WEBVTT - Starlink in Ukraine and Meta's FTC Troubles 0:00:02.480 --> 0:00:05.800 From the heart of where innovation, money and power collive 0:00:06.600 --> 0:00:11.119 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:11.200 --> 0:00:27.360 Emily jay My, Memily Tang in San Francisco, and this 0:00:27.400 --> 0:00:30.080 is Bloomberg Technology. Coming up in the next hour, Starlink 0:00:30.360 --> 0:00:35.200 in focus after Elon Musk says SpaceX can't fund satellites 0:00:35.200 --> 0:00:39.640 in Ukraine indefinitely. How could it impact the war? Will 0:00:39.680 --> 0:00:43.720 discuss plus new filing show Elon Musk is under federal 0:00:43.760 --> 0:00:47.280 investigation over his deal with Twitter or potential deal. We 0:00:47.320 --> 0:00:49.080 should say, we'll talk about all this and what it 0:00:49.080 --> 0:00:51.519 means for the company's future with Twitter founding member and 0:00:51.560 --> 0:00:57.040 a former board member, Jason Goldman, and pure speculation that 0:00:57.160 --> 0:01:00.280 is what Meta is calling the FTCs antitrust concerns over 0:01:00.320 --> 0:01:04.080 a deal to buy the VR fitness company within unlimited 0:01:04.319 --> 0:01:07.920 What hurdle Zuckerberg will face trying to dismiss the case 0:01:08.480 --> 0:01:10.919 this hour, all of that in a moment, But first 0:01:11.000 --> 0:01:13.279 it was a brutal end of the week for markets. 0:01:13.280 --> 0:01:16.959 We're gonna get the latest now with Bloomberg's Emily Graffito. Emily, 0:01:17.120 --> 0:01:19.760 what a week? And what a Friday? Hi, Emily, what 0:01:19.880 --> 0:01:22.160 a week? I mean? Stocks pretty much ending in the red. 0:01:22.200 --> 0:01:24.640 To finish a volatile week. We saw the SMP five 0:01:24.720 --> 0:01:28.160 hundred pretty much falling all day, finishing down about two 0:01:28.240 --> 0:01:31.360 point four percent. This is after that one year um 0:01:31.360 --> 0:01:35.040 you Michigan inflation expectations survey rose for the first time 0:01:35.240 --> 0:01:38.920 in seven months. We saw traders ramping up expectations for 0:01:38.959 --> 0:01:41.360 how aggressive the federal reserve was going to be. That 0:01:41.560 --> 0:01:44.880 US two year yield topping four point five percent for 0:01:44.920 --> 0:01:48.520 the second day in a row. NASDAC one hundred underperforming 0:01:48.560 --> 0:01:52.960 and really coming under pressure. In the technology spaces, those semiconductors, 0:01:53.120 --> 0:01:56.360 the Philadelphia semi Conductor's indexed down about four point four 0:01:56.760 --> 0:01:59.720 six percent, all about a lack of demand and again 0:01:59.760 --> 0:02:02.640 can scerns of those rising rates. Taking a look at 0:02:02.640 --> 0:02:05.720 some of the individual movers in the SMP five hundred 0:02:05.720 --> 0:02:08.680 in the stock market, Apple down about three point two 0:02:08.680 --> 0:02:12.120 percent today. It was actually the biggest contributor to the 0:02:12.280 --> 0:02:16.679 SMP five hundreds declined today. Twitter, though rare stand out here, 0:02:16.800 --> 0:02:19.520 up just a little bit about point two percent to 0:02:19.639 --> 0:02:22.960 finish the day. This is after it's reversing course after 0:02:23.000 --> 0:02:27.000 it fell yesterday on news that Twitter sawt documents last 0:02:27.040 --> 0:02:31.320 week related to a federal investigation into that Musk deal. 0:02:31.400 --> 0:02:33.960 And speaking of Elon Musk, let's take a look at 0:02:34.000 --> 0:02:39.280 Twitter stock falling about seven percent seven point seven percent today. 0:02:39.320 --> 0:02:45.520 It actually closed today fifty percent below it's November closing high. 0:02:45.800 --> 0:02:48.359 The stock has just been absolutely crushed me one year 0:02:48.360 --> 0:02:52.200 down about twenty percent. However, I looked back to how 0:02:52.240 --> 0:02:55.600 it performs since the end of twenty nineteen, it's still 0:02:55.720 --> 0:02:59.240 up about six hundred thirty percent. It's easy to forget 0:02:59.280 --> 0:03:01.840 about that that Tesla has had when we look at 0:03:01.880 --> 0:03:04.840 these short term movements, but overall, Tesla getting crushed with 0:03:04.840 --> 0:03:08.560 the rest of the stock market. Emily Good good point, Emily, 0:03:08.760 --> 0:03:12.760 thank you for that update, Emily Graffeo. Meantime, the Pentagon 0:03:12.800 --> 0:03:15.760 says it is in touch with SpaceX in regards to 0:03:16.000 --> 0:03:19.800 Starlink satellites in Ukraine that provide crucial broadband support in 0:03:19.800 --> 0:03:23.480 the war against Russia. This following Elon Musk's threat to 0:03:23.560 --> 0:03:26.880 cut off financial support for Starling terminals in the region. 0:03:27.080 --> 0:03:30.200 He's putting pressure on other entities now to step in 0:03:30.360 --> 0:03:34.200 and make up the shortfall after costing SpaceX at least 0:03:34.240 --> 0:03:37.880 eighty million dollars. The Pentagon says it could turn two 0:03:37.920 --> 0:03:41.440 options other than Starlink. This all following an earlier dispute 0:03:41.440 --> 0:03:46.040 over public comments suggesting the government and Kiev seed territory 0:03:46.080 --> 0:03:49.200 in exchange for peace with Russia. For more on this, 0:03:49.240 --> 0:03:51.200 I want to bring in Bloomberg's at Ludlow as well 0:03:51.200 --> 0:03:54.560 as Dr d J. Peterson, president of long Geoglobal Advisors, 0:03:54.560 --> 0:03:57.760 which is advising business leaders and investors on short and 0:03:57.920 --> 0:04:01.120 long term risks of the Russia. You crane war and 0:04:01.160 --> 0:04:03.480 I want to start with you. What exactly did Elon 0:04:03.560 --> 0:04:06.200 Musk say and why is he saying it right now? Yeah? 0:04:06.320 --> 0:04:11.119 So in a tweet response, uh, he basically said that 0:04:11.160 --> 0:04:16.560 he was following the advice of a Ukrainian diplomat Ukrainian 0:04:16.720 --> 0:04:19.800 envoy who had used profane language which I won't repeat 0:04:19.800 --> 0:04:23.120 on this program, but basically said Elon Musk should take 0:04:23.120 --> 0:04:27.159 a hike for want of a better expression, and must 0:04:27.200 --> 0:04:30.080 said in his tweet, we're just following his recommendation. That 0:04:30.160 --> 0:04:34.320 led to a wide range of media coverage and suggestions 0:04:34.360 --> 0:04:38.760 that actually Elon Musk might pull support either funding support 0:04:38.920 --> 0:04:42.400 or literally operational support for Starlink in the country. And 0:04:42.440 --> 0:04:44.880 we know, as you said, m that that the Pentagon 0:04:45.240 --> 0:04:48.839 say As of Friday, they're engaged with SpaceX over the 0:04:48.880 --> 0:04:51.440 broad issue of starlink and depends on saying that they'd 0:04:51.480 --> 0:04:54.000 have other issues. But for SpaceX, this is very much 0:04:54.040 --> 0:04:57.480 an issue of cost in terms of how starlink's operating 0:04:57.480 --> 0:05:02.560 in that country. Did you how crucial is starlink to 0:05:03.200 --> 0:05:08.720 Ukraine's defenses? Emily, I think it's central to their defenses. 0:05:08.800 --> 0:05:12.000 If you think about first of all their ability to 0:05:12.000 --> 0:05:15.840 wage war, you think about how much they have integrated 0:05:15.920 --> 0:05:21.760 Western military gear into their operations. Well, the communications is 0:05:21.920 --> 0:05:24.680 essential as well. And one of the things that Ukrainians 0:05:24.680 --> 0:05:28.800 have done much better than the Russians is actually coordinate 0:05:29.320 --> 0:05:34.560 their defense and offense across a very very long a 0:05:34.680 --> 0:05:41.080 line of contact. And so this is essential, um for coordination, 0:05:41.400 --> 0:05:47.080 it's essential for targeting and using the Western technology very well. Um, 0:05:47.120 --> 0:05:49.200 if you think about a lot of this area, it's 0:05:49.320 --> 0:05:52.160 very rural, it's spread out, their very great distances, so 0:05:52.240 --> 0:05:56.279 traditional radios might not work. As we know, Um, the 0:05:56.320 --> 0:05:59.880 Russians have knocked out so much infrastructure, So this is 0:06:00.200 --> 0:06:04.320 crucial and it's it's actually a very important leveraging factor 0:06:04.440 --> 0:06:07.520 of leveraging all this other assistance at the West is giving, 0:06:09.400 --> 0:06:11.960 can you give us an idea dj how much these 0:06:12.000 --> 0:06:18.120 satellites costs to manage and whether that resonates with what 0:06:18.160 --> 0:06:22.000 Elon Musk has said here right that there's a lot 0:06:22.040 --> 0:06:24.600 of just kind of debate around the numbers, and as 0:06:24.640 --> 0:06:27.880 we saw with the Twitter deal, kind of playing loose 0:06:27.920 --> 0:06:30.200 with numbers around what is real and what is not 0:06:30.320 --> 0:06:32.640 real in the in the Twitter verse. So I think 0:06:32.960 --> 0:06:35.480 we do have to take these numbers with the grain 0:06:35.520 --> 0:06:39.200 of salt um. You know, generally speaking, if you look 0:06:39.240 --> 0:06:41.680 at what has been deployed in the field already that 0:06:41.760 --> 0:06:44.400 we know is about twelve thousand units, it is has 0:06:44.520 --> 0:06:48.920 cost probably around eighty eight million UM two hundred millions. 0:06:48.920 --> 0:06:51.560 So that number that that that that that he has 0:06:51.600 --> 0:06:54.760 put out is not is not too bad. I mean 0:06:54.760 --> 0:06:57.120 when you get to these issues around he's raised the 0:06:57.120 --> 0:07:00.760 issue of just maintaining the satellite network and side or security. Well, 0:07:00.760 --> 0:07:03.479 that's the cost of doing business as a big global firm. 0:07:03.680 --> 0:07:07.200 So I'm a little bit less um, I'm a little 0:07:07.200 --> 0:07:10.160 bit more skeptical of that. I think another thing we 0:07:10.200 --> 0:07:12.000 need to pay attention to if you're looking at the 0:07:12.040 --> 0:07:15.880 cost side is obviously the Ukrainians have asked for much 0:07:15.960 --> 0:07:18.960 more in terms of these units on the ground, the 0:07:19.000 --> 0:07:21.720 transmitter units, I mean, do they need them all when 0:07:21.760 --> 0:07:24.560 they get them all? So that goes into say the 0:07:24.600 --> 0:07:29.520 four hundred million dollar number that UM that UM SpaceX 0:07:29.560 --> 0:07:32.360 has put out, So that's that's an ask, it's not 0:07:32.400 --> 0:07:35.400 necessarily going to be delivered. And then finally I want 0:07:35.440 --> 0:07:39.480 to add that we've talked about a commitment about over 0:07:39.560 --> 0:07:43.800 a year, and frankly, from my perspective, long Global Advisors 0:07:43.800 --> 0:07:46.280 take is that this war is not gonna last another year. 0:07:46.720 --> 0:07:49.920 Russia has only months to fight, so it's not clear 0:07:50.000 --> 0:07:53.040 really how at this point. Well, they need all these 0:07:53.440 --> 0:07:57.280 all the satellite comms for for an entire year, so 0:07:57.320 --> 0:07:59.920 it needs to be played out. But officials that I've 0:08:00.000 --> 0:08:02.120 talked to in the US government say it's not a 0:08:02.160 --> 0:08:05.520 reasonable ask, and it's not an unreasonable left not only 0:08:05.520 --> 0:08:08.480 for the US but also for all of our allies 0:08:08.520 --> 0:08:11.840 that are supporting so combined UM, I think there's a 0:08:11.840 --> 0:08:16.080 lot of countries that would be willing to contribute. Meantime, 0:08:16.480 --> 0:08:21.400 there's a report that Elon Musk spoke to Russian President 0:08:21.480 --> 0:08:26.000 Vladimir Putin before he made those public tweets public comments 0:08:26.080 --> 0:08:32.080 that public Twitter Bowl poll suggesting how Ukraine could seek 0:08:32.200 --> 0:08:36.160 peace with Russia, of course widely criticized. Elon Musk is 0:08:36.200 --> 0:08:38.800 denying that that he spoke to Putin. What do we 0:08:38.840 --> 0:08:42.040 know about this? Yeah, and categorically Elon Musk has denied 0:08:42.120 --> 0:08:45.760 that he spoke directly to put In about Ukraine. So 0:08:45.960 --> 0:08:49.240 Monday of this week, Ian Brema, who is the head 0:08:49.240 --> 0:08:53.439 of Risk consultancy Group Eurasia, said that he spoke to 0:08:53.640 --> 0:08:57.000 Musque about two weeks ago. He hadn't been planning on 0:08:57.120 --> 0:09:01.400 revealing what was in that conversation, but decided to in 0:09:01.520 --> 0:09:05.400 his regular newsletter after he saw Musk's own comments on 0:09:05.400 --> 0:09:08.880 Twitter about Ukraine, and he said that Musk had told him. 0:09:09.040 --> 0:09:12.520 Musk had told Maramma that he had spoken to Putin 0:09:12.679 --> 0:09:17.160 about the issue of Ukraine, you know, which was controversial. 0:09:17.760 --> 0:09:20.800 Um so must denied it that. Musk went further to 0:09:20.880 --> 0:09:24.080 say that he hadn't spoken to Putin for about eighteen months, 0:09:24.440 --> 0:09:28.199 which you know essentially predates the war the current conflicts 0:09:28.280 --> 0:09:34.240 in Ukraine. Did you why imagine Musk would present this 0:09:34.320 --> 0:09:37.760 starlink issue to the public, given the controversy about whether 0:09:37.840 --> 0:09:40.280 or not he spoke to Putin and when, and given 0:09:40.440 --> 0:09:45.800 the controversy over his Twitter poll in general. Emily, that's 0:09:45.800 --> 0:09:49.280 a great question, and frankly I find a dumbfounding. Um 0:09:49.679 --> 0:09:54.760 really Um. Musk got into a lot of trouble um 0:09:54.800 --> 0:09:58.839 politically obviously as as as as as well as reputationally 0:09:58.920 --> 0:10:02.320 by making uh this statement about Russia. He got a 0:10:02.400 --> 0:10:07.040 lot of favorable press in Russia. Um. Not a good thing. 0:10:07.600 --> 0:10:10.440 I also think the timing is very bad because it's 0:10:10.559 --> 0:10:14.320 on the heels of days of massive Russian attacks on 0:10:14.480 --> 0:10:19.160 Ukrainian infrastructure. So is he It looks like he's you know, 0:10:19.240 --> 0:10:22.920 he's trying to pick play up a situation where Ukraine's 0:10:22.920 --> 0:10:25.719 in a bind um and that's not good either. There 0:10:25.760 --> 0:10:28.160 is a deal to be had here. I think the 0:10:28.240 --> 0:10:30.920 Allies are more than willing given all that we've spent. 0:10:31.080 --> 0:10:35.720 Four million UM dollars is actually not that much. So 0:10:35.800 --> 0:10:38.160 there is a deal to be had here. But he's 0:10:38.240 --> 0:10:41.480 not doing He should not be presenting himself as a 0:10:41.480 --> 0:10:44.040 global states and as not his strength, and he is 0:10:44.080 --> 0:10:50.280 clearly screwing up on this repeatedly. All right, not mincing 0:10:50.320 --> 0:10:54.880 words there. Dr D J. Peterson, long View Global Advisors President, 0:10:54.920 --> 0:10:57.880 along with our own ad Ludlow, we're gonna have a 0:10:57.880 --> 0:11:00.840 little bit more on the musk Twitter saga later this hour. 0:11:02.120 --> 0:11:05.640 Here's something else we're following. Instacart slashing its valuation for 0:11:05.679 --> 0:11:08.360 the third time. The new valuation of about thirteen billion 0:11:08.400 --> 0:11:11.920 dollars was announced internally this week. According to sources, it 0:11:12.040 --> 0:11:16.000 was valued at most thirty nine billion dollars back in March, 0:11:17.520 --> 0:11:22.000 instat Carts executives reiterated the company still intends to go public, 0:11:22.120 --> 0:11:35.800 but is waiting for market conditions to improve. Meta is 0:11:35.840 --> 0:11:38.840 pushing back against the FTC's attempt to block its acquisition 0:11:38.920 --> 0:11:42.560 of the virtual reality app within Unlimited Meta, arguing the 0:11:42.600 --> 0:11:45.680 FTC hasn't laid out the elements to show the deal 0:11:45.679 --> 0:11:51.680 announced in October would actually hurt potential competition in VR fitness. 0:11:52.000 --> 0:11:55.760 Earlier this week, Mark Zuckerberg advertised the metaverse as the 0:11:55.800 --> 0:11:59.720 future of work, gaming and entertainment. Here to discuss Bloomberg's 0:11:59.760 --> 0:12:04.040 alec sparanka, So what precedent, Alex is this feud between 0:12:04.520 --> 0:12:08.680 Meta and the FTC setting. Yeah, so this is actually 0:12:08.880 --> 0:12:12.400 um a move that is under the umbrella of FTC 0:12:12.720 --> 0:12:15.680 chair Lena Cohn. She's taking a much more aggressive stance 0:12:15.760 --> 0:12:19.439 against big tech and this suit to block the acquisition 0:12:19.440 --> 0:12:22.760 of within this virtual reality fitness company is one of 0:12:22.800 --> 0:12:25.320 those kind of big swings she seems to be taking now. 0:12:25.520 --> 0:12:29.320 The latest drama Emily Um last week the FTC actually 0:12:29.600 --> 0:12:33.880 narrowed its argument to block the deal, uh, basically only 0:12:34.000 --> 0:12:37.840 leaning into this idea that the acquisition would kill potential 0:12:37.920 --> 0:12:41.720 competition in a future market. They killed the argument that 0:12:41.800 --> 0:12:45.160 the acquisition would consolidate power under Meta with its feat 0:12:45.160 --> 0:12:48.080 Saber app. In response to that, Meta is coming out 0:12:48.160 --> 0:12:50.720 this week and basically saying, Hey, if this is the 0:12:50.800 --> 0:12:53.800 argument you're making, we don't think you have enough here 0:12:54.160 --> 0:12:56.440 um to actually block this deal, and they're asking the 0:12:56.520 --> 0:12:59.680 judge to dismiss it. In terms of what happens next, Emily, 0:12:59.760 --> 0:13:02.640 the judge can rule on this and have some hearings 0:13:02.760 --> 0:13:07.160 or uh, the hearings on the injunction could actually still 0:13:07.200 --> 0:13:09.600 go forward in December and the judge make a decision 0:13:09.640 --> 0:13:12.760 after that. But either way, Emily, folks who watched the 0:13:13.000 --> 0:13:17.360 FTC and it's anti trust Um actions and Meta and 0:13:17.400 --> 0:13:20.000 the metaverse be paying attention to this at least through 0:13:20.040 --> 0:13:23.560 the end of the year. Why is Meta so keen 0:13:23.640 --> 0:13:27.760 to buy a virtual fitness company? Yeah, and and I 0:13:27.800 --> 0:13:30.240 think an illustration of that, Emily, we saw it firsthand, 0:13:30.280 --> 0:13:33.000 if you were like me with an oculust dropped your face. 0:13:33.080 --> 0:13:37.760 This week, Meta had their Connect product conference on Tuesday, 0:13:38.120 --> 0:13:40.880 and they showed off basically all of the things they're 0:13:40.880 --> 0:13:44.280 bringing to the metaverse right now. Uh, Meta's argument to 0:13:44.320 --> 0:13:48.160 get folks living in this virtuality world, it's really dependent 0:13:48.200 --> 0:13:51.400 on what you can do there. They talked about video games, 0:13:51.480 --> 0:13:54.480 they talked about a lot of new partners, but this 0:13:54.640 --> 0:13:59.320 fitness idea that they spent a number of minutes talking 0:13:59.360 --> 0:14:02.240 about it on Tuesday. Fitness is one of the things 0:14:02.320 --> 0:14:04.599 that they said their users come in every month for 0:14:05.160 --> 0:14:08.480 and within game Supernatural is one of these fitness apps 0:14:08.480 --> 0:14:11.120 where you can have the controllers in your hand, you 0:14:11.160 --> 0:14:13.079 can have the oculus on your face, and you can 0:14:13.120 --> 0:14:15.520 move their body. So it's key to this kind of 0:14:15.720 --> 0:14:18.360 argument for them of why people need to show up 0:14:18.600 --> 0:14:21.800 to the virtual world that frankly, they're spending ten billion 0:14:21.840 --> 0:14:26.920 dollars a year on now. Meta reports earnings in just 0:14:27.080 --> 0:14:30.800 a few weeks. Obviously, the market cape cap has tanked 0:14:31.360 --> 0:14:35.400 over the last year. It's of the revenue is going 0:14:35.400 --> 0:14:40.320 to metaverse efforts. What are you watching for I mean, 0:14:40.480 --> 0:14:42.840 I'm watching what investors think. As you said, the stock 0:14:42.920 --> 0:14:46.040 is down more than six since January. UM. They are 0:14:46.080 --> 0:14:49.120 also paying attention to what's paying the bills for Meta 0:14:49.360 --> 0:14:51.400 you know Meta who used to be called Facebook, who 0:14:51.400 --> 0:14:54.520 owns Instagram and all of the social media properties. It's 0:14:54.560 --> 0:14:59.520 been a really tough year for marketing budgets. Advertisers haven't 0:14:59.520 --> 0:15:02.160 been spending us much on ads, which is where all 0:15:02.200 --> 0:15:05.080 of the social media properties make their money. So that's 0:15:05.080 --> 0:15:07.040 what I'll be paying kind of the most attention to. 0:15:07.200 --> 0:15:10.440 And frankly, Emily, that is probably the thing that's going 0:15:10.560 --> 0:15:14.280 to determine how much patients investors continue to have with 0:15:14.360 --> 0:15:18.640 Mark Zuckerberg, the CEO, and his aspirations to spend a 0:15:18.760 --> 0:15:22.120 tenth of every dollar that comes in onto something that 0:15:22.200 --> 0:15:28.040 you know hasn't really materialized, this metaverseus digital universe. Alright, 0:15:28.120 --> 0:15:32.040 Bloomberg's Alex Bringa, who covers social media for us, Thank 0:15:32.080 --> 0:15:36.160 you for keeping us up to date. Okay, coming up, 0:15:36.360 --> 0:15:41.120 network effects made Facebook, Uber, even Bitcoin a thing. What's 0:15:41.160 --> 0:15:43.080 the next big thing? We're going to talk to an 0:15:43.120 --> 0:15:46.640 investor focused on betting on network effects. Next. This is 0:15:46.640 --> 0:16:14.840 Bloomberg Network effects impacts all of them. If you're gonna 0:16:14.840 --> 0:16:17.000 be spending your life synergies building a startup, it's going 0:16:17.040 --> 0:16:21.000 to take your effort. You're trying to defend the business 0:16:21.080 --> 0:16:23.360 area that you've carved out, you might as well be 0:16:23.400 --> 0:16:26.120 working on a business that has network effects, because then 0:16:26.160 --> 0:16:29.080 you'll have a shot at going the distance and making 0:16:29.080 --> 0:16:31.800 a real impact in the world and creating true value 0:16:32.080 --> 0:16:37.040 for your employees, for your investors, and for your whole network. 0:16:38.000 --> 0:16:40.960 Part of the teaser there for the venture firm NFX 0:16:41.080 --> 0:16:44.640 is Master Class on Network Effects, a new program by 0:16:44.640 --> 0:16:48.080 the venture capital firm to help startups build at scale 0:16:48.120 --> 0:16:49.920 from more on. And I want to bring an NFX 0:16:49.960 --> 0:16:52.400 founding partner, James Currier. James, it's kind of like a 0:16:52.520 --> 0:16:57.200 VC master class if you will. What who founders get 0:16:57.240 --> 0:16:59.720 access to with this and what are you hoping they 0:16:59.720 --> 0:17:02.840 take a way? Yeah, So, as you know, Nfects is 0:17:02.880 --> 0:17:06.439 a seed stage firm, uh, probably the largest seeds stage 0:17:06.480 --> 0:17:08.639 only firm in the in the world. And you know, 0:17:08.680 --> 0:17:13.240 our mission is to help ten million founders. We can 0:17:13.240 --> 0:17:16.000 only invest in a few hundreds, but we can help 0:17:16.040 --> 0:17:21.159 them with software and with content. And the content that 0:17:21.200 --> 0:17:25.080 we've most recently released is this masterclass on network effects. 0:17:25.119 --> 0:17:26.960 So the name of our firm is n Effects, which 0:17:26.960 --> 0:17:30.400 stands for network effects. But you know, and we've done 0:17:30.400 --> 0:17:32.600 blog posts, and we've done tweets, we've done other ways 0:17:32.600 --> 0:17:36.560 of sort of educating folks about what we see with 0:17:36.640 --> 0:17:38.919 network effects and how you use them to build the 0:17:38.960 --> 0:17:42.639 giant companies of today in the future. Uh. This masterclass 0:17:42.760 --> 0:17:46.760 is our next level product where we encapsulate about twenty 0:17:46.840 --> 0:17:50.359 years of learning about network effects and then bring that 0:17:50.400 --> 0:17:54.400 into three hours of video so that founders and teams 0:17:54.440 --> 0:17:57.560 with the founders can really educate themselves quickly about this 0:17:57.640 --> 0:18:03.280 most powerful tool in building giant, important tech companies. So 0:18:03.400 --> 0:18:06.840 we mentioned companies like Facebook and Uber and you know, 0:18:06.880 --> 0:18:10.640 even bitcoin um has been a success because of network 0:18:10.760 --> 0:18:13.040 network effects. What are the startups that are being built 0:18:13.119 --> 0:18:16.760 now based on network effects that you think are going 0:18:16.800 --> 0:18:20.119 to be the next big thing. Yeah, So companies like 0:18:20.480 --> 0:18:24.719 Mammoth Biosciences is building a platform network effect like an 0:18:24.720 --> 0:18:28.199 operating system really like a Microsoft or an iOS but 0:18:28.240 --> 0:18:30.439 they're doing it in the biotech space. They're based in 0:18:30.440 --> 0:18:33.000 the Bay Area, recently raised it over a billion dollars 0:18:33.400 --> 0:18:35.320 and we think, you know, Jennifer Doubt of the ERN 0:18:35.280 --> 0:18:38.080 Nobel Prize winner is one of the founders. This company 0:18:38.119 --> 0:18:40.320 is going to be a monster. Another company you might 0:18:40.320 --> 0:18:43.399 have heard of recently is called Incredible Health, which is 0:18:43.480 --> 0:18:46.640 run by him On Abuside uh in Rome, and they 0:18:46.880 --> 0:18:51.480 have built a marketplace between nurse labor forces and then 0:18:51.480 --> 0:18:54.440 the hospitals that hire them, so they install software in 0:18:54.480 --> 0:18:57.960 the hospitals and then they bring the hiring to to 0:18:58.080 --> 0:19:00.320 the hospital so they can find the nurse. Is that 0:19:00.359 --> 0:19:04.600 they're understaffed on so many businesses, both in marketplaces platforms 0:19:04.640 --> 0:19:07.200 as well as the ones you're talking about like Twitter 0:19:07.240 --> 0:19:10.359 and Facebook which have direct network effects because there are 0:19:10.359 --> 0:19:13.040 actually sixteen different network effects. We're finding a lot of 0:19:13.080 --> 0:19:17.680 different companies that are today building a new ways using 0:19:17.720 --> 0:19:21.160 these techniques that can create multibillion dollar companies and Incredible 0:19:21.160 --> 0:19:23.920 Health at Mammoth or two that are our unicorns and 0:19:23.920 --> 0:19:27.920 and heading on up from there. While we've had both 0:19:28.200 --> 0:19:30.640 u I mon Abusie and Jennifer down on the show, 0:19:30.680 --> 0:19:33.119 so I'm glad we're on the right track. Um, you know, 0:19:33.240 --> 0:19:35.400 we are in the middle of a massive downturn. There 0:19:35.400 --> 0:19:38.560 could be a lot farther to fall here. How concerned 0:19:39.119 --> 0:19:41.439 are you about that? And you know how is it 0:19:41.480 --> 0:19:47.360 impacting your investment strategy. Yeah, you know, NFECTS as sort 0:19:47.359 --> 0:19:50.120 of largest c fund, we see across a whole bunch 0:19:50.119 --> 0:19:55.240 of different verticals like marketplaces and fintech, prop tech, games, biotech, 0:19:55.320 --> 0:19:58.920 web three. We're investing across a lot of different verticals, 0:19:59.640 --> 0:20:02.400 and but we're investing for seven to ten years from now, 0:20:03.040 --> 0:20:05.840 So in that way, we're a little bit insulated from 0:20:05.840 --> 0:20:09.960 the current market conditions and are still looking for founders 0:20:09.960 --> 0:20:13.840 with big ideas, particularly ones with network effects, because the 0:20:13.920 --> 0:20:16.120 next two or three years won't really matter for them 0:20:16.119 --> 0:20:18.600 when we invest this year. What will matter is what 0:20:18.640 --> 0:20:21.640 the market conditions are seven years from now and what 0:20:21.920 --> 0:20:25.120 the market will value them at. Then the market will decide. 0:20:25.119 --> 0:20:27.680 But in the meantime, we're looking to build you a 0:20:27.760 --> 0:20:31.080 hundred million of revenue two million of revenue in real businesses, 0:20:31.520 --> 0:20:34.359 and we can invest now. So actually, we do feel 0:20:34.359 --> 0:20:36.280 like now is the best time in the last four 0:20:36.359 --> 0:20:39.880 years to start a company, So we're leaning aggressively in. 0:20:40.240 --> 0:20:43.879 We leaned aggressively in during COVID. We actually ran a 0:20:43.920 --> 0:20:47.800 program called fast where we offered one to one, one 0:20:47.840 --> 0:20:52.399 to two million dollars for fiftcent of companies within nine days, okay, 0:20:52.440 --> 0:20:55.840 and we touched four thousand companies at that time, right 0:20:55.880 --> 0:20:57.760 at the beginning of COVID, and now that we're in 0:20:57.800 --> 0:21:02.040 this downturn, a similar thing is happening. So so does 0:21:02.040 --> 0:21:03.840 that mean you're not worried? I mean, last quick question. 0:21:03.840 --> 0:21:06.000 I mean we're talking about instant We just talked about 0:21:06.000 --> 0:21:10.119 instat cart slashing its valuation from thirty nine billion to billion. 0:21:10.200 --> 0:21:14.520 I mean, you're seeing some huge haircuts here we are, 0:21:14.720 --> 0:21:19.320 and those companies were seated six twelve years ago. Our 0:21:19.400 --> 0:21:23.120 venture firm started five years ago. So we are still 0:21:23.160 --> 0:21:25.000 in the period of rapid growth for a lot of 0:21:25.000 --> 0:21:27.720 our companies, and so far we're not affected by these 0:21:27.800 --> 0:21:31.040 huge markdowns we're seeing. And again, where we're deploying capital 0:21:31.359 --> 0:21:33.040 is for seven to ten years from now, and most 0:21:33.040 --> 0:21:35.960 seed funds are doing that. That includes us, because we're 0:21:35.960 --> 0:21:41.640 focused on that stage. All right. NFX founding partner James 0:21:41.800 --> 0:21:52.120 Courier on your new VC masterclass, Thank you for stopping by. 0:21:54.880 --> 0:21:57.480 Welcome back to bloom More Technology. I'm emily changing San Francisco. 0:21:57.520 --> 0:22:00.119 We've got some breaking news crossing the terminal now that 0:22:00.240 --> 0:22:05.080 News Corps does indeed UH confirm it will explore a 0:22:05.119 --> 0:22:09.720 combination with Fox Corporation, News Corps saying received letters from 0:22:09.880 --> 0:22:13.479 Rupert Murdoch and his trust to that effect. There had 0:22:13.520 --> 0:22:18.840 been some reporting that Murdoch was considering reuniting his media 0:22:18.920 --> 0:22:22.840 empire if you will, that he split back in, news 0:22:22.880 --> 0:22:27.560 Corps now confirming that it will explore combining once again 0:22:28.320 --> 0:22:33.560 with Fox. Meantime, Elon musk steal to buy Twitter has 0:22:33.600 --> 0:22:36.480 had so many twists and turns that one might forget. 0:22:36.920 --> 0:22:41.159 This all started back on January thirty one, that is, 0:22:41.200 --> 0:22:45.240 when Musk quietly began buying Twitter shares. He's since gotten 0:22:45.280 --> 0:22:48.600 a lot louder in so many ways, and Bloomberg Business 0:22:48.640 --> 0:22:52.560 Week broke down Musk's tweets by the numbers, joining us 0:22:52.560 --> 0:22:54.440 now for more on an in depth look at what's 0:22:54.440 --> 0:22:58.400 been going viral all year long? Really is Bloomberg's at ludlow. 0:22:58.640 --> 0:23:03.760 So Business Week seek the numbers here. What interesting insights 0:23:04.240 --> 0:23:06.480 did that yield? Yeah? I think first of all, it's 0:23:06.520 --> 0:23:09.920 the frequency and volume of the tweets since January, right. 0:23:10.000 --> 0:23:13.240 I think in May we were surprised how quickly Elon 0:23:13.320 --> 0:23:16.320 must put the deal on hold and raise his concerns 0:23:16.359 --> 0:23:18.280 about the level of bots on the platform and if 0:23:18.280 --> 0:23:21.280 we put the chart of his weekly tweets volume of 0:23:21.320 --> 0:23:24.240 weekly tweets, you can see that just after that deal 0:23:24.320 --> 0:23:26.639 is put on hold, there's kind of a big spike 0:23:27.359 --> 0:23:29.600 in the number of tweets he's making, right, and he's 0:23:29.600 --> 0:23:32.920 talking a lot about the concerns, in particular about bots, 0:23:33.000 --> 0:23:35.040 and then things go very quiet, and of course, just 0:23:35.080 --> 0:23:38.439 a few weeks laid everything changed because Twitter sues to 0:23:38.600 --> 0:23:44.919 enforce the original terms of the deal. He tweets, means, 0:23:45.000 --> 0:23:48.359 he tweets emojis, he tweets pauls. Does he have a 0:23:48.480 --> 0:23:52.280 favorite kind of tweet? What's really interesting is that the 0:23:52.359 --> 0:23:56.119 overwhelming number of tweets that must sends a replies, and 0:23:56.160 --> 0:23:58.120 this was why everyone was so interested in this deal 0:23:58.119 --> 0:24:00.080 in the first place. Right. Elon Musk is one of 0:24:00.160 --> 0:24:03.960 the most active and well followed users on Twitter. But 0:24:04.320 --> 0:24:07.160 it's not just him sending original tweets. It's mostly him 0:24:07.200 --> 0:24:09.719 replying to other users. And we know that he engages 0:24:10.240 --> 0:24:13.639 really actively with other Tesla users, people that he is 0:24:13.640 --> 0:24:17.359 a fan of, people interested in SpaceX, and you can 0:24:17.400 --> 0:24:20.159 see from that chart quite clearly that that's how he 0:24:20.280 --> 0:24:23.000 uses engagement. Very few of the tweets he sent since 0:24:23.119 --> 0:24:27.760 January thirty one, have been retweets either what's you know 0:24:27.800 --> 0:24:30.280 tweeting about the most? Is it Tesla? Is it Twitter? 0:24:30.400 --> 0:24:35.439 Is it's SpaceX? Isn't repopulating the world? You know, m 0:24:35.480 --> 0:24:37.600 you and I have been living this deal night and 0:24:37.680 --> 0:24:40.280