting no regulation. And that could be because of abuses, or just being free market monsters, or just believing wholly in the free market. Like there's some people who don't believe in a minimum wage, they believe the market should set it. And then on the other side, people who just want the union roles to grow because the unions vote in unison. So putting those two things aside, it's a pretty simple test here third way. It's very simple. You just look at the number of hours a person works. And if they are forced to come to a location and work on a shift, that that's what defines an employee. And when you control their time, when you control how they do their job, and they work over a certain number of hours, that's a full time employee. And it's somewhere around 30 hours a week, commonsensical. And do they have other jobs that they can work? In other words, can you demand they work for you today? You know, Uber, and Lyft and DoorDash, we've all seen it, people will have two phones, so they can keep both opposite but at the same time, we'll have an Android phone with Lyft or whatever. they can leave at any time and work for a different service. And most of them will take calls from multiple services depending on the spiff and that they give them. The real problem here, Molly, which people don't understand, is very nuanced, you have to pick one, you're not allowed to have two different modalities, or else you break the law, you have to treat all employees the same. What employees should do is every three months, they should elect, I want to be full time, and I commit to this set, I will wear the Uber logo on a polo, I will pick a shift from the open shifts, and I'll get benefits and the crew and I'll get time off, yada yada. Or they say, I'm not wearing an Uber or, you know, DoorDash hat and looking like a dork and I'm not putting a DoorDash logo on the side of my car. And like, you know, with a metallic thing like Domino's people have to do. No way am I doing that? I don't want that. I just want to go out do three rides before my kids get home from school, so that I can pay for it, whether you're the mom, dad or both. that is the easy solution. But you're not allowed to implement that solution. You're not allowed to let you're not allowed to let individuals have agency. That's the screwed up part. That's what I object to, I object to individuals not being able to make their own decisions, not be entrepreneurial. And you know who they do this to, they do it to the people who are up and coming. They carved out lawyers, they carved out real estate brokers.

### Human: We see gaming as a really strong growth category. It has been for many years. Three billion people play video games on the planet, half the connected world. It's nearly a $200 billion top line business. Both of those numbers growing by double digits. So gaming is just a secular trend in entertainment, people moving from passive entertainment to active entertainment. You see it, kids everywhere playing video games, Minecraft, Fortnite. It's just a really strong place for Microsoft to make an investment with the transformations seeing in the business. When I look at our growth aspirations in the consumer space as Microsoft, I think our investments in gaming and reaching communities everywhere is going to be critical to our long-term success with consumers.### Assistant: Alright, so obviously, Microsoft is got a plan here. And when Microsoft makes a plan, it's typically a multi decade plan. They're not in it for the next two or three years, they really, you know, as a company that's existed since, gosh, you know, through the 80s, 90s, 2000s, 2010s. And now in their arguably their fifth or sixth decade now, They really care about this. Here's a tweet from Satya. 3 billion people look to gaming for entertainment, community and achievement. Our ambition is to empower each of them wherever they play. Today is a step forward on that journey and we welcome the beloved studios and franchises. So they care deeply this is part of that if they can sell more games or they can sell more xbox game passes with the with discord that would be in sync with the founders wishes jason citron's wishes to not be an ad based one in other words they're just going to upsell people on the ultimate gameplay pass and you know make the money back that way which seems to be a great strategy. In summary, Microsoft is almost a $2 trillion company and 10 billion is a very small amount for them to spend on a business even though it's a colossal number. If they were to lose the whole 10 billion, it would be a swing worth taking and if it works out, and it becomes a YouTube or an Instagram, like investment, my god, this could go global. And they would have all of this hardware locked up with the Xbox, the surface, they're doing PCs, obviously, they'd have the software, they'd have the content with all their game studios now. And of course, the Minecraft purchase, I got to lift that out. And now they would have the communication platform to support all this and not have to rely on Skype. Big companies make these big acquisitions, they make mistakes sometimes. But think of about it like a portfolio, if Skype or Yammer, or any other product winds up getting deprecated, or they stop investing in it, and they switch, right? Because you're like, well, why are they still doing Skype when they're doing this Microsoft Zoom competitor, right? Or what do they do with Yammer, and then they did teams, all of these purchases of Billy here, 10 Billy here, all you need is one to work out. And if you look at the history of Microsoft, I believe their presentation software, PowerPoint and Excel were both acquisitions. And of course, Google bought Android and YouTube. Think about where Google would be if all they had was search in Gmail, and they didn't have Android sending all that traffic to their search engine. Or if they didn't have YouTube to sell video based ads, and they were only selling the click based ads on search. These were two super critical acquisitions by Google. And then of course, Facebook would not be anywhere near where it is right now if they had not purchased Instagram and WhatsApp. And Apple, not very acquisitive, probably a mistake on their part, but their style works for them. It's still a money printing machine. This has been another emergency pop from this week in startups. We'll see you next time. Bye bye.

### Human: Do you think it's enough for an anti competitive case against them?### Assistant: You know, the, the government gets involved in antitrust. And so dovetail with the Lena Khan story coming up. typically in a very narrow set of circumstances, consumer harm being the number one vector that people look at the number one lens or framing they look at. So is there some consumer harm here? No. Now, are shareholders getting harm? Or is there some allegiance between open AI and inflection that Microsoft should have, you know, be loyal to open AI and not inflection, you know, okay, maybe that would be something Sam and Greg could bring up with. Satya Nadell and say, Hey, why are you doing this? These guys are competing with us. That's not cool. But you know, Masayoshi San was investing in Uber competitors around the world. And I think he famous, I think it's pretty famously invested in DoorDash and was like, that's not competitive with Uber. So, you know, no conflict, no interest. And so it's just massively conflicted, but it's not a legal issue. It's an issue between partners. And then for Nvidia, an arms dealer. So when you're an arms dealer, like the United States is, we give our Patriot missiles to any number of people, those people could get in conflicts with each other, and we could be replenishing their missiles and be on both sides of a conflict potentially. When you're an arms dealer, you're an arms dealer, you just want to sell weapons, right? So this is an arms dealer. Okay, listen, you got an idea for a tech startup. Great. You think you want to change the world? You think you got this? This is the one? Well, you've got that same problem that we all do. You don't have an engineer, or you don't have enough engineers to make this happen. And you need product velocity, you need to go fast. And how are you going to go fast? And how are you going to control your burn rate if you got no engineers? Well, what if you had a partner who could provide you with more than 1000 on demand developers, and those developers were all vetted experience result oriented and passionate about startups and building great products? Well, what if they also charge competitive rates? Does this all sound too good to be true? I know it does. Well, then you need to head to lemon.io because your dreams have come true right now startups choose lemon.io because they only offer handpicked developers with three or more years of experience. and ones that have strong portfolios. Only 1% of candidates who apply to work at lemon.io actually get accepted. And if anything goes wrong, lemon will get you a replacement ASAP couple of great launch founders have worked with them in.io people in our portfolio, and they have had great experiences. So I want you to learn more at lemon.io slash twist. And when you go there, you're gonna find your perfect developer or any entire tech team. And you're going to do that in 48 hours or less. And twist listeners get 15% off the first four weeks. I want you to stop burning money. I want you to hire developers smarter and faster. Visit lemon.io slash twist and give it a shot.

### Human: Running a startup is like being a small market team and you're trying to compete against somebody with unlimited resources like the Yankees and the Dodgers. Well, if you've seen Moneyball, one of my favorite films, you know that using data correctly can help you compete against those big incumbents who have seemingly unlimited resources. One thing that startups haven't really had access to until now is detailed scenario planning. This is stuff that like big companies get to do. There really haven't been tools that are affordable or elegant enough for us in the startup crowd, where you can do this easily with org space, O-R-G-S-P-A-C-E. It's people, software, for software, people. Basically, it lets you create plans for deploying the capital that you just raised and money you're making, and then adjusting headcount based on different future scenarios. For example, what if you raise your Series A? You get 10 million in the coffers. right? And you got to deploy that. What if you can't raise right now and you got to make it work with your $3 million seed round? What if your revenue goes up 20-30% next month with org space, you're going to be able to plan for hyper growth, plan for rifts and everything in between. Things like cost, skills, DEI, all that is in context. So you understand the impact of your decisions. This is the thoughtful way to do it, folks, twist listeners get $2,000 in credits on org spaces, pro plans with a 30 day free trial at org space.io slash twist, org or g space as p a c.io slash twist get those $2,000 in credits. It's really interesting with this cognitive biases we start to have in the signaling. What signaling do you have right now around AI, generative AI? the meme of the moment, the focus of the moment. And what signaling did you have around web 3.0 and crypto? Did you get it right? How do you look at it going backwards? Do you did you do you regret things? Or do you felt like you had a good decision making process?### Assistant: And then here's where age Yeah, of course, of course, sorry to jump in. This is where age helps. Okay. So the advantage of youth is their peer group are the people creating companies for the most part, right? Like some people create companies at 48 or 52, but for the most part, it's younger people. And when you went to Stanford or Yale or Princeton together or Michigan State or Washington University, wherever you went, but When you went together, and that was your peer group, and then you all got jobs together at Google or Facebook or Stripe or Dropbox, right? You have meaningful relationships, and they're more likely to want to raise money from you. So we have gone out and hired younger partners. I have Aditi Maliwal. She's much younger than I am. Kevin Zhang is much younger than I am. Kobe Fuller is much younger than I am. So they run in different circles and have different networks and crowds. And that's a huge benefit to me. But I'll tell you what happened in the crypto craze. I said to people, that's not our swim lane. If anybody wants to drop what you are working on and go super deep in crypto, Then we can have a discussion, but until such time, we're, we're just going to skip that. It's okay. If Chris Dixon and Fred Wilson make a ton of money on that because they were early. So to be right about venture, to be good at venture, I think you need to have three things, right? You have to believe in a trend that's going to happen in three to five years that most people don't see yet. Okay. You need to be correct about the timing of that. If it's eight to 10 years, as you know, Jason being too early is the same as being wrong. Yep, if you're reading about it today, you fucking missed it. Yep It's okay The next trend is coming but if you if you pushed your whole pile in if I take your poker analogy if I push my whole pile in on crypto in 2020 and I wasn't doing it in 2013 14 and 15 like chances are you know, like it was, you know, your old pal tony shea who said like um that his thesis in Las Vegas was not to be the best poker player at the table, but to sit at tables with the worst poker player. Yeah, for sure. Or if you don't know who the sucker at the table is, it's you. It's you, for sure. So if you push your pile in in 2020, you're probably hurting right now. So in 2020, 19, 20, 21, I was under a lot of pressure from some of my colleagues saying, we need to pay more. It needs to be 40 pre, we need to do NFTs. We need to do crypto. And I said, well, I think you missed that trend. And there's some great people who caught it and understand it better than you do. If you want to drop everything and go deep, I'm here. Nobody wanted to do that. Right. So we didn't do crypto. We skipped that.

### Human: Yeah, all of us who lived through this era remember the ride the sudden because it did feel very quickly even compared to a lot of other hot products. It felt like all of a sudden, you'd never heard of a BlackBerry. And then everybody had a BlackBerry.### Assistant: Yeah. And this is when the concept on a business basis comes in of market pull. This product didn't just have product market fit in the beginning of the film. start to figure out product market fit. But then it became such a status item. It was so effective at doing what it did. The product was so transcendent, and had no competitors, and was so technologically unique in how they were able to send data, that it really had market pull. And they knew they had it because they literally couldn't they sold so many of these, they were breaking the networks. And this is something I had forgotten. Yeah, there were many times in the 90s, when the BlackBerry network will go down and go down, I forgotten about, I had forgotten about that. And so you just think, you know, it literally is like when Twitter first started the fail. Well, one of the signs that you're doing great in business is you have so much market pull on that your service cannot handle it, your cars are sold out, there was a period of time when Tesla's was a two year wait, And so ramping up and scaling is very hard. If you get market pull, your organization lawn goes from trying to find product market fit, to trying to fill consumer demand. So yeah, your your company, the entire mindset of the company is trying to figure out product market fit and solve problems. And then all of a sudden, boom, like lightning. when you get product market fit, the consumer demand becomes so overwhelming, it can literally just break the company. And this company almost broke from it just like Twitter almost did. If you're a SaaS or services company that stores customer data in the cloud, then you need to be SOC 2 compliant. You knew that from a third party and you need that third party to close big deals. And if you want to get compliant easier and faster, you need to use Vanta, V-A-N-T-A. Vanta makes it so easy for you to get and renew your SOC 2. On average, Vanta customers are SOC 2 compliant in just two to four weeks. pair that to three to five months without Vanta and Vanta can save you hundreds of hours of manual work and up to 85% of compliance costs. This is a total no brainer and Vanta does more than just sock to compliance. They also automate up to 90% compliance for GDPR, HIPAA and more you can't afford to lose out on major customers. We all know that listen, it's a hard year last year was hard. You can't lose those major customers because you don't have your compliance dialed in. Just work with Vanta get your compliance automated and tight and tight is right lock down those big deals. Here's the best part Vanta is going to give you $1,000 off that's 10 hundies get $1,000 off at Vanta.com slash twist that's Vanta.com slash twist for $1,000 off your sock to Okay, let's continue because there's multiple, they kind of structured this into a couple of, you know, key moments in the history of the company. So it's probably a good way for us to analyze it.

### Human: Yeah. I mean, there's no clear answer even after all these years. Without Facebook, my media company never would have existed in the way it did. We never would have reached as many people, right? So we use Facebook to get to where we ultimately ended up. But I guess you have to kind of choose in the beginning. Do you want to run like a lifestyle cash flow business and keep it really small, five, 10 people? Or do you want to kind of shoot for the stars and go for that billion dollar? business and if so, then you have to lean all the way into these things. You have to strap yourself to the rocket and hope YouTube or Amazon or Shopify or Facebook or any of these platforms don't cut you off or don't decide something else is more interesting over here and remove whatever you're leaning on them for.### Assistant: I have a pretty good strategy with this. Now, having gone through it with Mahalo, we created a search engine was content, sort of Wikipedia plus search results. And Google did the same thing to us. They changed the algorithm fame famous Panda update our revenue went down 95% of traffic went down 85% in one day. I call Larry curl called Sergei had I had the biggest ends you could have. Well, he returns my call. I finally get them in the room. I've talked to PR people because I go on a jihad publicly about this. And all of a sudden, it starts being in the New York Times and other places. And Matt cuts had lied to me a bunch of times. He's like, Hey, you're not a partner. I said you How could you do this to a partner? We're me. We made we're making $10 million a year in AdSense. And he says we don't have partners. And then I forwarded the email CC Larry, I'm going to win. crazy. And I said, here's an email from your business development, calling our statement, our partnership statement. He's like, well, search doesn't have partners, Google. And I said, you said Google doesn't have partners. Well, which is it? Because we were making $10 million a year in ad sets. And I had 100 people just like you and I had to go in and I had to lay everybody off one day. And it was brutal. That business eventually became inside comm it's thriving now. But my strategy to this is Molly, what happens when you get on this crack pipe when you get on this crazy drug, that is a high performance drug, you know that the second you stop taking this performance enhancement drugs, let's call them PDs, that you're going to revert back to whatever your normal state of being is. And so we looked at and said, anything going forward that we get is gravy, we're going to look at the organic traffic, people searching for inside calm people, tweeting it, just people doing it off those big platforms. We're going to judge our success based on that, not the free traffic, which we know at some point, they'll take away or charges for. And I think that's the best practice now is to not judge yourself on that free stuff, just exploit it while you can. Yeah. So if right now, like we have to tick tock accounts, one for all in one for this week and startups, they're crushing it, we're getting tons of traffic. None of it results in clicks to the podcast, it just builds awareness. But are we going to invest in that? No, we're going to invest in having better guests on the show, bringing on Molly as a co founder and making the content better, because I think the trap is you stop putting money into your product, Molly, and you start putting money into the platform and the distribution before you have product market fit. Because if your content was so good that it was Oprah, let's say, or Howard Stern, or Joe Rogan, or this week in startups, or whatever that people sought it out, they search for it, you probably would have survived this, right?

### Human: When we look at this, it is a bipartisan issue now. It does not seem like it's just Republicans who are concerned about that here in the United States. It's the Democrats. And what seems to have happened, in my estimation, is we had an interesting run-up over the last year. One of them was Daryl Morey from the Rockets, the Houston Rockets, the greatest general manager of this generation, I think anybody would say, in what he's done with the Houston Rockets. tweeting, you know, I support the people of Hong Kong. It was just a gif or, you know, an image on Twitter. And the entire NBA got into a frenzy and essentially attacked him, you know, superstars up and down. And then we had Hong Kong, which I had just visited just two years ago when my book came out, had a wonderful time and how we show my friend where the protest used to be. And then I left and whatever, a couple months later, we started to see the protest and we started to see the law change there. And you could start to take people from Hong Kong and then put them on trial in mainland China. And then lo and behold, the pandemic happens and we realize PP, you know, this PPPs and masks and everything, or PPE rather, and certain medicines, putting aside fentanyl, the drug. certain pharmaceutical medicines that we need. Maybe we're over. We're, we're at too much risk in terms of our dependency on China. So these three things seem to all happen within 12 month period. Is that what kind of shocked the system to bringing everybody to this collective awareness now?### Assistant: Well, Jason, as you're accurately pointing out, the big picture that I think provides a lot of the framing for what we're living through today is that we are in the early stages of a new kind of a Cold War between the United States and China. And unfortunately, in the United States, we've had a tendency to forget that China has as much agency as we do in the US-China relationship. In other words, they're not a non-active player. We've known from leaked CCP documents that date back to 2013 that Xi Jinping had every intention to avoid being the Mikhail Gorbachev of China. He saw the USSR's attempts to liberalize as the key reason for the collapse of the Soviet Union. And in fact, in January of 2013, he delivered a speech saying as much to members of the Central Committee. Since then, Xi has also outlined a lot of different plans that paint a naked ambition to dominate the world's technology companies, which has led several prominent national security professionals, including the current head of the FBI, to conclude that China's long-term aim isn't to be one of several superpowers, but it's to be the world's only superpower. And that raises some serious questions for democracies. So the writing's been on the wall for some time, and China has backed up a lot of their rhetoric with action, aggressively engaging in what the US military calls gray zone conflict, which typically refers to attacks on an adversary that fall just short of the conventional threshold of war. We call them gray zone because these tactics are often said to be in the murky gray zone between war and peace. And just to cite a few examples, by some accounts, up to 90% of the world's fentanyl compounds are made in China and are all for export. the vast majority of which go to the United States, where 35,000 Americans die from fentanyl overdoses every single year. China's unfair trade practices has produced a bilateral trade deficit in goods that's the size of a G20 economy, just to put things in perspective. They've blocked nearly every American content platform, including Facebook, Twitter, GitHub, Google, YouTube, Reddit, just to name a few. The level of IP theft that they've engaged in has been referred to by the former head of Cybercom as the greatest transfer of wealth in human history. And the FBI announced that they now open a China related investigation every 10 hours, which paints color on the scope of China's corporate espionage operations in the United States. They're actively working to dislocate the dollar status as the world's reserve currency through bilateral currency swap agreements with a number of African countries, as well as Russia, as well as through new institutional mechanisms like the Asian Infrastructure Investment Bank, And of course, more recently, they've sought to export their model of authoritarianism around the world. So, peace on those terms, Jason, and a peace that's predicated on the United States abdicating so many of its core interests is, as George Orwell once described, it's a peace that's not really a peace. And that's why in the last three years or so, we've seen policymakers in the United States increasingly awaken to the comprehensive nature of the threat posed by the Chinese Communist Party.

### Human: He got CSI Miami eventually, or whatever.### Assistant: Whatever, he could have done five more seasons of NYPD Blue. His ego got in the way. Number two, you never leave a winning movie franchise. Robert Downey Jr. did the right thing. He started the franchise. They said, Can you do a cameo here, cameo there, be in this one, be the lead be second. He's like, I'm here. I'll do it forever. Now, spoiler alert, obviously, you know, he goes away in the last film after I don't know, was that the 20 or 25th movie, he never left that franchise. He'll be back anytime they want him. He gave a multiverse. Yeah. Other people have left winning franchises. don't want to be typecast. Right? There's many people who were supposed to play Superman, they were supposed to play Batman, they didn't want to take on the franchise, you never leave a franchise. And you never leave a rock band. Roger waters, who wrote, I think, dark side of the moon wish you were here. And the wall, I think all three of those were, you know, obviously the rest of the band participated, but I think he left after those. And then Roger waters, I just saw him in concert had the first row. Incredible. Incredible. I believe those were the best albums dark side of the moon wish you were here. And the wall I think, are like one, two and three for me of all the and then I guess some people like animals. You can have this debate all day long. But Roger waters left the band. And he's got a great he never had a solo career, but he does play those songs at his concerts. And if he didn't, nobody would go. I'm adding to my list a fourth, you know, I have my lists, like a things I'll never do a cruise while you can eat buffet, or if you need sushi and buffets, like there's a list of things I don't do. This is a link list of links list of things you should never do in your career. And the last thing in your career is you never leave the CEO job at Disney. It's the best gig in the world. Yeah, you go to Disneyland. Yeah, you got Marvel, you got Star Wars, you got Pixar, you can get your friends into Disneyland, you can throw a birthday party at Disneyland for any of your friends, you can have any one of the Marvel superheroes, except maybe Scarlett Johansson, who's got to do a little bit of extra work to get her back in the fold. Black Widow shout out. You know what he needs to do? He needs to tell Scarlett Johansson we're going to have Black Widow Day at the parks. And we're going to make a Black Widow experience ride. And we're going to make a Black Widow TV series. And whatever you want, is now on the plate. Because you got to do what's right for the artists, right? You got to shake hands, you got to love the fans, you got to love the job. It's the best job in the business. Worst job in the business, CEO of Twitter. Best job in the business, CEO of Disney.

### Human: My management company is called Picking Winners, LLC. I've got an Amex This is picking winners LLC. That's the goal.### Assistant: Yeah. So I it's such a great question. I sat out a lot of 2021 and 2022 2021 because of the valuations. It didn't make sense people want to 50 million before they had product market fit or customers or had even launched their product. And I was like, well, that makes no sense. There's no chance for I like a 50 x. Anytime I make an investment, I want in my mind, to be able to map out a 50 x, we're investing a 10 million. Okay, 50 x is 500 million, we might get diluted a little bit. How do I get what kind of revenue with this company to have? And then I do what's called a total addressable market, but I do it a bottoms up. So I just, with my team have that very thoughtful conversation about entry price. And to your question about deployment, it is based on market conditions. My belief is in 2023, I'm seeing so many good companies that have, you know, five to 50k a month in revenue, which is my sweet spot. And they're priced at five to $15 million. And then I see these other companies come out of certain accelerators. I'm not going to dig anybody for getting a great price, but they've built people up, they've built up such a frenzy, maybe some accelerators, that, you know, raising at 2030 40 million before you have a product in market, not for me, those companies inevitably come back to market at the same valuation with five customers. So I'm patient. I think the right deployment schedule, according to everybody I talked to is 30 months, 24 to 30 months for primary investment, you save a little bit for reserves. That's what I hear. But I think you could do it in 18 to 30 months as well, if you have great opportunities. The most important thing is portfolio construction. Picking winners. If you have 40 names, you have a chance of an outlier. I hit outliers every 25 to 50 and as best as I can tell. So, and I think this is the vintage where it's gonna be extraordinary. If you can invest at 5 million, that's when I invested in Ubercom. Robinhood was under 20, I think. When you invest in those kind of early valuations as a seed investor, and you maybe can put in a second bet and the winners, this is why I think the one flaw in your game is the follow on. And so I'm going to keep pushing on just save 10% for follow on. Because what if you hit an Uber? What if you hit a Robin Hood? What if you hit a calm, you really want to put that 500 k check in or 250 k check in and be bold. That 250 k check, it might only go 30X, whereas your 150 might go 100X, but 30X on 500K, whoa, returns the entire fund plus 50%. And you're going to know it's a winner. That's the paradox. Yeah. So my management- You know the winner.

### Human: Venture doesn't seem to hate that, but okay.### Assistant: Yeah. And but I joined and it was like, I started to work on the assignment that I just described to you. And private equity firms were questioning... We had a $500-$600 million paratransit business. And private equity firms were questioning... It was 2015 or something. And they were questioning... This company Uber is growing like crazy. they going to just replace your entire business?" And so I was having to learn those things from private equity firms and then go work on, okay, I got to deal with Uber to prove to these private equity firms that we have a right to exist in the world. And that was... I don't know if you remember this, but that was like the time when mobility VC became a thing, and it absolutely exploded. And anybody with a PowerPoint deck that said, mobility, AI, autonomous electric vehicles, I could get $5 million and start a company. And when I began to look at vehicle electrification for our business, it was kind of a little bit into Proterra's life, and people were starting to buy electric vehicles. I and my job was kind of like, as head of strategy was meet with mayor's offices and departments of transportation, understand their needs and figure out how to get them into that thousand page RFP response in a way that brought in new technologies and fit the business model. And they started to ask for electric vehicles and I realized, you know, it was just going to change every aspect of our operations, change our maintenance operations, change what our drivers needed to do, change our site operations. And then I started to meet with people at contemporary companies, not competitors, but like just other fleet operators. They also had no idea what to do and their staff had no idea what to do. And then I started to talk to a friend who is another Terawatt co-founder. His name's Ethan Goldsmith, who was one of the earliest Rivian employees. And the two of us were brainstorming a little bit about... And so he was obviously very bought into electrification as a concept. And I'm easily excitable, so he got me even more bought in. And You know, so we started making one of those, one of those slide decks, putting those words, those buzzwords on there. And we were like, we could, maybe we could start something. And then we, we, um, we meet a, uh, we meet our third co-founder, his name's, his name's John Rappaport and Earlier in his career, he had had brought all the capital together to start Virgin America. And I know that name sounded familiar. And yeah, and and he had done a number of things like that afterwards, in transportation and energy. And we weren't sure why he was so excited to have conversations with us. But Hey we just we started brainstorming further with him and Ethan and I had this absolutely horrible idea we're brainstorming with with john about it and. And it was going to be a transportation service of like autonomous electric vehicles. And we were like, it was going to lose a bunch of money for a long time, which is not a thing someone should do for a business. And we were, um, I don't know.

### Human: I think that's really true. And it's not like this is going to have some huge impact on the social media ecosystem, right? Even if even if this occurs, and it's, there's not a legal mechanism short of somebody declaring power of attorney, right? There's not a legal mechanism for anybody to say, like, hey, you're not competent to make this decision right now, right? So it this may happen, who knows, it's not going to change the social media ecosystem, very much. This is still going to remain a niche player in a small and very crowded field, ironically, of super right wing platforms. what I think you're pointing out really is that the story is, this poor guy needs help. And instead, people are just like, this is my chance.### Assistant: There are people in the world who use people. And when somebody has a mental breakdown, and they're vulnerable like this, you get to see who likes to use people. And you just keep a list in your mind mentally, of who is attaching themselves to Kanye at this moment. I just am cataloging it. Here are people and I know some friends of his. I've got an because he has dabbled in the you know, like, like many artists, you know, he's made friends with a I know a dozen people who know him. And, you know, he has like, really wonderful ideas. He's an incredible artist. I mean, this is all obvious genius. Yes, it's an artistic genius. And it's not and it's not just in one category. I mean, it's in fashion. It's in video, it's in stage production. It's in obviously music and producing rap. He's so talented across so many different genres that of course, you're going to meet with him. If you're in entrepreneurial, you have to But what I would encourage people is like, if somebody's having a mental breakdown, the first thing you have to say to the person is like, hey, how you doing? Yeah. Do you need help? Do you need somebody to talk to? And knowing a lot of people in a circle, there are people who are doing that with him. And then there are a group of people who are not doing that with him who are saying, Oh, this is my window. This is my angle. I got my angle shot here. This is my chance to get in deeper with Kanye to build a relationship with him to build a business to, you know, get myself in a picture with him or get myself in a story with him to get myself in a video with him. This is gross. You know, this is really gross. Yeah. These days, every new potential hire can feel like a high-stakes wager for your small business because we are living in turbulent times, so you want to be 100% certain that you have access to the most qualified elite candidates. That's why you need to check out LinkedIn Jobs. LinkedIn Jobs helps find the right people for your team faster and they'll do it for free and you can add your job and the purple hiring frame around your LinkedIn profile to spread the word that you're hiring. They've got tons of simple tools over there at LinkedIn jobs to make screening questions easy so you can find the candidates who really want the jobs and of course you know they have the skills and the experience all out there on everybody's profile people voting for what skills people have to validate that for you. I don't have to explain how awesome LinkedIn is and all these features, you know that because you're on it every day. And this is why small businesses rate LinkedIn jobs number one in delivering quality hires versus leading competitors. LinkedIn jobs helps you find the qualified candidates you want to talk to faster. And did you know every week nearly 40 million job seekers visit LinkedIn? That's right. Post your job for free at linkedin.com slash twist. That's linkedin.com slash t w i s t to post your first job for free terms and conditions apply.

### Human: Yeah. Yeah, this is just Apple. Continuing Apple overreach, you may remember, they destroyed the experience when you were using Audible for the past decade or two. On your phone, you have to open up a web browser, you could look at the library, you could you could browse books in your Audible app. But very anti competitively, they won't let you buy inside there. And then lo and behold, 10 years later, you could buy books inside the audible app. And they very quietly did it, I think because they were getting a ton of antitrust pressure. But this flies in the face of everything that NFTs are about, they're supposed to be not controllable, they're supposed to not have these high fees, theoretically, maybe if you're using Solana, or the new Ethereum, you don't have as many gas fees on it. So Apple, I think just doesn't get NFTs right now. And the fact that they're you know, not centrally. Well, I don't know.### Assistant: Yeah. I mean, I had this conversation with Sax about a year ago, and NFTs were kind of raging. And I said to him, I said, I mean, the reason SACS is because obviously he's a SaaS guy, software as a service guy, and I was like, do you see a world, could we have a world where, and I think this is possible, where people buy a license, like a perpetual permanent license to a product? So for Sunny, for example, instead of paying him whatever, tens of thousands of dollars a year for a license to Definitive, I go and say, hey, I'll pay you you know five thousand bucks a million bucks is an enterprise license perpetual forever we don't have an expense he gets a cash flow up front when i'm done with that or we sell the company or we do whatever i can just sell that license to someone else and it grants you access and maybe there's a limited supply of those type of licenses and full access all features etc so. I do see a world where NFTs become... It's effectively an access token, if you think about it. It's tokenized access to some product, service, utility, a party, an event, a software license, whatever the case is. And so these NFTs become very valuable. And at some point, Apple can't really deny someone importing an NFT into a wallet. They can do it on the web and then go to the app and unlock functionality within the app i mean the game is a good example right so if apple says we're not gonna allow it and i go online and by the way amazon does this with prime uh if you go and play hearthstone for example you can go to amazon prime and unlock um certain cards and packs and gold directly on the website without going through the app store when you go log into your game on the app store that you downloaded, it's all there already. And this is kind of one of my criticisms at Epic Games, I think, when they went after Apple. And I know what they were trying to do, and I kind of commend them in the sense that they were trying to do the greater good. But all they had to do was offer gamers the 30% discount if you buy direct and say, hey, if you buy gold on our website directly, or Fortnite V-Bucks on the website, you're saving 30%. The kids would do it. And the people who play these games And they'll go, why am I going to use the in-app purchases when I can go and save 30%? So they didn't have to confront Apple directly. And I think free markets resolve these things. It's the same principle with NFTs, right? So if I have an NFT and I want access to a $1,000 software license, why buy it through Apple when I can go to the website, buy the NFT, deposit the token in my account, and then log into the app that was downloaded through the App Store, and it works? And so this is the problem Apple's got. So I agree with Sonny, like, if they don't enable this, they're gonna lose out in the end.

### Human: And it's, and it's more risk, you're like, it should be risk adjusted to some degree, right? Like, and frankly, we've, in some cases, like just for cash flow purposes, we actually want people to take to take options because they're playing that purpose on our side as well. So we have an ability to offer incentives for people to go into options, which we are not doing much with. But in the future, you can imagine that they might like if everyone's in cash, maybe there's more discounts on options to get people into that or whatever. I think there's a lot that becomes a lot easier. And there's a common ground truth of what everyone is making that doesn't require that you don't forget that you're also getting equity, or you don't forget that you're like us use pre-tax and post-tax and like it just everything becomes very comparable easy.### Assistant: In this market, we're all sick of hearing so much bad news, layoffs, inflation, funding drying up, but early stage investing is slowly starting to heat up again. Trust me, I know, I'm doing all these meetings. So all is not lost folks. It's not all bad news. I want to tell you about one of my favorite startups and this one's out of New York City. It's called Masterworks. Masterworks is an alternative asset investment platform and they're focused on blue chip art. Now you know alternative asset allocation is projected to grow and it's projected to grow at an average of 17.5% within the next two years according to market intelligence firm Cerulli Associates. Masterworks grew to $500 million under management in just five years. Wow. And so far, they've averaged 29% net returns for their investors. And I've made a couple of investments myself on the platform I have a Basquiat. I'm so proud that I own a little bit of that. And when I see the picture, I just think, oh, that's awesome. I own some are super innovative what Masterworks has done. And Masterworks, if you didn't know, is one of the only startups in the world to become a unicorn after its first fundraise. They've done so well, there's a huge wait list to get on the platform, but you can skip the line, J-Cal style, at masterworks.io slash twist. That's masterworks.io slash twist, so you can skip the line. see important regulatory aid disclosures at masterworks.io slash CD. What's great about it too, I think, you know, you you had this great post where you're like, Hey, listen, we're not a family. We're sports team. We're here to win. We're here to get better at our jobs every day. Everybody's got a role on the team. Everybody should be thinking about their contribution. And if you if you don't make a contribution, like you can't be on the team, that's kind of how teams work. Whereas in a family, you're a screw up, you're still part of the family, like we've all got somebody in the family who's a complete screw up. But being a product first company like this, and then letting people have agency is so brilliant, because what I find is sometimes people will come to you as the leader of a company, and I've been through this to a much smaller scale, but they're looking at you like, well, why are you doing this to me? Or, like, I am, this is being put on me, I don't have the ability, I'm just a victim here. And it's like, You're not a victim, you chose to work at this company. And now we're making it even easier for you to choose long term versus short term. Hey, maybe you need cash now, you got over your skis with your mortgage, or you got to take care of a parent, you don't want to go long, you just need cash. Great. But you can set it quarterly. That's a bold decision. My god, the finance organization must have fought.

### Human: Yeah, I think that the one last thing that we could touch on, and it seems like this was a pretty constant question too, is what sort of verticals over the next couple of years do you see a lot of value in, and which ones do you feel like will fall to the wayside because they actually never had any value to begin with?### Assistant: Yeah, and there was one I saw that was, what are you optimistic about? So those two are really good. So I am seeing that the consumer package good businesses and the consumer hardware businesses are really, really out of favor, and some might argue unfundable. Now that might be obvious to everybody, because they have lower margin, they're not software based businesses, typically. So you're seeing the DTC stuff that went public is getting demolished. Obviously, meat has never been a good business. And BuzzFeed, you can see that their Peloton is a hardware product with a subscription. So it was a darling for a while. Now, it's probably too out of favor, there's something in the middle for that business, because it's kind of hardware as a service. I think if they did it as such, it would be better. And so I, those categories are really foobar. The things that are classics for all time are making software that make humans that take away pain and suffering for humans or make them bionic or superheroes. So any software that can make a human in their personal private public, professional life, better at what they do. And better can come in a lot of fashions, you can do something faster, you can do it better, you can do it cheaper, you can make it more delightful, like some stuff, some software is not much different than what came before. If you look at kota, you look at notion, you know, I love these products, you know, you look at slack, I love that product. are they much different than the IRC chat rooms that came before them or the wikis that came before them? In some, some might argue No. Others might argue they're completely different. I would argue their design, and the thoughtfulness of the user interface makes them dramatically different. It's a completely different experience to use media wiki to edit a Wikipedia page, then to use coda to use notion, or these modern, you know, document sharing stuff, even using Google Docs, which made word look terrible. you know, like, now using Grammarly and using, you know, notion encoder, it's just so much more delightful. So there's always room to make something more delightful, to make people more efficient, marketplaces will always be in favor, I think fintech is out of favor now, because of Robin Hood and Coinbase and all this cohort that I think maybe their valuations got pretty robust, because there was a lot of activity in them. I think that's still going to be a great category. So that's one that's probably went too high and now is too low. Um, yeah. And then in terms of who is going to get funded and who's going to thrive, I think we're back to builders instead of storytellers, you know, people could actually build product. So, you know, the Elon musks, you know, the jacks of the world, uh, you know, uh, I think they are really good at product design and making great product. And we've spent the last five years of people who are really just good at telling a story, um, maybe not actually acting out the story. Does that make sense?

### Human: Your problem, not mine. Take it away. Take all the pieces of the teeny little pieces of plastic.### Assistant: What Molly's referring to is the J cow move. I you know, I go to the store, I buy a laptop. I buy you know, a phone. I buy a watch. they bring it out or an iPad, like literally what I did this when I bought my iPad Pro with the magic keyboard. I literally sat there and I unboxed it in the store. I folded it, I took the cable, put it in my pocket. And I walked out with my and I set it up while I was in the store. And I got this big stack of garbage. And they were so offended by the amount of garbage. I said, maybe you should just hand me the goddamn iPad on the shelf. Imagine if you went to the Apple store, and they had just in a thin sleeve, like a leather folio or something, your iPad, and they had a stack of 100 of them. And they just said, here you go, take it off the shelf. I now when I get produce, I don't know if you have these like pro fresh produce vegetable containers. But I again, back to like, you know, pantry life, perfect pantry life, hashtag pantry life, have to have pantry life, they have these ones that you can put inside your, you know, draws in your refrigerator that holds your berries, and they have like a divider. So when the berries come and the fruit comes, I like a dad, take all of the berries out of the plastic, I wash them. And then I put a little paper towel down inside of these and I pour them in. Now my daughters, the little you know, raptors, they are because they're eating all of my money. It's I'm going to be broke soon. I got to be on this podcast for another 30 years to pay for just the amount of fresh produce. They think people go to blackberries like they're going through M&Ms and it was a lot more. So they just my literally my five year olds go in, they take strawberry container out, and they just literally eat strawberries till they're gone, or blueberries or blackberries or whatever. And so I don't want plastic blueberry container, I just make life easy. And like, if I order batteries, why are my why is my four pack of batteries come with wrapped in plastic and wrapped in paper? If zero grocer bought or the one we're working with, if they bought, you know, 1000, double A batteries at a time, and I ordered double A batteries, you could literally just put them into the box naked. I'd rather have naked stuff. Yeah, I trust you that it's not the battery from your Walkman that's used. I trust you your store. I get it. toothpaste. don't need it to be I tried to open a toothpaste container, I felt like it was like a Fort Knox, I had to go get like a knife because it was wrapped in plastic, then a paper and then inside of it, it was wrapped in another layer of plastic, then a little bit of foil over the thing. I understand there's got to be some safety here. But there's also got to be something reasonable.

### Human: Yeah, this is like, you know, the late Steve Jobs, you know, have incredibly high standards. You want to pitch something, I mean, be bursting with excitement about what you're talking about. Because if you're not excited, why would I be excited, right? So we're not peddling mediocrity here. You know, I'm just yawning and getting tired just having this conversation, you know, instead of being amped up about, oh my god, this is really cool. I had an episode not a couple years ago where this was a very trivial example but it illustrates what's going on. We had our seven-year anniversary, and we had an anniversary t-shirt like every year we do. And they had it designed for it, and they wanted to show it to me. I still don't know why they wanted to show it to me, but they wanted to show it to me. And I looked at it, and I'm like, well, I felt nothing. So I asked, I said, what do you think? Well, of course, it went exactly as you just described the quote from the book. And she just grabbed the shirt and walked out of my office. She's like, OK, I got the message. It doesn't take that much more energy to say, to go from, you know, okay to, oh, this is really cool, right? And you gotta have a smile on your face. Oh, this is really cool, right? Let it be surprising, okay? Even if it's as trivial as a t-shirt design, you know?### Assistant: Yeah, I mean, be fired up with enthusiasm or be fired with enthusiasm. Let's go. Let's make it work, people. I love this. Another reading from the book, Frank. I always operated as if I owned everything, whether I did or not, didn't always sit well with peers or superiors. Since always tried to increase our people sense of ownership, so they will act as owners, that mentality needs to be nurtured. So if people step out of their lane, and they do more in corporate America, they get in trouble. It's not your job. But you're saying the way you got where you are, One of the great, and I'll be frank, unknown CEOs of our time. I don't think you got enough credit. This book and Snowflake, obviously, I think you're getting your flowers now. I think the book's going to really help because a lot of young founders are going to read this. It's going to change their attitude. Let me tell you, some of these millennials and Gen Z, they need to change the attitude here because they've been only operating in an up environment. Okay, it's the divisional round of the NFL playoffs and you know what that means. Eight great teams and four winners will go on to their conference championships. So FanDuel Sportsbook is giving new customers 30 to one enhanced odds when they make a deposit. That means you can bet $5 to win $150 on any team to win any divisional game. If you're an existing user, you can still get a $50 credit when you refer a friend and your friend gets the $50 too. Why do people love FanDuel? Well, the app is so easy to use, it's totally safe and secure, and payouts take as little as two hours. So use the promo code TWIST when signing up for a chance to win $150 off a $5 bet. It's a pretty good deal. Download the FanDuel Sportsbook app, use the code TWIST, and pick your team before kickoff. Okay, and here's a quick disclaimer. 21 and present in Arizona, Colorado, Connecticut, Iowa, Illinois, Indiana, Michigan, New Jersey, Pennsylvania, Tennessee, Virginia, or West Virginia. New users only $10 first deposit required must wager in designated offer markets. Max bonus $150 bonus for Tennessee users fulfilled in site credit within 72 hours. Tennessee site credit expires 14 days after receipt restrictions do apply. See full terms at sportsbook.fandool.com gambling problem call 1-800-GAMBLER or visit fandool.com slash RG in Colorado, Iowa, Michigan, New Jersey, Pennsylvania, Illinois or Virginia call 1-800-NEXTSTEP or text NEXTSTEP to 53342 in Arizona call 888-789-7777 or visit ccpg.org slash chat in Connecticut 1-800-9 with it in Indiana, Tennessee red line 1-800-889-9789 in Tennessee, or visit 1-800-gambler.net in West Virginia. But let's talk about how we train people in society to not take ownership and to never, you know, to just stay in their lane. It's just so frustrating.

### Human: Yeah, and I mean, Europeans have their have a better lifestyle, they do it. So maybe what happened during this pandemic, when we look back on and we do the postmortem, it's going to be, hey, you know what, maybe Americans, we were slaves to the offices a bit too much. Yeah, we over indexed on it. And maybe there's some balance, because when you do take a four week vacation, and you work half days for two of the weeks, you kind of come back refreshed, and you stay with the company longer, you don't resent your company. And you're not, you depressed because you feel guilty about not spending time with your kids or not checking that bucket list items. And I think you're so right about the speed to hire that talented person versus the annoyance of somebody quiet quitting, or somebody's phoning it in, or somebody's working two jobs, like, of course, you're gonna have abuse in every system. There's abuse and people who come to the office, screwing around with their door closed. So, you know, you're gonna deal with some level of, I don't know, bad actors.### Assistant: Yeah, actually, yeah, so probably actually even good to clarify. Um, We're not a so-called returned office company or a remote company. I would say like Shopify and Coinbase are probably remote companies as far as I can tell, like last I checked. I go to an office every week, and many of my top people go to an office every week. And we have offices open, and we welcome people back to the office. But we don't require people. We say, you work wherever the hell you want, because we're so disciplined, so organized that we don't think there's going to be a hit to productivity. I basically came to the conclusion that, especially with the accelerating rate of technological progress at AI, increasingly you're going to be able to have more and more of a global talent pool. And so then you have to, if you're going to require people to come into office, you have to believe that you get a greater productivity gain by having them physically there than the productivity gain you have being able to hire anyone, anywhere in the world. And for some jobs, like your core team, where it's really creative and you're making stuff, I think you want to be physically together. But I do not need our accounting systems to be managed together physically around me. I don't need like thousands of people physically around me. I can't even talk to them. After about 50, 100 people. I don't know, I can't remember the conversations. I can't keep track of those conversations. So my vision is that we have a small, tight team of the most some of those senior people, many product people, we built this creative studio, and we're in San Francisco a lot. And then the rest of the company, they can choose some groups, they do come to the office, other groups, people just work totally remotely. And then once a week, a quarter, we try to bring people together. Sometimes it might be a week every six months. And I think that kind of suffices for a lot of people. In other words, we kind of give teams the option. But the most senior people, we were pretty, pretty much together. We also travel a lot together. So like, I'm here in New York, we probably had like 20 people here with me. So I was around them. But I think we're just still learning. We're still moving. And I think Jason, the future is flexibility. I think that this is the worst technology will ever be in our lifetime. As screens get better, as bandwidth gets stronger, I think people are going to want more flexibility. And my prediction is even proponents of working in the office, I bet you a lot of those people are going to be somewhere else over the summer in an Airbnb. Yeah. It's easy for all these guys, all these, all these rich guys in New York, let's just be honest, all these rich guys in New York who said they want to call back to the office. They're all going to Hamptons for the summer and they're going to Europe in August. So even the return to office, those aren't 12 months a year. Those are now nine months a year.

### Human: Apps are the enemy. If there's protocols and standards or our friends, And silos, proprietary, locked down. I mean, you think of, you know, what's the anti-web? And I would say it's the iPhone. So the iPhone is locked down on every level. So it's all segmented into different apps. So there's no links that go between apps, really. I mean, it's really, it's not designed for that. And they approve what's on it and what's not on it. That's kind of awesome. There's no law involved there. And then you can't change the operating system, or it's called jailbreaking. And then it goes over the cell phone network, which we know some of the problems there. So that's kind of the anti-worldwide web. So we have to really keep an open internet going if we're going to have lots of winners. Otherwise, we're going to end up with very few winners. And I like games with lots of winners. So we don't want to just one monopoly and, oh, well, we'll all wall wind by owning stock in it that that's sort of the milo minor binder from from catch twenty two is that's not the way to make a rich ecosystem work so what were really into the whole open and commons providing services and structures around the commons.### Assistant: All right. And when we get back from this final break, I want to talk about the app revolution and all of these stories and ephemeral by design content that we're now losing unless people happen to screen record and how you think about that next challenge at the Internet Archive when we get back on the screen startups. Do you wish you were in on some of these best performing IPOs in 2019 and 2020? Well, our crowd investors were. Yes, that's right. Our crowd. O-U-R-C-R-O-W-D. And now you can join them in the next generation of startups that are going to go public. With rCrowd, accredited investors, you know what that is, have access to invest directly, easily, and most importantly, early. And that's a key. rCrowd investments have IPO'd, like Beyond Meat, or been bought by companies like Intel, Microsoft, and Oracle. Today you can join rCrowd's investment in... Tech-C. And Tech-C is a software startup revolutionizing how leading enterprise companies provide remote customer support. And you can get in early on Tech-C and other opportunities at rcrowd.com slash twist. Obviously, they're partnering here with This Week in Startups because they know we have a lot of accredited investors, got a lot of angel investors. And a lot of angel investors, they don't just want to invest in like accelerator incubator companies that are very nascent. They may want to invest in that middle phase of startup life, the growth phase, before they go public, but after they've gotten some amount of traction. And that's really what our crowd is specializing in. So if you're interested in investing, the account is free. Just go to our crowd, O-U-R-C-R-O-W-D.com. That's right, rcrowd.com. Join now if you're investing in that next generation of potential IPOing companies like Beyond Meat. Great job, rcrowd, and let's get back to this amazing episode. Hey, everybody, Bruce DeCal is with us. And as we round third base here with the internet legend, just want to remind everybody that you will use the internet archive at some point, you've probably used it many times, maybe didn't realize you're using the Wayback Machine. And that is worthy of your consideration for a donation, especially if you've got equity in companies or crypto, go ahead and ship it, ship it over at archive.org and make a donation and really be part of the solution here of preserving our legacy. All this stuff is important. Hey, two more things I want to talk to you about. One is apps and two is Microsoft. Let's go quickly through apps. You know, you have these things like Snapchat and Stories, TikTok, people record stuff, these corporations own it, it's in an archive somewhere, they have access to it for all time, but it kind of goes away at any point in time, they could just take away your YouTube channel, take away your Snapchat, turn off your Instagram account. Do you have the ability to go deep into apps to kind of extract that data or is that too hard? You have to wait for somebody to post it on a website?

### Human: And it's their actual personality to want to give all their time to work, right? Like, that's my style. Yeah, you I don't do that literally, as you want me to, it's I just prefer it. I got bored on the beach and started doing work because I like it better. And those are the people who you've got.### Assistant: That's a tier. That's the tier. That's your top tier. That's the most important tier in your company. You need to build relationships with them. You need to treat them really well. You need to check in on them, but you don't need to push them. Yeah, you can just have a conversation with them. When I have somebody like that, and they're not performing at a level, I'd literally just say to him, Hey, I noticed this didn't get done. I know that we both know this is not the level of work you do. anything I can do to help here to drop the ball? Did you not have the resources you need? Did you just simply forget about it? And they're like, I forgot my bad. You know, they just take ownership, and everybody moves on. Then there's a second tier. Now, these people could be full time, they may not hate the mission, or they're not required to be super enthusiastic, they just be highly competent. You can have highly competent people. They're not anti, they're generally good soldiers. They work hard product is consistent. But you don't need to manage them. But they also but they don't have the motivation. Okay, they shouldn't be in the top tier positions, but they can be in a second tier position, you just have to know they're gonna leave, and they're gonna give two weeks notice, or they have no weeks notice. And you don't need to obsess over those folks. They're just like, I think they call them in the NBA, like journeyman, they're going to come in, they're going to, you know, play the game already and fielders, utility journeyman, whatever, totally. adequate. Now, there's the third tier, which I talked about before, which is like, you know, Fiverr magic, you know, all these great freelance places, and those people are going to do tasks for you. And you're going to mat you to look at the output. And you're constantly going to say to them, can you make this better? Can you do this cheaper, some combination of that, and then they're going to look at you and say, Can you pay me more? for doing less. And this is called a marketplace. It's a natural ruthlessness. Yeah, the best thing a freelancer can do. I talked to my brother about this. He's an electrician. And he's like, he's overworked. I said, Josh, double your rates. And if you don't have half the people saying no, you're not doing your job. But if half the people say no, and you've doubled your rates, you're charging far too little, then you'll have the same income and half the work. Yeah, he did it. It worked better than he expected. Good. he kept more than half. He's like, you're not gonna believe this. It's the best advice you ever gave me. I kept 90%. I was like, I lost one person, the person was the biggest pain in the ass. And now I'm making like 180% of what I was making.

### Human: Yeah, there's a few examples under wraps. Um, but a lot more of that's going to come out now that there's both this content that people can use, but also something you can speak to. And that has really been the missing element, um, for, um, uh, much wider adoption, sort of ubiquitous adoption.### Assistant: Yeah. Yeah. Just having them, it's kind of like an enhanced painting. Yeah. It's an enhanced graphic, but it's not an experience exactly until you can talk to them and talking to them, man, that's going to just be crazy. I mean, imagine if you had some comedian, Will Ferrell or Dave Chappelle or something. I mean, you literally could take Ricky Gervais, you take somebody like that, and you could have them roasting people, you know, you could, you know, in a comedy club, you could have them interacting. And I mean, people would not, if you had Will Farrell, you know, goofing on the person and it had the ability to, with a camera, assess the person, they're short, they're tall, they're ugly looking, got blue eyes, whatever it is, they got a shirt, they could make fun of their shirt, they could make fun of their hair, you could get roasted, you could make jokes. I mean, it could be pretty compelling. You can start to sort of, Yeah, see where this is going. Listen, you know I'm a bulldog guy. I've had bulldogs my whole life. But you know what? Dog owners, we're spoiled. We have so many dog-sitting, dog-walking options, right? What about cat people? You know those cat people in your life. Well, I've got the purrrrfect solution for them. Meowtel. Meowtel is the number one cat sitting app, and it's available on iOS and Android. And Meowtel sitters have over 60,000 five star reviews from happy cat parents. And you know, these cat people, they're very demanding, they're not giving five stars out easily. All these sitters are fully vetted and insured. And they offer once or twice daily drop in visits, or overnight stays in your home so that your cats can enjoy playtime and cuddles in the comfort of their regular environment. A meeting greet is included with each reservation so you can ensure the perfect fit. And your sitter will send detailed updates and photos to you each visit to let you know how your cats are doing so you get that security, right? It feels great when you get the photo and you're like, ah, now I can enjoy my vacation in Italy or going skiing in Tahoe. Meowtail provides a 100% satisfaction guarantee and a team of support specialists to help make sure you have the perfect experience. Use the code twist 25 for 25 bucks off your first booking. Okay, it's 25 to 10s and a five waiting fee. Code twist 25 or $25 off. the pace of AI, you know, based on the pace of what you're doing with hardware, maybe you talk about how you perceive that as a technologist who's worked in something for a decade. But that, let's be honest, is a grind, a little grind to get this thing up the hill. And then you see AI come in and the pace is best described as what daily, weekly, I think we'd probably both agree on. So maybe talk a little bit about that.

### Human: I don't even know if I answered your question, Rachel, but I hope that was... Definitely did. Thank you. And I didn't realize I must have joined your Slack crazy early because I joined in like January. That's when I started getting into venture. I was in a VC fellowship and kind of very similar to you. I didn't go to a school that had a huge venture capital presence. I went to Penn State and we do have an awesome venture capital club that I was a part of, but I wouldn't consider like a ton of people coming out of that club to be staying in venture capital. So the alumni that I had from my university was very few and far between. And throughout college, that was my community that I totally relied on because Penn State was a giant school. Yeah. But then when I graduated, I was like, oh, my gosh, like, there are first off, the people that are in VC that came from my university are so much older than me. And second off, the people that are in VC that are my age are doing things so incredibly different than I was. I was looking at supply chain and mobility at the fund I was at, which I am still very passionate about. I think it's a very interesting space. You just don't get a lot of young people talking about it. And when I joined your group, I was actually able to connect with other people that were interested in the supply chain space that were around our age. And we have another Slack channel that broke off that just talks about supply chain and mobility. And It was super just awesome, honestly. So big thank you to you. And in Business Insider, you said that it's not just about networking, it's about building friendships and genuine relationships. And I think that's totally true. And I would like to ask you, how does one actually build these authentic, genuine relationships online?### Assistant: I really think it all comes from a sense of vulnerability. I think some junior investors have a negative reputation for being very transactional. You join a fund, you want to build your presence internally, you want to get good deal flow. And so you think that the way to do that is by... Oh, hi, I'm Megan. I work at LearHippo. I focus on seed. These are the areas that I'm interested in. What do you focus on? And then No one remembers those conversations. Like that is not how you build actual relationships with people. You build relationships by being vulnerable and by being yourself. And, you know, maybe it feels a little bit atypical for most people, but I think like, I'm someone... I can't be anything other than myself. It's a blessing and a curse because sometimes it can be a lot. I got coffee with a friend this morning and I was like... And I tweeted about this. I was very emotional this morning. I felt like I was gonna cry just talking about things that were really important to me. And that's not a bad thing. That builds even stronger relationships with the people around you because you're being... It's just... You gravitate towards people who are warm and and human at the end of the day. And I think that's something that I do really well. I'm very, very good at removing any and all barriers around myself and who I am to let people in to my brain, my thoughts, and also encouraging other people to do the same. I usually start a conversation... If people are new to venture, I ask, how can I help? And also, what are you struggling with? What are the areas that you could use help with? Versus like, what areas do you spend time in? Like, how do you think about like, the future of ecom enablement? Like, no one's gonna remember those conversations, they're gonna remember the people that like really took the time to get to know them. And also that, like lended a hand or lend an arm to, you know, to make their experience more positive, especially if they're newer to the ecosystem. So the answer is vulnerability, I think you have to be vulnerable, you have to put yourself out there. And that's how you build great relationships. And even for me, like, the original 30 Gen Z VCs that were in the Slack group. So many of them are very, very close friends of mine. I'm doing a sleepover with two girls on Friday. Oh, that's awesome. They were in the original group of people. And I've just gotten to know them so well over the past year as friends. That's the difference. They're the people that I know best in venture. A lot of them are women in VC, which I think is very special. But They're friends. Yes, venture is what initially connected us. But if we were all to stop being investors tomorrow, we would still be very close friends. I would have a very hard time believing that anything else would be the case. And it's not the deal flow that connects you. It's the genuine relationships that you have with other people.

### Human: Is that the appropriate amount of money?### Assistant: All right, when we get back from this quick break, you've raised $50 million already for this. I want to understand why so much money to build this and how much runway does that actually give you? And then what's the business model here? Because most people are getting a presentation software for free. And there's this whole concept of SaaS burnout happening. So I want to understand how do you get people to go to their boss and say, let me use pitch and pay extra for that when I've already got PowerPoint, Keynote, or Google Slides available as part of our already paid for office suite when we get back on the suite of startups. As someone who's invested in over 200 amazing startups and advised countless others, I want to talk to you about a serious pain point I see all the time. People are spending a ton of money, they have massive burn, and they don't have a lot of revenue. And what that leads to is a short runway. What are one of the big costs that people have? It's all of the time and money that they spend on SaaS software that they've got to integrate together. And they take all this time that should go towards their customers, right? Well, Odoo is here to change that. Odoo is a fully customizable and fully integrated suite of software that allows you to build and scale your stack as you build and scale your business, right? That's the way it's supposed to work. It's really simple. It's modular. So you just plug in the different pieces and it's all open source. So you can spend your capital on talent, people, resources, human capital, as opposed to having 50 different, 25 different expensive software products. So here is your call to action. Your first app is forever free. That's right. Free forever. and right now Odoo is offering you a $1,000 credit on your first implementation pack. That's no joke. I'm not, I didn't say a hundy. I said 10 hundies. $1,000 right now, but you have to get it now. Odoo.com slash twist. Odoo.com slash twist. Get that $1,000 right now. All right, let's get back to this amazing episode. Welcome back to this week and star is my guest, Christian Reber. He is the CEO and co-founder of Pitch, which has raised fifty two million dollars last round was a thirty million dollars series b uh with thrive capital who led it uh my pal kevin system from instagram shout out episode i don't know maybe 40 when he had two people at the company uh my boy raul from superhuman and previously um he was in superhuman and previously reported and i'm gonna little micro LP and his micro fund. And they've got a little fund where they're investing. And then I guess before that, Index Ventures, our friends, Danny Reimer and the team over there, plus Eric from Zoom, Slack's fund, great list of investors, 52 million raised. Is that a lot of money for building a company like this, or is that the appropriate amount of money? I mean, that seems like a ton of cash.

### Human: So earlier this week, we're not going to cover this in depth or anything. But Sequoia announced this big, big Southeast Asia fund $2 billion for India. I am definitely I'm in some slack groups with climate investors. And I'm seeing that it's very clear that there's like a lot of activity happening in that sector in Europe. And, and I, I know that there are kind of various legal reasons for like, not investing internationally. And I guess my question is sort of like, minus the issues of language and culture. How hard is it? And is that is it? Are we going to see? Do you think over time, especially in a downturn? Yeah, that we might look for places where there's actually more growth opportunity than there might be in the US?### Assistant: Yeah. So if you're going to do that, you need to really commit. And if you look at Sequoia for their China and India operations, they had dedicated funds, dedicated LPs, dedicated teams who are native to the country. So if you want to do it, I would look at the best venture capital firm in the history of venture capital Sequoia. and then say, how did they do it? They didn't do it everywhere. And they didn't do it often. They did it selectively. They took their time. And they built domestic teams with deep domestic knowledge of culture and law, traditions, finance in that country, because you can imagine If a bunch of Americans are just throwing money at Chinese companies, and then all the crazy machine that happened over the last three years, with DD being delisted, Hong Kong being taken over the Uyghurs, education startups not being allowed startups not you know, having to give all their data over to the government and go through these audits, like, how do you navigate that if you're 1000s of miles away, and you don't know, you didn't go to high school with the person who works in the government. But if you did go to work with the person who worked in your high school buddies with the person who is working at the security exchange that does the data privacy audits, Well, I mean, you're gonna have such a competitive advantage over the person who does it. So you really have to remember, it is a competition. So the domestic team, the domestic resources, and the knowledge and the network is going to just trounce you. You need that network, you need that knowledge. So yeah, that's my that's my. And then if you do get invited by people to be in the deal, if there's room in the deal, understand that if it was a really truly great deal, they would have taken the whole position themselves. Be careful. See, that's why we go to school. That's why we go to school. Are you putting into sales? Like, Oh, no, we're leading it. Yeah. What? So it's a $10 million. How was you putting? I'm putting a 500. It's like, Oh, you're 5% of the $10 million. You want me to put 2 million in? Okay. I'll tell you what, we'll put in 50% of whatever you put in, which is something I do, you know, I'll look at like, what the lead investor is doing, or somebody's bringing to me and I'll just be like, Oh, okay. So, you know, this seed fund wants us to help their company. And I'm more than happy to take that call. And if it's a great opportunity, we'll do it. But I'm like, how much are you in for? You're in for 750? And you want us to come in for three? And your funds bigger than ours, like you have to look at the bed size and why aren't you putting a bigger bed in? Or maybe I'll do half of whatever you do. Yeah, pretty good way to challenge it.

### Human: I think that opening was right. So if you look at the art market today, the total size of the asset class is roughly $1.7 trillion, $68 billion in art sales every year. But the only way that you can invest in it is if you have millions of dollars to buy a painting. So to us, it just felt like this natural asset class that needed to be democratized. We were the first company to securitize a painting. So, you can go to masterworks.io, you can look at individual artworks, and you can invest in paintings by buying shares, and then you can trade those shares on our secondary market. So, you know, it's very similar to how you think about startups, but we just think about art as an asset class.### Assistant: Hey, everybody. Hey, everybody. Welcome to this week in startups. It is July of 2020. And we are still in the pandemic. And we're still producing episodes of this week in startups. We're still investing in companies, but we're wearing masks, and we're social distancing. And we're hoping that treatments and cures and vaccines keep making progress, and that the world comes back to normal By the end of this year, maybe, early next year, who knows? But we are carrying on because entrepreneurs need to keep making companies that create jobs so that people have something to do every day and we don't hit 20% unemployment or stay at 15 forever. And so for those of you out there who are wondering what we're doing at our little company, we're still investing. In fact, things have gotten busier for us. there are maybe a third of investors who are saying we're not going to invest in 2020. There's a third that are saying, we'll invest selectively, probably, you know, circling the wagons and protecting our own investments. And then there's a third of us, which our firm launch is in then the syndicate are included in where we're actively investing. So if you're looking to join our accelerator, You can go to launch.co slash apply, or just go to launch.co to learn more. And we're also syndicating deals at thesyndicate.com. And if you want to read my deal memos, you can apply there. And if you want to pitch us on being in the syndicate, you can do that as well at thesyndicate.com as a founder. Today on the program, I've got a really interesting cat who I met when I was in New York. His name is Scott Lynn and he's got a company called Masterworks, which you can visit at masterworks.io. just like startup investing became more democratized, not fully democratized, but more democratized when angel this seed invest and Republic started doing SPV special purpose vehicles, which meant that many investors can invest in one startup that was private, not a public company. But You know, Uber when it was private, not Uber when it was public. Or Netflix or Amazon when they were private. Imagine you could have invested in those companies. It's a pretty cool idea, right? And so we've been working on that. We've done 130 or 140 deals with our syndicate. It's got 4,000 people who are members of it. It's actually the largest syndicate in the startup space. But Scott is doing something different with masterworks. He's taking an even more opaque, even more confusing, confounding, and difficult to wrap your head around as a neophyte category of asset. And that asset is art. And he's going to talk to us today about what he's trying to accomplish by democratizing the art world. Welcome to the program, Scott Lynn. You heard my opening there. What did I get anything wrong and explain to us what masterworks is, and the domain name is IO, right? Yeah, masterworks.io. Got it. So explain to us what you built. Yeah.

### Human: it's, it's great to have this honest conversation about it, because it's sort of it reminds me of the conversations about something like minimum wage, like we always say, okay, if you know, if we want people in America to be able to afford houses, we have to raise a minimum wage to, you know, $15 minimum, maybe $20, and companies will go out of business. And that is just a fact. And it is a hard fact. And we are sorry that that will happen. But it's very interesting, because the Google ad-supported search model created in some, I mean, the ad-supporting publishing model obviously predated Google, but because you had this huge ecosystem that got even bigger, exponentially bigger under Google, it sounds like what you're saying is that a lot of the ad-supported publishing ecosystem as we know it now only exists because of the Google ad-supported search ecosystem.### Assistant: It's a real question. We try to be very thoughtful with how we do these snippets. We want to keep the length short. We want to convey the answer. And clearly, people want to take action. They're going to go click on the link and actually go to the site. But I do think that we are at a moment where the traditional search engine publisher model is just going to go through a lot of stress. The second order And many ways you can think of this as like the ads ecosystem sort of coming back full circle. What I mean by that is that the contract between search engines and sites was that they would make their content available to search engines and search engines would deliver traffic. Now, over the past 20 years, Google slowly but surely has been lowering the amount of organic traffic that goes out, especially for commercial clicks. You show more and more ads, then fewer and fewer people are clicking on those organic links. So this is a This is a slow but steady degradation. And similarly, because of the ads model and the kind of things that search engines have prioritized, which is like, how much time do people spend on site, bloggers, for example, rather than just show you the recipe, they have made them long because you want more space to put in more blocks of ads because you know that that drives more click through. I think we are headed to a world in which a lot of these things are going to be short circuited. And I won't pretend that I know exactly what the consequence is going to be. But I think one important consequence will be that a lot of sites that simply thought of their role as just creating lots of content, and traffic would just roll in from search engines and ads would monetize. are going to think long and hard about what does it mean to actually attract, acquire, keep customers and have them coming back. So for example, one of our predictions is that the same technology that's used to generate answers on Neva can be used to, you know, as a publisher product, so that a publisher like Vox Media can essentially offer a conversational interface to content that's on Vox Media, we have the tech to already do this. So that's a much more engaging experience right on the site. But right now, most of these sites don't even bother to put a search box because no one's going to search here. They're just going to search on Google. And that's how we get people back. So I think there's a little bit of back to basics of every customer that shows up at our site is precious. We have to figure out how to convert that into a meaningful long term relationship. And what are the tools that we need to have in order to in order to do that. And I for one, you know, have to say like, I will not be sad to see the anonymous internet and pages full of ads designed to grab your attention go. I'm old enough that I remember the time when I used to like subscribe not just to magazines, but also newsletters that I paid for. And, you know, I think there will be quite a bit of back to basics, plus also consolidation. I think that is something else that will definitely happen.

### Human: Amazing.### Assistant: It was 110 again. I had gotten shares from some venture firm that invested in a company that Facebook acquired. I rode those puppies up to 115 and sold them because I just didn't want to be an investor in Facebook at the time. But then I was just watching this and I'm like, I think Zuckerberg's going to take medicine at some point. Because this is so much negativity from investors, right? So this is the mighty Zuck. He's worth $50 billion, $100 billion. Even he had to bend the knee and say, okay, fine, Brad Gerstner. Fine, whoever's going to... All these people started selling the stock. We don't buy your story. And he said, Okay, fine, I'll make a riff, you know, cut 10,000 people, I'm gonna austerity measures are going to happen. And he communicated that. And his stock went up from $90 a share to 110. Boom, massive rebound 20% rebound. And now people like who work at the company are like, Okay, great, we're taking the medicine, we're facing reality. And that's what, you know, a little monthly missive does it makes you take ownership, face the music, and that'll just make you a great leader. We have so many delinquent people on this that we have a system in our firm. email, hey, we missed August, hey, we missed September. Hey, we missed August, September, and it's October now, are we going to get an October update? Or maybe we could bundle these three into a quarterly update, maybe or something. And then if there's a fourth email, hey, CC and Jason, here's his calendar, the link, can we jump on the phone? And if I don't get a meeting from that, then it's, hey, CC and you on your phone, Jason is CC here, and then I hit the dial button. And I'm increasingly just hitting the dial button and calling my founders when I don't get one. So for all the investors out there, just call your founders. Then we had three or four people who were so delinquent. I popped up a notion page. Oh my gosh. With the headings in it. I had them talk to one of our operations people who did like a little interview with them. How many employees do you have? What's the cash position? You don't have the cash? Okay, who's your accounting from? Oh, it's Cruz. Can we have permission to talk to Cruz? And we literally started building the bones of this based on what they said. And they had a board meeting. So we're just like, okay, we have the board doc. Let's adapt some of that we literally started writing for them. And then this founder was like, Okay you prove to me i should write these i'm just so busy so busy no one's to fills line yeah yeah did you go did you see the new black panther. What is that one time two hours forty five minutes. Come on right in the popcorn you watching house of the dragon on ten episodes they always go like one oh five one ten.

### Human: Um, yeah, I've become very, very self sufficient with with GPT these days. And I'm also using the Google generative search. Have you seen that?### Assistant: this is going to be the key thing I have made this discussions, I've had these discussions internally at my companies over and over again, inside.com is a newsletter business. And we have great newsletters, and it makes millions of dollars, it's doing great. And I was just looking at like, we spend a little bit of time tagging stuff. And I just took a story. And I said, Tell me who this story is about. And I just cut and pasted our summary of the story, because we kind of aggregate and organize the data there, and try to make sense of it for folks. So they don't have to spend so much time reading, they just read like a little presidential brief, as it were, like, that's what I sort of based it on. And then I took the original story and I put it in. And it knew chachi p4 and Bard both did a stellar job I've, you know, when I said, Hey, tell me what this story is about, or who's in this story, it organized it perfectly. And that was, I think, really interesting to me when I said, Hey, I literally went through this and said, put who is in this story, and put them into a category and describe them. And it was like, Oh, this story is about a company named x and another company named three companies in the story. Describe them in a sentence link to their website. And then it said, Oh, and there's a media outlet that wrote the story. And then there's an alliance in this story, which is a smart home alliance. And then there's this person who is the host of this podcast who was quoted. And I was like, Whoa, like the tagging, just that little thing of tagging information on the internet was done by humans for so long. And I was like, this is incredible, like you could really understand what the story is about. And you don't need a human to do that anymore. Now humans tagging journalism stories and organizing them, that might be 5% of the job, it's gone, it's automated. And there's no difference. And there's just going to be this continual 5% improvement on how to write a lead sentence in a story, or I did a bunch of research on event spaces for the all in summit and event managers, party planners, because we're looking for party planners, we like to use different party planners, one for each night. And then we look for like epic locations. And I started putting the locations in. And I think in an hour or two of me doing that and brainstorming, and I'm not perfect with my prompts, but I'm getting really good at them. I had done what would normally take somebody a week like, you know, a $30, $40, $50 an hour employee, it was a week's worth of their work done by an hour or two with me. And then I just shared it with that person. And with the shared GP, now that you don't have to share GPP, I just shared it with them. Have you had any moments like that where you figured stuff out long before handing it off to somebody?

### Human: So the services revenue was $20.8 billion, and that's up 6% year over year, up 8.3% quarter over quarter. And that was a bright spot. I mean, it beat estimates by like $300 million. And remember services, that includes all those subscriptions that they have, plus Apple's App Store fees. So like you said, this beat estimates. It really did do well.### Assistant: But if you think about the services business, that's almost $21 billion. And if you look at like, the MacBook $7 billion, iPad $9 billion, the watch and AirPods $13 billion services is bigger than those three categories and services is a third of the iPhone revenue. So even if iPhone sales slow a little bit people are gonna buy you know apple music apple tv gonna pay their app store thirty percent tax you gonna need extra storage because now with photos there's no way to store all of your photos in your five ten fifteen of having a mobile phone. on, you know, on your phone, so you're gonna have to pay for extra cloud. And then like news is actually a pretty good service. I find myself using Google News a whole bunch. And then my kids use the I'm sorry, Apple News, and then my kids use Apple Arcade. So when you have this family plan, whatever I'm paying for it, this Apple one or whatever it's called their version of prime, I mean, I spend a I spend a lot of money on it. And I get a lot of value from it. And I'll never get rid of it. So this is a really bright spot for Apple. So it seems like each company, Apple had the bright spot of services and iPad, Google, their cloud is doing pretty well. And then Amazon, their ad business is doing well. So, you know, even though they got headwinds, they are doing really innovative product things. And I think when you're looking at these companies, you have to ask yourself, Are they throwing off cash? And are they continuing to make innovative products that delight customers? I think in all three cases, they're still throwing off some amount of cash, depending on the unit. And they're still delighting customers with great products. So I still love all three companies. As you know, I've been on a health kick for over the past year. And you know, I care about data driven solutions as well. And if you listen to this podcast, I bet you do too. So let me tell you about fit bod. It's a data driven workout app that blends machine learning with exercise science. FitBod creates a custom dynamic program based on your fitness goals, your experience, and what your available equipment is. And FitBod will maximize your fitness gains by varying the intensity and volume between your sessions. You can customize your length of workout, what muscles to target, and so much more. Look at this demo. Hey, let's say you got 30 minutes to work out. and you want to work on your chest, triceps, and abs. But let's say I'm staying at an Airbnb and there's no equipment. Well, FitBod can create a perfectly optimized workout based on these parameters. Check it out. It's absolutely amazing. FitBod takes the guesswork out of fitness. Just open the app and start making progress. Get 25% off your FitBod subscription or try the app for free when you sign up now at fitbod.me slash twist. That's F-I-T-B-O-D dot M-E slash T-W-I-S-T for 25% off.

### Human: Very awesome. So now I guess I want to pivot. You have mentioned your startup a few times on here. Fresh mentioned it to me. He said, if you can get him to talk about the startup, you better hop on that. So now that you already mentioned it, can you tell us a little bit more about Sequence? What do you guys do? I've seen your TikTok account, but if you guys, if you feel comfortable even talking about your TikTok account on that end and what it's like to build a second account after already creating one crazy successful account, give us the details on it.### Assistant: Well, not crazy successful, moderately successful in the world of startups and shout out to Presh. I love the twist Canadian representation. So, you know, as it so yeah, so the idea for sequence was started in the summer, I was really excited about this idea of, you know, media tools. So again, my interests have been like the intersection of media and technology. And I think this is around the time when I started to kind of think, like, form opinions, perhaps that that maybe they were kind of the same thing you needed media to build to drive users to technology and technology to create value what were kind of your media companies you know could struggle and so the idea was to kind of intertwine intertwine the two. And in the summer, I kind of played around with this tool of working on narrative presentations. And I built a very scrappy kind of MVP. This was really on the side. I was kind of just finished up the TikTok deal and was kind of looking to figure out what to do next. And we sent that out to a few people. And the feedback was really interesting, whereby a lot of people kind of reached out, a few people tried it, a few people liked it, a few people didn't like it. But a small fraction of those people, you know, it became clear that there was this interesting use case where this could be something helpful for folks in the education space, creating courses, and specifically the mechanism of creating lessons, creating video lessons for courses. it's typically really hard to make engaging video and it's something that i've spent a lot of time thinking about as it pertains to my work on the podcast and and tick tock and just like you know the many years of editing before. So perhaps i became a little numb to the fact that making video. engaging video for most people is relatively challenging and if you think about an area of focus where creating engaging video matters the most it's education and yet what we see on many online courses created by people who aren't necessarily masterclass per se are these kind of really long screen recorded videos that aren't necessarily super engaging. And so it was this kind of realization, we kind of got introduced to a few course creators, and I teamed up with my co founder Nils, and a startup studio here in Toronto. And we just started speaking with course creators, and just started talking to them, and asking them, like, you know, what is your process for creating videos? How do you create videos? Is it something you struggle with? What we learned was that overwhelmingly the answer was yes, creating engaging videos is very difficult. There's a big opportunity. And so in December, we kind of wrapped up our interview series and started building. And our product is coming out in a few weeks. It's called Sequence. And we aim to essentially build the easiest video creation platform for course creators. So imagine if creating an engaging lesson is as easy as creating a presentation. So that's kind of the little longer-ish elevator pitch for Sequence. But now I'm very excited and it feels very natural to kind of work on a tool that helps people create more engaging videos when that's basically what I've been doing my whole life.

### Human: uh you gotta build a chat we haven't even started to unpack just the number of forces working on us at once but it is interesting where as you can only appreciate history in the rearview mirror you go like wow those uh 2000s were pretty chill weren't they um and of course they weren't there was the iraq war and there's all these other things but the feeling of it the acceleration of it um feels novel and part of that is Twitter. One of the things I learned, I would take these long breaks over the past year. And time slows down if you don't put yourself into these streams, these rivers of shouting people. It really does. And if you just consume like one daily newspaper, The world to some extent doesn't seem as terrible that maybe it is or that it appears, but we can't let it go. These platforms are so addictive and they're now so dominant. If you look at Twitter's role in American politics right now as the agenda setter, it's the main, it's the main deal. It's really one of the main deals at least. And that is just, that's a terrifying prospect. And what's more terrifying is like, where's the off ramp? Like, I'm having even a trouble of imagination.### Assistant: I can't, I actually know I can see it. You know, like, when you look at somebody like Dave Chappelle saying, like, I don't listen to Twitter, because it's not a real place. And watch me exist in the world without caring about Twitter. And he is. And I think what happens to a certain point is you left Twitter, you started writing, and and other people are leaving and going to private chats. And I think what people are saying is, okay, there are these two crazy groups of extremes in at least in the United States, this crazy alt right, this crazy, you know, hysterical left. They're actually like really weird people who are not enjoyable to be around. And then it's kind of nice to be with the people in the middle. And that old world in the 90s and 2000s, where we had the dinner party, and we disagreed, but we drank wine, and we learned something from each other. And we couldn't wait to get back together and have another dinner and open another bottle of wine, or have a coffee and play chess and debate for two hours. I think everybody's like, I kind of missed that. So I think the off ramp is, we choose, we choose to put our attention somewhere I've chosen to not engage with these people and do more podcasting. Because when I get out of a conversation with you, I You know, we have our conversations, I think we both look forward to them. We come out of them and say, you know what, that was a really great conversation. I learned something you and I have learned so much, I think from each other. I know I've learned a lot from you. You had all these like ideas that really challenged my thinking about work. You know what I did, my realization was, you know what, I've worked too hard in my life. I I thought over the last two years, when my friend Tony Shea died, you know, Tony really enjoyed life. Are there things that I should be doing that Tony was doing? And am I gonna die? Yeah, I am gonna die soon. I could die young. And one of the things I realized was, I'm not skiing enough. I always loved skiing. So I bought a ski house. I skied 33 days a year. I was skiing three days a year. I've skied more this year than I did in the last decade, at least. And it was just a simple change. I said to my team, I'm going to work from four to eight at night, four to 730. And I'll work from whatever seven to 12. Just don't put anything in that 12 to four window so I can get out on those slopes for two hours. I it's changed my whole mental framework, my I think I physiologically and mentally, spiritually changed, where I just dream about carving. And, you know, the feeling of going down the mountain, and it's totally changed my brain chemistry. It's a lot to do with like the balance you talk about other people have talked about, and constructing my own life to one that makes me happy.

### Human: Well, so there are a lot of questions in there. But there are a number of people watching what's going on. And so one is certainly we're there, and we've got an active set of enforce... A lot of our attorneys are enforcement attorneys, or they're working in our Office of Compliance Inspections and Exams, and they're watching the markets as well. They're also state regulators who are very actively watching what's going on. And then we do have this wonderful whistleblower program where people can come in and tell us about something. And now there's a monetary reward if you alert us to something and we end up bringing a case. Really? Yes. So tcr.gov. Go to the SEC website and look for tips, complaints, and referrals. It's not tcr.gov. I can't give you the off the top of my head the address. But if you just go to our main website, scroll down, and you can see where to file a tip. So you've got to use the form there, but go ahead and do that. And we get tons of really good cases from that. And so that's a piece of it. There's always going to be a lot of fraud out there. You have these heart rending cases where people will They'll build up someone's confidence and trust in them, and then they'll turn around and stab them in the back and take all their money. So you've got to be always alert when you're giving your money away to someone to invest. You've got to ask a lot of questions. Don't be embarrassed to ask questions, even if it's someone that you trust and like. still ask questions. If they tell you the opportunity is too good, and it's going to go away tomorrow, then you can just... You don't invest before you are comfortable and you've got to be just extremely alert for red flags where people are telling you it's this or nothing. You can always find another investment opportunity, but you can't always get your money back. So never feel bad if you feel you have to say no to someone. because you have qualms, those qualms you should really listen to. So part of it is really getting people. We've got a big investor education effort under our umbrella to try to get people to come ask us questions. If something doesn't look right to you, come tell us about it. If you just want some basic information about investing, we've got all kinds of resources on investor.gov, which is our investor education website. So there's no shortage of resources. Come ask us questions. With respect to the ICO craze, there certainly was fraud. And we've brought quite a number of cases now. But there were also a lot of people who put their money in with eyes wide open. And so again, you raised the point, Jason, of got a little white paper here and you're going to invest all your money based on a little white paper. That's a good example of when you need to ask more questions. You need to think carefully. A lot of people... One of the benefits of the ICO, of the legitimate ICOs is they put their code out there for everyone to take a look at. So if you know how to read code, then take a look at it and see, does it match what the white paper says or doesn't it? And if it doesn't, then you probably don't want to be part of that. So there are a lot of tools that you have. And I really encourage people, be empowered to make some wise decisions for yourself. When you do see something bad happening, please tell us. Don't tweet it at me, but Go to TCR, go file a tip complaint or referral. So it gets into our system and our staff look at all of those.### Assistant: I know your time is limited, and I want to be respectful of it, but I think it is a really great segue for us. And maybe we'll start to wrap on this, which is knowing when you are getting scammed. And I have witnessed on the TikTok and Instagram, a cohort of people who are selling get rich quick scams. And what I told everybody when I did my angel.university course was, it's $100 to come to the course, and we donate all the proceeds to charity. We happen to do a charity called Smash, which teaches people who are from disadvantaged communities how to do science, technology, engineering, and math to help them do better in college and get those degrees. And we donated $100,000 this year. don't need because because I don't need to make money teaching you how to be an angel investor. If I was the third or fourth investor in Uber and Robin Hood and thumbtack and other great companies. And so we were seeing this young group of people showing Ferraris and showing, I guess, selective trades they've made on heads up displays, and then making videos of it, and then really shaping a person into a scam. Come to my $100 seminar, come to my $500 seminar, come to my $3,000 personal finance thing. How on earth are Does a company, I'm sorry, an organization like the SEC with limited resources deal with this level of selective fraud? And from what I've seen of these folks, they're not disclosing their complete performance, which I have to do. I have LPs. I have LPs who are serious professionals. I have LPs who are the most legendary venture capital firms in the world. I get an audit on my fund and the results are there. But what these people do, from what I gather, is they'll place five trades. They might place five trades that are counter to each other or counterbalance each other and delete the four videos where they lost money or did broke even and take the one on the other side of the trade where they shorted and went long on the same stock or whatever and say, look, I made $10,000 today. when really they just broke even because they took two sides of the same trade. How does SEC enforcement work? When does something hit your radar? Is it when somebody in Florida who lost money complains to you? Or do you have people out there watching this nonsense and saying, let's dig deeper and are you properly resourced or improperly resourced to enforce? Because when I saw the ICO craze, That to me, as somebody who really takes the work seriously, I do not want people to lose money. When I saw people investing money in white papers with spelling errors in them and shipping their Bitcoin to a wallet of somebody they've never heard of in another country, I thought, oh my Lord, this is going to be one of the greatest scams in the world. We watched thousands of ICOs And I think you've been able to, you tell me how many of those have you got, you've been able to have the team been able to take action on? And how do you even make that decision of who to take action on?

### Human: Yeah, I totally agree with you. I mean, I haven't found another platform. Once I found you guys, I guess I did stop my search there. But I definitely was looking for a platform that was, you know, just switch the tables a little bit. And it's exciting because I see more and more of my friends. Maybe that's just the nature of living in New York City. But more and more of my friends are taking on gig work or just a project to do on the weekends. And I feel like before, when my friends had to have a second job, Megan's meet to live in a really expensive city that was like bartending or working as a barista. And it's kind of cool now to see people, um, you know, first off, like fine tune skills, like learn how to upscale themselves like you did. And I have friends that I went to college with in that computer science world that maybe now they don't do anything like software engineering as their nine to five, but they do freelancing for UX UI a little bit on the side and they can make extra money. And I'm excited to see where the world of independent work goes.### Assistant: No, no, no. I was 17 whenever I first sold my first track. And I was like, that's super cool. I just made money with computers. And so I actually dropped out of school and moved to New York when I was 19. And so I really had this huge kind of imposter syndrome of like, oh, you know, I'm probably not going to get a real job so I kind of have to figure this out. And so I was producing music, and I would run into all these different types of creatives like creative engineers or the graphic designers who would make the album art. And I just remember thinking this was this was so cool but they're all working freelance they're all working remote and I was like there's definitely something here. And so I finally, I met a friend through Airbnb who was staying at my place at the time, who was freelancing, who got me my first referral gig. I think it was either making a pitch deck or making a website. But I remember at the time, I was a true starving artist. And I know you live in New York, so it's kind of a rite of passage to live in a really, really horrible place. So at the time, I was living in like a really, really bad apartment. It was like 800 square feet, four bedroom, we turned into a five. We were Airbnb-ing one of the rooms just to make ends meet. And this person comes in from San Francisco. It was crazy. He had been freelancing. And I was like, that's so weird, because you're making money doing this. And I've been doing this like all of my life. So I got my first client and it changed my life. I was like, I figured it out. Even though I dropped out of school, I'm still going to work in tech. I'm still going to be creative. And then I figured out what ODesk and Elance were. And so I started getting local contracts in New York and then outsourcing all the things that I wasn't good at. And from there, I started my first business. Once again, it was bootstrapped. And so I would take my freelance revenue to hire other freelancers. And so I kind of became this expert at hiring independents. And so I saw both sides of the table and I was like, there's got to be a better way. I think this is going to be huge. I think everyone's going to default to this at the earliest stages of their career, but also as like supplemental income in the future. And so I just became obsessed with the problem. And so that's how Contra was born. Just solving a personal problem that I accidentally became an expert at because I had no other options. And so, I don't know, it's crazy to see like kind of where we are now and where we're going. But I think that, like I said, I think everyone's going to work independently in some capacity in the future. And we just want to make that ecosystem as advantageous for both sides as possible, really, really focusing on the independence, because I think that's where I think the true potential is.

### Human: And look, I'm coming from a completely different space. I used to be investigative reporter in Russia. So that's how that works out. Wow, that's fascinating. That's the different I'd say that, you know, my background is very different from anything that I tend to run into here. But I think that what, and we're mostly female led companies, so most of my, you know, my head of product, my head of growth, they're all women, and most of our product efforts are led by women. And I think this is not because we decided to do so, it's just that women were a lot more attracted to the idea of creating something that will take care, an AI that will take care of humans and will help them and genuinely believed in that mission and wanted to see that through. Maybe that also made us a lot more naive than maybe some other companies because we started, we never even thought that people would do romance. Even though that, you know, now it feels like a completely, you know, in hindsight it feels absolutely obvious. But yes, I do feel like it's slacking a little bit because these brilliant minds are working on these products but I think a little more, a little different, a different point of view would be needed to make sure we're building something that's actually good for people. Because otherwise, there's just no nuanced conversation about what is the emotional utility of a product like that. And I think what made us stand out and, you know, we started so long ago, we were the OG, the Coca-Cola of AI friends and allowed us to build a brand is that we understood that it's not that much about tech capabilities. It's really about human vulnerabilities. People were able to build relationships with Eliza 100 rule, super simple chatbot from MIT decades ago.### Assistant: So I mean, people create relationships in their minds. I mean, if you've been to Japan, and you've seen some of the maid cafes slash virtual avatars with QR codes in VR or AR. I remember seeing that a decade ago that grown men were lining up to get limited edition paper sticks with a QR code on and I'm like, what are they doing? And like you put this in front of your webcam. And then a little maid pops out like a French maid pops out of a box, and then we'll talk to you. And I'm like, I'm sorry, what? It really was like a passion. And then you just worry a little bit about the species and population. If people are using this as a replacement, Are you still using your personal phone number for your startup in 2023? Okay, listen, it's time to stop. This is such a common mistake that founders make. But OpenPhone has totally rethought every detail of what a business phone should look like in 2023 so they got you covered. OpenPhone makes it super easy to get business phone numbers for you and your team. But here's the magic. It works through a beautiful app on your phone or desktop. Open phone is amazing because we use it for our sales team and our ops team every single day. We have gotten so much value out of this for, you know, things like the Angel Summit we're doing. It's an event, we want to have a phone number for customer support. And we want that phone number to roll over to the different people on our team. So VIPs never get more than one ring. Okay, open phone is the number one rated business phone on g2 for customer satisfaction for a reason. It's perfect. It's delightful. It's affordable. And look, Brian Jagger, the co founder of a startup called athlete tweeted the following. I'm literally cash flow positive from listening to this week and startups from listener deals and he says he's not paid to say this. It's really nice to see that kind of feedback. Open phone is already affordable at a starting price of just $13 per user per month. But twist listeners get 20% off any plan for your first six months at open phone.com slash twist. And if you got an existing number, no problem, they're going to port it over at no extra cost. Head to open phone.com slash twist to start your free trial and get that 20% off. How do you program it to ask inquisitive questions as an investigative reporter in Russia? you must have mastered the art of asking questions in a way that didn't get you put into jail, but did get you information. And didn't get a red notice put out for you. So tell me how you've crafted and thought about what questions and prompts to put into replica. And we are going to hold this for the 15th for when you launch. So you can say the name of the new app if you want. We won't release this until it comes out. So with both apps, how did you come up with really intuitive or evocative or engaging prompts that send people in a world positive, human positive direction?

### Human: But anyway, but now we're in the program a long term because we're doing the work.### Assistant: Well, exactly. It's like, you know, if you look at Y Combinator and Techstars and launch accelerator, most funds will dabble in an accelerator. In fact, Sequoia is doing one right now. It's not exactly a salary. It's a three week program where they kind of teach their growth philosophy. So it's not even like 16 weeks or 12 weeks, like some of the other ones out there. But every firm at some point says, Oh, we should do that. And sequoias is called arc, by the way, it's amazing. I highly recommend it. I think it's like sort of PhD program, maybe, you know, if we're graduate school, and then there's other places that are undergrad, just kind of like, you know, PhD program or professional development kind of program. But anyway, putting that aside, Molly, the fund starts an accelerator. And then you know what the fund managers realize? Oh, my Lord. This is work. Yeah. Yeah, when you have one company that has 100 customers, and 12 employees and their accounting is nice and tight. They're serial entrepreneurs. You know what that is for an investor? Easy, easy, right? That's easy. Yeah, rubber stamp. Yeah, you're kind of go to the board meeting, they present everything nice and tight. It's a very fully baked, refined team. It's like, know, somebody who's been a restaurateur for 20 years, they come to you with their latest fast casual concept, I'm going to make a burger joint, here's what it's going to be. And I'm bringing my chef from, you know, this Michelin star restaurant to do the menu, and then we're going to train people and we'll have some supervisors from our other Michelin star places come by every weekend and train the staff. Okay, easy peasy, lemon squeezy, no work on the VC sport. especially if you're investing in that founder for the second or third time. Wonderful. Now, you find somebody who's like, I want to start a food truck. And I did a pop up and I couldn't get the people paid 50 bucks to come to my pop up and I couldn't even keep up with the number of people came I didn't collect you know, I didn't collect the money in advance people stiff me people walked out I service was a disaster. It's kind of like the bear. You see the TV show the barrier. Yeah, yeah, yeah, yeah. Remember in the bear he's dealing with like a bunch of raw talent. who nobody's ever believed in. It's kind of my jam. I kind of like that energy. I kind of like it. Yeah. And so we're now like sort of embracing that with founding university starts November 14. It's 500 bucks to go to this. If you come to all 12 weeks, we give you back the 500 which by the way has costed me thousands of dollars, I just found out that we have to pick up the refund fees. We Oh, yeah. So I'm actually losing money.

### Human: And then I had an absolute **** and almost canceled the whole thing when I saw the 480p. Okay. You got to be kidding me.### Assistant: This is dumb. Who's paying for 480? Number one. Number two, is this how you segment your users? Why are we segmenting users like this? This sounds dumb. This sounds like the creatives and the product people have lost control of the company to the CFO and some wonky, you know, spreadsheet jockey, who is now saying, if we want to optimize, you know, if we if we just boil the frog, and we upgrade everybody to $20, that's 200 files a year. And we're going to lose like 3 million subscribers. So we'll lose 1%. But we'll raise the prices 5% because they just raise the prices. So here's what happens when you have this many subscribers, Molly, and this is what happens in a big company. Reed Hastings starts having like two people, two factions inside the company. One factions are the artists and the product people, the creatives of the world. Yeah. And then there's the frickin bean counters. And I think what's happening is Reed Hastings is getting steered off course by the bean counters, because these moves are bean counter moves, not visionary moves. And Reed Hastings needs to come into the office today, and say enough of the machine gonna too much nonsense. We got How did we win? How did we get here? Great content. Let's stop playing games with the customer base. Let's have fair pricing and simple pricing. But now these being counters Oh, you know, so this is the as Antonio grassi has said at the all in summit, the over financialization of the p&l. Yeah, every company gets this point. And they're just manipulating stuff to optimize us. And you know what, we're consumers, we're smart. Molly doesn't it doesn't matter to Molly. I know her salary. I negotiated it. I know her like net worth. I know her future possibilities. I can tell you from Hollywood 240 verse, you know, 20 months or 15 makes no difference. But nobody likes to be abused. Exactly. So Netflix, you're not making the great content. You got serious competition that's got better offerings at better prices. Wake up. The beginning and end of this is killer content, and not price manipulation. So Netflix is got some serious but solvable problems. There is also this fourth thing I'll bring up, which is the natural audience size, there is a natural audience size to any service. And then when you hit it, it's very hard to add the incremental subscribers. So what we might be seeing here is Netflix with all this competition hitting what I'll call a natural audience, a ceiling. Now, this is where I think the advertising business I'm warming up to it could be a great business. I need to know, what do other streaming services make in revenue per user? So there is a free version of Hulu, correct? Like you can use Hulu for free, I believe. I pay for it. I paid to get the ads off of it. I still see fricking ads. Yeah, I believe you can get it. There's a free tier of Hulu. Somebody let me know.

### Human: Yeah, I mean, I think you have to because I think All of that is 100% true and math, you know, as I have written on a post-it and I'm keeping next to my bed and thinking about all the time, math is a harsh mistress. Like, the truth about math is real. And also, some people will be bailed out by their LPs or extended further benefit of the doubt. Yeah, then other so when there's a pullback, it is very likely and this is I think what people are pointing out that underrepresented investors and or founders may get less of that extension. Yeah. It sounds like what Arlen is saying in some ways is Yeah, hi. I'm one of them.### Assistant: Henry Perry Jacques from Harlem Capital, great name, said on twist that they're focused on underrepresented founders. But if Zuckerberg walks in the door, they're not going to pass just because he's white. And he was sort of upfront about this. So this is I think, one of the hard conversations. Monique had the opposite with some help ease. where, you know, people want to do the right thing. Some people want to do it just to check a box. And then the nature of what we do is we're judged ultimately on our returns. So now no matter what people say to you, matter what they say on Twitter, at the end of the day, the reality is this is going to be based on numbers for all of us. And will certain people get the benefit of the doubt? Will certain people start in second base? Will certain people have a fraternity brother or sorority sister do them a solid and squeak them in ahead of time or get them a bigger allocation? Of course, the world's unfair. Nobody's saying it's not. But ultimately, the numbers are the numbers. And so what we've seen is there are some women in the industry, because 1015 years ago, we're talking about how underrepresented women were in the industry. There are some women who crushed it, who now have billion dollar funds. And so they're there. And I think two of the largest funds recently were both started founded by new funds were founded by women. So there is this let's call it 10 years, 15 years of this delay, that we will see in which fund managers actually were able to make it happen and which ones didn't make it happen. And you know, it's very random strategies matter timing matters luck matters. Yeah, I am fully confident that we're going to see a large group of people who are underrepresented raised billion dollar funds 10 years from now, but it is going to be a 10 year process. And that's how these LPs work. When they turn me down, when they turn Arlen Hamilton down, when they turn everybody in between down, they will basically have the same story. We want to get to know you for three funds. Yeah, that's it. And I listened to Arlen's, you know, podcasts, and I've had her on the show, and we're friendly. I don't know if we're friends, we don't like hang out socially, but we're friendly. And, you know, we get into it sometimes. But she was just lamenting how like, LPS have not shown up for her. But she has had a lot of LPS. And she she actually called them out by name on her pod. which was highly not interesting. I've never seen that before in the history of venture capital. So but these are large LPS. And so, you know, she is kind of publicly challenging them to step up. So maybe there is something to, you know, what she's saying is like, well, why won't a large endowment, take more risk, and make this change happen faster. And, you know, she might have a point there.

### Human: I mean, I love this. I was actually doing a little research to try to see because I feel like I'd heard some chatter about the edtech startup ecosystem. It was obviously the hot thing. And I'm trying to figure out sort of where it sits now. There's been a lot of investment, but I do think and actually one of the note is sort of you didn't steal my line, because I hadn't said it yet. But database said what I've been thinking for a long time, which is like, we are so we're so proto matrix. Right now, we're like, all almost Neo, just like jack in, learn whatever you want. And I feel like more opportunities for that is incredibly valuable. And I like the fact that this also includes credentialing, so that you do come away with some sort of a certificate that says I completed this thing, there is value in it, I did this work, you can, you know, believe that I have gotten this education, which is, frankly, no different from your little like fifth grade graduation certificate or your diploma at this point.### Assistant: Well, that's what I would found a university this brand that we're creating founder dot university 12 week course $700 to go for 12 weeks. If you make it through the 12 weeks, you get the $700 back. So it's free. Do that to help society and founders. I want to do found a university high school edition and just allow 15 to 20 or 15 to 17 year olds join and just run up to the exact same course. Yes. Squarespace is the platform where you can build or sell anything you all know Squarespace it's the best we love them here at launch and we've used them for a bunch of different projects here are three awesome Squarespace features that all founders will absolutely love number one e commerce Squarespace has the tools you need to get your business off the ground including beautiful templates, inventory management APIs, advanced analytics, and a super simple checkout process. Plus they've got mobile optimization. All websites are optimized for mobile right out of the box. The content automatically adjusts so your site looks great on any device and Squarespace now has member areas. If you want to generate revenue through exclusive members only content, well Squarespace is now the place to do that. Like if you want to sell a subscription to your cooking classes and recipes, maybe you're doing piano tutorials, the possibilities are absolutely endless. And this can be done on Squarespace's easy to use platform. So If you don't want to give the rake to all those other platforms, build it yourself on Squarespace. Here's a very quick call to action squarespace.com slash twist for a free trial. And when you're ready to purchase use that offer code twist to save 10% off your first purchase of a website or domain. All right, let's do our startup of the day. Subject.com Formerly known as Emil Emily learning is an accredited meal a meal a meal. Is an accredited learning platform offering high school level education nice rebranding. Subject.com is like a $500,000 domain name for those of you who are wondering anytime it's in the dictionary can add a zero to it. subject Kurt subject.com currently has 65 courses, including 29 plus core courses like algebra, Spanish history, 21 advanced placement courses, calculus, biology, physics, 15 electives, students can access material for just 959 a month or 6999 a year. It's not like a pitchman. To me, this is great. When you look at what textbooks cost, I really wish this was more open source and free. And then they charge for paper, in other words, anybody could access it for free. But then if you want it to take a certification where you prove you learned it, then you pay the, you know, 10 bucks a month or something. But whatever, it's such a de minimis amount of money, it's per month, it's less than the average minimum wage in the country. So I always look at that if something costs less than one hour of work, or, you know, two or three, then it's probably easily affordable by everybody. And so what do you think?

### Human: Yeah. Tell me a little more about the triggers. My closest friend in the world, her husband is bipolar and has had a number of hospitalizations. And people in your life and you yourself become so adept at tracking these super specific triggers like one too many glasses of wine or not quite enough sleep. And then add to that the stress of starting a company. Can you even separate them out at that point?### Assistant: I think there is a there is an avalanche of potential information to be attuned to prior to it being too late. And I think the goal is, how do we identify self intervene, have mental mental health professionals around us who can help intervene, like before we get to that point, where it's so hard for anyone to deal with it. We've talked about sleep, I would also observe irritability, like I start to notice, if I have this like rising anger, that is sort of inexplicable relative to the conversation that I'm having, you know, I'll notice it now sometimes at work where I'm like, someone's disagreeing with me and I just get mad. And it's like, well, what's that about? You know? Well, what's so threatening about that competing idea? And oh, wait, Isn't the job of a leader to be able to hear a dissenting idea, lead a discussion or a process and get to the best answer? Or is it kind of a job just to be right, to want your idea to be right? And so I'll notice that if that's happening, that must mean that something like on the ego side for me is flaring where it's more about my ego than the company. And then I'll be like, well, wait, what's happening in my life? I'll talk to my doctor. And it's like, oh, yeah, I've been drinking a little bit more. I've been working a little bit too hard. I've been kind of slingshotting around between different things. And it's like, oh, that's a hypomanic ingredient. And one of the, sure enough, like diagnostic DSM criteria for hypomania is irritability, or overly goal directed behavior. So like, I remember I had one night where I was just hanging, I was attempting to hang framed pictures in our apartment. And I just like had to get it right. And I had to get it done before the end of the night. And there were nine. And I was making a mess of the wall. And then I was just like, what are you doing? Like, let's get someone that can do this, or just let me do it. Give me the damn drill. And like, I'll do it myself. And, you know, same thing I spoke to my doctor about it. He's like, Oh, yeah, like you're on a path there with goal directed behavior, or on the flip side, just noticing a little bit lower mood. So I think It's like anything with human communication, we have to deal with stuff before it's like blinding light 10 out of 10 problem when it's a two, three or four. But we tend to not want to notice something when we're at the headwaters of it. And so I think the job for me, you know, as someone with bipolar one, is to be really vigilant about mood at the headwaters. And then to have the people around me and the medication, and you know, the doctor twice a week is a real privilege, because every 72 hours, I'm talking about this kind of stuff.

### Human: Jason, you nailed it. I would I would put one tiny caveat on it, which is that, yes, our guards cannot jump in front of a bullet for you. But they also do not fall asleep, plan their iPhones, pick their noses or turn around away from their cameras. And so your friend David Sachs is actually a great example. And he's, you know, also very security minded. but very conscious that, you know, the security guards that they work with at their at their business, you know, they go to the bathroom and play on the iPhones for an hour between 1am and 2am. And it turns out that's a great opportunity for somebody to break in. And so I would say that on balance, our guards are probably only maybe 150% as effective as a live guard while being a ton cheaper.### Assistant: It's time for another R Crowd Deal of the Week. Right now you, yes you, can join R Crowd's investment in BlueTree. According to the deal memo, BlueTree has developed a process to significantly reduce the sugar in any natural liquid. This lowers health risks while retaining great taste. And BlueTree has already signed a 5-year, 100-million-liter contract with an industry leader, according to their deal memo. Speaking of investments, it's clear that all over the world, companies are innovating and driving returns for investors. Well, our crowd analyzes many of these companies across the entire global private market. Then they select companies with the greatest growth potential and they bring them to you from personalized medicine to cybersecurity to robotics, one of my favorite, and quantum computing and more. In state-of-the-art labs, startup garages, and anywhere in between, rCrowd identifies innovators so you can invest when growth potential is greatest, which is early. So here's your old CTA, the call to action. If you're an accredited investor, you can join rCrowd for free. at o u r c r o w d.com slash twist and review the current deals. There is no payment involved until you decide to invest. So go sign up for free and check out those deal memos at our crowd.com slash twist. Every time you read a deal memo, you're going to get smarter. Such a great opportunity for you. And thanks to our crowd for being one of the greatest supporters of startups, founders, investors and this weekend startups in the world. Hey, everybody. Next up on the program is Dave Selinger. And he is the CEO and founder of a company called deep Sentinel, which I was lucky enough to invest in. This is a company that when I saw it, I said, Why didn't this exist before? I have been obsessed with security cameras since drop cams came out and ring doorbells like many of you. But I always said to myself, gosh, you know, this is great for me to have a video of somebody robbing my house or my office. But this is not going to be helpful in deterring in, you know, some crime, intense crime environments, like I say, San Francisco. And so a friend of mine, David Sachs, a bestie, in fact, had put in his office something called Deep Sentinel. And he sent me a video one day. And he said, Wow, Jake, I'll check it out. Somebody's breaking into my office in Deep Sentinel, talk to them. And And what Dave created is 24 hour a day, seven day a week monitoring on a two way video camera that also has a blaring alarm. It's not as cheap as a drop cam or a nest cam or a ring doorbell, but it's nowhere near the cost of having a security guard on your property. But it kind of gives you most of the value, I would say 98% of value because your security guard is not going to jump in front of a bullet for you, they're gonna call the police. So welcome to the program, Dave. I think I described the company accurately. Am I correct?

### Human: So then there's the like, what's the upside? What's the compounding potential? So I think there's probably gonna be more margin of safety in Airbnb right now on the price than any of these others. Beyond that, gosh, it's so hard to say. I'm not familiar enough with any of these names. I'm tempted to say Ant Financial like Ben, but I'm really worried about WeChat Pay, my understanding is taking huge share away from Alipay in, um, in China. Uh, now I do think Ant Financial has a very robust and growing wealth management business, but I just don't know enough. So I think that's probably my number two, but I need to do more work.### Assistant: Okay. So if you had to pick your number two, you go with that financial at this time. All right. I too was attracted to the Airbnb possibility and I do think that that's a company that will be here in 10 years. However, I do think they will face competition at some point. I do think they are fully valued here and I'm going for return. I'm not going for safety because I'm looking for big returns. I need something that moves the needle for me. I believe that Qualtrics is run by an absolute beast of a CEO. And that's my first choice because I think that that business is just going to continue to be a juggernaut and is run so professionally, it's crazy. And then that leaves me with Asana and, and Financial and the fully valued Airbnb. ThredUP I don't know enough about. And, you know, Palantir is interesting, but it's tiny. And I, I think if it was going to break out, it would have broken out already. I kind of feel like maybe that's a niche business and it's not, doesn't have a lot of room for customer and more customers, right? So I'm going with Qualtrics because of the professional of the management. And then, I don't like the idea of investing in opaque Chinese companies, because they don't trust the market. So, you may find this shocking, but I don't like to play in a rigged casino, and I consider anything out of China is a rigged casino. So I take Ant Financial out for that reason. But I do applaud you for being a maniac who wants to shove all his chips in in a casino where you could be using a marked deck. Or the value of your currency could suddenly change rapidly. Now, I love the product, Asana, and I feel like that could become the standard for what they do. And I do love Airbnb, and so it's really now down to between Airbnb and Asana. And my gut tells me Airbnb is very valued, will be here, but it's not going to be a 100x return. I think in 10 years, it's going to be a 3 or 4x return. I do think Asana has the chance to be a 50x return. So therefore, I'm going with Qualtrics, which I think is a 10x return. Asana, which I think is a 50x return. I'm going for cash on cash return. I am going to, in my bet, Nick, I want these bets put on a long-term betting site. There's some betting site where you can put a long-term bet. Longbets.org. So we're going to go to Longbets.org. I'm putting Qualtrics in as my number one I'm putting No, I'm putting Yeah, Qualtrics and Asana. And I'm going to even stipulate that I think I could 10 x Qualtrics. And I could 50 x on Asana in 10 years. So let's make that that you guys want to put what you think your cash on cash multiple be?

### Human: And timing, right? Timing matters. You're you're doing this at this moment when, as you described earlier, this conversation is really increasing. I also want to ask you how this how if at all, because there's also been news about drug prices, specifically around like Mark Cuban's new company, Cost Plus Pharmacy. How does this interact with that, if at all? Or how could it? And is it part of this ecosystem of like, let's upend this?### Assistant: Oh, yeah. No, completely agree. So but part of it is I often say there are no shortcuts in health care. So if anyone says, hey, my sister is a big wig executive at this Fortune 500 company and they're just going to move their business to us. I'm like, I've never seen that because normally someone is going to say, well, wait a second, how many 200,000 life accounts do you have? And if you're new to the business, your answer is going to be zero. And they're going to be like, hit the road. So no one has a tolerance for risk when it comes to benefits. So what I say is there's no shortcuts in healthcare. So we've been at this for four and a half years. And what I often say is I never want to go back. I never want to go back and sell four years ago because it's miserable. Think about it, Molly. You're my customer and I'm trying to convince you. And I say, hey, here's the reason why you should use CapitalRx. The first question is going to be like, well, how many other customers do you have? I'm going to be like, including you? And you're going to be like, oh, that's very cute. And they're like, how long have you been in business for? And you're going to be like, including this month? Right. And you're going to be like, are you trying not to get the sale? But I'm trying to be honest. But my point is, you start by selling 500 life cases to get to 1000 life cases to 2000 to 4 and 8 and 16. And I make this point all the time, because I want people to understand there are no shortcuts in healthcare, you build upon your trust score. So if I've been scored to service 10,000 life cases, Yeah, I might be able to sell a 20,000 life case, but I'm not selling a 200,000 life case anytime soon. This is what we had to build upon. Also, if you think about it, statistically speaking, as I stated earlier, depending upon your accounting for market control, the big three, Cigna, United, and CVS control 80% of the self-insured marketplace. 80% of the time, I've got to displace a Fortune 20 company. Mm-hmm. And so that's never easy, but it gets easier each year. And part of it is because our performance and our track record. But it's also... I give a huge amount of thanks to my customers. They're our best sellers. My best brand ambassadors, hands down, are my customers. I have more sales for my customers. Talking to other people, be it at conferences, at just get-togethers, people knowing people in industry, HR people are pretty tight. And they'll just say, Oh, my goodness, I'm having the best experience with capital Rx, you should you should speak to them. And I think that goes back to that trust and strength of your brand.

### Human: startups need a central hub to store information and collaborate on work more than ever, especially when you have remote teams. That's why you need to move to a right first culture. Any best practice any project should be written down in one place. We went fully remote back in March of 2020. And notion became our internal knowledge bank now We use it for external purposes, you can go to this week in startups.com slash checklist to check one of the many ways we're using it externally. We took our hundred point founder checklist, which we made for the podcast. And we made for our founders. And you know what, we said, Why don't we share this with everybody? This is like a book for free on notion and you can take it copy to your notion, you can write notes on it. And that's the magic of notion have great templates, it puts everybody on the same platform, and it just accelerates your efficiency. When new people join your company, they go to notion and they see all the projects going on and they quickly get up to speed. It's changed everything. So here is your call to action. Go to notion.so and get addicted like the rest of us use the promo code twist, you get $250 off their annual plan, notion.so and use the promo code twister and check out for $250 off. Thanks to the notion team for making a great product that we love and enjoy every day.### Assistant: And if they're in hyper growth mode, a snowflake or whatever, it's higher, it's going to be 60% or higher. Okay. And so assuming you have any DNA, anyone running the place, you're going to consume all of your revenue or more growing, right? Because half of it's to sales and marketing, but renewals cost less, right? And eventually you hit a point in SaaS where you have so many customers and they're renewing profitably that you'll crest this and you would become profitable. But imagine if you're growing at hyper growth all the way to a billion in revenue, it might take a long time because you're still consuming half of all your revenue in sales and marketing. And it turned out to be true. Finally, we're seeing cloud companies at a billion in revenue, right? And they're all profitable in cash flow. We can distinguish between profitable and cash flow positive in a minute. But they're all generating 20% or more of each dollar as free cash, cash to the bottom line of the bank account. But in many cases, they don't get there till after 500 million in revenue. So that was a bet back in when Box IPO-ed and early guys backed that anyone would be profitable. No one believed Aaron Levy Box would be profitable. And Box didn't grow like a weed, but it's generating lots of free cash flow today. And so the biggest knock from cloud and SaaS has been somewhat addressed. But anyhow, the concern is that if the markets are based on profits, not revenue, what's the point of a share of stock? I'm not sure anybody really knows, but in theory, it's a share of the profits, right? If there's no profits, because SaaS eats it all up, the shares are worthless, and that was a knock. So if we roll it back in time, investors, even at the early stage, are going to be wondering, will you ever be free cash flow positive? Will you ever be profitable? And I think the interesting point is, there's a lot of issues in SaaS stocks. There's a lot of issues, for example, in low quality fintech attached to SaaS. It's great to have payments attached to SaaS. But look at Shopify today. Shopify's gross margins are only 50%. Because most of its revenue is not from software anymore. It's what it's called merchant services, which are payments. And that's great. But the margins are lower. Square's margins are low, right? Lots of these fintechs are low. But for a while, we ignored a lot of quality of revenue and other issues. Twilio is one of my favorite SaaS companies, but its margins are relatively low because there's telephony in them. And so founders at least need to understand there's going to be a lot more investor scrutiny of your quality of revenue. And of course, how long it's going to last, how long your cash flow is going to last. But quality of revenue has come back with vengeance in the last eight to 10 weeks, right? And it wasn't a conversation in 2021.

### Human: Yeah, it's really happening. Compulize wrote to us and said, this is just sort of this is definitely a prompt all in its own. self-destructive behaviors commonly seen in startups. Okay, self-destructive founder tendencies. What are the things? Because look, we are betting, especially at this early stage, we're betting in great ideas. We have markets that in some cases still need to be proven with product market fit that might be in progress. And sometimes everything seems to be firing on all cylinders, but great companies still go away. So like, what is it? What goes wrong?### Assistant: This question is self destructive behaviors commonly seen in startups. So I am going to include investors in this. Okay, not just founders, right? Because there are self destructive things that investors do too. Let's start with the founders and the team. The most self destructive behavior is distraction focus is what makes for great outcomes. And when you drift, you're not committed, and you're not focused, it's very hard to have a really world class game changing outcome. The people who succeed in the world are the ones who obsessed full stop. If you're not obsessed, it's not going to have an outlier. These things do not happen by accident. people like to think they happen by accident. And again, back to you know, people's cognitive bias, they will look at why Google was successful and give you every reason of why it was the free food. They'll look at Oracle and say it had to do with like, they had a hard driving sales team. You know, they'll look at Airbnb and say it was because they were from RISD and their design was great. We look back at success. And then we say, Okay, it succeeded. Therefore, what attributes did it have? And that's amazing. You what we want to do, you know, in terms of being better at our jobs, Molly as capital allocators, and what I challenged myself to try to do is think about things, not based on the outcome, you know, necessarily, but what actually made not in reverse from one outcome, but looking at a larger sample size, what do we see across all of the winning companies, and I can tell you across all the winning companies, focus, and a lack of distraction is what wins. And focus results in product velocity in customer obsession. And in team building, we're back to T P, C, the team, the product, the customers, and we just I'm going to keep banging my hand and my hand and my hand that this teleprompter every week, that when you're focused, you build a great team. Look at the team here. recruited you recruited Mike Savino, you look at our team here, producer Nick, he just recruited two more producers for this week and startups, it looked like we got great potential here. We recruit really great talent to this company, high performers, high performers, and then we develop that talent. We have a relentless focus on that. And that's why we succeed. And then you look at our product, this product, this week in startups, we talk about J training, we talk about this week in climate, this week in streaming, we talk about VC Sunday School, you and I debated, hey, what should we do in the show? Should we do more of this or less of this, right? And that obsession with the product works. And then, okay, back to the customers. We really think about the founders. And how do we support them? We think about the notice, we recognize the notice, keep a list of the notice, we send them Don Julio, We care about the customers. Yeah, yeah. So okay, here we go. Yeah, focus, focus.

### Human: Yeah, you're on this, you're sort of zero to one.### Assistant: Yes, we we are the first investors, we have a program called Foundry diversity, where we give people their first $25,000 to incorporate, we have launch accelerator, we give them 100,000. And then we'll see invest 250 k to $2 million. So we own about 10% of the company. But along those three investment milestones, you know, we're looking at the craftsmanship and the thoughtfulness in each of the features. And so as but one example, when Travis was showing me Uber, we were having a conversation about it. And the cab icon that was moving on the map as if the person was drifting the car, you know, when they drift cars, it goes sideways. Because the designer never thought to turn the icon and make two icons, one going this way, one going that way, one going north, one going south. And I said to him, I said, you know, you could change any time he goes, I know about this. It's on the roadmap. It's incredibly frustrating. I told him seven times, it's going to be out next week. And his obsession on each of those details. And then Travis and I would have these long conversations about tipping. I'm from Brooklyn. And in Brooklyn, everybody gets tipped. People who are you wouldn't think get tipped get tipped, like your garbage man gets tipped or you tip the person who installs your phone like it's just like a Brooklyn thing. And i said you have to let me check and he said no no it's too much friction we want you to get in and out of the car we want you to know the price we're just gonna give them a better rate and they don't worry about tipping. And i would argue with him about this like hey how about if i hold the button and then it gives me a secret way to give a tip and he's like no it's about friction wanna reduce the number of steps. And you just saw that level of obsession. But the truth is, at that early stage, I could lie and tell you like, Oh, I can see it. And I lied to myself for a long time, I thought I could look in a founder's eyes, and I could figure it out, right. And it was just that when I started investing was 2008 2009, I started in the down market. So when I hit three out of the first seven companies were unicorns, I thought, Well, I'm a genius, I can pick one, two, okay, unicorn, three, unicorn, unicorn, I am great at my job. It wasn't that it was just that there was only seven people starting companies. You had to be like a lunatic to start a company in 2008 2009. That's the moment right now. So the the absolute relentless focus that I'm seeing now, I'm investing more money now in more companies this year than I ever have in my career in the Dow market because I'm seeing incredibly focused teams who are obsessed with product But it's the ideas that sometimes confound us the most, that are the ones that break out and induce a market to exist.

### Human: That is fascinating, because you do have a funnel, which you're using the analogy of coming around the bases. And it is fair that if you saw a YouTube ad, and then eventually typed in the name of, you know, if we were talking about Coke zero or something, and that a new flavor, cherry Coke zero, you know, if I saw the cherry Coke zero ad before a Mr. Beast video, But I didn't click on it then because I wanted to watch the Mr. Beast video on YouTube. But later on, I did a search for Coke Zero. And we knew that happened within, you know, whatever 90 minutes or nine days, I don't know what the window would be. Yeah, you could say, Hey, you do know that that video happened there. And what's the chance of it being a false positive? In other words, the person didn't actually see the video or the video didn't contribute, I think it's very low. So I guess people could always ignore that data as well, if they wanted to, as a marketer. But this would be a wave this does this not signal that YouTube is maybe they're so bullish on YouTube as a business, that they really want to get marketers to understand the power of that spend. Is that what's happening here?### Assistant: Yeah. So the big changes... So traditionally, Google search advertising has been built on... And this, we get really wonky and esoteric, but it's actually really important. It's built on what's called last click attribution. And so the way that works is you go, you buy Google search ads. And I go to Google and I need some new tires for my car. And I'm like, snow tires for car. And boom, the ads come up at the top of the tire rack has paid Google to put their ad at the very top of that search result. I click on that ad, I go to Tire Rack, I buy some tires, they send them to my house, all done. And Google claims credit for basically delivering that $1,000 in sales to Tire Rack. And so that's what we call traditional last click attribution. And Google's had that for 20 plus years now. And the entire industry is built off of that. Now, if you think about it, It makes sense when you're thinking about search. But for the rest of the advertising ecosystem, it doesn't make any sense at all. So when I'm driving down the street, I don't go click on a billboard. When I see a YouTube ad, I watch a television ad, I don't go click on those things. Those are things that put ideas into my head so that when I walk into a store or when I go decide what beer to order at the bar, those ideas are there to basically instruct me on how to buy. So you can think of one hand, you have bottom of the funnel, sort of completing a transaction, and the other how you have effectively brainwashing done in a very nice way. And so you can think about it kind of like a baseball game. In baseball, the rule is when you get around to the home plate, you score a point. And so that's the way it's always worked is all the all the points are scored in that last moment when you get the home plate, even though getting around the other plates is super important, you didn't really get a point for that. And now Google said, ah, well, we're going to change the rules. And so now if we're going to add credit to other ads that drive transactions, even if they don't necessarily lead to a click and a conversion. And so that's like changing the baseball game, where now if you get the second base, you get half a point. And so you can imagine if we change the rules of baseball, or if you got the second point, second base, you got half a point, it would change the way that the whole game worked, everyone would think about it differently. And so that's what Google just did. Now they claim it's a privacy thing. I think that's bullshit. I think it's they've just decided that their media mix has shifted from being all search. And now YouTube has become so big that they need to move proper credit to YouTube. And as TV, as digital TV has grown, they need to move credit there as well. And so it's a it's really a strategic game they're playing.

### Human: Wordpress and Shopify, right? I mean, that's it.### Assistant: Yeah. Yeah. Maybe one or two others, but the, um, you know, like, Back when I started, there were like, I felt like there were like a thousand, you know, and there still are a lot of niche ones, but what's great about what we do is it's so broad that we can hit so many different verticals and so many different use cases. And like the stuff we do is just such like fundamental building block stuff, right? It's like a domain, a website, a flexible content management system. You know, e-commerce, physical products, digital products, donations, services, like all this stuff. It's so broad. Um, and that's what enables us to do these, these kind of big ads. If it was so niche, you know, you can't do those kinds of ads. That's why the super bowl is like. Beer and cars and like laundry detergent. It's like stuff everyone has. Right. And so we're not at that level, but it is a broadly used thing. Lots of people have websites, incredibly relevant in people's lives. Look, I mean. We, we try and remain innovative and to push things forward and push the envelope with our ads and our product releases. You know, sometimes we are rapid fire on those. Sometimes it takes longer than that. Every single person, you know, in any of our positions, you know, you want things to go twice as fast and it just doesn't, it just doesn't happen that way. It can't happen that way, but trying to remain relevant, remain in front of trends. I mean, if you think about where we are right now. Just to pick two off the top of my head, you know, we've done a lot of investment in our member areas product and that lets people make paywalls and subscription content. You can mix that with our email campaigns product and make a paid newsletter. You can mix that with our e-commerce products and have a paid newsletter where you're also selling a book all in one website. And I mean, that's amazing. And that's stuff that's just kind of starting to kind of pick up right now. And then also one of the, one of the things we did is a couple of years ago, um, we joined forces, we acquired a company called unfold, which lets people on Instagram and other and other social platforms. It started with stories, um, sort of to brand themselves and to help them stand out. And, you know, the insight there was, you know, a long time ago, people would start with a domain, start with a website. A lot of people start with Instagram. and they prove out their brand, they grow an audience, and they're trying to stand out there. And so Unfold is evolving now into a toolkit for creators where you're saying, hey, actually, you can make a site in your, you can create a super quick website, put a link in your bio, and create a, we call it a bio site, in one second, you know, in one minute in the app, and it can help you schedule your Instagram story.

### Human: Yeah. I mean, it's going to be interesting to see how many people actually maintain this going forward. There's so many people that are eager to get back to the office. And 45% of American businesses... 45% of American workers have to physically show up to their office more space to do the work that they do for their job type. Tech is extremely lucky in that we could just like, oh, you know what? Let's deal with the pain of having to jump on Zooms back to back and still get paid the same amount. That's crazy. Yeah. move to some third or tertiary city and drop my San Francisco lease. It's incredible. The balance sheet is incredible. Yeah. I think the thing that I'm most excited about, even just as an observer, is the number of companies that are getting started by folks who either got furloughed or laid off or whatever else. I think Stripe had some crazy number of companies that are using Atlas to get started. And these aren't just venture-backed companies. These are These are lifestyle businesses and venture-backed companies. These are sort of all types. I think you might be right. I just hope it's not a K-shaped recovery where people are left out.### Assistant: Yeah, just like what, what's your sense? It's interesting one, a lot of people have told me privately. And again, I like to be always be honest with my audience of what I'm hearing privately. So I will anonymize it. But I have heard from more than one investor, and this is not my opinion, that they are just going to wait out 2020. And the pandemic and keep their dry powder for their companies. In other words, make new no new investments. which would mean a steady state for new investments. For myself, and I know some other investors, they're looking at this and saying, well, we can take more meetings. And we can diligence companies and we recaptured two hours a day of people commuting and chit chatting in the office and every meeting is half an hour instead of an hour. So we can do twice as many meetings is literally what's happened. you know, going from two meetings a day or three meetings a day to three or four meetings is pretty amazing, right? Because nobody wants to be in a zoom for now they want to be on and off a zoom and what 2030 minutes 40 minutes max. So we're investing twice as much I would say, our velocity has gone up close to double. And then the number of people who want to get involved investing has increased back to the efficiency and second order third order effects of a pandemic and, you know, of space. So when you recapture time, you get to redeploy it. And this is why I think coming out of the pandemic will be one of the greatest recoveries ever. And that we're massively underestimating the impact of this recovery, because every single company now is a remote company, at least in technology and entrepreneurship. And so the gains of remote are you can hire twice as fast, three times as fast, because you're not limiting yourself to a location. You're also not paying the premium of a city of 30 or 40%. So once you figure out how to manage people remotely, you now hire remotely, which means you lower your prices and your cost of hiring people by 50%. So you could double the number of people you hire or um, you can just hire quicker, right? And everybody's balance sheet is getting corrected, because people are not going out and spending, companies are not spending on office space, they're not spending maintaining these spaces. And then you reclaim what two hours a day, every employee claims to three hours a day of commuting, showering, getting dressed up big, long lunches, all this bullshit. So you reclaim three hours a day, I think conservatively, And I think the social contract that's not spoken is the employee gets half and the employer gets half. Because you get to work from home. So people are some people are complaining, Oh my god, there's no line between working and being at home. I think people are I don't know if you're seeing this, I'd be curious what you see. But I think people are working an hour more a day. At least, I think they're saving another hour or two. So they feel like okay, cool.

### Human: Yeah, I actually I had there. There was another pretty sure it was an Atari box even before 2600 with breakout on it that has dial.### Assistant: Okay, everybody, I'm really excited about our next guest. We don't talk too much about video games here on this week and startups, because the video game industry has become a bit of a giant conglomerate business, right? You have these giant conglomerates, they make all these big games, the games cost hundreds of millions of dollars to produce. And it's kind of left its startup roots. But our guest today is very much involved in a startup called frost. giant studios. He's the CEO, co founder, and the production director. But we had Nolan Bushnell on the show, the founder of Atari back on episode 282. That was 10 years ago in August of 2012. I met him when I was in LA. Really great guy, if you don't know Atari. That was sort of the beginning of not only, you know, the video game industry pong becoming a major cultural force in our lives as humans. But it also was the start of Sequoia Capital, very famously, Sequoia was the only company that backed Atari, Atari was unbackable. But Sequoia Capital back in its early days, was able to back the crazy concepts that Nolan Bushnell was working on, And it was pretty radical. I mean, people were smoking pot, they were doing business and hot tubs. It's a pretty crazy story. You can go watch twist at 282. But Atari eventually got a deal with they were making arcade games, you know, basically put a quarter in them. And that's how I grew up. Our guest today also had the Atari 2600, like I did. And I actually had the first version of the Atari 2600, which came because Sequoia Capital pressured Nolan Bushnell to do a deal with Sears to make a Sears version of the 2600. And that became, you know, this one of the great investments of all time for Sequoia also put the video game industry on the map. Well, today's guest Tim Morton, he worked on one of my favorite video games of all time, Starcraft, specifically Starcraft two, which still has an amazing, amazing group of loyal fans, as people have moved to first person shooters, etc. The category of real time strategy, also, the extension tower defense, which became very popular on iPads, and iPhones, is, I think, one of the most beloved categories. And also, I believe the most sophisticated of all genres of video games, that's just me. But I'm super excited to have him here because he's got a new game coming out. And it's a startup that he's working at not just a studio, you know, working for some big giant PA. So welcome, Tim. Thank you so much for having me on. Hey, Tim. So you heard my little preamble there, my introduction of you, you like myself got your start in video games with the Atari 2600. When did you get your Atari 2600? And what was your first game? Because I know it came with tank, but I'm not sure if that was the first game you played. Oh, wow.

### Human: Do you do you ask for pro rata rights? 100% Wow.### Assistant: And with a $10 million funds, investing in that many names, if you do wind up doing 40 5060 names, given the staff side, you're also not going to have the ability to do deep due diligence, you're not going to have the ability to do governance, you don't have, you know, three managing directors to put on, or two managing directors to put on boards to represent you. So you know, it's, it's, I think the approach you're taking is perfect. Learn, deploy 510 million, 15, whatever you get to, and learn the only thing I would edit in it would be to save 1 million for reserves. And, you know, maybe do five less investments, because I do think when you hit 30 or 40, you have enough diversification, that you'll hit a winner. And the thing I'm trying to learn, because I have 350 investments over 12 years, is how do you find out which ones are the winners, and then get more money into them before other people figure out their winners and take all that opportunity. Because man, the, the ability to invest in the series A, B and C of Uber or Robin Hood or any of these, which I didn't, because I was one and done. Yeah, that was the big challenge for me. And now we've kind of fixed that we're I think that's what most fund managers do if they enjoy being a manager, which you'll find out in the next 24 months. If you're listening to this podcast, you clearly have an interest in startups and technology. But do you have the skills and knowledge you need for a career in tech? And if you do have those skills, are you still learning and growing because everyone in tech knows if you're not building new skills, geared towards the latest platforms, well, you're falling behind. And right now, that platform is AI artificial intelligence. AI isn't just the future. It's the present. We see that happening. We're talking about it every day on this podcast. And to be part of the tech revolution, you need to understand the core concepts behind AI. You know, things like neural networks, machine learning, these are complex terms, you can guess what they are. But why not go learn about these concepts at brilliant.org. org. This website helps users learn math, science and computer science interactively. And right now, they feature some amazing courses geared towards AI like an introduction to neural networks, 15 lessons in that one and search engines, which includes 20 lessons on the core idea behind search engine technology. So here's your call to action. You can try everything brilliant has to offer for a full 30 days by heading to brilliant.org slash twist to start your free trial and for a limited time only twist listeners will get 20% off an annual subscription. I'm an investor in the company. It's a brilliant company. And I really want you to try it for you and your company for kids college everybody in between. Everybody should get smarter. Let's all get brilliant together brilliant.org slash twist for 20% off today.

### Human: Yeah. I mean, honestly, if you're talking engagement rings, not to be cliche, but I'm sure that people are like, I did not want the cheap knockoff. Like, I want the perfectly, you know, equivalent luxury item that's also better in every other way. Is there stuff that you can do, and I use the term stuff very scientifically, with these diamonds that you couldn't do with a mined diamond? Like, can you cut them with less waste? Do they have any special properties?### Assistant: Diamonds from the ground are imperfect. Diamonds from a lab are less imperfect. You know, I talked about that storm and hammering shingles to the roof. Essentially the conditions are still somewhat consistent inside the reactor. So there are less. soft spots in the crystal matrix. So it's a more consistently hard material throughout. Depending on how it's made and how many post-treatment that it goes through, it may or may not have certain internal stresses that could be the same or could differ. So it ultimately depends on whoever's making it, what they choose to do with the stone, how they choose to treat it. In the mine side of the business, post-treatment is looked down on stones that are post-treated. You can put a diamond through an annealing process. So you heat it up and cool it down slowly. Essentially, what that does is help kind of reorder some of the imperfections in the crystal lattice, and that might improve its color. So, you take a diamond that's a lower color, and you can improve that. When it comes to lab grown, we don't think that that negative needs to apply necessarily. Everything happens in the lab anyway. What is one additional process? Why should that be? That's my personal opinion. We don't have a stance as a company. Most of our stones go untreated. It's only on the off chance. We have a batch that comes in. We're like, have, you know, be great if that was a little bit nicer in color. And sometimes we will do some post treating, but that's really, you know, one of the only major differences from a material standpoint at the end of the day, what we're producing. is, as I said before, identical to the material that naturally occurs in the ground. The process that a diamond is made on the ground can take a very long time, billions of years. So diamond production from the ground is going away. We hit peak diamond in 2017. So every year from 2017 forward, fewer diamonds are going to come out of the ground. It's crazy. What blew my mind when I first learned this a couple of years ago, When you open a new diamond mine, you've done your geological surveys. You know how big the kimberlite deposit is. Kimberlite is the igneous rock formation that diamonds are found within, and they came up old volcanic chutes, essentially. So there are cylindrical deposits that go straight down, and it's only economically viable to pull that material out. at such a depth. Eventually, those mines close. When you open your mine, you know when it's going to close. And we have not seen a large-scale industrial diamond mining operation open up since like the late 90s. So by 2040, 18 years from now, 50% of the production of mined diamonds is going to disappear. Wow. So globally, half the supply is going to disappear in the next two decades. We're only going to be able to backfill and meet demand with manmade diamonds. So our goal is to get out there and commercialize the best manmade diamonds on the planet.

### Human: You own the board, you own... What was your ownership at that point, percentage wise, ballpark?### Assistant: Well, I gave up a lot. So I had 70% of the company and I gave about 30 to my employees. I wanted them to all become rich. And so I gave, I wanted them all become, you know, I don't want all the money myself. I want to share it with, I want to share it with people that are- So you created a 30% employee stock option pool and- Well, I gave away probably about 15% directly. And then the other 15% through the option. So it was, it was over 30% of my stock was diluted. It was taking off 30% of the top to, to those guys. And I still had 40% of the company. Yeah. And, uh, and I'll make, you know, hundreds of people wealthy in their generations to come after it. And that's what I like in life. But the answer to the why the stock was sold is they came to me and said, look, we want you to, we don't want you to be the CEO and the executive chairman. You got to choose one or the other. And I asked them why. I said, what's your reason? And they said, well, it's not healthy to have one voice everywhere to control everything. And I said, I can see that. That's actually some wisdom in that. And I've always done everything where everything I've ever done with the board has always been a unanimous consent, which means I've successfully convinced my board to do so on every one of them. I don't ever overrule my board. If someone doesn't like something, I want to know why. I'm a very objective guy. People may not think this, but I won't do something if even one of my guys objects to it. I want to find out why. And if I can't convince him, then I won't be able to convince the market. So when they came to me and they said that, I was like, okay, I understand. And they said, we want you to be locked up longer. We want you to be here for a long period of time. We want you to take $1 salary. and also the whole executive team. This is what no one ever reported on. All they did was report on the bad because it gets headlines. So the entire executive team came in and said, okay, we're going to take $1 salary and we get stock bonuses. That's it. And they said, Trevor, we want you to reduce down some of that control. And And they said, we'll buy some of those shares from you so you can live on this. You're not focused on money during the time that you are running this company. We want you to have some money out now. It's smart. And we want you to focus on Nikola and not focus on how you're going to pay your bills or pay for your house or whatever else. So they came in and they they offered to buy as part of that deal, they offered to buy $70 million of my shares at the exact same rate they paid for everything else.

### Human: I think they should, I mean, I still maintain there are some headwinds, and not least of them might be, I mean, that nimbyism isn't going to go away. But nor is I think, pressure on figuring out housing stock, because you are having a lot of investors buy housing stock. And I feel like at some point, regulators are going to come for that.### Assistant: housing crash might arguably make their business better, they could buy up more homes, lease them, and they know how to buy homes low. So even if the housing market crashed, maybe that would give them some opportunity. It's really interesting to think I think they should steal the Picasso model. Are you aware of Picasso, the timeshare? So I was going to do this when I was looking at buying a ski house, they take a house, they create eight shares, I had the founder on the pod before you joined me as co host. And so let's say it's a $5 million house, which is kind of what they're going for is the like, you know, high end homes in a destination, you divide by eight, that's how many days you get, they charge you like maybe 10% more. That's how they make their profit on setting up the home, then the eight people own the home. and open door manages it. So then you have an app and let's say you own two shares, I owned one share, you would have a quarter of the days I'd have an eighth a quarter of 365 days, you get the idea 10% of it would be 36 days. So a quarter would be, you know, two and a half times that. So you'd have like, almost 100 days in this house, I would have less and you then book it in an app. And then if there's like ski weeks, or holidays, I think they have prime days, and it manages it through an algorithm, like, so if you get Christmas this year, I'll get it next year, you get Easter, whatever the prime days are. What it does is it makes owning a second home accessible to the people who maybe aren't there yet, or they have a more efficient use of the second home, and it's better for the planet, right? Like, you have a lot of affluent people buying second ski homes that they use, you know, x number of days a year. Yeah. it's kind of a waste, right. So Picasso CEO Austin Allison was on episode 1288 in September 2021. They got banned in Napa for being like a timeshare. I think it was Napa they the NIMBYs up there really hated it, which is kind of dumb, because then you're just gonna have rich people buy up all the homes and not be there. So it's more efficient to have it divided by eight. But this is something that open door could do with homes, and then even put some of them into the Airbnb inventory. So imagine in this theoretical, you know, let's pick a house and a destination, you might want to go for a week or two, let's say two weeks a year, Palm Springs, Palm Springs house. you know, you sell half the days to the ownership group, and the other half days, you put in an Airbnb, you have somebody managing the home, and they're managing 20 homes, it's better for society. So this is what open door should be looking at, I think they should go hard into that area.

### Human: Yeah, I mean, it's interesting. I think there's, to me, I feel like there's this interesting migration of the 1.0 of internet review sites to kind of the 2.0. And, you know, Glassdoor comes to mind is like the way people currently decide, you know, where to work and you get a sense from, you know, Glassdoor, just how big this type of thing can get. But As these companies get big, you have all these weird stories that you hear about Yelp and you hear about Amazon too. The reviews being distorted. They hold companies hostage. All sorts of weird stuff start happening. And that, I think, devalues the currency of the review. Yes. And so I think there's, you can actually see across every industry, be it job selection, which is what Key Values is doing. I imagine this will happen to product search, you know, in the future as people lose faith in Amazon reviews. And I imagine, you know, this has kind of already happened with Yelp reviews kind of meaning less and less over time, especially compared to Google reviews. There are all sorts of these, I think, new platforms that will hopefully provide I think the interesting thing for her to reason is as she becomes successful, how does she ensure things are high quality and trustworthy? Because there does seem to be the economic incentive is, you know, at some point, I think, potentially going to compromise the quality of the review. So having kind of rigid founder grip strength there, I think will matter quite a bit and wouldn't surprise me if two, three, four years from now, we see this becoming kind of more impactful than Glassdoor.### Assistant: amazing. When we get back from this quick break, I am going to share a company that I absolutely fell in love with because they were charging $35 a month to be part of a slack community. And they got 1000s of people to do it. And they just raised their $2 million seed. I'll tell you the name of that company we get back on this week in startups. I am in love with a new product that's called Chart Hop. It's new to me. I mean, it's been around, to be honest. Many of you are already using it. You can go see it at charthop.com slash twist. When you want to create an organizational chart for your company, this is a critical moment that shows you are venture fundable. If you know these are my top executives, these are my units, this is my group that's going to do customer support, this is my marketing group, this is my CTO, this is finance, this is operations, well you can do all that and make like some cruddy little drawing with like some painting program or sketching program or you can make your own org chart that has all the data around all of your people we call this people data we call it human capital in the industry but in this org chart you can also put in performance reviews right into the org chart and you centralize all the data there and you can build a nice agile adaptable and inclusive team because you can look and say hey Where's my diversity? How am I doing with building out my organization? And at the core, a startup is about people. We all know that. Go to charthop.com slash twist and try it out today. You're going to get $600 in credits. I talked to the founders, I talked to the marketing team over there and I said, just give people hundreds of dollars. Just come over the top and throw like just grab a handful of hundies and throw them at the audience Well, here it is chart hop.com slash twist six hundred dollars in credits go and get it set up now Basically that six hundred is going to cover your first five employees on the platform Which makes it no-brainer to get started go ahead and check out chart hop chart hop.com slash twist For six hundy get it now because I don't know if they're gonna keep that offer up. All right. Welcome back, uh, daniel gross just made a great point, uh about Structured reviews, let's just call it reviews 2.0 because we all know Yelp reviews just immediately go to like three and a half stars and these dipshits will write reviews like, this is the best sushi I ever had in my life. They sent me 10 minutes late, one star. And you're like, how am I supposed to process this? Or in the case of Glassdoor, it's just this constant like, oh, I was fired. I was like, oh, I'm going to go flame my former boss because they didn't let me do what I wanted to do there. Cortland, what's your feedback on Daniel's insights into your startup, keyvalues.com?

### Human: And so not that people can't get their money out, or can't easily get their money out, and they're sitting on it. I think a lot of people who bought Bitcoin over the last decade just thought, this is a, I'm buying this to hold it in case it goes to a million dollars a coin. and I don't want to feel stupid, and if it keeps going from $16,000 to $30,000 to $45,000 to $10,000 to $20,000... And some people will sell it the wrong way.### Assistant: So I've been chatting about this on Spaces and a few other things, and there's a couple of things. I think what Chokepoint's doing is if you think about who is Chokepoint really affecting, is it affecting net buyers or net sellers or market makers? Okay? Okay. Let's go through the category. The net buyers are retail. Me, you, Sonny, whatever, we go and use our Coinbase accounts and we go and buy Bitcoin. It goes to our JP Morgan or Wells Fargo or Bank of America accounts. That's still happening. That's still happening. No one's shutting off the rails for us to go buy Bitcoin and Coinbase. What's happened is they've shut off the rails for the big traders and the market makers that are out there to go and arbitrage these platforms from one exchange to another and move money around and pay out their clients and do big sales and all that stuff. These guys are not net buyers or sellers. They're pretty much market neutral with the exception of all the opportunity that they take. So cutting off the rails, the only other group that has really been affected is companies that are crypto companies operating crypto accounts and they employ people in crypto and they're being cut off or whatever. Now, how does that affect them? Well, they probably have to go buy more crypto, stable coins, Bitcoin, Ethereum, to pay their employees around the world and say, look, we can't send you dollar wires anymore, we'll just send you Bitcoin. And so that's probably more, I'd say, you know, net buyer situation, but over the long term, because it's a burn, it goes towards market neutral. And then the miners are the other ones that are affected in the sense that they go and sell their Bitcoins, but they probably just don't, they probably don't do it in the US, they probably do it on Binance or wherever else. So The one thing it arguably could do is reduce liquidity in the system because market makers are less able to move money around in arbitrage. But the flip side to that is I think that there's too much liquidity as you look at the trade volumes per day. The guys I speak to have got hedge funds, crypto hedge funds, and doing arbitraging. They're making a couple of percentage points a month, maybe 4%, 5%. It's an over-traded space. There's just too many guys out there doing the arb. And the arb, for those listening, is like Let's say Bitcoin's trading for $30,000 on the dot right now on Coinbase, and it's selling for $30,100 on a different exchange. They will buy the coin on Coinbase, they'll sell it on the other exchange simultaneously, and they'll make a $100 margin in between. And that's what they do. And that causes the prices to be more stable worldwide. cutting these guys off, I don't think changes the equation. Are there more buyers and sellers? I mean, economics is very simple. Why do prices go up more buyers and sellers? Why do prices go down more sellers than buyers? Like, that's it.

### Human: And generally, it sounds like actually, they had multiple investors and AVG funds had complained to AVG when they learned about this fee practice, and yet they continue this unusual fee structure. for years. And it's also just sort of interesting because AVG seems to have on the regular co-invested with larger, more established VC firms, including Andreessen Horowitz, Benchmark, Sequoia. And so it's surprising that at some point, no one noticed this, at least according I'm reading from this article, observer.com, saying, you know, over four years, they easily touch 10s of 1000s of people, at least 3000 investors plus would be investors did no one ever notice.### Assistant: This tends to be like a gambler who is, you know, stuck and they're chasing it. So chasing it is a term in gambling, like you're stuck a hundred grand at. know, whatever poker, and then you go to the blackjack table, you put 200 grand the table trying to get back the original 100. So this is really weird behavior, and non standard. Now, if you said to the folks, hey, getting into this fund, we're going to take your 20% management fees, we're going to do 20% management fees up front, it sounds like they were taking and unclear from the press release, or the statement from the SEC. I don't know if they raised 100,000 from an individual if they asked them for 120. which is like the fees to come on top of it or if they took twenty k out of the hundred putting that aside. would be okay, theoretically, if the folks knew that they were doing this, if it was disclosed up front, but it wasn't disclosed. So they said industry standard, then they did not do the industry standard. Then this idea of co mingling funds, this could happen many different ways. I didn't see an example exactly of how it is. So maybe somebody can email producers out if you want to be an adjunct producer, producers had this week and startups calm. I'm trying to figure out, did they have I don't know why if they had five funds set up Harvard, Stanford, Yale, why would you move the Harvard money to the Yale fund? I don't understand. Or were they taking a deal vetted by Harvard and then having the other two funds invest in it? I don't know what's going on here. Yeah. But there's also those rules of like, hey, if you have multiple funds, you need to make sure that you're not using the next fund to make up for the sins of the previous fund. So how would that occur? Now that I'm not saying that's what happened here. But this is another one I've been alerted to. Let's say you have funds, you know, A, B, and C. fund a invest in a company, it's struggling, it's got 2 million in can't raise money. So fund B puts a million dollars into a fund is fully deployed, and then it struggles and it's almost there. And then fund C puts a million dollars into so the company never dies. It can't raise money from outside investors and fund B and C are doing that. Now, if you said, Hey, funds B and C will get the pro rata funds a and you were clear with investors, that would be fine too. You'd say, Hey, listen, this was a small fund. we're going to do some additional funding from those. The problem is when it's making up for mistakes. So we don't know if that happened here, either. Right. But, you know, you need to take this stuff seriously. The SEC didn't put anybody in jail. So that's good. And they're a very serious group of people.

### Human: And Jason, eight years ago, or maybe six years ago, we knew that drivers for Lyft on the weekend would switch over to Uber and vice versa. Had Uber and Lyft offer equity to their drivers in the early days, you're going to have the kind of engagement without a narrative. And in 2018, Uber and Airbnb asked the SEC for an exemption to give away equity to the customer before they go IPO. And the SEC said, no, you got to work with the current laws and regulations. We didn't have a product then, but now we do. So, you know, we're two years behind on that trend. But I have no doubt in the years to come, companies series D, E, F, pre IPO would eventually engage this whole REC and REC CF to give the community.### Assistant: I love Squarespace. Squarespace is such a fantastic company. The founder, Anthony, is amazing. And if you want to create a blog or publish content, promote your business or a special project of some type, maybe you want to sell a product online, you can do that all with Squarespace. And they have beautiful templates. You don't have to hire a designer. You go to the template library and you pick something stunning. And it works on your iPhone and iPad and an Android phone and a weird size phone, browsers, big screen monitors. All those beautiful designs and templates are responsive and gorgeous. And they're done by world-class designers. And you get to draft after all of this incredible work, including they added powerful e-commerce functionality, including SEO, something you usually have to hire a contractor for. That's all built in. And you get free secure, 24-hour, seven-day-a-week, award-winning customer support. And you know what? I got really frustrated during this pandemic. I was trying to figure out, what do I do? How do I get companies funded? I'm going to start this RemoteDemoDay.com. I told my team, make me a beautiful website. When I say beautiful website, They think Squarespace, it took longer to write the copy than to make a beautiful website. I'll be totally honest. And you know who was responsible for writing the copy? Me. So I was slowing the team down. You can get a free trial of Squarespace by going to squarespace.com slash twist. And when you're ready to launch, just use that offer code TWIST, T-W-I-S-T, so they know I sent you and you get another 10% off your first purchase of a website or domain. Congratulations to the team over there on their great success. Congratulations on making the best product in the business. And thank you for your support of this week and startups for years. I mean, it really does mean a lot to me. Okay, let's get back to this amazing episode. I think all competition is good is good for the space. What I love about this is it gives competition to even me as an early stage investor. Now as a syndicate, I get 20% of the upside, obviously, in every deal I put on the syndicate.com we left AngelList after about 40 deals decided to do it ourselves. So we get 20% of the game. But now we are in competition with you to a certain extent, where somebody could go on your platform and raise a million dollars or take a million dollars from me. I don't get the 20% carry, you get a little taste of it that little 2% of, you know, whatever the dilution might be. But oh my lord, can you imagine if Uber or Airbnb said or LinkedIn said to drivers, hosts, or HR managers, in the LinkedIn example, who knew in year one, they knew in year one that these companies were going to succeed, because they were soaking in them. That's the magic here. That's why I'm so excited about what you're doing.

### Human: Yeah. And it's so interesting because that is why, like, when one of the things that Benioff was really upset about was that this leaked, that this memo was leaked. And he was like, what? And the thing is that all of that, all of that is the stuff that starts to happen more and more and more. Like you never used to hear a peep out of Apple. You never would. Facebook employees did not leak. They loved it there. Loved working there. And again, when you all leave, you're not part of the cult. You don't go and get indoctrinated. You don't go and take that stroll on that beautiful rooftop. You lose the connection a little bit. You start to disconnect. You feel less loyal. You're like, I don't like the way they're treating me. I think that I surprisingly agree with you. It's not even that surprising. I mean, I 100% agree with you that people feel better when they go to offices. And also, there are going to be some companies who can like, and also work has changed forever. So some companies will continue to use it as a differentiator to say you can always be remote. And people there will be choices and that management will have to over time, adjust and adapt to how to manage a remote workforce. And that conversation needs to be happening in equal and opposite and equal impact.### Assistant: You know what, the underlying tension here is the commute. The reason why CEOs are oblivious to this is because they pick where the office is and they can afford to live near it. So if you're Benny off and you live, I don't want to dox him, but I think it's public knowledge, he lives somewhere in San Francisco and his driver can get him to the office in 15 minutes. Right. he's like, what's the issue? But now if you're coming from the East Bay, totally got to get on Bart, and you got to be accosted by some mentally ill person who's on fentanyl. You're like, here's the issue. I got to get on Bart, and it smells like urine. And, you know, I got to stand for 45 minutes, and it breaks down every other day. Like, there is a direct correlation between depression, domestic violence, suicide, anxiety, and commute length. And it turns out the ideal commute length is like 20-30 minutes. After that, it becomes oppressive. Our office, you know, I can get to, even I live far away from it, but I can get to it in, you know, similar amount of time. I don't feel depression about it. But now if you had to go 90 minutes, I'd be like, well, F this. So you could solve the whole problem. If people can e-bike to work, that's all. just got to be able to get to work on an e bike or car in 15 to 30 minutes, 40 max, this would not be an issue if housing was probably and what should happen next is these kingdoms, these temples that are built should come with the requirement that you build housing next to it. And all of these NIMBY people need to stop their nonsense. And when Apple builds that big round circular campus, they should be allowed to build two towers next to it of employee housing that they control. that is theirs. And if they want to have 5000 people come to a location, they should be required to have 10% of that in employee towers near it. That's at a discount or just whatever at cost. And that may seem creepy to people. But for a young person, when they go to college, college provides housing. Why wouldn't Google and Facebook and Apple and Salesforce be able to say, hey, we're building this giant building, we want to build a dormitory next to it, aka an apartment building? Yeah. And if young people want it, their studio is one bedroom. It's not for families. We're not replacing housing. We're just we're taking a little pressure cooker off, you know, like the little when you do the hot pot, the little steam comes out the top, you have the little pressure cooker, so don't blow up. Yeah, that would be amazing. Then you got 500 or 5000 people going to the campus. The young folks are like, Oh, I can walk. I can e-bike and I'm at work, they might very much like it.

### Human: Oh, you're not alone here, though. You're not alone. This is not a person, you know, this is not a poor choices situation, except for maybe the one.### Assistant: Right. If you were to look at these as like race cars and stuff like that, like, you can only drive the car so fast, it needs to have the right brakes, it needs to have the right tires, you know, and if you try to take a rocket ship or a car, and you make it go too fast, the thing will come apart. You have to really be thoughtful about how fast these things can go before you and that's product market fit is what I'm talking about, right? So you try to like, spend money on marketing for your product market fit, there's that classic leaky bucket syndrome. So you got all these companies coming into the top of the bucket, but there's two big holes in the bucket. So you're pouring customers in, and they're just pouring right out where you're losing half the customers and keeping half. Well, yeah, that bucket is really and you know, depending on how often you're losing them, if you're losing 50% a year, you got to, you know, really spend a lot of money to keep that company afloat. And we saw that, right? If you're building an enterprise app, you need to offer SSO. What is SSO that single sign on it is what it says it is basically the ability for enterprise users to log into your app with their existing credentials. So if you work at a company, a big company, you know that they have an identity provider and you say to yourself, well, I can build that myself. I can write all that code and put it into my app. That's fine, but that's hard. And you're going to be duplicating a bunch of work just like you might want to do payments, but you don't want to duplicate all that work. And then you have to maintain all those integrations in your app with every single identity provider your customers might use and new ones are coming out the specs change, and then your login breaks, you don't know it's broken, yada, yada, yada, it is a ton of technical overhead. Well, this is why you need to check out work OS. It's basically stripe for all those important enterprise features. You know how people wanted to put payments into their products, and it was arduous and painful, and then stripe came out and just drop a little code snippet in, and you're done. That's what work OS does simple API plugins that let you move faster, spend less time on developers, and you don't have to worry about maintaining all those integrations. They don't just have SSOs. They also have API's for multi factor authentication and much more work os.com is going to teach you how to do it. It's app enterprise ready. And if you want to learn more about their different integrations, just go to their podcast. It's the work OS podcast, work os.com slash podcast or just search for work OS podcast in your podcast player. Welcome to the this week in startups family work OS, you know, speaking of getting outside of your zone, the J trading portfolio has been absolutely demolished.

### Human: Yeah, well, we have tons of companies in Silicon Valley that are the walking dead, except they don't know it. And they have hope, and they can't give up on it. The VCs can't give up on it because they don't want to write off the investment. So they keep on going. There's no intellectually honesty. People cannot face their demons. They cannot really look at the problem as it really is. And, you know, that's just human nature. The thing is, if you have no fit, in other words, you're nowhere near the target, right? You gotta go completely back to the drawing board, start to reimagine and rethink everything from scratch. It's a better scenario when you have a partial bullseye where, okay, I'm connecting, but I'm not connecting the way I want to, right? but I can iterate my way towards it because I am partially connected to it. People may not be chewing off my left arm yet to get it, but I'm triggering enough, interested. I'm not afraid enough. What are my next steps? And by the way, that data domain, we literally had a scenario like that. We had a partial fit, but our product was small and slow. So it was not applicable to the vast majority of workloads out there. But since we knew that, we just targeted that with an enormous amount of energy and zeal. And we overcame that over a number of years and we built an insanely big, fast, you know, ass-kicking product. And it works, but the initial product, you know, had poor, you know, market fit. I mean, we even debated just, you know, not selling, going back into R&D mode. This is in a 2004 timeframe. But back then, you couldn't. I mean, you couldn't just say like, well, I'm thinking you couldn't even raise money on that basis. You couldn't stay alive. So we have to try and sell through it, you know.### Assistant: Do you want to get ahead on your q1 marketing goals? I know you do. And wouldn't it be nice to have a ringer to help you out somebody who just crush it? Well with marketer hire. Now you can market or hire gives you access to expert freelancers on demand, no long term contracts and no risk that's critical. So you can hire experienced specialists across the most valuable marketing disciplines. You know the ones that can really move the needle for your company startup or your side hustle, paid social paid search growth SEO and you can even have a fractional CMO that's chief marketing officer. So again, no long term contracts and you can cancel at any time they take all the risk, you get all the benefit. If it's your first time working with freelance talent, you're going to start with a no risk trial, only hire what you need and stay on budget with hourly part time or full time agreements you get to choose every freelancer. Our marketer hire goes through a rigorous vetting process with industry experts and Freelancers from Marketer Hire have been hired at over 1,500 companies so you get the benefit of all those companies having used the service. This includes top brands like Netflix, Allbirds, and Lambda School. Here's your call to action. Get $500 off your first hire at marketerhire.com. and make sure you use the promo code TWIST. You can also get a free consultation on who to hire based on your needs and goals. That's 500 right now at marketerhire.com and use that promo code TWIST please. And, and really looking at this incrementalism, if you're making an incrementally better product, okay, that's not going to work, it's not going to become an at scale product. But if you do have, yeah, like you're saying, you're a little bit off the target, then incrementalism does work, because it might be a speed issue, it might be an interface issue, it might be some feature you haven't thought of, and I don't know if it could be pricing. So you can kind of go down that iterative iterative process. Talk to me about when you've taken over these companies, looking at management, you kind of were honest that you hired, you know, people with potential, not people with experience for a lot of your career. And you pretty many times in the book, yourself deprecating. And I think that's what makes the book even more credible. you said, you know, I'm just gonna hire, you know, whatever, mid level execs, and you've changed your philosophy on that. So let's talk about getting people on the bus and your philosophy of hiring. And then what you demand of people, because, listen, you, you're a pretty demanding guy in terms of outcomes. So let's talk about how you get people on the bus. And subsequently, you know, you cut a lot of people when you came into snowflake, and you redid the management team. And you talked about that, like, people were shaking, according to what you said in the book. So let's unpack it.

### Human: Where you at? It's a great question. I mean, it, uh, uh, so it is not enough to sustain us. I don't want to pretend it's like our day jobs. Um, but, uh, the way that we sort of think about it is that the LP show is a huge leg of the stool. It's around half of what we make. Um, the sponsorships are the other half and we've been sort of like insanely curatorial on sponsorships to date. with the idea that anybody who's sponsoring the show has to be value creative to the content. And that's, you know, it's probably held us back from full monetization potential. But that's, that's how we thought about it.### Assistant: I call it white listed advertising. So we turned down, you know, all these guys doing these like payday loans against your SaaS revenue. I don't know if you saw me getting into it with them on Twitter. I was getting into it with the guy from pipe.com, who's created a marketplace. And he's like, you're bestie, David gave us money. How could you not like us? And I was like, listen, nice try. But we're trying to ask you what the percentage is that you charge. And you can't answer the question. And then this other one, I'm not gonna say the name of it, but they were charging. One of our founders just had a very bad experience with them. But they were charging 6%. And they were like, I was like, okay, you charge 6%, right? They're like, no, no, we charge $6,000 on the 100,000. I'm like, that's 6%. They're like, no, no, it's just a $6,000 fee. I'm like, over what period of time? They're like two months. I'm like, okay, what is compounding interest 6% over six time periods? That's 100%. No, it's, I'm sorry, it's 50%, right? Or something like that. It'd be 50%, I think. Because the rule of 72 is if you divide 72 by 6, it would take 12 months for it to, 12 periods for you to double your money. So anyway, it's like 50% a year. So I was like, do credit cards charge that much? And they're like, oh, no, no, this is just to float, don't worry about it. It's just to float your, your receivables, and I was like, wait a second, that makes no sense to me. If I have that much in receivables, VCs are gonna throw money at me at a high valuation, why would I do this stupidity? And literally, they begged to be on the podcast, and my salesperson's ready to get a big commission, and I just said, you know what, I can't get behind it. I can't get behind it, I'm sorry. If one of my founders tells me they had a shitty experience, and you can't explain to you, but the Pipe One is very interesting. They take, let's say you sold your SAS product for 100 bucks a month per seat, and you had a somebody who had 100 seats, so they were paying 10,000 a month, you had 120,000 in ARR, but they're paying you monthly. You could put your $120,000 on their marketplace. And then somebody could say, I will give you $100,000 now for $120,000. And then you could bid, I'll give you $105,000. They take the $105,000, that person makes $15,000, so they're making 15% interest essentially.

### Human: I'm so obsessed by as a category. Yeah.### Assistant: And so and then you have institutions like Harvard's endowment, MIT's endowment, and a zillion other endowments, Ford Foundation, retirement, anybody who wants exposure to the venture category falls into the bucket of an LP, a limited partner, they make a commitment, let's say their commitment is to put a million dollars into a venture fund, we have a venture fund, we're raising right now launch fund for I'm doing another webinar for it, by the way, calisthenics slash four, launch.co slash four, if you want to sign up, or if you want to find out more, you can just email me Jason at calisthenics.com or calisthenics at launch.co. So that person, let's say high net worth individual family says we'll put a million dollars into your fund. Okay, let's say it's 100 million dollar fund. They're 1% of the fund, the fund is going to be deployed. Traditionally, over three or four years, you might do the primary investment in three years, and then some follow on funding for a year or two after that. Let's just say it's four years. For simplicity sake here, you will do a capital call for that million dollars from that individual, you say, Okay, we're going to ask you to send us 20%. of the capital now. And then for other times, you'll ask for 20%. So you'll ask for 200k five times. And why wouldn't you ask for the million upfront? Well, people want to fund their commitments over time, because that's more capital efficient for the LP. It's also got a benefit for the GP, the general partner, the partner who's running the fund, in this case, me, I don't want and we don't want our metrics and statistics of how we're doing counted from when we pull down all that money, because if we pull down the million, and we're going to put it out over four years, actually, let's say five, because we're making we're doing this five year kind of thing. Five capital calls over five years, 200 k each. And that means 20 million over five years, each year, if we take down the hundred million, and we don't deploy 80 million of it in the first year, That means that money has no chance to grow. And it's counting against our IRR, our rate of return. So what you do is you take down only the money you're going to invest, you deploy it, and that money gets calculated your return from your one, the money from your two that you take down and you deploy in your two, that gets done in 2023. And then the money you take down 24, the clock starts ticking for your performance in 2024. So it's very complicated to do in a spreadsheet, you have to take the money you took down. And then you say how much money the internal rate of return over time. And so that's the reason it's it's good for the GP, and it's good for the LP.

### Human: Well, there are others who have Twitter accounts and do engage. So I think it's been a really useful way for me to find out what people are thinking, sometimes very unvarnished opinions. I get lots of lots of doses of humility when I look at Twitter and people say really, really negative things. And I think actually, that's quite helpful for someone who's a regulator, because we do have a lot of power to make decisions one way or the other. I mean, we're going to talk about accredited investor here in a second. And it's really important for us to remember that we are making decisions that affect people's lives. And we have to be very careful about how we wield that power.### Assistant: which reminds me in a way coming from a family with a lot of law enforcement in it from the State Department to the FBI to the New York City Police Department, that I hear that a lot from people who co work in law enforcement, they feel like they're doing something virtuous, and good for society, and it's intellectually stimulating. When we get back from this quick break, I want to talk about the accreditation rules, which is something that I deal with a lot. And it seems to me to be something that coming from a background in which I grew up poor, to maybe the bottom of the middle class, The accreditation laws, which we'll explain when we get back, felt unfair to me. I happened to be one of the lucky people who was able to break through the accreditation laws and get to a level where I could make private investments. And then once I was able to make those private investments, I was able to generate let's just be candid here, a large amount of personal wealth and wealth for other investors. But looking at it now, I wonder deeply about the fairness of it all, because I see a lot of people who couldn't make that jump. And when we get back from this break, I want to unpack the accreditation laws and how the SEC is deeply trying to change them when we get back on this week in startups. The colorful days of fall are here. And despite the current uncertainty, having the right people on your team is like that feeling when you wrap the warm blanket around you, you get by the fire, and you get that nice hot cocoa going, put a couple extra marshmallows in for yourself. But it's hard to find great people. Let alone people who are going to be game changers in your organization. I'm looking for game changers. So are you for your startup. And you know where you find the game changers? They're on LinkedIn. You know they're on LinkedIn because LinkedIn has over 706 million members around the world now. It is the largest professional network in the world. They 1. Track all the hard and soft skills that people have. You want both of those things. That's the yin and the yang of having a great team member. So with LinkedIn jobs, you're going to find a great person and you're going to find them in just days because I've done this over and over and over again, not just at my companies, but at the 200 portfolio companies I've invested in. So go to linkedin.com slash twist linkedin.com slash twist. and get $50 off your first job posting. Tell your friends to go to linkedin.com slash twisting at the $50. Thank you, LinkedIn. Okay, welcome back, everybody. Hester purse is here. I highly recommend following her on the Twitter because She's active and she talks and she engages with people, which is something I would think is a little risk taking. H-E-S-T-E-R-P-E-I-R-C-E. You are active on Twitter and you engage with people. Do other people in the SEC do that or are you a little unique in that regard, Hester?

### Human: And it's a small number of people. It's a couple 100, I guess, got him to here. So it's not a it's not like it took Google to do it. And obviously, Google has their own, but it didn't take a Facebook Google size effort, took a relatively modest size group of people to achieve this, and they should get all the credit in the world. As we wrap here. I guess I have two questions at the end. How close are we as possible question to answer? I know, but very interested in hearing your thoughts on it to AGI. And, you know, if you had to put a year or set a betting line over under, and then how do we how do you know, like, in your mind, when will you know that we have something that is an AGI?### Assistant: you know, about that, you know, last 50 years, I've been paying attention to kind of what happens with computers and all this kind of thing. And people saying, when we can do x, then we'll know we have true, you know, artificial intelligence. You know, I've personally built a few of those x's that people have said, you know, when we have this, and then when you actually have it, people say, Oh, it's just a piece of engineering. That's not true, you know, intelligence, and so on. I think that The thing, I mean, it's almost, the thing that you'll, when you'll know you have true human intelligence is when you basically have a copy of a human. And you can always say, Oh, well, it doesn't have this attribute, you know, because it isn't mortal, it can't think this way, or because it doesn't have, you know, five fingers, it can't do this, you know, the only way you'll have something which is just like a human is to have something really just like a human. Now, I think that the question of kind of when the you know, it's sort of an incremental thing. It's kind of a, you know, this was a big shock to LGBT people didn't expect sort of this level of humanity, so to speak, in an automated system. I think that I would say that, well, in terms of what else do you want kind of thing. There was the Turing test that Alan Turing made up in 1950, which I think pretty firmly, as of 2023, we can do that. That one is done. Nobody knew when that was going to happen. And that was one of the last of the kind of standard, this is a test for whether you have true artificial intelligence. So when we can ask questions like, for the things for this set of people, when will we be able to automate the main thing that they do? It's worth understanding that when we say, when we talk about automating things, it's kind of like, Back in the day, people would handwrite this or that thing. And then printing came along, and there was just a standardized font for A and B and C. And some people would say, well, it's much more efficient, we can... It's much more automated. And some people will say, well, you kind of lost the human touch of the calligraphic stuff. And the same will happen here. There'll be plenty... It's like, when I read a chat GPT written essay, it's very perfect. It's very kind of anodyne in some ways. And, you know, it doesn't have... It's kind of like the rug that was made by a machine rather than by a person with those little errors in it type thing. And, you know, I think people will continue to say, oh, well, if the rug doesn't have little errors, then it isn't really, you know, an AGR, an automated general rug or something.

### Human: Alright, see you tomorrow. Like, launch a company. See you tomorrow. See you tomorrow. Bye.### Assistant: I think it's kind of fun to everybody get educated and make a good decision. Somebody was like, is this for everybody? Absolutely not. It's for accredited or qualified purchases only. So it's only for 6% of the country. But I do think in the coming years, maybe launch on five, six or seven, we would be able to set up some kind of a pool Molly and say, Hey, to our family members, non accredited people who are friends, if you want to put in $100 or $500, instead of, you know, going out this weekend and having a dinner or whatever, you know, take a flyer learn about venture, get educated, go ahead and do it, you know, like, I think it's really interesting. I, I'm a little upset at myself for being honest, I wanted to do this for lunch on three. I don't wanna say I felt bullied, But I kind of got bullied into not doing it. A lot of people were like, it's just don't do it, don't do it, don't do it. And I'm like, but my whole career is about increasing access to this asset class. Why not do it? Because nobody does it. Because it's just the tradition. Because it's complicated. I'm like. Not for me. Not complicated for me. It's extra work. I'm like, not for me. It is a lot of extra work. But it is. Yeah, it's extra work. It is a lot more work. I can tell you, you know, these 20 to 50 emails a day I asked people when you email me, hey, tell me a little bit about yourself because I want to know who I'm in business with, obviously. And even if it's a small check, even if it's a 10k check or 25k check or 50k check, which is nothing for an accredited or qualified purchaser, obviously. You know, it's like going on going away for the weekend. I mean, I've seen people play poker hands for that amount, much even larger amount. So it's not a lot for a rich person to put in a 50k check, but I still want to get to know them because I have a limit number slot. So I'm trying to get to know everybody. And with 1000 people already signed up, if this gets to 2000, it's impossible for me to do that. So that's where I'm now thinking, how do you even CRM Yeah. How do you even build relationships that many people? And that's why I decided to do these group webinars, because I can reach 600 people a webinar or more. And so tomorrow's the first one. And then I'm going to do one, I'm going to do three of them. So one a week for three weeks. So if you're hearing this, you missed week one, but week two, and three, we still have slots open Calacanis. C a l a c a n i s at launch.co. Not a com CEO.

### Human: And this is a unique, I mean, you know, as much as we want to draw on historical parallels, there are there are things about this moment that are also unique and hard to understand. So we went and got the best experts we could find, basically. Redfin CEO Glenn Kelman and Divihome CEO Adina Heffetz joined us to break down everything that's going on in the housing markets and to try to figure out as much as we can.### Assistant: And they were like, is this too geeky? Is this too in the weeds? Are we getting into too much detail? And I was like, that's the point. We're dumb. We can't figure this out. We want 16 boxes in the matrix. Let's go. Well, yeah, I can do the matrix for this. I can't do the matrix for real estate. And so enjoy this conversation. It was absolutely fabulous. And we're gonna do more of these like really expert roundtables. I'd like to get one of these going crypto actually get you know, Brian Armstrong and whoever on the program. Yeah, whoever the founder is on it and like have a really detailed discussion about are these equities or not, you know, so more roundtables coming. Enjoy. Listen, if you're a remote startup, you need to sign up for Notion. Point blank, that's it. You need this tool. It is a central hub and I run both of my companies off of it. Inside.com and Launch and The Syndicate. We have just absolutely saved hundreds of thousands of dollars on other SaaS products and building custom software. In fact, I was like, you know what we need to do? We need to build a database and have like a CRM. And so I had my teams go research all the different SAS products I could use for this. And then they're like, you know, we have to build custom software. And then two people on my team were like, you know, I think we can do this in Notion. We're already paying for it. And they built me a database of all the companies I had met with. And then we put hooks into it for all the people applying to come to our accelerator. Boom. Within six weeks, I kid you not, my internal team, which has no developers on it, built our own CRM. Now this is on top of us taking notes for the podcasts or me doing my to-do list and my punch list. It's just amazing what the flexibility of a wiki-style piece of software combined with a database combined with some hooks in it and just a whole community creating templates every day. It has changed how we do business and it will change your business and I want you to just go to notion.so right now and use the promo code TWIST And they'll give you $250 off their annual team plan, which is going to be a couple of months if you're a growing startup. It's notion.so and use the promo code twist during checkout for $250 off. All right, everybody, welcome to another episode of This Week in Startups. Molly and I were talking and we had a lot of questions about the housing market because let's just, you know, call it what it is. we had the crypto market implode, the stock market implode, we're in a recession, depending on your definition, let's just go with the standard definition. Why not? But housing always trails and is a very weird market, isn't it? Molly, it's it's very hard to get a handle on what's going on in the housing market.

### Human: Hey, everybody, welcome to this week in startups. We've got a great guest today on the program. Andrew Dudum is with us. He founded a little company that you may have heard of called hims and hers for him calm for hers calm. And their ticker symbol is h i m s. What people may not know is that this company was part of a startup studio. If you don't know what a startup studio is. Oh, it's kind of like a weird vent combination of venture capital slash entrepreneurship slash incubator, where a group of individuals create projects, and then spin them out, try to find people to invest in them. And typically what happens is these all fail. startup studios have a horrible track record of not working. But when the more typically one company works, and then it becomes so big that it's very hard to work on the startup studio. I suspect Andrew, that's part of what happened as part of your story. Tell everybody, how did you start atomic? And then which project in your startup studio was hims? And then what happened after hims blew up? And what program?### Assistant: Yeah. Thanks, Jason, for having me. So I've been building companies for about 15 years. I started as an undergrad out in Philadelphia at Wharton. And I was spending most of my time trying to get engineers to build projects for me over at the engineering school, as opposed to showing up to finance classes. So I ended up dropping out after sophomore year and moving to San Francisco and building a company. It was an early Sequoia company and selling it to Telefonica. And then kicked off Atomic, which was this venture studio with my partner, Jack Abraham. And the idea there was really simple, which was, you know, we built companies before we worked with great investors in the valley, the best people we've worked with had amazing investor pattern recognition. And if you could combine that type of venture capital pattern recognition with operator part pattern recognition, we felt like you'd have a much higher hit rate at building companies that are actually going to succeed instead of the, you know, what, five or 10% of startups that ever have a chance. So starting in 2013, we launched that first fund. It was about $100 million fund with Peter Thiel and Marc Andreessen as the core LPs. And we started prototyping and testing ideas. We probably did 20 to 30 tests a year, landing pages, go-to-market tests, calling up, pretending to sell things that didn't exist, tracking all the data. And then from that, narrowing it down to 3 or 4 different companies that we'd invest in. And then start to build, as you were mentioning, and try to spin out as real companies. So, what's really beautiful about the modern model is that you get really good at understanding relative customer demand across companies. You see so many different inputs from customers. what they love, what they're interested in, what they're willing to buy and not buy. And starting around 2015 and 2016, this whole concept of everything is on demand, everything is accessible from my phone, everything is price transparent, except things when it comes to my health, was just really an idea that we couldn't get out of our head. Why was it that I could get a car, I could get food, I could get clothes, but I couldn't get a doctor on demand to talk to? I couldn't get that product I want shipped to my door. I had to go wait in a line for 3 weeks or 3 hours after waiting 3 weeks to actually talk to a doctor to get access to this stuff. And I think that was really the moment of hims and hers was we want to empower people. We want to give them control of their healthcare. We want to give them the control to buy products and talk to specialists, just like we have control in every other part of our life. And so we kicked off that project. We raised a couple hundred million dollars really quickly. The company is only 36 months old from founding until IPO. And so it was a really quick journey. Wow. And I decided to go and participate and run that company once we started it.

### Human: I still have that song in my head right now. I can hear that song right now. I'm trying so hard not to burst into song. Anyway, yes, please, please continue. So when was this? This was the brandy attempt?### Assistant: This was like 2000. This was like 2012. Okay. I was working for an agency in San Francisco called 11. And yeah, just was pretty bored. They're not doing anything that interesting. And then I was like, Okay, I'm gonna, okay, what's like, because I was really into spirits. Like, I loved all the different whiskeys, tequilas, mezcals, like, I was dating someone who was like a mixologist at the time. My other best friend, she worked for a wine distributor. I'm like, oh, I'm more in the world of spirits than the average person. So I feel like I could have an advantage going into that category. And then it was like, okay, well, what category should we go into within spirits? It's like, okay, well, what is the Where is there no cool brands at all? And it was hard to find because there's like a million vodkas, a million whiskeys, a million tequilas, and then found Brandy where it was literally there was dust on the bottles in the liquor store where I bought the first bottle of it. And then I tried it and I was like, oh, this is actually really similar to bourbon. It's just a little bit sweeter. And whiskey was the most popular spirit. Why is this spirit not as popular? Clearly, it's a brand problem. And found a way to create like a fun, more whiskey-esque brandy brand and then found a distillery in Northern California that had been making some of the best brandy for like 20 years. pitched it to them. They're like, oh, this is great. We've been waiting for someone to give a shit about Brandy. And then they're like, we'll make it. We'll do a partnership. Then I found a couple of alcohol industry folks that created Hendrix Gin and Sailor Cherry Rum. They thought it was really interesting. They joined up and moved back to my hometown of Philadelphia where these other people were based. And we kind of built, we got a spirit company off the ground, which was a nightmare because it's all legal red tape. It's like, yeah, every state is different. And Pennsylvania is one of the worst states. It's still, it's government owned liquor stores. So it was just, we never got to the fun part. It was never marketing. It was not brand. It was just like, getting through legal stuff and permits and then you don't even have the money to do marketing so it's just about like finding bartenders that want to push it and doing tastings and it just was, I ended up butting heads with the people I joined forces with and We didn't see eye to eye on the brand. And I was just like, you know what? You guys take it from here. I'll take my little piece of vested equity or whatever, and I'm going to go back to the agency world. And I'll, you know, I'll figure out my next thing. Best of luck to you guys.

### Human: And then Facebook changed the algorithm and the business died.### Assistant: I remember this time period because there was somebody who created a LinkedIn competitor, somebody can Google it for me. There was a LinkedIn competitor inside of Facebook. And then there was Zynga poker in Farmville, inside of Facebook. And what happened was the virality of Facebook and the amount of people were spending time there. If you played Zynga, you know, poker or whatever, if you invited people, they gave you more chips. So that viral loop went crazy. And all of a sudden, Zynga had 10s of millions of members, this person got 10s of millions of people watching his video and following his pages. If you remember Facebook launch pages, then Facebook did is the classic rug pull, branch out, branch out was the name and branch out had become worth like $100 million at 50 million members. And then Zuckerberg turned it off in one day, boom. And he didn't turn it off. What he did was he said, if you want traffic, you have to pay for it. And people were like, well, wait, no people subscribe to my page. And I paid $1 per subscriber for my page, because you told us we could promote our page. And I did an experiment like this, you can look up Mahalo guitar lessons and Mahalo fit bod and we had done and actually somebody could pull these pages up and show us on the video. And we did a little experiment. And I met personally with the Facebook team, like I'm talking top members of the Facebook team. And they were like, Hey, what can we do? I was like, Well, we're putting our videos on here, we have a deal with YouTube, YouTube is giving us 55%. Give us 55% of revenue match YouTube's deal. And they were like, No, we're not going to do that. And I was like, Well, you're asking us to pay to get followers to our page. And now we're not getting our organic followers to our page, what's going on? And they're like, Yeah, well, we're just like, you know, tweaking the algorithm. So people get a blend of things. And we had like 100,000 followers on some of these pages. And I very quickly realized, wait a second, we're only getting 1000 people are seeing the videos now. But in the beginning 100 that all of the people were seeing it. Yeah. And I was like, okay, I know a rug pull when I see it. So they're pulling the rug, I feel my feet like I'm like wobbling. And I'm like, I look over I see Zach on the ground pulling the rug. And I was like, he's the guy stepped off the rug. Yep. I was like, I'm out of here. I told him straight up. I was like, I know what you're doing. You're getting us to pay for followers. And then you're going to make us pay to reach those same followers. And that's exactly what they did. So all this free traffic was no longer free.

### Human: Well, Jason, it's such a pleasure to be here. Thank you for having me. And you did a really nice job of describing the function of the SEC. I should start by saying that my views represent my own views and not necessarily those of the SEC or my fellow commissioners. And that's an important point to make because unlike some other federal agencies, The Securities and Exchange Commission is made up of five commissioners and then a staff of about 4,000 to 5,000, and we're spread out across the country. And the five commissioners, we're the ones who vote on new rules. We're the ones who vote on enforcement actions when people violate those rules. And then the staff does the day-to-day difficult work of both looking for when there have been violations, but also working to write the rules, and also reviewing corporations' filings when they come in, reviewing investment companies, which are mutual funds, filings. And so there's a lot of really detailed work that goes on at the SEC. And I think you made a really important point, which is that the SEC is part of the fabric of the regulatory framework, the rule of law that governs our capital markets in the United States. And that is what makes our capital markets markets that people want to come to, to raise money, to invest money, because there's a level of trust there that they know that if they come to these markets, they're going to face a consistent reasonable set of rules. And that set of rules will apply to everyone. There's no favoritism. And so that is a really important piece of having markets that work. Now, I approach my job with a view that markets generally work quite well. And so we do play a referee role, but our role should be quite limited. And we have to be very careful in getting in between two people who want to come together and make a transaction that's mutually beneficial. So I tend to be on the side of wanting to be very careful about adopting rules that will change the way people behave.### Assistant: Hey, everybody, welcome to another episode of this week in startups. And this is an episode I've been looking forward to for a long time. Because today we're going to get to speak with one of the, I would say more innovative or most innovative people at an organization called the SEC, the Securities and Exchange Commission, which is something we're very lucky to have here in America, the most vibrant democracy and the most vibrant capitalist combination of capitalism and democracy in the world, which is why we as a country are so innovative. And we have such an amazing amount of trust in our system, having traveled the world and watched angel investors and venture capitalists invest in other regions, other geographies, Sometimes they lose their money. Sometimes they get screwed. There's no referees. And we have a wonderful, wonderful group of people at the SEC who are incredibly principled and who try to referee and essentially create some guardrails around what we do in creating businesses and having shareholders, the mission of the SEC. As stated, I believe on their website, I'm not sure if this has changed, is the mission of the SEC is to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation, capital formation. It's a fancy way of saying putting a bunch of money together to start a company, and to build a product or service, efficient markets, we all want efficient markets, we don't want to slow people down, we need to have that speed and velocity. But with speed and velocity, and with innovation comes complexity. And people in the United States are risk takers. If you were to look at the companies that have become global companies in the world, Well, there's a handful of them that you can name off the top of your head, Amazon, Google, Facebook, Instagram, Uber, Airbnb. The reason why this great country, America, of only 300 million people, not one of the biggest countries in the world by far, punches above its weight. The reason why we have companies that make it around the globe in record time is because we have figured out a way to create a fair and balanced and efficient system. The SEC is a critical part of that. Now the SEC sometimes you say the words SEC, people get a little nervous, oh my god, is that like the FBI? Did I do something wrong? They're actually a very approachable group of people. And I believe they're some of the most principled people in the world, and certainly in the business world, because they take a job with a level of knowledge and expertise that I believe their compensation is dwarfed by what they could do in the private sector. Hester Peirce is with us today. She's very active on Twitter. She knows more about cryptocurrency than most people who are in these cryptocurrency companies that I know. So I'm really, really delighted that she took the time to come on this week in startups and help us understand why the SEC exists, and how they're dealing with the massive innovation around finance in the world, while still staying true to that mission that we talked about Hester. So thanks for coming on the program.

### Human: you're asking for information we're not giving to people who are putting in 10 times as much money as you in this round and we don't have the time and I was like I always feel bad when somebody asked me for a tiny little sum which is what I could afford and then I'm like well I have about 23 questions yeah They're just like, what the hell? How can I get off the Zoom?### Assistant: The 23 questions from Glenn Kelman is a gift for a founder to answer. That is a dialogue that you can do for an hour that'll make you a stronger founder because you have somebody who's been through, like we're talking about here, all these wars. Listen, NFL season is ripping right now. All these great Thanksgiving Day games are coming up. It's going to be a great weekend. And New York Giants are playing the Dallas Cowboys. So it's the perfect time to download FanDuel, America's number one sports book. And check this out right now. New customers get a no-sweat first bet for up to $1,000 in free bets back if your first bet doesn't win. Just sign up with that promo code TWIST and listen, FanDuel is the best place to place your bet because they have all your favorite bets from point spreads to parlays and even my favorite player props. And if you missed the tip off, FanDuel has live betting with live odds so you can keep the game interesting. The app is safe, secure, and super easy to use. And of course, you get your winnings paid fast. I mean, look at these live odds. Steph Curry had 50 points just a few days ago. He's averaging over 30 points a game. My guy, Steph, I think he's gonna win his third MVP, if I'm being totally honest. And right now, he's plus 1,200. Means if you bet 100, you win 1,200. So I'm not telling you to place this bet, but I'm putting $1,000 on Steph Curry to win the MVP. I'm not kidding. So sign up today with the promo code TWIST for your No Sweat First Bet. Make every moment mean more this season with FanDuel, official sports book partner of the NFL. Hey, and if I lose that $1,000, I get it back with my No Sweat First Bet. Sign up today with the promo code TWIST. Let's just talk about the concept of iBuying and real estate. Sure. A quick little real estate roundup here. Seem like a great idea to me. Um, but the market conditions changed very quickly. Now I'm seeing the inventory in, and I, listen, I get this data from Redfin, you guys have great data, you do great content marketing, but my Lord, the amount of homes available for purchase, I guess inventory is a key driver in your business because inventory leads to time on market, time on market leads to capitulation on seller's parts and maybe local offers on the buyer's parts. I'm just spitballing here with you. But the I buying seem like a pretty good one, because you can rent the places, but maybe you don't want to be a renter. Is the I buying, in other words, the red fins of the world owning a home, a good or a bad business? Are you throwing the baby out with the bathwater? Or are you temporarily pausing it? What did you learn in the I buying?

### Human: I think, I think what I said, I think there were lots of abuses over here, lots of overcorrection over here. I think we're still trying to figure this out. This is a pretty nascent tsunami in the in the labor world. But it's not a conversation that's going away, obviously.### Assistant: You know, the the the area where you get into trouble with this was there was a company called TaskRabbit. I don't know if it still exists. But TaskRabbit was particularly they really? All right, because one of the major thing for task rabbits was put together IKEA furniture. Now here was the problem. People would say, Hey, I want you to come do this task. And then they would auction it off. Okay, sounds fair. I want you to build these three IKEA things for me. Great. I'll do it for 50 bucks. Molly says, I'll do it for 40. Somebody else says, I'll do it for 35. They really need the work. they show up takes four hours, okay, now we're gonna pay nine bucks an hour, or something in that range. And the minimum wage in San Francisco is 15. Federal minimum wage might be eight, then the person complains about it. And you know, and you have this back and forth. And this is what happens with a lot of what are they called, you know, like, handyman, but there's a non sexist word for handyman handy people. Anyway, people who do projects, project based, you know, whatever. They give you a price based on the project. And sometimes the project takes longer, and it's their fault. Sometimes it takes shorter, and it's they get the benefit, and you feel like you're overpaid, whatever. But TaskRabbit made this into such an efficient system. And there were so many people looking for work in these tasks that too often people were under minimum wage. That was the main issue. So TaskRabbit is a bad guy here. I think it was a really great idea to have a reverse auction so that consumers can get the best price and you have price discovery. The problem was they never had the foresight to say with a minimum of $15 an hour. So this cannot go below if they just put that in the terms of service. You know, you can people can battle it out for how much they'll pay to do this. But the other one was, by the way, Amazon, Turk, remember that one mechanical Turk? Mm hmm. So Mechanical Turk would put in like, hey, tag this photo and tell us three things in the photo. It's an orange and a flower and a vase. Mm hmm. Should you be able to have that be the lowest possible price globally or Do you need to have a minimum wage there? Because if you did one of these every if you made, if you said, I'll do it for five cents, and you did, I don't know, three an hour? 15 cents? Yeah, you might get to like seven bucks an hour or something. Yeah, maybe, you know, if you're in California, you now broke a labor laws, should you be able to put that kind of task on the web on a global basis? I don't know how you feel about that. if people are opting into it, should they be able to do that?

### Human: Yeah, totally. One last sort of big picture question related to all of this, you know, FAA regulations, battery technology, adoption, consumer concern. What do you think that the time horizon looks like for this to be something that is totally commonplace when you're ordering online?### Assistant: You know, if you'd asked me that two years ago, I probably would have given you a much different answer than I'm going to give you now. But when we I think part of the test I used to joke until two years ago, you had a better chance of getting hit by a stray golf ball in your bathroom than you did the news running a positive story about drones. Right. Everything was negative, negative, negative, negative. Yeah. And when the pandemic hit and we were given the opportunity to partner with Walmart on the COVID test kit delivery, I think it was an interesting moment for our industry because people were scared. They wanted to know if they had COVID. A lot of them didn't want to get in the car. They didn't want to sit for hours in these lines. So it was the first time for them to be able to order these kits and have them delivered at home and then just drop them in the mail and send it back. It was amazing the number of people who, even during the COVID test kit delivery in Chico Tawaga in North Las Vegas in Texas, in El Paso, who wouldn't drive up to the store to get tested, but would order the COVID test kit, have it delivered, and then drive to the store to tell us how amazing the experience was. And I think that's when we really started to see a shift and people went, well, they're not loud. They're not noisy. We explained to them, we go in and we do community outreach and we tell them we don't record any video while we're flying. We don't take any pictures. Even when we first started, we were taking a picture of the package just to show it's delivered, kind of like an Amazon driver does. So you'll get a picture that says delivered. We don't even do that. So from the time that we take off to the time we land, we're not recording, we're not taking pictures. And we tell the communities this. And I'll tell you in Arkansas right now, we have people who drive up to the hub every day and ask, when are you going to be able to deliver to my house? When are you going to be able to deliver to my house? And we'll tell them and they'll come back. But to your question on how, when it's going to be commonplace, Um, I think it's going to happen a lot more quickly than people think. I mean, here's what we've got to overcome. We've got three different drones that we're working with right now. We've got these drones right now that you're seeing the pictures of those are being replaced next month by another drone. Uh, that'll have about a three to five mile range that out and back. Um, and, and we'll be able to go a little bit faster. Um, the next generation drone that's coming out is, is not a quad. It's a whole totally different. drone, and that's going to have about a 90 minute flight time, and it'll be able to travel at about 80 miles an hour.

### Human: I mean, look, I'm sorry. There are going to be a lot of people who like, and there's one in the chat right now being like, not all Bitcoiners. Hey, it doesn't matter if the poster behavior for your thing is brigading is this incessant attacks, right? Brigading. Yeah. Brigading is like when you go and get all your friends slash bots on the internet to attack a person on a specific thing. It is targeted, targeted, coordinated harassment. And I deal with with proxy.### Assistant: so good. He did a follow up one to young people who have grown ups speaking crypto and web three see money laundering as a new social form. journalists who don't understand that will become irrelevant. I mean, that is literally my replies. If you these crypto folks are so good at psyops, that if you give them Eve, they're such snowflakes, that if you give them even the most modest criticism, They will get into your feet and be like, have fun being poor, you don't get it, blah, blah, blah, blah, blah. And you're like, oh my God, it's so toxic. All I said was, do you think you should know your customer? And in this case, know your customer, that was the thing about the little press conference we played there, the Law and Order press conference. We should have put the bum bum music behind it. Good old fashioned police work. Good old fashioned police work. The start of the year is always crazy and you might need some extra help. Sound familiar? That's the boat I'm in right now myself. So look no further than Fiverr Business. Fiverr Business puts a world of expert freelancers right at your fingertips so you can get any project across the finish line and still be really proud of your work. Plus, They have everything you need to seamlessly integrate your new team members into your workflow. We love Fiverr at launch. We've used it many times. Research is one of the things I love to do. I like to find out all of the startups, all of the different founders in a category in a country. And I was wasting all this time trying to get this data. So I use their researchers and they were amazing. You want to stop wasting time searching for talent and you just want to leave it to Fiverr business. They have a team of dedicated business success managers that will help match you with the best talent for your team so there's no more endless guessing, no more interviews. Plus you can save and share your favorite freelancers for future projects. So find the freelancer you need to give your next project the boost it needs to finish strong. Right now you can sign up. Fiverr business absolutely free for the first year, get one year for free and save 10% on your purchase of Fiverr business with the promo code Jason what a promo code just go to fiverr.com slash business f i v e r r.com slash business and don't forget to use the promo code Jason to get 10% off. But Jeff makes a very good point. Because people, I think, if you are in crypto right now, listen, I see a lot of companies, I work with a lot of companies, the amount of entitlement, insanity, accountability, and reasonability in crypto is at an all time, like either low or high, depending on what's worse, like, no accountability, ridiculous entitlement, no discipline, madness, no buttoned up nature to this, everybody's just winging it. And you know what, like, it's a bad look for crypto.

### Human: I mean, I would, I gotta like, you gotta, you gotta, you gotta face your fears. You gotta face your demons.### Assistant: Just like get ready. Unbelievable. Yeah. OK. And hey, just a special thanks to all the amazing sponsors. I want to give extra sponsor love and I want you to do it, too. If you're a super fan of the show and you made it to this point in the show, it is your gear. It is your duty. It is your honor. It is your privilege to go on Twitter and just say thank you to whichever one of these sponsors you love the most. And then just at mention us. So I want you to say thank you at Notion. for supporting at TWI startups, right? That's a perfect example. If notion or Squarespace are your jam. I love both of those. I use both those products. Hey, maybe masterclass. I love that product. I got the yearly subscription. Maybe using broker free insurance like me and a lot of my startups. Maybe you're getting healthy with thorn. right? Get healthy with Thorne. Or maybe you got a nice tight suit from Indochino. You go ahead and thank Thorne Indochino in Broker or Masterclass on your Twitter. And then that sends love to them and to us. And we keep this whole operation growing. Maybe we go to seven days a week, right? How great would that be? And thanks to Microsoft. They really support founders so great. masterworks. I'm buying my second painting on masterworks. Can't wait. I got a Basquiat. I'm trying to pick my next one. I may go for a Warhol. I don't know. Lemon.io they do a great job of landing developers for a lot of our startups policy genius. You need to have insurance to life insurance for your family and they're going to help you get the best price Vanta for your sock to compliance intercom so that you can understand your customers and not churn customers. What a great product. Bubbles have been getting a lot of pitches on bubbles recently. Brave great browser does a lot of interesting things in terms of saving you from a lot of tracking. Maybe if you want to get rid of some of the ads that are annoying you and have some cryptocurrency hooks that are kind of neat. And of course, I trust if you want to put crypto in your IRA, which I am going to do, by the way, I have some crypto holdings, but I want to put a little bit of my IRA and get that tax benefit like Mr. Peter Thiel did famously with his Facebook stock. So, thanks again to all those... Who knows? Maybe it works out. You never know. You never know. Maybe it works out. Hit it out of the park. All right, everybody. I should have given you a trigger warning on that one. Any time I mentioned Peter Thiel... I don't mind. Did I trigger the libs? Okay. Sorry. Sorry. Sorry. I love Peter Thiel. He's such an interesting, weird dude. I had him on the show. I interviewed him. Would you interview Peter Thiel? Would that be triggering for you?

### Human: And when will we be seeing some of your blog posts come out or is this like a in the works process?### Assistant: Are you saying Wanting as in So that's actually mimetic. You're saying M-I-M-E-T-I-C. Yeah, what are you saying? I'm saying M-E-M-E-T-I-C. So mimetics with an I is sort of the theory of how things that are alike, like very similar, naturally come into conflict. And mimetics, which I'm talking about, is basically the mimetics are like the traits that enable ideas to survive and spread. Gotcha. So mimetics actually is this like cultural, It was like this term created and then immediately killed by its creators. It's not even considered true in cultural idea theory. It's like this term that was immediately left for dead and thrown to the corners of the internet, but it survived. And so I find it incredibly fascinating. It's basically how animals have speed or strength or intelligence, and that helps them evolve and stay alive. But being fast isn't the point of being an animal. Staying around kind of is the point of evolution. And so mimetics are the traits that make ideas get sticking around so like truth or like not true or like Virality, those are all traits that ideas used to stick around. Um, so yeah, I uh, I think it's a relatively new idea people talk a lot about memes and which are like I think less they're like less important actually on the grand scheme of things than like Understanding mimetics. But yeah, I think we're seeing a lot of like that's going to be one of the trends that's going to probably going to come to like Dominate society like right now with this ukraine russia stuff like you're seeing a lot of like highly mimetic like m-e-m-e-t-i-c like like war going on people are like Making sure their tanks spread. They're like trying to dominate news feeds. Um on either side So yeah, I think just something people need to be constant cognizant of like Um, we've reached this point in society. I think where virality is like almost too strong in the metagame. It's too strong. What do you mean? Metagames are the natural state of things. If you play Tic-Tac-Toe, there's a metagame. There's an optimal strategy. Optimal strategies aren't always balanced. They're often deeply unbalanced. I think in the spread of ideas and in sociology, virality has come to dominate society. The internet is that most of the content you see is highly viral. Truth gets destroyed by false truths, just because false truths can be more viral. Basically, virality is almost too strong. So, there's a lot of implications that has for society. That's some of the stuff I like to write about. I think it's a relatively new thing. No one really is talking about... I mean, there's a lot of stupid tech bros that are like, oh, memetics, and how you can use it to get 5% more growth metrics. But this is really like society defining stuff, like how we transfer ideas and what ideas we prioritize. So anyway.

### Human: Yeah, of course. Thanks for having me. Very honored and blessed to be in this company. A great way to kick off the year. So Pioneer is effectively built for people that are working on projects where they're not even really sure if it's a company or maybe it's a small company and they're not sure if it'll be a big company. It really gives people kind of before they have real product market fit, a leaderboard and a metric and a score to optimize and grow. So the way it works is you go to the website, fill out your application, and then you basically get a score. And the more revenue you get and the more progress you make on your project, the score grows. And if the score reaches a certain point, you get reviewed by an expert at Pioneer. And if that works out, you can actually become a Pioneer. So it's almost like a venture capital firm, it built it with Strava, so to speak, where there's very clear metrics, numbers to optimize, which I think is very pleasant for founders. It's actually quite motivating. And our long-term goal and mission is not necessarily to be first in the door to startups that would have been created regardless, but to really be counterfactual in the creation of companies that wouldn't exist without us. To me, it's pretty interesting that in the venture world, at the end of the day, there's like three to four great deals a year. That's it. And I don't think the world must be that way. It's like, I think the world can afford to have $1,001 billion companies instead of a trillion dollar company. And so we're kind of trying to create that by almost trying to convince people that their startup is real, just like Strava can kind of convince people that they should take running a bit more seriously. And it's about two and a half years old, we funded We have about just shy of 200 Pioneer companies to date. Some of them have gone on to race series A's or large seed rounds. So it seems like the people, and some of them are launch companies, it seems like the people that the network is finding and selecting are actually kind of working on good things. I'd urge everyone that's kind of interested slash confused about what we do to just go check out the website. We don't own the .com yet. That's the Japanese company, pioneer.com. But we are at pioneer.app.### Assistant: Hey, everybody, welcome to this week in startups. I'm Jason Calacanis. And one of the things I like to do is work with very early stage startups. But one of the things that's happened in Silicon Valley is, as the market has exploded with the number of startups, and the cost of starting a company has gone down, well, a lot of the VCs have decided, it's just too much work. It's too much work to work with a one to 10 person startup. So what have VCs done over the last couple years, they've moved downstream. They are no longer in the orchard. They are no longer at the well. They've just moved downstream and they wait until startups get traction and they get to a million dollars or $2 million or $3 million a year in revenue, 75k a month, 150k a month, and then they pop in and try to overpay for 20% of the company because you've reduced all the risk. But that's not when startups need help. Startups don't need help when they hit 75k a month. Then it's just about growth and scaling and management issues. It is a playbook when you get to a million dollars in revenue, and you can play the playbook. The discovery phase, when you try to find a new idea, a new founder with a new idea, with customers who maybe are just super inspired by it or even confused, that's where the magic is. But most people, as their years go on in investing, move downstream. Why do they move downstream? It's economics. The amount of time it takes when you're a seed investor in a company like, I don't know, Robinhood, Uber, whatever it happens to be, it's going to be 10 years before you see your exit in all likelihood. Maybe you can sell some secondary in year seven or six or something, but basically you're in it for close to a decade before you see any money. But if you do late stage and you jump on in the series A, series B, series C, which are really like the B, C and D these days because they happen further down the line, Well, you could collect your money, your return on investment as a venture capitalist, in as few as three to seven years. In other words, there's economics at play in incentives matter. And so I asked myself, who's actually doing this hard work anymore? Who's actually helping the two person startup. And I found two people who are doing that. And I had them on the podcast, and they got an incredible response from you, the audience. And so I wanted to try a new format. It's a new format we're going to try today, which is startups that are inspiring us right now. And I've brought back Daniel Gross, who is from Pioneer Labs, which is an incredible concept. He's gamified startups. I had you on the program before, Daniel. So welcome back. But maybe you could explain for people who are unfamiliar and just hearing about Pioneer, what you do at Pioneer.

### Human: I mean, it's funny that you describe it as a casino, because to be honest, it sounds a lot to be fair. I'm rewatching The Sopranos with my son, but it sounds a lot more like a mob shakedown that maybe started as an attempt at efficiency, right? Like we don't want to ascribe values to what people were doing. Everybody was trying to make more money and things we've seen things spiral out of control. So I guess let's fast forward to impact and then talk about solutions. What are the I mean, I think we sort of understand what the impacts are of drug price inflation, but give us the kind of big picture of what this system has led to.### Assistant: Well, and this is interesting, is roughly around, by my estimate, 2010, pharma had basically ceded control of the supply chain. That for decades, pharma had basically controlled the US supply chain. And then by 2010, the liberation had happened, and the PBMs had finally basically taken control. And what this meant is there was nothing to stop them from making more and more egregious asks. And people would often say, what comes first, the chicken or the egg? And in this equation, I want everybody to think. People say, well, drug inflation is running rampant. Well, if someone's knocking on your door, PBMs every year asking for more money in the form of rebates and manufacturer incentives, how do I pay for it? So, you come to me each year and you say, let's say I'm a manufacturer and you're the PBM Molly, and you knock on my door every year, it's your job to say, I need 10% more. well, I could take 10% less out of my earnings, or I could raise my price 10%. A lot of arguments are circular in the sense that pharma will oftentimes point a blameful finger at the PBM industry, the PBM industry will point a blameful finger at pharma. But I want everyone to understand the history here, because what you have is PBMs that are truly in control of the US supply chain. They're in control of everyone. from the manufacturer to the wholesaler to the pharmacies to the hospitals. Make no mistake, they're in charge. The second thing is we have a system that's based upon price opacity and price encumbrance. Price opacity, as I mentioned, is nobody can see and understand the buy and sell side, the true and buy sell side of the economics of a prescription. The other part is this price encumbrance. You have the ability to change the price at your sole discretion under a traditional PBM model to be anything you'd like. That is extraordinarily powerful and it equates to very big earnings. And so, you know, I want everyone to understand this is how we got here. You know what I mean? It shouldn't be a surprise. It took roughly 25, 30 years and there were different points. But what it left us with is a scenario where literally you can charge anything. So, the way I want people to think about this is I often say is imagine the US drug system is a casino. and we deal in probability and odds. And if I'm the casino, if we look at the US drug pricing system, our cash marketplace in the United States is about 6%. These are the people that either aren't covered by insurance or are, and they kind of hunt for a better price. But what does that mean? That means 94% of the time, a patient, when they go to a pharmacy, will accept any price I put in front of them. And if you own the casino as the PBM, those are great odds. Right. And that is so important.

### Human: And that is why I got it. Yeah. Oh, yeah. 100% the value of the social graph specifically, like they used to talk about the social graph, and it would be like, blah, blah, blah, I don't know what you're talking about. And what it really meant is exactly what you just described. Yeah, that that it that you will start to get ads that feel like they read your mind.### Assistant: that's nuts. See, here's the thing. Those numbers don't lie. You you can't hit 10 billion if the average ties are not getting value. Yeah, right. Like they must be getting some value. It's not a fad. And I think this is where I was wrong about Facebook. I thought Facebook advertising was going to be do a because who wants to have an ad between like a conversation and photos of people. And I was right because the ads got so few clicks. The click rate was like a 10 of the or maybe a 50th of the ads getting clicked on Google. So when compared to Google's click through rate, it was absurdly low. So we all thought in the industry, social media advertising is going to suck. What we didn't realize was, oh, my God, people are spending a lot more time on this social network than they are on a Google search, right? Google search, you just you get in and out. The better job Google does either advertising or organic results, the quicker you leave Google, right? If you're hanging around Google search, it means you didn't find what you want. And you're still going through the menu, right? Mm hmm. with social media, you're just spending hours and hours on there. So therefore, even if it has a lower click through rate, you're going to get a lot more time and you're going to understand the person's psychographics, a fancy way of saying like, what they think about and what they're into, you know, their hobbies, their interests, the targeting is going to be so specific. Yeah, over time, we underestimated what the algorithm could do and serving your next ad or serving ads to your your friend group. So if one person in your friend group let's say our friend group, Molly, you know, like, somebody's talking about, I don't know, podcasting microphones, and you and I are friends, and Tom Merritt's in there, and Kai Risdahl's in there, and Joe Rogan's, you know, in there. And it's just, you know, an orbit of people on a social graph. It starts showing the ads to our friends, well, we have friends who are in podcasting or in radio. And all of a sudden, those ads perform better. And it's all because one of us know, went to the Facebook page for, you know, this new podcasting microphone. And that's like, okay, if you went to that page, and you spent three minutes on it, and you interacted and asked, and asked two questions on it, let's try 100 people you're closest to, oh, that worked. Let's try the 100 people, each of them are closest to. And all of a sudden, you have the graph of every podcaster in the world. Yeah. And nobody knows how it happened. It just happened magically through the app. I mean, just think about how revolutionary that was. And we all missed it in the industry. It's terrifying.

### Human: I really good question. I think that we're today. Yeah, that's now we won't have a misogyny.### Assistant: I mean, I, if you told me somebody said that and you said, you know, they're going to come work for me. Without the context, I would not hire them right with the context, I would have to have a conversation with my team and say, this person said this, here's the full context. I have a lot of women who work with me. I would say, you know, do you want to talk to him? Do you want to go down this road? And I would have had a very inclusive discussion about, hey, is this like a risk we want to take, right? Like I at one point in my career, I hired somebody who was a hacker inadvertently, who had a felony charge, and I had to own that. And it was difficult. And, you know, employment is, it's another thing we have to think about, like, we have massive compassion, for somebody who comes out of jail after 20 years for armed robbery, maybe even assault, murder, and they try to get back on track. Yeah. But somebody writes a quote in a book that's offensive. Nobody would argue it's not offensive. And they can never work again. So that is, I think, something we're going to have to contend with is like, what is the path to redemption here? If he wrote a statement that he was sorry about the quote, he disavows the quote, he restates it, whatever goes to therapy, or I mean, I don't know if we have to get ridiculous here, but there should be some path to this person being horrible again, Paul Graham, who, you know, is probably pretty triggering. AGM is actually a good guy. I believe that that's true. Yeah, he might write the occasional shocking thing for effect. But he'd never, for example, organize a petition to deprive someone of their livelihood. So that's a nuanced take. stripe employee says we turned down many people at stripe for saying much less doesn't matter if somebody is a good guy. This is a response to program. Many good guys don't get hired. It's a bad idea to hire people who say things for shock value, especially if those things alienate half the population. That's, that's also a valid point. That's, that's a pretty nuanced take. And David Sacks has taken the number of woke millennials and zoomers who claim their safety is threatened anytime they encounter a dissenting viewpoint, work from home may be common necessity, just to prevent spurious HR claims. I think that this has nothing to do with this Antonio quote, but he had just said that recently. And I think that actually, maybe that is the nuanced. I don't know. But I tell you something. And Tony is going to get five to 10 million bucks and a million dollar book advance for the next book, where he savaged his cancel culture or whatever. And really, I mean, Apple should if these Apple employees are serious. I don't know where they did they fight against Dr. Dre becoming a billionaire? I don't know.

### Human: Can you send it to your favorite reporter?### Assistant: Yeah. I'm like, no, I'm not in the leak business, but I guess you could create a fake Yahoo account and send it to somebody. And founders have done that, by the way. delete their own updates because they're so good because they want to get coverage but you have to include hey here's the seven things we're doing on a growth basis that are our secret sauce to get new customers if you figured out some customer acquisition don't put that in there if you have some new product coming you don't need to put it in there you could put it in after you launch it hey we launched our new product here it is you can show that to select investors on a zoom privately tell them don't tell anybody so just you know if there's any concerns You don't need to include everything top level, but runway, cash flow, revenue, customers, all of that super important. If you have hires, people might be able to help you with hires, you put a couple links in, you could have retweets in there with a click to tweet link, which is a cool little service where it pre-populates a tweet, gives people the ability to edit it. So I tell people, hey, put a little click to tweet in there. Hey, a new version of Calm Sleep Stories is out, and check it out with the link. But it's just a great way to help. You can put requests in it. So if you want it to work for you, you put requests at the bottom. Requests, we're looking to fill these positions. We're looking for customer introductions. And we've got an open note with 500k left on it, if anybody's interested in double down on their investment. So many great things can come from these, but really the discipline is the key, I think. If you can go for a coffee every day, you go to Starbucks, you go to Blue Bottle, you take a walk, you wait in line, This is what I say to founders. This is my little trick. You know, you learn some tricks to trade. Where's the monthly update? Oh, no, got it. I said, OK. Hey, have you been to Blue Bottle? Or what's your favorite coffee? Oh, I like Philz. I'm like, oh, which Philz should we go to? Oh, you go to the one on Market Street? Oh, that's nice, Philz. Big line there, right? Oh yeah, took 15, 20 minutes. I'm like, great. Next time, send your assistant, send somebody else to get you goddamn coffee, get your pour over for seven bucks, sit at your desk and write a 20 minute goddamn update. And I'm not telling you this for my, I already own my shares. I've already made my money. I've already got a portfolio. I'm saying this for you. Skip the fricking, no offense to Phil, this is delicious. Get that mojito, but you know, just take the 20 minutes and write it.

### Human: Yeah. No, I mean, yes. And almost by design. And it's just not, I know, this is so embarrassing, but I'm so grateful that one, I'm so busy here that I like literally yesterday, I had no time for Twitter. Like somebody told me something that was happening on Twitter that was everybody's talking about. And I was like, Yeah, I don't I don't know what you're talking about. Thank God. And then second, I installed Candy Crush. Because during those rando 20 minutes, when I might be tempted to look at Twitter, I'm now setting a timer. Yeah. And I'm playing Candy Crush. Well, I mean if you want to my son is like you're a boomer.### Assistant: You're officially turning into like you're like turning into auntie molly It's fine auntie when it gets too hard. I uninstall it and then I put a new You know, I play threes or you know, I like to play age of empires or these kind of like uh real-time strategy. I like strategy games Um, they're good for letting your brain get into a flow state, but without all the, you know, emotional baggage that comes from the game of doom scrolling, which is pretty gross. Listen, one of the hardest things in business is turning a lead into a customer, right? You get that lead, but now you got to close that customer and keeping that customer around for the long term, right? It's a funnel. Do people even know who you are? Did you get that lead? Did you turn them into a customer? And did they stick with you? Well, one of the best ways to do that is by having a seamless customer experience. So you'll save time and provide a tailored experience at scale. Active Campaign helps you automate email marketing, sales pipelines, reporting, follow-up scheduling, notifications and more. The whole process is dialed in and it's going to cut out all those tedious manual tasks like moving information around, cutting and pasting, checking for customer replies and sending emails. You want to have a great process, you want to refine that process and you need a great tool and that great tool is Active Campaign. So start creating personalized customer experiences and get 10% off your active campaign subscription today at active campaign.com slash promo slash twist that's active campaign.com slash promo slash twist for 10% off and most importantly, to let them know that you're a fan of this week and startups in our startup of the day segment, Molly, we all know companies like Microsoft City and Verizon, you know, are always trying to get talented people. But you know, not everybody wants to go to college. And so there should be some new career pathways. And one of those is apprenticeships. And I've always we invested in one apprenticeship company, I've looked at a lot of them, people are resistant to apprenticeships, they kind of put them into, like, maybe a predatory, I'll say like, if they're, if you're paying for an apprenticeship, should you be paying to do work? People look at them as like unpaid internships, that's triggering for people, they feel there's an inequity. They're not equitable, I guess, is what some people argue, could understand that argument, I guess, although I'm more in the camp of like free, well, people should be able to do what they want to do, but I get the counter arguments. But it does seem to me that an apprenticeship is a quick way or if you call it an unpaid internship, but one with more training involved in it. If there is actual training, and it's not just going to get lattes for people is a really cool way to, you know, get a career path. So tell us about multiverse.

### Human: Well, I haven't run into the teachers unions. I've primarily spent my time trying to build relationships and understand how superintendents and school boards think. And what I've primarily found was that they're, this is like a novel idea to them. This is, it's just so, it just came out of, you know, left field. It's, when I bring it up, I'm operating under the assumption that this is something they've researched and that they've thought about, but that's, it isn't really. That's crazy. Yeah. That's, I think, I think that's a really important thing to note. It's not on their radar. Wow. And then.### Assistant: The back channel I got after my tweet was that the school unions, I'm sorry, teachers unions, were very upset at what I had said, that they had coordinated perhaps some of the response to my tweet since I am an influencer on Twitter with a couple 100,000 followers. So people would say maybe he's going to inspire people to do the same. But what you're saying is you believe that this is something that maybe even the public school system and government should embrace. I'm curious when we get back from this quick break. What role that teachers unions have in all of this? And are they opposed to or in favor of this potential change when we get back on this week in startups? Ah yes, Klaviyo. If growing an ecommerce business is your focus, you need a platform focused on growth and that platform is Klaviyo. Klaviyo is the ultimate ecommerce platform for online brands of all kinds and sizes. Whether you're just getting started or you're running a well-known brand, it will give you everything you need to send memorable branded emails, text messages, and so much more so you can build those strong relationships that keep customers coming back. What they do at Klaviyo, just to say it in plain English is, they understand targeting. So if you had people on your website and they were looking at certain types of clothes or shoes and they liked a certain color, or they were looking for a certain size or style, or they were male or female, Well, you could send them targeted emails that get better response rate. Instead of sending a generic email with every product, why not send that product that's like a silver bullet that will get that specific customer engaged with your brand? Well, that's why Klaviyo is trusted by 40,000 brands like Huckberry, 8sleep, and Living Proof. And trust me, I get the emails from these companies, and I'm an investor in 8sleep, and I see the difference between targeted, customized, personalized marketing and generic marketing and you know that too you don't want nobody wants generic marketing you want stuff that's really personalized so if you want to learn more of how you can grow your brand with Klaviyo go to klaviyo.com slash twist and they will give you a free trial because you came from this week in startups again, k l a v i y o.com slash twist. That's Klaviyo k l a v i y o.com slash twist. Thank you Klaviyo for supporting independent media like this week in startups. Let's get back to this amazing episode. Chris Bennett is with us. Follow him on Twitter be e n n e t. Is that right? Or you ate in it. I just saw that. Yeah. So anyway, it's not Bennett, he's Bennett, if you're placed to be with an eight, like in hacker speak, that's so eight e n n e t. Fantastic. Have you run into the teachers unions? And when you say you think public dollars should go towards this? Is that not blasphemy in the teachers unions and public school system?

### Human: Anyway, yes, what's going on with this like Coinbase protocol situation?### Assistant: Yeah, so at the highest level, it's an Ethereum L2. And so, you know, that gives the ability to have pretty low transaction costs, high transaction throughput, and then, you know, ultimately, you can settle on Ethereum. Um, why are they doing this? Let's take a step back. So, um, we've talked about this before. If you actually look at Coinbase, right. The ad for, as a company, for the most part, you know, it's a, it's a custodial system. And so, um, a lot of, um, a lot of what happens in Coinbase itself, isn't really happening on the blockchain. Like they may enter, like, so if you go to Coinbase and buy, you know, any type of asset, Bitcoin, Ethereum, you're most likely not buying it from, uh, like a, like a blockchain transaction. you're probably buying it from a pool that exists within the Coinbase custodial system. So I think one, you know, there's an interesting push to kind of create this system where a whole bunch of other applications and services, whether it's their own or others, start getting created. What you get by Coinbase putting it out there is you get, you know, there's a lot of these L2s that exist. There's even, you know, other blockchains. You get the backing of a public company running this system for you now. And so if you're a company and you're thinking of building on blockchain for whatever that may be, could be NFTs, could be loyalty systems, anything along those lines, Coinbase is like the AWS in this case. offering a blockchain that's run by them. Hopefully their services are put on it. They maintain the development and growth around it. And so it's a sort of a choice for enterprises and companies to build on. I don't think we see startups go there because I think startups are closer to what's happening more at the core of the crypto and blockchain ecosystem, whether it's in Solana or Polygon. But I do think if you're a big company and you're looking to leverage blockchain for some type of service you're building, it becomes sort of an answer that you can go after. Now, that said, all the big clouds also offer services they don't have their own. L2 that they're running, but I believe AWS has an Ethereum service that they run if you want to interact with it through that system. I think it's a play as part of becoming an infrastructure provider, so looking more and more like an AWS. Although I'm not sure, you know, how much energy from enterprises right now, given everything that's happening is going to go towards this. And unfortunately, like, you know, with Coinbase, they had their own marketplace as well, like an NFT marketplace that didn't really take off. And so the track record here on these kind of expansions from their core offering hasn't been so great yet. But, you know, it's a trusted place for an enterprise, Vinny. Got it.

### Human: I think we're just living off kind of biases from past bad experiences because, you know, and now we're past that. And I think the interface is voice. Right. And, you know, Bill Gates has kind of always said this for a long time. Um, and I think we're just going to, I mean, I think it's a great idea, like to start that way and then have kind of the back and forth between voice and, you know, sort of like that, that's the superpower kind of.### Assistant: you know, like Amazon does this already, I open up Amazon, and it's like, order things that you ordered in the past, or here's some things you might like. So they're really using AI on the back end, obviously. Yeah, you know, and they know that, like, I, I've ordered some coffee 10 times in the last 10 years, toothpaste or deodorant. So they're upselling me all the time. imagine I came there and I was like, and it was like, Hey, do you own any pets? And I'm like, Yes. What What do you own? I own two dogs. Or what type of dogs? Yeah. English Bulldogs. How old? Oh, once two ones. Well, what are their names? Oh, now. because I'm talking to it, and it's just changing the screen. And it's like, Oh, do your dogs have any behavior problems? I'm like, yeah, they run away from me. Oh, have you tried a shot caller to train them? Oh, have you tried a clicker? And you know, doing treats? Or do you want to order this book about this? That's the kind of interaction I want to start having. I want it not just to anticipate what I want. But I wanted to interview me. Yeah. And that's going to be the Holy Grail. Are you still using your personal phone number at work at your startup in 2023? Stop! Such a common mistake founders make. But Open Phone has totally rethought every detail of what a business phone should look like in 2023. Open Phone makes it so easy to do this and so affordable that you have no excuse and you really don't want your team using their personal phones for business. Why? Well, it could get creepy, people start texting people on your team, it could be that they leave your company, and the salesperson has all of these text threads going with all your clients, and they bring them to your competitor. Do you want to deal with this nonsense? You don't I can tell you open phone is amazing, because we use it our sales team, our ops teams, we use it daily. We also started using open phone for angel summit communications. It's rated number one on g2 for customer satisfaction. And let me tell you those g2 rankings. Those are dogged battles. If you win that you really have to be the best twist listeners love open phone my sales team uses it ops team uses it customer support uses it and you know what's great about it you can create a shared phone number like we did for the angel summit with multiple employees being able to feel those calls and text and keep it all sorted it's affordable at just $13 per user per month but twist users gonna get 20% off that already ridiculously affordable price for six months at open phone.com slash twist. And if you got an existing number, open phone will port it over at no extra cost head to open phone.com slash twist to start your free trial and get 20% off.