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Speaker 1: Welcome, Welcome, Welcome back to the Bob left Sets Podcast.

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Speaker 1: My guest today is business expert extraordinaire, the one and

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Speaker 1: only Seth Godin. Seth, good to have you on the podcast.

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Speaker 2: It's a treat I never thought it would happen, and

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Speaker 2: I never asked. And I've just been sitting here thinking Lefsets,

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Speaker 2: who has so generously chronicled the oral histories of so

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Speaker 2: many people who changed my life, my childhood, my young adulthood.

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Speaker 2: What I have impostered syndrome. I'm not sure why I

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Speaker 2: am here.

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Speaker 1: I'm not sure how to respond to that, So I'm

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Speaker 1: gonna jump right into the questioning. Okay, we just had

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Speaker 1: a presidential election. What did we learn about marketing in

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Speaker 1: this election? Let me just sort of set the landscape.

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Speaker 1: Traditionally it was a ground game, it was network TV.

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Speaker 1: There's a campaign where we saw the power of podcast.

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Speaker 1: What's your insight in terms of the selling of the candidates.

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Speaker 2: I think most people don't understand what marketing is. It's

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Speaker 2: not advertising or hype or hustle. It's not a logo.

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Speaker 2: It's this ephemeral, ephemeral story that doesn't easily have words

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Speaker 2: on it that we consume, and then we attach a

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Speaker 2: narrative to it. So I don't chime in about the

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Speaker 2: horse race of politics because it's a distraction and.

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Speaker 3: It's designed to divide us.

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Speaker 2: But I think we can learn a lot about which

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Speaker 2: stories resonate and why they resonate. And lots of people

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Speaker 2: in the music business understand intuitively that they're storytellers, but

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Speaker 2: they can't find words for it and figure out how

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Speaker 2: to put the words on it so that we can

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Speaker 2: tell a better story. Time to get back to what

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Speaker 2: people really want, which is affiliation, status, belonging, freedom from fear,

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Speaker 2: and believing that they were right all along. When those

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Speaker 2: things kick in, the story sticks and the words are secondary.

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Speaker 1: Okay, how important is the marketing relative to the quality

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Speaker 1: of the product itself.

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Speaker 2: The marketing is the product itself, So let's dissect that.

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Speaker 2: Quality has nothing to do with luxury or goodness or

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Speaker 2: whether you like it or not. Quality is whether it

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Speaker 2: meets speck. And so art has problems with quality because

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Speaker 2: there is no speck for a perfect Joni Mitchell song.

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Speaker 2: There is no speck for how do we create this

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Speaker 2: resonant story, because the second time we do it is

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Speaker 2: not art anymore. The second time we do it, we're

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Speaker 2: just a little bit more in tune. But back to

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Speaker 2: your original point, marketing that story that resonates with people,

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Speaker 2: we will make up all sorts of facts about its

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Speaker 2: quality to justify the fact that the story resonated with us.

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Speaker 2: So simple example, Saint poly Girl beer Beck's Light, Which

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Speaker 2: one do you like better?

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Speaker 1: Bob Well, I no longer drink, but when I did drink,

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Speaker 1: I liked Becks better.

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Speaker 2: But okay, it's exactly the same beer, made on exactly

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Speaker 2: the same assembly line, put into slightly different bottles. And

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Speaker 2: that's because the story of Saint Pauly Girls fraternity brothers

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Speaker 2: and the story of Beck's Light is yuppies, and they

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Speaker 2: told different stories, and people would argue about this, just

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Speaker 2: like in a double blind study you can't tell the

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Speaker 2: difference blindfolded between a Ford and a Chevy truck. But

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Speaker 2: they're Ford people and they're Chevy people. Because the story

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Speaker 2: is about identity. There is identity in being a Stones

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Speaker 2: fan instead a Beatles fan, and vice versa. And it's

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Speaker 2: this need that we have to live a life before

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Speaker 2: we die, to be part of something, to not be alone.

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Speaker 2: That's identity. And then identity can express itself through music,

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Speaker 2: and if you hear the song over and over and

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Speaker 2: over and over and over again, growing up becomes part

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Speaker 2: of your identity. It's not because it's quality, it's because

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Speaker 2: of who you are.

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Speaker 1: Okay, just to stay on that same theme, something has longevity, because.

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Speaker 2: So what did I buy when I bought a one

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Speaker 2: hit wonder top forty song that I was totally into

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Speaker 2: for a week? What I bought was it was going

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Speaker 2: to be replaced next week by a new one. That's

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Speaker 2: what teeny boppers do. What did I buy when I

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Speaker 2: became a Bruce Springsteen fan for life and pay six

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Speaker 2: hundred bucks to go see him? I bought the tribe.

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Speaker 2: I bought the circle of people that I identified with.

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Speaker 2: They're different products, and there have been people in the

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Speaker 2: music industry have been churning out the first one forever

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Speaker 2: and the second one we sort of back into. But

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Speaker 2: every once in a while a musician works hard to

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Speaker 2: build that arc to say, you know, I'm not sure

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Speaker 2: when the Warlocks decided that The Grateful Dead was going

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Speaker 2: to become a lifestyle, but it's pretty clear after a

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Speaker 2: couple of records that that's what they were committing to,

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Speaker 2: that they were making music for the family, not eagerly

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Speaker 2: trying to find new listeners.

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Speaker 1: Okay, if you started in the late sixties and the

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Speaker 1: sixties when the Warlocks turned to the Grateful Dead, everything

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Speaker 1: happened much more slowly. We hit the MTV era, where,

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Speaker 1: you know, in aligned with their logo of the rocket ship,

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Speaker 1: you could literally go from zero to hero overnight. But

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Speaker 1: it's well established that the faster you went up, the

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Speaker 1: faster you came down. So what can we say about

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Speaker 1: that ascension?

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Speaker 2: That's interesting. I was listening to your Dire Straits podcasts

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Speaker 2: a couple of weeks ago, and I'm not sure that

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Speaker 2: the evidence backs that up. I think that one of

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Speaker 2: the breakthroughs that happened for Dire Straits was MTV, and

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Speaker 2: yet today they're still part of the fabric of a

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Speaker 2: whole generation of people. One of the things that happens

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Speaker 2: when you get programmed because you buy your way or

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Speaker 2: luck your way into the top forty is by its nature,

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Speaker 2: most of the top forty is disposable. But then that's

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Speaker 2: part of the reason Billboard had to invent a new chart.

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Speaker 2: Because those other people who were selling and selling and

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Speaker 2: selling and selling and selling, they were important in the

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Speaker 2: music industry, but they weren't the hit of the day.

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Speaker 2: I don't know if that makes any sense.

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Speaker 3: You know way more about this thing.

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Speaker 1: No it does. I mean the case is the dire straits.

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Speaker 1: I don't want to get into the weeds, and that

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Speaker 1: most of their success was prior to the MTV era,

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Speaker 1: and then they blew up in the MTV era. I

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Speaker 1: don't want to, you know, split hairs here. But the

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Speaker 1: question is can I'll put it a different way. A

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Speaker 1: member of another band they said, we're afraid of having

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Speaker 1: a hit. This is in the modern era, it will

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Speaker 1: destroy our career. Yep, we're as it is so hard

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Speaker 1: to be recognized at all. And he was taking advice

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Speaker 1: from older acts who'd already had hits.

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Speaker 3: Yeah.

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Speaker 1: So you know, when you have this level of success,

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Speaker 1: you can't really plan it a lot of times anyway.

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Speaker 1: But I think today, to have some level of ubiquity

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Speaker 1: can only be a good thing.

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Speaker 2: No, no, it cannot only be a good thing. The

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Speaker 2: system wants to chew you up and spit you out.

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Speaker 2: I think it's worth asking the musician, what's this for?

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Speaker 2: This journey you're on? Why are you here? What are

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Speaker 2: you doing it for? If you're doing it to make

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Speaker 2: as much money as possible. You didn't pick a great

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Speaker 2: industry to do that. Because someone's going to win the lottery,

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Speaker 2: it's probably not going to be you. If you did

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Speaker 2: it to have this craft, you know. I'm a huge

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Speaker 2: fan of Patricia Barber. I was lucky enough to sort

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Speaker 2: of produce at an executive level one of her records.

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Speaker 3: But I've known her for a while.

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Speaker 2: Patricia Barber plays beautiful jazz piano, and first it was

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Speaker 2: at the Green Mill. Now it's at a different club

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Speaker 2: in Chicago. They basically turned the clobe over to her

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Speaker 2: once a week. The rest of the time, if she

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Speaker 2: wants to, she can sell out a pretty big jazz

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Speaker 2: club in New York if she wants to go on

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Speaker 2: the road. But once a week she shows up. That's

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Speaker 2: her living room and I'm talking to her and I said,

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Speaker 2: you've got that one song that gets everyone out of

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Speaker 2: their seats, that sits in the in the beautiful overlap

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Speaker 2: between jazz and pop. But most of the songs you're

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Speaker 2: playing are calmer than that, more melodic than that. Need

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Speaker 2: more insight than that.

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Speaker 3: What are you doing?

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Speaker 2: What's the goal here? And she said, my goal isn't

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Speaker 2: to sell records, right. My goal isn't to be famous.

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Speaker 2: My goal is to create the conditions for this music,

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Speaker 2: for this music to reach people. And if there's only

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Speaker 2: two hundred people in the room and she can do

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Speaker 2: it again next week, that's fine. So the trick that

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Speaker 2: social media and media before that has pushed on creators

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Speaker 2: is this, you know, it doesn't matter what you say

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Speaker 2: as long as you're famous and they spell your name right.

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Speaker 2: I think that's ridiculous. I think that makes the executives

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Speaker 2: at the record label happy, but I don't think that's

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Speaker 2: how you build the career you want to have.

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Speaker 1: So what comes first? You're in your bedroom, there's a

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Speaker 1: belief in yourself or is it the ta years of

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Speaker 1: music lessons? Or is it the people? You know? What's

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Speaker 1: the germination of this career?

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Speaker 2: So Dave Grohl wrote a book in which he argued

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Speaker 2: that it's what your mother did when you were eleven,

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Speaker 2: and he interviewed all these rock and roll moms, and

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Speaker 2: you know, we're all living in a high school for

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Speaker 2: the rest of our lives. High school does something to us.

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Speaker 2: And for pop music, it's from the stories I'm hearing.

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Speaker 2: It's often what happened in high school? How did that

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Speaker 2: help you find an identity? And then by hook er

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Speaker 2: by crook, who did you become? And so if we

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Speaker 2: think about someone like David Bowie, or we think about

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Speaker 2: other musicians who we think we know what they sound like,

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Speaker 2: and then you listen to their early music, they didn't

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Speaker 2: sound like that, right that.

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Speaker 3: What happened was.

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Speaker 2: They became whatever they needed to become to do their

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Speaker 2: music for the people they wanted to do their music for.

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Speaker 2: And that experimentation and exploration is driven by an unsatiable desire,

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Speaker 2: an empty hole that a certain kind of musician is

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Speaker 2: trying to fill. Sometimes they get fortunate and it happens

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Speaker 2: right when they needed to happen. Sometimes it happened sooner

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Speaker 2: than they needed to happen. I think Ricky Lee Jones,

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Speaker 2: it happened sooner than she was ready for it. But

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Speaker 2: when you watch what Ricky Lee Jones has done since

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Speaker 2: she blew up with a couple of records, is she

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Speaker 2: doesn't care how big the venue is. She wants to

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Speaker 2: play her music her way for the people she's playing

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Speaker 2: it for, to share the noise in her head with

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Speaker 2: other people. So I'm mixing together a bunch of ideas

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Speaker 2: about creativity here. But I don't think these people.

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Speaker 3: Were talking about are born that way? Really confident that

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Speaker 3: they are made, not born.

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Speaker 1: Okay, you're not born that way. What is the biggest

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Speaker 1: influence the mailstream of high school or your parents or

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Speaker 1: luck of the draw?

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Speaker 2: Yeah, it's all three, It's all three. What radio station

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Speaker 2: was playing every night when you went to sleep? You know,

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Speaker 2: you think that you were born to sing and perform

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Speaker 2: a certain way? Well, what a coincidence. No one's doing

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Speaker 2: that with this sitar because they weren't born in Bangalore, right,

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Speaker 2: And so the noise in your head combined with the

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Speaker 2: encouragement or discouragement you get, combined with your identity, combined

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Speaker 2: with did you get a call when you were at

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Speaker 2: Risdy to join Tina and David? Or didn't you because

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Speaker 2: if you didn't, we've never heard you play.

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Speaker 3: The bass or the or the drums.

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Speaker 1: Okay, breaking it down on a granular level, success, what

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Speaker 1: percentage is luck?

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Speaker 2: Well again, I keep playing with words with you, Bob.

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Speaker 2: I'm sorry, I'm not sure what you mean by success,

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Speaker 2: and I'm not sure what you mean.

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Speaker 1: Oh okay, okay, let's use conventional wisdom, which is not

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Speaker 1: internal success, but the measurable success of the external world.

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Speaker 1: It can be dollars, it can be chart positions, et cetera.

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Speaker 1: We live in a world where you have these billionaires

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Speaker 1: write books saying how I did it, but people don't

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Speaker 1: understand is that's how they did it. You can't replicate

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Speaker 1: those steps. If you know those people, they are unique individuals. Okay,

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Speaker 1: Then there are people who say, I'm sick of hearing

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Speaker 1: the rich people tell me how they did it. They

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Speaker 1: were just lucky. Whatever. Let let's let's go to Bill Gates.

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Speaker 1: Bill Gates was approached by IBM. They said they need

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Speaker 1: an operate system for their new computer system.

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Speaker 4: He didn't say I don't have that. He said, well,

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Speaker 4: hold on a second, I could do that for you.

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Speaker 4: I mean when bought some other operating system and sold them.

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Speaker 4: So the question is, no matter what he did, would

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Speaker 4: Bill Gates have been successful?

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Speaker 1: Okay? Or you know, are there people who are really

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Speaker 1: good but they just don't hit the right situation.

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Speaker 2: I have no doubt in my mind that every billionaire

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Speaker 2: that I've ever met is lucky. And Bill Gates was

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Speaker 2: lucky long before he got that call from IBM that

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Speaker 2: the books in which someone tells you here's how I

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Speaker 2: did it, are a selective recall of some lucky moments

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Speaker 2: interspersed with a small amount of grit and determination. It

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Speaker 2: is very clear that lots and lots and lots of

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Speaker 2: people are born with enough privileged to show up in

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Speaker 2: Silicon Valley and then fail, or that something goes well

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Speaker 2: and then they double down on it and they fail.

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Speaker 2: But sometimes they double down on it and it goes well.

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Speaker 2: So the mythology that this sort of external success is

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Speaker 2: completely earned is just mythology.

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Speaker 3: And you know so a.

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Speaker 2: Simple example, Yahoo was built on the Stanford computer system,

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Speaker 2: and as it grew, two students at Stanford were making

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Speaker 2: the thing work. Stanford calls them up and says, look,

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Speaker 2: you guys are using way too much bandwidth. We're kicking

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Speaker 2: you off. And they know my friend Lisa, and my

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Speaker 2: friend Lisa knows the people at Netscape. Now, the people

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Speaker 2: at Netscape at the time, we're getting more trafficked to

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Speaker 2: their website than almost any other website.

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Speaker 3: This is nineteen ninety five or six or something.

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Speaker 2: And if you went to Netscape, the homepage for the browser,

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Speaker 2: so when you turned on the best browser on the internet,

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Speaker 2: it took you to Netscape's homepage. There was a search box,

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Speaker 2: and they had a problem, which is people were typing

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Speaker 2: stuff into the search box and sometimes they would overload

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Speaker 2: whichever search engine you went to. So Netscape said, sure,

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Speaker 2: we'll put Yahoo on our servers so that way it

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Speaker 2: won't crash when we send people to them. If that

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Speaker 2: hadn't happened, you never would have heard of Yahoo. That

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Speaker 2: had nothing to do with David or Jerry. That had

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Speaker 2: to do with proximity, the luck of the draw, the

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Speaker 2: network effect, the multiplication of small advantages getting to be

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Speaker 2: bigger advantages. And the same thing's true for Howard Schultz.

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Speaker 2: He takes over a coffee shop that has two outlets

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Speaker 2: that doesn't sell coffee. Well, Howard had a really insightful

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Speaker 2: idea about what Starbucks could become, but it could just

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Speaker 2: as easily have been Pietz or somebody else that ended

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Speaker 2: upping the United States. I think we can set ourselves

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Speaker 2: up to increase the chances we get lucky, or to

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Speaker 2: multiply it once we do get lucky. But I don't

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Speaker 2: think people should bet their life on getting lucky.

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Speaker 1: Let me give a personal example. When I was living

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Speaker 1: as a ski bum in Utah. I was living with

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Speaker 1: these guys. They would meet people out on the hill

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Speaker 1: and they would invite them to stay with us. Okay,

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Speaker 1: and this I would never do anything like that. I

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Speaker 1: guess my upbringer, who are these people? Where are they

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Speaker 1: coming from? Taking to my house? Whatever? So is that

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Speaker 1: mindset ultimately working against my having lucky situations? Or is

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Speaker 1: it about finding your own situation where your personality works.

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Speaker 2: Okay, So now we're talking about strategy, and I love

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Speaker 2: talking about strategy. That's what my new books about. Strategy

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Speaker 2: is a philosophy of becoming. It's about seeing the system them.

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Speaker 2: So the strategy of the first person who funded my

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Speaker 2: internet company was if anybody had a pulse and an

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Speaker 2: internet company, he would write them a check for one

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Speaker 2: hundred thousand dollars because he had enough money to do

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Speaker 2: that eighty times, and he just believed that this thing

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Speaker 2: was going to go in a certain direction. If you

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Speaker 2: think about the strategy that someone like Barry Gordy brought

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Speaker 2: to building his record label, it wasn't are you a

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Speaker 2: guaranteed hit? It's do I think that this small amount

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Speaker 2: of money is going to take to record a track

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Speaker 2: from you is going to get me to the next level,

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Speaker 2: just be promiscuous about it. So perhaps these guys had

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Speaker 2: a strategy that said, more surface area, more exposure to

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Speaker 2: the kind of people who come here, will make our

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Speaker 2: lives more interesting. And if the strategy we bring to

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Speaker 2: whatever change we're making is working, fantastic, that's great. But

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Speaker 2: in the music business, particularly since it's changed in the

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Speaker 2: last twenty years, many of the strategies that we were

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Speaker 2: indoctrinated as music people to believe don't work anymore, and

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Speaker 2: it's boiling down for some of those people to I

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Speaker 2: hope I get lucky. That's not a strategy, that's just

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Speaker 2: a wish. And so when you see somebody who says, oh,

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Speaker 2: there's a new social media platform, my strategy is every

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Speaker 2: time there's a new social media platform, go in early

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Speaker 2: and make a splash, because I will have outsize influence

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Speaker 2: there and it's more likely I'll grow to the next step.

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Speaker 2: That's a strategy. It's not a strategy to say I'm

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Speaker 2: going to sound just like this person and I hope

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Speaker 2: I get more spins on Spotify.

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Speaker 1: Tell us more about your new book.

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Speaker 2: So a lot of people people like you will ask

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Speaker 2: me questions that they think are marketing questions, but they're

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Speaker 2: really strategy questions. And I don't do any coaching or consulting,

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Speaker 2: but I like chiming in with interesting problems. And I

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Speaker 2: found that people didn't see what I was seeing about strategy.

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Speaker 2: Strategy is games and empathy and systems and.

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Speaker 3: Time.

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Speaker 2: Games, empathy, systems and time, and if you can see them,

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Speaker 2: you can make a different path forward. Games are simply

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Speaker 2: I made this move, it didn't work. I'm not a

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Speaker 2: bad person. I just made the wrong move. I made

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Speaker 2: this move. They made that move.

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Speaker 3: In return.

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Speaker 2: Systems are what you've been writing about so eloquently for

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Speaker 2: all these years, right with personalities involved. But you see

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Speaker 2: the system, you see which forces push things in which direction.

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Speaker 2: Empathy is I don't know what you know. I don't

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Speaker 2: believe what you believe. I don't even want what you want.

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Speaker 2: But I'm going to bring you something that matches what

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Speaker 2: you believe you want. So if I'm a musician playing

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Speaker 2: my hit for the four thousandth time, no one in

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Speaker 2: that room has heard me play it four thousand times,

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Speaker 2: I am bringing it to them because they need to

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Speaker 2: hear it, not because I want to play it. So

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Speaker 2: it's a gift and time. Time is the key to

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Speaker 2: the whole thing in the music business. Not four or

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Speaker 2: four time or five to four of your Dave Brubeck,

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Speaker 2: but time says, the first day my record, my song

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Speaker 2: is out there, only one hundred people are going to

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Speaker 2: listen to it. What do I have to do to

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Speaker 2: make that one hundred go to two hundred, five hundred,

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Speaker 2: one thousand and a million. Over time, these things unfold.

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Speaker 2: And so when we think about the legends that are

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Speaker 2: still in our lives, like you know, Joni, part of

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Speaker 2: the reason is because she's been at this for a

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Speaker 2: very long time. And there are other people who did

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Speaker 2: a thing in nineteen sixty nine and then stopped fertilizing

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Speaker 2: and stopped planting, and so time ran out for them.

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Speaker 2: So what we're doing is planting seeds to create the

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Speaker 2: conditions for tomorrow.

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Speaker 1: You know, this is interesting. There are a couple of

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Speaker 1: classic examples in the music business of people who achieved

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Speaker 1: great success and then intentionally went in a different direction,

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Speaker 1: alienating their audience. So you have people like Neil Young,

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Speaker 1: he doesn't want to be pigeonholed. You have someone like

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Speaker 1: Bob Doing, who happens to be eighty three. He is

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Speaker 1: on the road singing material that most people cannot recognize,

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Speaker 1: even when it's well known material. Are we just saying

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Speaker 1: he's saying to himself, I am this old. I can

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Speaker 1: do it however I want to. Or do you think

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Speaker 1: he has a conscious strategy?

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Speaker 2: So this is where the art comes in. And this

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Speaker 2: is why I have so much respect for people like

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Speaker 2: Herbie Hancock and Miles Davis and what Dylan decided to

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Speaker 2: do several times in his career, the willingness to get

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Speaker 2: booed offstage because the musicians say, I got into this

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Speaker 2: business because I want freedom. I got into this business

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Speaker 2: because I want to let the muse out. I got

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Speaker 2: into this business because I want to be a musician,

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Speaker 2: not a cover band. And yet almost all the people

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Speaker 2: who have been at this for a long time are

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Speaker 2: cover bands of their former selves, and they gave up

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Speaker 2: the dream in order to be popular. So when Miles

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Speaker 2: played with his back to the audience, or when Dylan,

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Speaker 2: according to his fictional autobiography, intentionally went back to the

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Speaker 2: same city three years in a row, and what it

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Speaker 2: says is the first year, what I'll do is I'll

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Speaker 2: offend the fans who came to hear the old me.

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Speaker 2: The second year, the people I didn't offend will bring

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Speaker 2: their friends, and then the third year I'll have my audience. Right,

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Speaker 2: there was this act of independence. So I don't know Bob.

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Speaker 2: I have no idea what noise he's got in his head.

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Speaker 2: And lots of strategies are intuitive. But as a creator me,

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Speaker 2: I regularly don't do sequels. I am trying very hard

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Speaker 2: not to be a cover band of me because I

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Speaker 2: got into this because I want to make art, not

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Speaker 2: because I want to be popular.

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Speaker 1: Okay, I just want to don and I from earlier

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Speaker 1: in on conversation, you're talking about the motivation of musicians

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Speaker 1: in high school and you talk about filling a hole inside.

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Speaker 1: Can you amplify that for us?

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Speaker 3: Okay?

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Speaker 2: So this the insatiable needs. That is how you become

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Speaker 2: a billionaire. That is how you build something for the ages.

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Speaker 2: Everyone has a need for lunch every day, but it's

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Speaker 2: not insatiable. We don't eat lunch four times a day.

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Speaker 2: One lunch is enough for most people. But we have

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Speaker 2: an insatiable need to be loved often, or to be respected,

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Speaker 2: or to achieve something. And what often happens when someone

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Speaker 2: becomes successful is they try to top what happened to

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Speaker 2: them last time, which is why it's so difficult to

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Speaker 2: win a gold medal in the Olympics, because you might

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Speaker 2: not be able top that again. And so if that

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Speaker 2: was your need to show the naysayas they were wrong

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Speaker 2: and to always get a better personal best, you better

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Speaker 2: find a new way to make a living because you're

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Speaker 2: not going to find it running to decathlon again. And

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Speaker 2: so what happens often for the driven musician is, yeah,

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Speaker 2: I'm in another city twenty three out of twenty four

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Speaker 2: days in a row, in another grimy bar. But here

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Speaker 2: is that chance to fill that hole again. And I

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Speaker 2: know it's not going to be filled forever, but filling

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Speaker 2: it tonight is the most important thing in the world

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Speaker 2: to me. So someone like Springsteen, who's worth more than

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Speaker 2: half a billion dollars, how much would you have to

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Speaker 2: pay him to go do a performance he doesn't feel

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Speaker 2: like you couldn't. What he feels like is filling the

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Speaker 2: hole at least for now.

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Speaker 1: Okay. I have a theory. People always ask how come

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Speaker 1: these people have hits and then they dry up. Most

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Speaker 1: of the people from the classic era today the landscape's different.

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Speaker 1: Classic era. These were alienated people, didn't interact that well

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00:26:36,800 --> 00:26:40,240
Speaker 1: to use the vernacular, couldn't get laid. So they work

436
00:26:40,320 --> 00:26:44,800
Speaker 1: with this incredible effort. They get wealth, they get sex,

437
00:26:45,400 --> 00:26:48,520
Speaker 1: and they realize it still doesn't fill the hole, and

438
00:26:48,560 --> 00:26:50,480
Speaker 1: then they just don't have the motivation anymore. They just

439
00:26:50,520 --> 00:26:51,400
Speaker 1: can't do it anymore.

440
00:26:52,320 --> 00:26:53,840
Speaker 3: I think as part of it, I think.

441
00:26:55,119 --> 00:26:58,880
Speaker 2: A very big part of it is a fear of

442
00:26:58,920 --> 00:27:02,320
Speaker 2: being seen as a front odd fear of failing from

443
00:27:02,359 --> 00:27:08,000
Speaker 2: the perch that they're on. And so if you don't

444
00:27:08,600 --> 00:27:13,640
Speaker 2: push outside of the new comfort zone, then you can't

445
00:27:13,640 --> 00:27:16,399
Speaker 2: get in trouble. If you stay in the new comfort zone,

446
00:27:16,720 --> 00:27:18,560
Speaker 2: you're back to being a cover band, and cover bands

447
00:27:18,600 --> 00:27:22,320
Speaker 2: don't get booed off stage. And so it takes a

448
00:27:22,440 --> 00:27:25,520
Speaker 2: much deeper hole to have to decide, Okay, I'm going

449
00:27:25,600 --> 00:27:28,520
Speaker 2: to do a completely different thing and I'm going to

450
00:27:28,560 --> 00:27:32,280
Speaker 2: fail at it. And you know, Billy Joel and Paul

451
00:27:32,359 --> 00:27:36,879
Speaker 2: McCartney and Sting make classical music albums. Well, they knew

452
00:27:36,960 --> 00:27:40,600
Speaker 2: intellectually that the classical music world wasn't going to embrace them,

453
00:27:41,640 --> 00:27:45,639
Speaker 2: but they needed the feeling that would come from going

454
00:27:45,680 --> 00:27:48,359
Speaker 2: way outside that comfort zone, even if it meant that

455
00:27:48,440 --> 00:27:49,400
Speaker 2: it wasn't going to work.

456
00:27:52,119 --> 00:27:58,480
Speaker 1: Okay, So once again, how much of this is conscious

457
00:27:58,960 --> 00:28:01,520
Speaker 1: and how much is just intuitive? And does it depend

458
00:28:01,600 --> 00:28:03,000
Speaker 1: what walk of life you're in.

459
00:28:04,520 --> 00:28:07,440
Speaker 2: So I was talking to a friend of mutual friend

460
00:28:07,440 --> 00:28:10,880
Speaker 2: of ours who has made many gold and platinum records,

461
00:28:11,280 --> 00:28:15,480
Speaker 2: and I said to him, so, what's the secret of

462
00:28:15,920 --> 00:28:17,760
Speaker 2: a hit record? He said, Oh, it's the song, There's

463
00:28:17,760 --> 00:28:19,560
Speaker 2: no question about it. You got to find a great song.

464
00:28:20,440 --> 00:28:21,680
Speaker 2: I said, well, how do you know if it's a

465
00:28:21,680 --> 00:28:25,480
Speaker 2: great song? He said, because it's a hit record, And

466
00:28:26,320 --> 00:28:31,280
Speaker 2: he had no words to describe the intuition. So there

467
00:28:31,280 --> 00:28:35,800
Speaker 2: are many industries where intuition drives the whole thing. And

468
00:28:35,840 --> 00:28:40,040
Speaker 2: then there are other industries, like I would say heart surgery,

469
00:28:40,600 --> 00:28:44,040
Speaker 2: where being a scholar of it definitely helps you do

470
00:28:44,120 --> 00:28:49,040
Speaker 2: better because the words help you improve quality as you go.

471
00:28:49,600 --> 00:28:51,480
Speaker 2: So if you look at the way they used to

472
00:28:51,480 --> 00:28:57,120
Speaker 2: make cars, the crafts people on the Rolls Royce assembly

473
00:28:57,200 --> 00:29:02,000
Speaker 2: line could feel whether the piece of metal was going

474
00:29:02,040 --> 00:29:04,000
Speaker 2: to be stressed or not. They could feel how it

475
00:29:04,040 --> 00:29:08,280
Speaker 2: should fit together. You can't build a Toyota by doing that.

476
00:29:08,920 --> 00:29:12,440
Speaker 2: You build a Toyota by using words and measurement for everything.

477
00:29:13,760 --> 00:29:19,080
Speaker 3: So I think we have failed every.

478
00:29:19,000 --> 00:29:22,120
Speaker 2: Time we've tried to come up with words and algorithms

479
00:29:22,120 --> 00:29:26,160
Speaker 2: for making hit music that lasts for the ages. But

480
00:29:26,200 --> 00:29:30,920
Speaker 2: I think it's very clear that words help record executives

481
00:29:31,640 --> 00:29:35,480
Speaker 2: do much better because now if they can articulate to

482
00:29:35,520 --> 00:29:37,640
Speaker 2: people what they're trying to do, they can get other

483
00:29:37,680 --> 00:29:40,920
Speaker 2: people to do it with them.

484
00:29:41,120 --> 00:29:44,520
Speaker 1: Okay, staying with the music business and staying with the

485
00:29:44,520 --> 00:29:52,240
Speaker 1: traditional executives, the traditional pillars of success, print, radio, physical

486
00:29:52,280 --> 00:29:57,360
Speaker 1: distribution have all been decimated such that a lot of

487
00:29:57,440 --> 00:30:03,960
Speaker 1: things start independently, whether the especially online. To what degree

488
00:30:05,040 --> 00:30:08,280
Speaker 1: must you change your philosophy with the external and what

489
00:30:08,360 --> 00:30:10,600
Speaker 1: are they not seeing about the future?

490
00:30:11,720 --> 00:30:14,200
Speaker 2: Okay, so you've taught me so much about this, but

491
00:30:14,320 --> 00:30:16,360
Speaker 2: let me try to use a different story to help

492
00:30:16,400 --> 00:30:21,600
Speaker 2: people understand the system. There were two key things that

493
00:30:21,720 --> 00:30:24,880
Speaker 2: most people would not name that led to pop music

494
00:30:24,920 --> 00:30:28,160
Speaker 2: as we know it. The first one is the law

495
00:30:28,200 --> 00:30:32,920
Speaker 2: of physics that affects spectrum of the radio. There can

496
00:30:33,080 --> 00:30:35,920
Speaker 2: only be a few radio stations in a city, and

497
00:30:35,960 --> 00:30:38,120
Speaker 2: when you're add FM, it goes up by double but

498
00:30:38,200 --> 00:30:41,040
Speaker 2: that's it. There can only be a few. And number

499
00:30:41,040 --> 00:30:45,320
Speaker 2: two the headphone jack. When Sony came out with the

500
00:30:45,320 --> 00:30:49,160
Speaker 2: transistor radio. The breakthrough was it had a headphone jack,

501
00:30:49,200 --> 00:30:51,840
Speaker 2: and so for the first time in recorded history, teenagers

502
00:30:51,880 --> 00:30:54,480
Speaker 2: did not have to listen to the music their parents

503
00:30:54,520 --> 00:30:58,160
Speaker 2: were listening to. It made it so that teenagers, it

504
00:30:58,200 --> 00:31:02,320
Speaker 2: invented teenagers could find what their peers were doing instead

505
00:31:02,320 --> 00:31:03,840
Speaker 2: of having to sit in the living room.

506
00:31:03,720 --> 00:31:04,400
Speaker 3: With their parents.

507
00:31:05,080 --> 00:31:10,120
Speaker 2: Those two things created a forty year cycle that brought

508
00:31:10,200 --> 00:31:14,600
Speaker 2: us all this classic music. And what happened, well, we

509
00:31:14,680 --> 00:31:17,920
Speaker 2: got rid of radio and we don't need the headphone

510
00:31:18,000 --> 00:31:23,520
Speaker 2: jack anymore. The end result is there is no scarcity

511
00:31:23,560 --> 00:31:27,640
Speaker 2: of spectrum. There is no desire for the shorthad. The

512
00:31:27,720 --> 00:31:32,520
Speaker 2: long tail is real. People connecting with small circles of

513
00:31:32,560 --> 00:31:39,560
Speaker 2: people is real, and the music industry is gone. We

514
00:31:39,640 --> 00:31:43,680
Speaker 2: have music, more music than ever before. But the industry

515
00:31:43,720 --> 00:31:46,720
Speaker 2: cannot be called the industry the way it was because

516
00:31:46,760 --> 00:31:50,520
Speaker 2: it's not a few assembly lines turning out stuff that

517
00:31:50,560 --> 00:31:55,000
Speaker 2: are hits. It is instead this permeable long tail. The

518
00:31:55,080 --> 00:31:57,760
Speaker 2: same thing has happened in my industry of books. The

519
00:31:57,840 --> 00:31:59,800
Speaker 2: number of books published every year has gone up by

520
00:31:59,800 --> 00:32:03,880
Speaker 2: a factor of twenty five, and the laydown of a

521
00:32:03,920 --> 00:32:06,360
Speaker 2: new book, meaning how many of the stores take in

522
00:32:06,400 --> 00:32:09,840
Speaker 2: the first week is down by a factor of twenty

523
00:32:10,800 --> 00:32:13,520
Speaker 2: and so yeah, that's what decimated means ninety percent gone.

524
00:32:14,800 --> 00:32:18,600
Speaker 2: And we're going to need a new model if we

525
00:32:18,720 --> 00:32:22,600
Speaker 2: want musicians to make a living, and we need definitely

526
00:32:22,600 --> 00:32:25,320
Speaker 2: need a new model if the people who help musicians

527
00:32:25,360 --> 00:32:26,120
Speaker 2: and get paid.

528
00:32:25,880 --> 00:32:27,200
Speaker 3: For it are going to make a living.

529
00:32:28,400 --> 00:32:31,479
Speaker 1: Let's stay with books for a second, your area of

530
00:32:31,600 --> 00:32:34,920
Speaker 1: true expertise. What's the future for books?

531
00:32:36,120 --> 00:32:42,200
Speaker 2: So five hundred years, a book is a physical object,

532
00:32:42,360 --> 00:32:44,360
Speaker 2: and in order to get a book into a bookstore,

533
00:32:44,400 --> 00:32:47,200
Speaker 2: another book has to leave the bookstore because the bookstores

534
00:32:47,200 --> 00:32:51,200
Speaker 2: can't get any bigger. And this physical object that we

535
00:32:51,240 --> 00:32:54,400
Speaker 2: had to spend years of our lives writing and bringing

536
00:32:54,440 --> 00:32:59,360
Speaker 2: to you that effort is received by the reader. It

537
00:32:59,440 --> 00:33:02,800
Speaker 2: means this is important. It's not a blog post someone

538
00:33:02,800 --> 00:33:07,360
Speaker 2: about in fifteen minutes. Someone invested in this. So there's

539
00:33:07,400 --> 00:33:10,160
Speaker 2: a lot to be said for the Pristian value of

540
00:33:10,360 --> 00:33:14,440
Speaker 2: I am holding this artifact. But it has been ripped

541
00:33:14,560 --> 00:33:18,360
Speaker 2: to shreds, not with mal intent, but for sure by

542
00:33:18,400 --> 00:33:23,840
Speaker 2: Amazon and Audible because it's very hard to tell a

543
00:33:23,840 --> 00:33:26,760
Speaker 2: page of a kindle book from a blog post, from

544
00:33:26,800 --> 00:33:32,680
Speaker 2: a series of tweets. And when we atomized ideas we

545
00:33:33,240 --> 00:33:35,600
Speaker 2: rip the heart out of the industry. Add to that,

546
00:33:35,640 --> 00:33:38,800
Speaker 2: the death of the independent bookstore and book publishing is

547
00:33:38,800 --> 00:33:42,720
Speaker 2: on fumes, and it only survives because of the backlist.

548
00:33:43,000 --> 00:33:46,320
Speaker 2: It only survives, as you've talked about, because of the

549
00:33:46,400 --> 00:33:48,600
Speaker 2: royalties you're making from the stuff you published ten or

550
00:33:48,640 --> 00:33:51,680
Speaker 2: twenty years ago. This is a crazy time to start

551
00:33:51,720 --> 00:33:55,000
Speaker 2: a new publishing company, which I just started working with.

552
00:33:57,320 --> 00:34:00,000
Speaker 2: But books matter still, particularly to people of our general

553
00:34:00,600 --> 00:34:05,040
Speaker 2: because they're a symbol and a totem. And I don't

554
00:34:05,080 --> 00:34:08,759
Speaker 2: think we're ever going to see books be more important

555
00:34:08,800 --> 00:34:12,320
Speaker 2: than they are today. And books are way less important

556
00:34:12,360 --> 00:34:13,560
Speaker 2: than they were twenty years ago.

557
00:34:14,880 --> 00:34:19,440
Speaker 1: Okay, you have a new book, so what's the strategy.

558
00:34:19,520 --> 00:34:23,120
Speaker 2: So my strategy, which because I'm a writer I've said

559
00:34:23,120 --> 00:34:28,280
Speaker 2: out loud, is this. I stopped looking for new readers

560
00:34:29,480 --> 00:34:34,440
Speaker 2: twenty years ago because I found chasing new readers would

561
00:34:34,520 --> 00:34:37,719
Speaker 2: force me to be a writer. I didn't want to

562
00:34:37,760 --> 00:34:40,040
Speaker 2: be writing about stuff I didn't want to write about.

563
00:34:40,520 --> 00:34:42,799
Speaker 1: Could you just be a little deeper? What would you

564
00:34:42,920 --> 00:34:44,360
Speaker 1: not want to be? What would you not want to

565
00:34:44,400 --> 00:34:44,880
Speaker 1: write about?

566
00:34:45,080 --> 00:34:48,759
Speaker 2: So if what happened to the media of in my

567
00:34:48,880 --> 00:34:51,799
Speaker 2: space anyway? Starting about twenty years ago is you should

568
00:34:51,880 --> 00:34:55,839
Speaker 2: be quote authentic and vulnerable, and you should have meltdowns,

569
00:34:55,880 --> 00:34:59,840
Speaker 2: and you should pick fights, and you should tell really

570
00:35:00,120 --> 00:35:03,960
Speaker 2: simple things and this amazing secret will reveal everything, and

571
00:35:04,000 --> 00:35:10,560
Speaker 2: you should dumb it down. And if you're lucky, when

572
00:35:10,600 --> 00:35:13,400
Speaker 2: you do that, you could sell a whole bunch of

573
00:35:13,480 --> 00:35:16,560
Speaker 2: clicks or books or whatever it is you want to sell.

574
00:35:17,120 --> 00:35:20,680
Speaker 2: But it doesn't last. And instead I said, I'm here

575
00:35:20,680 --> 00:35:23,160
Speaker 2: to write for the people who give me the benefit

576
00:35:23,200 --> 00:35:25,520
Speaker 2: of the doubt. I'm here to write for people who

577
00:35:25,600 --> 00:35:29,239
Speaker 2: trust me to tell them something that they need to hear,

578
00:35:29,520 --> 00:35:34,400
Speaker 2: and then maybe they'll tell their friends. So if those

579
00:35:34,440 --> 00:35:37,640
Speaker 2: people go out and share an idea, that's when I succeed.

580
00:35:37,960 --> 00:35:42,600
Speaker 2: I'm giving ideas to people who benefit from telling the others.

581
00:35:42,960 --> 00:35:45,920
Speaker 2: So my strategy for the Strategy book is how do

582
00:35:45,960 --> 00:35:49,120
Speaker 2: I create the conditions for people to talk about it?

583
00:35:49,960 --> 00:35:52,239
Speaker 2: So in addition to the book, I made the five

584
00:35:52,280 --> 00:35:55,680
Speaker 2: point two million combination card deck, and I made the

585
00:35:55,680 --> 00:35:59,600
Speaker 2: collectible chocolate bar with trading cards in it, and mostly

586
00:36:00,680 --> 00:36:02,959
Speaker 2: I went on one hundred podcasts and I talked about

587
00:36:03,000 --> 00:36:04,960
Speaker 2: it in a way that would help other people talk

588
00:36:05,000 --> 00:36:08,680
Speaker 2: about it. Because I'm not trying to sell a paper

589
00:36:09,120 --> 00:36:11,080
Speaker 2: piece of paper. I'm not even trying to sell a book,

590
00:36:11,520 --> 00:36:14,839
Speaker 2: trying to sell a conversation, because if the people who

591
00:36:14,840 --> 00:36:18,720
Speaker 2: are listening to us today sit down with their colleagues

592
00:36:18,760 --> 00:36:23,040
Speaker 2: and talk about their strategy, I will have accomplished something.

593
00:36:30,719 --> 00:36:33,759
Speaker 1: Let's say you're on a podcast and your goal is

594
00:36:33,800 --> 00:36:36,879
Speaker 1: to get someone to start a conversation. You just say

595
00:36:36,920 --> 00:36:39,160
Speaker 1: I am who I am, and that's going to be natural.

596
00:36:39,680 --> 00:36:42,200
Speaker 1: Or do you say there are certain things I want

597
00:36:42,239 --> 00:36:44,480
Speaker 1: to say and how I want to say them.

598
00:36:44,920 --> 00:36:48,200
Speaker 2: So what we're trying to do, whenever we make a

599
00:36:48,320 --> 00:36:52,480
Speaker 2: change happen is to create tension. And the tension for

600
00:36:52,520 --> 00:36:54,560
Speaker 2: a teenager with music is, oh, I haven't heard that

601
00:36:54,920 --> 00:36:56,759
Speaker 2: new song. I need to hear it because I'll be

602
00:36:56,840 --> 00:37:01,680
Speaker 2: left behind. The tension for somebody who in their dreams

603
00:37:01,760 --> 00:37:04,200
Speaker 2: was going to go see Taylor Swift is the concert's

604
00:37:04,239 --> 00:37:05,600
Speaker 2: going to sell out. I got to figure out a

605
00:37:05,640 --> 00:37:08,080
Speaker 2: way to get a ticket before they're all gone. Tension

606
00:37:08,160 --> 00:37:11,760
Speaker 2: is very common in things where there's scarcity and time

607
00:37:11,880 --> 00:37:16,319
Speaker 2: is involved. But there's other sorts of tension that come

608
00:37:16,800 --> 00:37:20,759
Speaker 2: even just from the simple dana because the person who

609
00:37:20,760 --> 00:37:24,520
Speaker 2: hears it needs to say Dana or else they're unsettled.

610
00:37:25,400 --> 00:37:31,880
Speaker 2: So what I am doing with my work is opening

611
00:37:31,920 --> 00:37:34,719
Speaker 2: the door for people to see where I'm going. But

612
00:37:34,800 --> 00:37:39,320
Speaker 2: I don't steal the revelation. If I tell them every punchline,

613
00:37:39,400 --> 00:37:42,560
Speaker 2: there's no growth, there's no learning. So instead I can

614
00:37:42,680 --> 00:37:45,640
Speaker 2: lay out this groundwork and they can come to the

615
00:37:45,680 --> 00:37:49,520
Speaker 2: conclusion on their own in their industry that there's something

616
00:37:49,560 --> 00:37:53,520
Speaker 2: they can do next and it makes sense to them.

617
00:37:53,800 --> 00:37:56,960
Speaker 1: Okay, so you have a new book. How far in

618
00:37:57,080 --> 00:38:00,520
Speaker 1: advance of publication did you have the eye be to

619
00:38:00,640 --> 00:38:01,400
Speaker 1: do the book?

620
00:38:04,360 --> 00:38:04,920
Speaker 3: Okay, so.

621
00:38:06,360 --> 00:38:10,040
Speaker 2: Some people, including me, in the old days, if you're

622
00:38:10,040 --> 00:38:12,239
Speaker 2: in the book business, you need a book where you

623
00:38:12,239 --> 00:38:14,400
Speaker 2: don't get paid. So I would wake up in the

624
00:38:14,440 --> 00:38:17,719
Speaker 2: morning and think of book ideas. When I was a

625
00:38:17,719 --> 00:38:20,160
Speaker 2: book packager, I sold one hundred and twenty books a

626
00:38:20,200 --> 00:38:22,640
Speaker 2: book a month for ten years, and in order to

627
00:38:22,640 --> 00:38:24,120
Speaker 2: do that, I had to think of a new book

628
00:38:24,160 --> 00:38:28,120
Speaker 2: every two or three days. That's what I did, and

629
00:38:28,960 --> 00:38:32,400
Speaker 2: I stopped doing that about ten years ago because making

630
00:38:32,400 --> 00:38:35,920
Speaker 2: a book is exhausting and I can get my ideas

631
00:38:35,920 --> 00:38:38,840
Speaker 2: into the world much more efficiently and to more people

632
00:38:39,280 --> 00:38:42,000
Speaker 2: with a blog post. So I only write a book

633
00:38:42,000 --> 00:38:45,520
Speaker 2: when I have no choice, and I have no choice

634
00:38:45,520 --> 00:38:48,480
Speaker 2: because the book made me do it. So what happened

635
00:38:48,520 --> 00:38:51,680
Speaker 2: here is I write every day, no matter what. And

636
00:38:51,920 --> 00:38:55,960
Speaker 2: I started writing about a year ago, but not to

637
00:38:56,000 --> 00:38:58,359
Speaker 2: write a book, just to write down a bunch of

638
00:38:58,480 --> 00:39:00,520
Speaker 2: blog posts that I thought would rhyme with each other.

639
00:39:01,200 --> 00:39:04,680
Speaker 2: And after I had written twenty of them, which took

640
00:39:04,680 --> 00:39:08,320
Speaker 2: about three days, I realized there were all these pieces

641
00:39:08,320 --> 00:39:11,240
Speaker 2: in between that we're missing. So then I had forty

642
00:39:11,280 --> 00:39:14,160
Speaker 2: of them, and I thought, uh, oh, I have a

643
00:39:14,200 --> 00:39:17,560
Speaker 2: problem now because I have a book. And I was

644
00:39:17,600 --> 00:39:20,560
Speaker 2: not in any mood to publish a book because it's,

645
00:39:20,719 --> 00:39:23,920
Speaker 2: as I said, a slog. But it wouldn't let me go.

646
00:39:24,120 --> 00:39:27,280
Speaker 2: So there was a book starting in November. I wrote

647
00:39:27,480 --> 00:39:30,040
Speaker 2: it in not a lot of time, and then I

648
00:39:30,080 --> 00:39:35,279
Speaker 2: rewrote it two or three times. Then the work of

649
00:39:35,400 --> 00:39:40,120
Speaker 2: publishing the book that takes six more months of design

650
00:39:40,280 --> 00:39:43,719
Speaker 2: and discussion and layout, and I do all the typesetting

651
00:39:43,719 --> 00:39:47,160
Speaker 2: and coverge design myself, etc. Recording the audiobook cost me

652
00:39:47,239 --> 00:39:49,759
Speaker 2: my voice for over a month, going to DNT and

653
00:39:49,800 --> 00:39:52,719
Speaker 2: getting scoped. But the book won't let you go.

654
00:39:54,760 --> 00:39:57,680
Speaker 1: Okay, there was an element there I want to drive too,

655
00:39:58,160 --> 00:40:03,120
Speaker 1: which is promotion. You know, the music business, we've been

656
00:40:03,160 --> 00:40:05,240
Speaker 1: through a lot of stuff. In the last twenty five years.

657
00:40:05,880 --> 00:40:10,040
Speaker 1: There was all the issues of leaks. Albums were coming

658
00:40:10,080 --> 00:40:13,640
Speaker 1: out prior to the official release date. Someone in the

659
00:40:13,680 --> 00:40:18,120
Speaker 1: manufacturing plant stole a copy whatever, and everybody was freaked out.

660
00:40:19,440 --> 00:40:23,000
Speaker 1: Now we've actually gone two things have changed. One, it's

661
00:40:23,000 --> 00:40:26,279
Speaker 1: hard to gain notice at all at some level. Would

662
00:40:26,280 --> 00:40:30,040
Speaker 1: be great if you were leaked, okay, And then a

663
00:40:30,120 --> 00:40:33,879
Speaker 1: lot of major artists don't do any advance publicity at all.

664
00:40:34,600 --> 00:40:38,359
Speaker 1: They just put the album out and then things go.

665
00:40:38,480 --> 00:40:42,120
Speaker 1: So what's the status of advanced publicity today?

666
00:40:42,520 --> 00:40:42,839
Speaker 3: All right?

667
00:40:42,880 --> 00:40:45,920
Speaker 2: So Tim O'Reilly famously said your problem is in piracy,

668
00:40:46,640 --> 00:40:51,919
Speaker 2: your problem is obscurity, And speaking just for me, if

669
00:40:51,960 --> 00:40:54,200
Speaker 2: I thought five million people would read my book tomorrow,

670
00:40:54,239 --> 00:40:56,600
Speaker 2: if I just uploaded the PDF, I would do it

671
00:40:56,600 --> 00:41:01,040
Speaker 2: in the heartbeat. The hard part now for music but

672
00:41:01,200 --> 00:41:05,600
Speaker 2: always for books, has been getting people to pay attention, right,

673
00:41:06,640 --> 00:41:12,360
Speaker 2: And attention is scarce. You don't get any more of it.

674
00:41:12,360 --> 00:41:14,399
Speaker 2: It gets rebuilt every day, but you don't get any

675
00:41:14,400 --> 00:41:18,520
Speaker 2: more of it. So what's the point of advance publicity? Well,

676
00:41:18,520 --> 00:41:22,600
Speaker 2: if there's retail, if there's strawberries and Tower and three

677
00:41:22,600 --> 00:41:24,560
Speaker 2: other record stores that are going to kick you out

678
00:41:24,600 --> 00:41:26,319
Speaker 2: of the shelves if you don't sell in the first

679
00:41:26,320 --> 00:41:29,319
Speaker 2: four weeks. You need to prime the pump. So the

680
00:41:29,320 --> 00:41:33,120
Speaker 2: first couple of days are really hot, but Spotify doesn't

681
00:41:33,160 --> 00:41:38,560
Speaker 2: kick people out, so there's no upside from a streaming

682
00:41:38,600 --> 00:41:43,000
Speaker 2: point of view. To advance publicity, what you need to

683
00:41:43,040 --> 00:41:47,600
Speaker 2: do is become popular enough that the people who want

684
00:41:47,640 --> 00:41:49,520
Speaker 2: to only listen to things that are popular are going

685
00:41:49,560 --> 00:41:52,920
Speaker 2: to listen to you because you're popular. And that happens

686
00:41:52,920 --> 00:41:58,960
Speaker 2: when you concentrate the promotion geographically and over time, because

687
00:41:58,960 --> 00:42:03,160
Speaker 2: that burst of focus causes people to say, you got

688
00:42:03,160 --> 00:42:05,560
Speaker 2: to go do this, and you know, we see this

689
00:42:06,120 --> 00:42:09,640
Speaker 2: with you know, about half of the time you review

690
00:42:09,719 --> 00:42:15,480
Speaker 2: something that's on streaming TV in your letter, it's because

691
00:42:15,520 --> 00:42:18,480
Speaker 2: it's sort of new and you're noticing it because other

692
00:42:18,520 --> 00:42:23,000
Speaker 2: people are noticing it. And sometimes you find a gem

693
00:42:23,280 --> 00:42:27,000
Speaker 2: that we missed a year ago. That's a whole different story.

694
00:42:27,040 --> 00:42:32,040
Speaker 2: But the story of launch and promotion is the author's

695
00:42:32,080 --> 00:42:34,120
Speaker 2: job is to sell the first ten thousand copies of

696
00:42:34,120 --> 00:42:36,680
Speaker 2: the book, and then after that, it's the book's job

697
00:42:36,719 --> 00:42:37,399
Speaker 2: to sell the rest.

698
00:42:40,640 --> 00:42:47,080
Speaker 1: Okay, So in your particular case, the six months of

699
00:42:47,160 --> 00:42:50,799
Speaker 1: getting it all together to publication date. You have these

700
00:42:50,840 --> 00:42:54,920
Speaker 1: external products you're using as hype. How do you feel

701
00:42:54,960 --> 00:42:57,200
Speaker 1: you're going to sell the first ten thousand copies?

702
00:42:58,120 --> 00:43:02,320
Speaker 2: So I recorded eighty guest podcasts over the course of

703
00:43:02,400 --> 00:43:04,919
Speaker 2: two and a half months, and my deal with each

704
00:43:04,960 --> 00:43:07,600
Speaker 2: person who is super great to work with was you

705
00:43:07,640 --> 00:43:10,560
Speaker 2: got to hold it in Simbargo to October twenty second.

706
00:43:11,320 --> 00:43:15,840
Speaker 2: So on one day I was on eighty podcasts, which

707
00:43:16,960 --> 00:43:19,839
Speaker 2: means that you know, through the math, let's say eight

708
00:43:19,840 --> 00:43:22,840
Speaker 2: million people give or take two million people somewhere in

709
00:43:22,880 --> 00:43:28,520
Speaker 2: there heard me talking about this idea, and that was

710
00:43:28,560 --> 00:43:33,719
Speaker 2: my biggest lift to make it happen. And then the

711
00:43:33,800 --> 00:43:37,040
Speaker 2: second part is I'm very lucky a million people read

712
00:43:37,040 --> 00:43:39,440
Speaker 2: my blog in one form or another who give me

713
00:43:39,520 --> 00:43:41,839
Speaker 2: the benefit of the doubt. And I said to them,

714
00:43:41,880 --> 00:43:47,000
Speaker 2: with no advance hustle, today's the day. What I did

715
00:43:47,360 --> 00:43:51,720
Speaker 2: a month before that was I said to the true fans,

716
00:43:51,760 --> 00:43:55,839
Speaker 2: the people who are the super fans. I've got one thousand,

717
00:43:56,800 --> 00:44:00,239
Speaker 2: seven packs, seven copies of the book, a chocolate bar,

718
00:44:00,560 --> 00:44:03,960
Speaker 2: the strategy deck, and my online course together worth eight

719
00:44:04,080 --> 00:44:07,080
Speaker 2: hundred bucks. I'm selling it for one hundred and twenty

720
00:44:07,120 --> 00:44:11,239
Speaker 2: five dollars. And so the people who for whom that's

721
00:44:11,280 --> 00:44:15,239
Speaker 2: an instant yes, said great. And that means that we

722
00:44:15,280 --> 00:44:18,879
Speaker 2: sold out in thirty six hours, and that's a little

723
00:44:18,920 --> 00:44:21,040
Speaker 2: bit like what Ryano can pull off with a grateful

724
00:44:21,040 --> 00:44:24,680
Speaker 2: Dead record. And so I sold seven thousand books before

725
00:44:24,680 --> 00:44:27,959
Speaker 2: the book came out, So getting to ten thousand wasn't

726
00:44:27,960 --> 00:44:28,800
Speaker 2: that much of a lift.

727
00:44:31,160 --> 00:44:33,759
Speaker 1: So how long do you expect the life of the

728
00:44:33,760 --> 00:44:36,560
Speaker 1: book to be well?

729
00:44:36,600 --> 00:44:38,520
Speaker 2: I was at a conference on Friday and someone walked

730
00:44:38,560 --> 00:44:41,239
Speaker 2: up to me and said, Purple Cow changed my life.

731
00:44:41,320 --> 00:44:43,759
Speaker 2: And I wrote that book twenty three years twenty five

732
00:44:43,800 --> 00:44:47,080
Speaker 2: years ago. So that's my goal. My goal is to

733
00:44:47,120 --> 00:44:49,960
Speaker 2: write a book that twenty five years from now isn't

734
00:44:50,320 --> 00:44:54,600
Speaker 2: some weird dated artifact, but is in fact worth looking

735
00:44:54,640 --> 00:44:55,560
Speaker 2: at even then.

736
00:44:56,360 --> 00:44:59,160
Speaker 1: So you have all this great insight you did go

737
00:44:59,239 --> 00:45:03,480
Speaker 1: to Stanford Business School, were you taught or is this

738
00:45:03,600 --> 00:45:05,680
Speaker 1: all insight you gained individually?

739
00:45:08,000 --> 00:45:11,960
Speaker 2: I taught none of this at Stanford Business School. Stanford

740
00:45:12,000 --> 00:45:17,480
Speaker 2: Business School when I went was an interesting cultural experience

741
00:45:18,040 --> 00:45:23,320
Speaker 2: that was largely devoid of actual content that you could

742
00:45:23,440 --> 00:45:25,960
Speaker 2: that would take more than six hours to read in

743
00:45:26,000 --> 00:45:29,040
Speaker 2: a book. If someone had just like condensed everything they

744
00:45:29,080 --> 00:45:31,359
Speaker 2: taught us. It would only take six hours to read.

745
00:45:31,960 --> 00:45:36,480
Speaker 2: But the cultural experience of being in a group of

746
00:45:36,520 --> 00:45:40,160
Speaker 2: people who were expected to go into the world and

747
00:45:40,200 --> 00:45:43,680
Speaker 2: do a certain sort of thing really made a difference

748
00:45:43,880 --> 00:45:47,200
Speaker 2: when it came to feeling like an imposter, made a

749
00:45:47,200 --> 00:45:51,279
Speaker 2: difference of changing the perspective you would have. And then

750
00:45:51,440 --> 00:45:55,640
Speaker 2: the rest of it was being fortunate enough to be

751
00:45:55,719 --> 00:45:58,319
Speaker 2: in the room where I didn't get thrown out when

752
00:45:58,320 --> 00:46:01,080
Speaker 2: I said stupid things, and I could figure out what

753
00:46:01,120 --> 00:46:04,520
Speaker 2: a stupid thing was and not do it again. And

754
00:46:05,719 --> 00:46:09,239
Speaker 2: that cycle doing it as fast as possible is the

755
00:46:09,280 --> 00:46:11,880
Speaker 2: best life advice I have when young people ask me

756
00:46:12,040 --> 00:46:14,280
Speaker 2: what they should do. If you want to learn marketing,

757
00:46:14,320 --> 00:46:16,520
Speaker 2: do marketing. If you want to build a career, find

758
00:46:16,560 --> 00:46:19,640
Speaker 2: the fastest growing company you can because in a fast

759
00:46:19,680 --> 00:46:21,480
Speaker 2: growing company there's always.

760
00:46:21,239 --> 00:46:22,040
Speaker 3: A new job to do.

761
00:46:22,080 --> 00:46:25,360
Speaker 2: You're not taking away responsibility from someone else, it's just

762
00:46:25,400 --> 00:46:27,640
Speaker 2: sitting there. Someone needs to grab it.

763
00:46:30,000 --> 00:46:34,320
Speaker 1: So, to my knowledge, which is not extensive, Stanford Business

764
00:46:34,360 --> 00:46:36,480
Speaker 1: School is a little bit different from the others in

765
00:46:36,520 --> 00:46:40,840
Speaker 1: that it focuses on small groups. A to what degree

766
00:46:40,920 --> 00:46:44,120
Speaker 1: is it different from other environments and was it really

767
00:46:44,160 --> 00:46:46,880
Speaker 1: the hothouse of being at Stanford because you hear a

768
00:46:46,920 --> 00:46:50,480
Speaker 1: lot about Harvard Business School and it's people say it's

769
00:46:50,520 --> 00:46:54,120
Speaker 1: primarily about the relationships they make more than what's in

770
00:46:54,160 --> 00:46:56,600
Speaker 1: the school. So what was your experience.

771
00:46:57,560 --> 00:46:59,680
Speaker 2: Well, the best man of my wedding in my old

772
00:46:59,680 --> 00:47:02,000
Speaker 2: business partner went to Harvard when I went to Stanford,

773
00:47:02,160 --> 00:47:04,600
Speaker 2: so I had sort of a close view of this.

774
00:47:05,600 --> 00:47:08,560
Speaker 2: The indoctrination at Harvard. Again, we're telling you a long

775
00:47:08,600 --> 00:47:12,480
Speaker 2: time ago, but the indoctrination at Harvard is very intentional,

776
00:47:13,360 --> 00:47:17,600
Speaker 2: and it's not just the relationships with your section. So

777
00:47:18,000 --> 00:47:20,239
Speaker 2: here's one way to think about it. The first day

778
00:47:20,280 --> 00:47:24,760
Speaker 2: of the first class at Harvard, you elect your alumni representative.

779
00:47:26,360 --> 00:47:29,840
Speaker 2: That's profound. I love that because they're sending this message

780
00:47:29,840 --> 00:47:32,120
Speaker 2: that says you're going to sit through this for two years.

781
00:47:32,120 --> 00:47:34,000
Speaker 2: But the reason we're here is because you're going to

782
00:47:34,040 --> 00:47:37,920
Speaker 2: be alumni. But it doesn't change so much from year

783
00:47:37,920 --> 00:47:40,040
Speaker 2: to year, so it doesn't matter if you're Harvard eighty

784
00:47:40,120 --> 00:47:43,480
Speaker 2: six or Harvard ninety four. Harvard people are Harvard people.

785
00:47:43,520 --> 00:47:45,759
Speaker 2: We know they're going to behave in meetings, we know

786
00:47:46,160 --> 00:47:49,439
Speaker 2: they're going to you know, brutalize their way through when

787
00:47:50,320 --> 00:47:53,600
Speaker 2: it needs an unlimited amount of time or whatever. So

788
00:47:53,800 --> 00:47:55,960
Speaker 2: they hire each other and they respect each other, and

789
00:47:56,000 --> 00:47:59,960
Speaker 2: there's a status thing going on. Stanford when I was there,

790
00:48:01,560 --> 00:48:07,000
Speaker 2: felt like it was much more focused on helping people

791
00:48:08,080 --> 00:48:16,320
Speaker 2: see themselves as independent, thoughtful, consulting type professionals who could

792
00:48:16,440 --> 00:48:19,279
Speaker 2: you know, like Samurai, who would walk into a place

793
00:48:19,320 --> 00:48:21,399
Speaker 2: and be the smartest person in the room, even though

794
00:48:21,440 --> 00:48:23,920
Speaker 2: we weren't the smartest people in the room. It was

795
00:48:24,080 --> 00:48:30,480
Speaker 2: just this understanding that being smart was sufficient, And I

796
00:48:30,480 --> 00:48:34,719
Speaker 2: think that's wrong. And my gut is that they have

797
00:48:34,840 --> 00:48:38,680
Speaker 2: changed it a lot since then, because what most business

798
00:48:38,760 --> 00:48:42,799
Speaker 2: is about, especially the music businesses, in that meeting, in

799
00:48:42,920 --> 00:48:46,680
Speaker 2: that interaction, are you engaging with someone else to create

800
00:48:46,680 --> 00:48:50,720
Speaker 2: the conditions for something new to happen. This isn't about

801
00:48:50,840 --> 00:48:54,960
Speaker 2: using spreadsheets to squeak out an extra nickel. It's about

802
00:48:55,320 --> 00:48:57,759
Speaker 2: finding a window that's worth opening and a door that's

803
00:48:57,760 --> 00:49:01,600
Speaker 2: worth walking through. And that is a practice, just like

804
00:49:01,640 --> 00:49:03,640
Speaker 2: writing a book is a practice and writing a song

805
00:49:03,719 --> 00:49:05,880
Speaker 2: is a practice. But we don't do a very good

806
00:49:05,960 --> 00:49:07,160
Speaker 2: job of teaching it to people.

807
00:49:09,000 --> 00:49:12,279
Speaker 1: Let's stay you mentioned consulting, not in other way. I'm

808
00:49:12,320 --> 00:49:15,600
Speaker 1: going to bring it up. There's a huge backlash against

809
00:49:15,719 --> 00:49:20,239
Speaker 1: McKinsey and other consultants. What's your view of consulting.

810
00:49:21,400 --> 00:49:21,640
Speaker 3: I have.

811
00:49:22,880 --> 00:49:25,719
Speaker 2: I don't think we've heaped nearly enough. Shame on the

812
00:49:25,800 --> 00:49:29,200
Speaker 2: people who said I'm just doing my job but also

813
00:49:29,320 --> 00:49:31,120
Speaker 2: busy figure out how to get more people to smoke

814
00:49:31,160 --> 00:49:36,040
Speaker 2: a jewel or figure out how to get some monopoly

815
00:49:36,080 --> 00:49:38,360
Speaker 2: to extract more money from people who don't have money.

816
00:49:38,840 --> 00:49:42,880
Speaker 2: You're responsible if you're doing the work, your fingerprints are

817
00:49:42,920 --> 00:49:48,360
Speaker 2: on it. You should own what you do. And consulting

818
00:49:48,520 --> 00:49:54,719
Speaker 2: in general is magical when someone from the outside can

819
00:49:54,760 --> 00:49:56,960
Speaker 2: see a problem that you can't see because you're too

820
00:49:56,960 --> 00:50:00,000
Speaker 2: close to it. But that's not what most consultants get

821
00:50:00,120 --> 00:50:04,240
Speaker 2: to do because the hardest part of consulting is getting clients.

822
00:50:04,760 --> 00:50:09,680
Speaker 2: And getting and keeping clients requires an enormous amount of

823
00:50:10,640 --> 00:50:15,040
Speaker 2: understanding the status quo and making sure your right answer

824
00:50:15,160 --> 00:50:19,720
Speaker 2: is acceptable. And it's not really about the right answer,

825
00:50:20,360 --> 00:50:23,560
Speaker 2: because we're not doing engineering here, we're doing people.

826
00:50:31,360 --> 00:50:35,040
Speaker 1: I know someone who's CFO of a large company worked

827
00:50:35,040 --> 00:50:41,279
Speaker 1: for one of these name brand consulting firms, McKenzie. I say,

828
00:50:41,320 --> 00:50:43,440
Speaker 1: why'd you leave? Because I didn't believe in the model,

829
00:50:44,000 --> 00:50:47,960
Speaker 1: Because they're taking fresh graduates. We're going out there. We

830
00:50:48,000 --> 00:50:50,640
Speaker 1: don't know what we're talking about, right.

831
00:50:51,400 --> 00:50:54,680
Speaker 2: So you know, when you look at a place like

832
00:50:54,760 --> 00:50:57,879
Speaker 2: McKinzie or Arthur Anderson that has so many people there,

833
00:50:58,640 --> 00:51:02,400
Speaker 2: clearly half of them are below average no matter what

834
00:51:02,440 --> 00:51:05,799
Speaker 2: scale you want to look at. But mostly the problems

835
00:51:06,280 --> 00:51:12,319
Speaker 2: aren't that hard. Mostly the problems simply require verbalization. When

836
00:51:12,680 --> 00:51:16,719
Speaker 2: you hire McKenzie, you're often hiring them so you can

837
00:51:16,760 --> 00:51:18,520
Speaker 2: go to the board of directors and say, I'm doing

838
00:51:18,600 --> 00:51:22,759
Speaker 2: this because McKenzie said we should, and that's what you

839
00:51:22,800 --> 00:51:25,080
Speaker 2: paid for, not that they came up with some sort

840
00:51:25,120 --> 00:51:27,120
Speaker 2: of brilliant insight that you couldn't come up with on

841
00:51:27,160 --> 00:51:32,919
Speaker 2: your own. It's very cool when you see the rare

842
00:51:33,040 --> 00:51:36,880
Speaker 2: moment when a consultant comes up with a brilliant insight. So,

843
00:51:36,960 --> 00:51:41,680
Speaker 2: for example, in the eighties, seventies and eighties, digital watches

844
00:51:41,719 --> 00:51:45,000
Speaker 2: started to show up. And there's something in the production

845
00:51:45,080 --> 00:51:49,640
Speaker 2: of semiconductors called experience curve, which is the ten thousandth

846
00:51:50,040 --> 00:51:53,040
Speaker 2: chip you make is way way, way, way way cheaper

847
00:51:53,120 --> 00:51:57,040
Speaker 2: than the first one, and all these people who were

848
00:51:57,040 --> 00:51:59,760
Speaker 2: making digital watches were pricing them fairly at three hundred

849
00:51:59,760 --> 00:52:02,799
Speaker 2: dollars because it was costing them three hundred and two

850
00:52:02,840 --> 00:52:06,279
Speaker 2: hundred dollars to make them. And this consultant figured out

851
00:52:06,320 --> 00:52:08,880
Speaker 2: and explained to Texas Instruments, if they made a lot

852
00:52:09,040 --> 00:52:12,160
Speaker 2: of watches, they could make them for four dollars each.

853
00:52:13,320 --> 00:52:17,000
Speaker 2: So Texas Instrument lowered the price of digital watches to

854
00:52:17,120 --> 00:52:20,400
Speaker 2: way below what it costs to make, so that they

855
00:52:20,400 --> 00:52:23,600
Speaker 2: would sell a lot of them, and thus their costs

856
00:52:23,600 --> 00:52:25,360
Speaker 2: would go down and no one would be able to

857
00:52:25,400 --> 00:52:28,440
Speaker 2: catch up for years and years. And that's exactly what happened.

858
00:52:29,200 --> 00:52:33,960
Speaker 2: That's that's a consultant bit of brilliancy. But that's not

859
00:52:34,120 --> 00:52:35,919
Speaker 2: usually what consultants are busy doing.

860
00:52:37,200 --> 00:52:40,600
Speaker 1: It's interesting you speak of watches because in the watch world,

861
00:52:41,239 --> 00:52:47,680
Speaker 1: especially with Rolex, which is a major brand, they're constricting availability. Yep.

862
00:52:48,840 --> 00:52:53,520
Speaker 1: And you believe that's a strategy just about image or

863
00:52:53,600 --> 00:52:55,640
Speaker 1: what do you think the thinking behind that is.

864
00:52:55,960 --> 00:52:58,600
Speaker 2: I love this topic, Bob, It's so much fun to

865
00:52:58,600 --> 00:53:01,960
Speaker 2: talk to you. Okay, so we should talk about luxury goods.

866
00:53:02,719 --> 00:53:08,319
Speaker 2: Luxury goods aren't better except at one thing, right, Like

867
00:53:08,360 --> 00:53:12,240
Speaker 2: a Rolex watch does not tell more accurate time then.

868
00:53:12,280 --> 00:53:15,040
Speaker 1: It tells, it tells less accurate times I happened to

869
00:53:15,080 --> 00:53:15,680
Speaker 1: have one.

870
00:53:15,719 --> 00:53:20,040
Speaker 2: Exactly than a digital watch. So what exactly do you buy?

871
00:53:20,080 --> 00:53:24,120
Speaker 2: When you buy a burken bag or something from Louis

872
00:53:24,160 --> 00:53:27,800
Speaker 2: Vuittont or go out for dinner for four hundred dollars,

873
00:53:28,040 --> 00:53:32,040
Speaker 2: You are not buying the quality by most definitions of

874
00:53:32,080 --> 00:53:36,000
Speaker 2: what you purchased. What you're buying is something where the

875
00:53:36,040 --> 00:53:39,239
Speaker 2: motto is I paid a lot and I didn't get

876
00:53:39,239 --> 00:53:44,600
Speaker 2: what I paid for. That the intentional waste of a

877
00:53:44,680 --> 00:53:48,960
Speaker 2: verbulin of a what's his name verbulin good? Is the

878
00:53:49,000 --> 00:53:53,160
Speaker 2: price is the quality. The price is the point. The

879
00:53:53,239 --> 00:53:57,000
Speaker 2: scarcity is the point that if they made as many

880
00:53:57,120 --> 00:54:01,200
Speaker 2: Rolexes as they could, it wouldn't be a luxury good anymore.

881
00:54:02,000 --> 00:54:05,799
Speaker 2: That what makes it something that's worth owning is that

882
00:54:05,840 --> 00:54:08,280
Speaker 2: you can afford to have paid more than you should

883
00:54:08,360 --> 00:54:11,760
Speaker 2: have for the thing that does what's on your wrist.

884
00:54:12,840 --> 00:54:16,719
Speaker 2: And luxury goods, as we see more and more income inequality,

885
00:54:17,000 --> 00:54:21,400
Speaker 2: have become ever more profitable because the makers of luxury

886
00:54:21,400 --> 00:54:23,640
Speaker 2: goods have figured out that every time they raised the

887
00:54:23,680 --> 00:54:27,359
Speaker 2: price and lower the availability, profits go up, and so

888
00:54:27,440 --> 00:54:28,000
Speaker 2: does demand.

889
00:54:30,280 --> 00:54:33,040
Speaker 1: Okay, let's go a little bit deeper, because this is

890
00:54:33,080 --> 00:54:37,000
Speaker 1: happening right now, some of these luxury goods. Burbery, which

891
00:54:37,080 --> 00:54:41,239
Speaker 1: is not a super top, they started appealing to the

892
00:54:41,280 --> 00:54:45,600
Speaker 1: more casual customer. I won't say things are cheap, but

893
00:54:45,719 --> 00:54:50,239
Speaker 1: they're not out of reach yep. And they have now been.

894
00:54:50,400 --> 00:54:55,440
Speaker 1: The brand is on a downhill slide. Okay, So what

895
00:54:55,480 --> 00:54:59,319
Speaker 1: would your strategy be for a luxury good I'll give

896
00:54:59,360 --> 00:55:04,400
Speaker 1: you one more exact Mercedes Benz. Mercedes Benz decided to

897
00:55:04,640 --> 00:55:10,400
Speaker 1: decrease overall production and then move it to more expensive cars.

898
00:55:11,160 --> 00:55:13,840
Speaker 1: So what do you think about the varying philosophies on

899
00:55:13,880 --> 00:55:14,480
Speaker 1: each side of that.

900
00:55:14,920 --> 00:55:18,280
Speaker 2: Okay, So, once you're a public company, the stock market,

901
00:55:18,320 --> 00:55:20,960
Speaker 2: which is an idiot, wants you to make as much

902
00:55:21,000 --> 00:55:23,760
Speaker 2: money as you can right now. So if we think

903
00:55:23,880 --> 00:55:30,960
Speaker 2: about outlet malls, Burberry, but particularly Ralph Lauren, discovered that

904
00:55:31,000 --> 00:55:35,799
Speaker 2: they could make different products in a different factory. Call

905
00:55:35,920 --> 00:55:39,920
Speaker 2: them outlet mall direct to consumer seconds or whatever. But

906
00:55:39,960 --> 00:55:42,319
Speaker 2: they're not seconds. It's not like they went and they

907
00:55:42,320 --> 00:55:44,879
Speaker 2: got the seven thousand dollars cashmere thing and they found

908
00:55:44,880 --> 00:55:46,600
Speaker 2: a little error in it and they're selling it for

909
00:55:46,640 --> 00:55:48,880
Speaker 2: seventy bucks. It's a totally different sweater made in a

910
00:55:48,920 --> 00:55:52,960
Speaker 2: totally different factory. The last time I checked, half of

911
00:55:53,040 --> 00:55:57,560
Speaker 2: Ralph Lauren's profits came from outlet malls, from stores they

912
00:55:57,560 --> 00:55:58,600
Speaker 2: owned in an outlet mall.

913
00:55:59,200 --> 00:56:01,439
Speaker 3: So it's a one way road.

914
00:56:01,719 --> 00:56:03,719
Speaker 2: You start down that road, you make a lot of

915
00:56:03,719 --> 00:56:07,320
Speaker 2: money for a while, but it's almost impossible to reclaim

916
00:56:07,560 --> 00:56:12,439
Speaker 2: the super exclusivity thing. So Burberry's has been dancing back

917
00:56:12,480 --> 00:56:15,480
Speaker 2: and forth with this, trying to have it both ways.

918
00:56:15,600 --> 00:56:18,479
Speaker 2: Very very hard to do. So when you think about

919
00:56:18,520 --> 00:56:23,080
Speaker 2: the car business, car business gets even more complicated because,

920
00:56:23,520 --> 00:56:26,160
Speaker 2: unlike a handbag which you can leave in your closet,

921
00:56:26,680 --> 00:56:31,640
Speaker 2: cars you're gonna drive around and cars you're gonna drive

922
00:56:31,640 --> 00:56:36,560
Speaker 2: around for a while, and the narrative of the person

923
00:56:36,600 --> 00:56:40,319
Speaker 2: who's buying the car if it's not the Maybach, if

924
00:56:40,320 --> 00:56:43,600
Speaker 2: it's not the most expensive one, is much more complicated.

925
00:56:44,080 --> 00:56:46,000
Speaker 2: So Mercedes is one of the biggest car companies in

926
00:56:46,000 --> 00:56:48,680
Speaker 2: the world. It's really hard for them to make that

927
00:56:49,160 --> 00:56:53,440
Speaker 2: an exclusive luxury brand. It's also really hard for them

928
00:56:53,440 --> 00:56:57,440
Speaker 2: to compete with Toyota. So there's somewhere in between, and

929
00:56:57,760 --> 00:57:01,240
Speaker 2: there's always going to be this painful churn for people

930
00:57:01,239 --> 00:57:05,080
Speaker 2: in that industry because they can't change the way Diane

931
00:57:05,120 --> 00:57:08,120
Speaker 2: von Furstenberg Kay, Diane, you come out with a new

932
00:57:08,680 --> 00:57:12,160
Speaker 2: line in six weeks for a small group of people.

933
00:57:12,960 --> 00:57:15,080
Speaker 2: It takes six years for Mercedes to do that.

934
00:57:17,440 --> 00:57:22,360
Speaker 1: Okay, switching back a gear. You're from a similar vintage.

935
00:57:22,400 --> 00:57:24,720
Speaker 1: I'm a little older than you. But when I went

936
00:57:24,760 --> 00:57:28,160
Speaker 1: to public high school, there were uh, there were the

937
00:57:28,280 --> 00:57:31,320
Speaker 1: art kids. Everybody was middle class. If you were rich,

938
00:57:31,360 --> 00:57:34,760
Speaker 1: you drove a Cadillac. No one knew what a billionaire was,

939
00:57:35,880 --> 00:57:38,960
Speaker 1: and no one ever wanted their kid to be an artist.

940
00:57:39,640 --> 00:57:43,479
Speaker 1: But some people that's you know, the path they went down.

941
00:57:44,400 --> 00:57:48,240
Speaker 1: So today life is much harder financially, just period. I

942
00:57:48,280 --> 00:57:50,640
Speaker 1: just remember this comes up with by physical therapist all

943
00:57:50,680 --> 00:57:52,919
Speaker 1: the time. You know, you could live I'm seventy five

944
00:57:52,960 --> 00:57:55,320
Speaker 1: or one hundred dollars a week, even if you adjust

945
00:57:55,320 --> 00:58:00,480
Speaker 1: for inflation. You can't do that today. The scions of

946
00:58:00,520 --> 00:58:04,320
Speaker 1: the middle and upper middle class. What people don't realize

947
00:58:04,400 --> 00:58:08,280
Speaker 1: is people of that vintage young teenagers. They know the

948
00:58:08,320 --> 00:58:11,520
Speaker 1: score better than anybody, and they don't want to grow

949
00:58:11,600 --> 00:58:14,479
Speaker 1: up and be poor. They don't want to take the risk.

950
00:58:15,760 --> 00:58:20,720
Speaker 1: So a lot of these more risky endeavors, certainly artistically,

951
00:58:21,880 --> 00:58:26,480
Speaker 1: it is the lower classes that enter these fields. Let

952
00:58:26,480 --> 00:58:28,440
Speaker 1: me let me go a little sideways to make the

953
00:58:28,480 --> 00:58:32,640
Speaker 1: point even further. When Survivor blew up, the people whod

954
00:58:32,800 --> 00:58:36,840
Speaker 1: Survivor believed that they were now stars. That did not

955
00:58:36,880 --> 00:58:38,920
Speaker 1: turn out to be the case, but they believed it.

956
00:58:39,280 --> 00:58:42,440
Speaker 1: When we hit Jersey Shore, people say I'm doing this

957
00:58:42,480 --> 00:58:45,400
Speaker 1: as a lark, that I'm going back to Poughkeepsie. There

958
00:58:45,480 --> 00:58:49,480
Speaker 1: is no future here. So when you have the lower

959
00:58:49,520 --> 00:58:54,120
Speaker 1: classes involved, there's a different ethos. I'll do whatever you

960
00:58:54,320 --> 00:58:58,160
Speaker 1: tell me to because this is just a lark, as

961
00:58:58,200 --> 00:59:01,120
Speaker 1: opposed to the Jefferson airplane or the middle class artists

962
00:59:01,120 --> 00:59:04,040
Speaker 1: of the sixties seven said, I don't want to do that.

963
00:59:04,040 --> 00:59:08,400
Speaker 1: That doesn't feel good. So to what degreed does income, inequality,

964
00:59:08,520 --> 00:59:12,200
Speaker 1: wealth disparity sit over all these creative arts and other

965
00:59:12,240 --> 00:59:13,600
Speaker 1: elements of our society.

966
00:59:15,440 --> 00:59:20,720
Speaker 2: Wow, there are lots of ways into this, and I

967
00:59:20,720 --> 00:59:26,480
Speaker 2: don't think there's a definitive answer. I think we can

968
00:59:26,560 --> 00:59:29,720
Speaker 2: begin with the fact that for a very very long time,

969
00:59:30,320 --> 00:59:36,560
Speaker 2: the only people who were professional artists were people of wealth,

970
00:59:37,920 --> 00:59:40,680
Speaker 2: and they either had a relative who was wealthy or

971
00:59:40,720 --> 00:59:45,120
Speaker 2: they were wealthy themselves. And you know, you got the

972
00:59:45,200 --> 00:59:49,400
Speaker 2: Jane Austen, that whole thing. You're not finding someone who

973
00:59:50,800 --> 00:59:55,520
Speaker 2: is in a small village making music with any expectation

974
00:59:55,680 --> 00:59:58,040
Speaker 2: that there's going to be an industry.

975
00:59:57,520 --> 00:59:58,960
Speaker 3: That's going to propel them forward.

976
01:00:00,080 --> 01:00:03,160
Speaker 2: We get to this zone, the zone when the phrase

977
01:00:03,200 --> 01:00:07,200
Speaker 2: writer's block was invented. Writer's block is a made up malady,

978
01:00:08,120 --> 01:00:12,480
Speaker 2: and it started shortly before Ernest Hemingway was named by

979
01:00:12,560 --> 01:00:19,040
Speaker 2: Percy Shelley, Mary Shelley's partner brother husband.

980
01:00:18,600 --> 01:00:20,640
Speaker 1: One or the other, you're out of my league, all right?

981
01:00:20,800 --> 01:00:27,880
Speaker 2: Anyway, Writer's block is an affliction of middle class kind

982
01:00:28,000 --> 01:00:32,240
Speaker 2: of creatives who don't want to fail on their way up. So, yes,

983
01:00:32,280 --> 01:00:35,520
Speaker 2: you're touching on something important here. Now we get to

984
01:00:35,600 --> 01:00:38,680
Speaker 2: the current day, but I think what you're leaving out

985
01:00:38,720 --> 01:00:46,040
Speaker 2: of it is this golden age of artistic riches that

986
01:00:46,240 --> 01:00:50,360
Speaker 2: came from the scarcity from the gatekeeper. It's going away

987
01:00:51,440 --> 01:00:54,840
Speaker 2: that you can win TikTok, you can win YouTube and

988
01:00:54,880 --> 01:00:58,160
Speaker 2: get a check. But it's not an industry the way

989
01:00:58,200 --> 01:01:00,920
Speaker 2: it was when John Hammond would pick you. It's on

990
01:01:00,960 --> 01:01:04,440
Speaker 2: an industry the way it was when you know, we

991
01:01:04,680 --> 01:01:07,160
Speaker 2: listened to who was going to be the next hit.

992
01:01:08,600 --> 01:01:12,000
Speaker 2: So with that said, I don't think we're going to

993
01:01:12,120 --> 01:01:15,200
Speaker 2: end up with a lot of people who are fifteen

994
01:01:15,520 --> 01:01:18,920
Speaker 2: years old today growing up saying I'm going to be

995
01:01:19,040 --> 01:01:22,280
Speaker 2: the next Van Morrison, because I think they are smart

996
01:01:22,400 --> 01:01:25,720
Speaker 2: enough to know that there might not be that path

997
01:01:26,480 --> 01:01:29,680
Speaker 2: that they shouldn't, you know, get on a bus, go

998
01:01:29,720 --> 01:01:32,440
Speaker 2: to LA and hope to get discovered at a drug

999
01:01:32,440 --> 01:01:37,920
Speaker 2: store because that's not you know, starmaking machinery isn't there anymore,

1000
01:01:38,880 --> 01:01:41,320
Speaker 2: and I don't know what happens after that. We're not

1001
01:01:41,360 --> 01:01:43,280
Speaker 2: gonna runt of music, We're not going to run out

1002
01:01:43,280 --> 01:01:46,560
Speaker 2: of video slash movies, but it feels to me like

1003
01:01:46,600 --> 01:01:48,680
Speaker 2: the path is not particularly well lit either.

1004
01:01:51,320 --> 01:01:55,520
Speaker 1: There's been consolidation in the record industry. There are three

1005
01:01:55,600 --> 01:02:00,080
Speaker 1: major labels who are putting out fewer records in few

1006
01:02:00,080 --> 01:02:05,200
Speaker 1: were genres in error before Because we've referenced earlier, they

1007
01:02:05,240 --> 01:02:09,320
Speaker 1: can live off their previous product, which is generating capital

1008
01:02:09,360 --> 01:02:13,320
Speaker 1: and essentially no investment. But for a mature business like

1009
01:02:13,400 --> 01:02:16,800
Speaker 1: that in a changing environment, what might they do.

1010
01:02:21,320 --> 01:02:21,480
Speaker 3: Right?

1011
01:02:21,520 --> 01:02:24,560
Speaker 2: So this is a key strategy question, which is the

1012
01:02:24,640 --> 01:02:28,040
Speaker 2: feeling of entitlement that we get about how do we

1013
01:02:28,400 --> 01:02:32,880
Speaker 2: keep this going? But you don't get tomorrow over again?

1014
01:02:33,160 --> 01:02:36,760
Speaker 2: So what should they invest in to be able to

1015
01:02:37,520 --> 01:02:40,880
Speaker 2: have the careers that they want to have because the

1016
01:02:40,960 --> 01:02:44,280
Speaker 2: shareholders are going to ring every penny they can out

1017
01:02:44,280 --> 01:02:48,160
Speaker 2: of the assets that are already there. And what I've

1018
01:02:48,280 --> 01:02:51,040
Speaker 2: argued is we need to take a deep breath and

1019
01:02:51,080 --> 01:02:54,000
Speaker 2: think about what are the assets you own, and what

1020
01:02:54,040 --> 01:02:56,960
Speaker 2: are the skills you have, and what is the change

1021
01:02:56,960 --> 01:02:59,840
Speaker 2: you seek to make. So Simon and Schuster and Random,

1022
01:02:59,840 --> 01:03:02,800
Speaker 2: how if I had stopped by their offices, as I

1023
01:03:02,840 --> 01:03:07,400
Speaker 2: often did in nineteen ninety and said ask them those questions?

1024
01:03:07,600 --> 01:03:10,040
Speaker 2: They would say things like we organized the world's information.

1025
01:03:11,360 --> 01:03:13,200
Speaker 2: And if I said, no, what you do is you

1026
01:03:13,600 --> 01:03:16,600
Speaker 2: cut down trees and then hold them hostage, selling them

1027
01:03:16,640 --> 01:03:18,760
Speaker 2: to independent bookstores, they would look at me like I

1028
01:03:18,840 --> 01:03:23,120
Speaker 2: was clueless. But they could have started Google. It only

1029
01:03:23,120 --> 01:03:27,080
Speaker 2: took two people to start Google organizing the world's information. Right,

1030
01:03:27,240 --> 01:03:31,120
Speaker 2: Why didn't the book publishers start the search engines? Why

1031
01:03:31,120 --> 01:03:34,480
Speaker 2: didn't the book publishers take this great corpus of stuff

1032
01:03:34,480 --> 01:03:37,880
Speaker 2: they have and own a big piece of chat GPT

1033
01:03:38,840 --> 01:03:42,960
Speaker 2: Because they don't think that way. They're looking backwards, not forwards.

1034
01:03:43,480 --> 01:03:47,920
Speaker 2: So these three record labels have a particular competence in

1035
01:03:48,120 --> 01:03:53,880
Speaker 2: understanding what youth culture needs. Finding unknown creators and helping

1036
01:03:54,000 --> 01:03:58,320
Speaker 2: nurture those unknown creators to bring that idea in some form,

1037
01:03:58,400 --> 01:04:02,920
Speaker 2: to use culture to define in the generation. But instead

1038
01:04:02,960 --> 01:04:05,320
Speaker 2: of thinking that way, they're just looking for the next

1039
01:04:05,400 --> 01:04:08,480
Speaker 2: Taylor Swift, and I think that's a mistake. I don't

1040
01:04:08,520 --> 01:04:11,880
Speaker 2: think the middlemen are going to be rewarded the way

1041
01:04:11,880 --> 01:04:16,479
Speaker 2: they used to, because creators are discovering that they should

1042
01:04:16,520 --> 01:04:19,920
Speaker 2: go to the middlemen after they've become a hit, and

1043
01:04:19,960 --> 01:04:21,560
Speaker 2: then they're going to get to keep way more of

1044
01:04:21,600 --> 01:04:22,120
Speaker 2: what they have.

1045
01:04:23,600 --> 01:04:27,880
Speaker 1: Now. At this particular point in time, three major labels

1046
01:04:27,880 --> 01:04:31,800
Speaker 1: are either individually public companies Warner and Universal or Sony

1047
01:04:31,840 --> 01:04:35,760
Speaker 1: that's part of a much larger operation. No one there

1048
01:04:35,800 --> 01:04:40,640
Speaker 1: has skin in the game, which a you have a

1049
01:04:40,680 --> 01:04:44,720
Speaker 1: developing industry over decades, all these independent labels before this

1050
01:04:45,040 --> 01:04:49,600
Speaker 1: ultimate growth and consolidation to what degreed does having skin

1051
01:04:49,680 --> 01:04:53,360
Speaker 1: in the game affect employees and success.

1052
01:04:55,160 --> 01:04:58,600
Speaker 2: I have no idea what share Walter Yetnikov had in

1053
01:04:58,760 --> 01:05:01,240
Speaker 2: the game. I don't think that's what he thought of

1054
01:05:01,360 --> 01:05:05,560
Speaker 2: on any given day. I don't think that the people

1055
01:05:05,800 --> 01:05:08,080
Speaker 2: who I've met and have known in the music business

1056
01:05:08,200 --> 01:05:11,640
Speaker 2: were thinking about it strategically. I think they had a job.

1057
01:05:11,680 --> 01:05:15,000
Speaker 2: They loved, and I think they had interactions, sometimes bullying people,

1058
01:05:15,240 --> 01:05:18,680
Speaker 2: sometimes stealing from people, sometimes taking credit for other people's work,

1059
01:05:19,080 --> 01:05:21,880
Speaker 2: that every day was more fun than the next while

1060
01:05:21,920 --> 01:05:25,400
Speaker 2: they were doing it. Some of them got really wealthy,

1061
01:05:25,600 --> 01:05:30,560
Speaker 2: but I don't think that's what drove them. So what's

1062
01:05:30,640 --> 01:05:34,160
Speaker 2: missing for me when you bring in the nbas and

1063
01:05:34,200 --> 01:05:37,080
Speaker 2: you say, here are the spreadsheets and here's the balance sheet,

1064
01:05:37,520 --> 01:05:41,680
Speaker 2: go make us some more money, is if that's what

1065
01:05:41,720 --> 01:05:44,240
Speaker 2: you're if that's what the prize is, that's what they're

1066
01:05:44,240 --> 01:05:48,600
Speaker 2: going to go get. And this industry and the stories

1067
01:05:48,640 --> 01:05:50,480
Speaker 2: that people share with you on this podcast make it

1068
01:05:50,600 --> 01:05:54,040
Speaker 2: very clear this industry at some level was built by

1069
01:05:54,080 --> 01:05:56,600
Speaker 2: people who love the game, not by people who want

1070
01:05:56,640 --> 01:05:58,040
Speaker 2: to make as much money as possible.

1071
01:06:05,520 --> 01:06:08,760
Speaker 1: Switching gears a little bit, we talked about Bill Gates,

1072
01:06:08,760 --> 01:06:12,880
Speaker 1: We talked about your experience at Stanford. Right now, there's

1073
01:06:12,920 --> 01:06:16,800
Speaker 1: a huge discussion about whether people need to go to

1074
01:06:16,880 --> 01:06:21,040
Speaker 1: college or not. If you had a family friend, you know,

1075
01:06:21,560 --> 01:06:24,920
Speaker 1: and they had a teenage son, not a schlepper, as

1076
01:06:24,960 --> 01:06:27,320
Speaker 1: we put it, someone who could go to a good school,

1077
01:06:27,600 --> 01:06:30,160
Speaker 1: but says I have a business idea, I have to

1078
01:06:30,240 --> 01:06:33,520
Speaker 1: do this. What would your advice be actually.

1079
01:06:33,160 --> 01:06:35,800
Speaker 2: Give advice like this all the time to family friends.

1080
01:06:36,640 --> 01:06:41,240
Speaker 2: First of all, you got tricked too by the college

1081
01:06:41,280 --> 01:06:45,120
Speaker 2: industrial complex. You said good school. There's a good school

1082
01:06:45,120 --> 01:06:49,800
Speaker 2: and a famous school. Famous schools either have football teams

1083
01:06:49,880 --> 01:06:54,520
Speaker 2: or endowments, right, And it's very clear, and there's plenty

1084
01:06:54,560 --> 01:06:57,640
Speaker 2: of data to show this that people who get into

1085
01:06:57,680 --> 01:07:00,920
Speaker 2: Harvard and don't go have just as much happiness and

1086
01:07:00,960 --> 01:07:02,920
Speaker 2: wealth in their life as people who get into Harvard

1087
01:07:03,000 --> 01:07:06,640
Speaker 2: and do go. That the hard part is having the

1088
01:07:06,680 --> 01:07:09,920
Speaker 2: privilege and background and experience to get in, not what

1089
01:07:09,960 --> 01:07:13,800
Speaker 2: they did to you in class. Add to that the

1090
01:07:13,840 --> 01:07:17,360
Speaker 2: fact that you can take any class you want in

1091
01:07:17,400 --> 01:07:21,000
Speaker 2: the world for free online, maybe not at that institution,

1092
01:07:21,160 --> 01:07:25,520
Speaker 2: but somewhere. So what these institutions are selling are two things.

1093
01:07:26,360 --> 01:07:31,360
Speaker 2: One the badge accreditation proof that you got your ticket stamp,

1094
01:07:31,440 --> 01:07:34,680
Speaker 2: because that way you don't have to teach somebody everything

1095
01:07:34,720 --> 01:07:36,320
Speaker 2: you know. You can just show them this one piece

1096
01:07:36,320 --> 01:07:39,320
Speaker 2: of paper and they make assumptions. And the second thing

1097
01:07:40,000 --> 01:07:44,120
Speaker 2: is group cohesion, a group brainwashing to say, people like

1098
01:07:44,240 --> 01:07:47,040
Speaker 2: us do things like this, this is the way we

1099
01:07:47,080 --> 01:07:50,280
Speaker 2: see the world. And so for a long time, Saturday

1100
01:07:50,400 --> 01:07:53,840
Speaker 2: Night Live was written by people who worked on the

1101
01:07:53,840 --> 01:07:58,960
Speaker 2: Harvard Lampoon, and you know that's where a lot of

1102
01:07:58,960 --> 01:08:02,520
Speaker 2: talk show people have come, etc. Because the indoctrination of

1103
01:08:02,520 --> 01:08:04,600
Speaker 2: being a student at the Harvard Lampoon for all those

1104
01:08:04,680 --> 01:08:08,280
Speaker 2: years was actually your college experience. So now we've got

1105
01:08:08,280 --> 01:08:11,840
Speaker 2: this grand reshuffling, and the question is what would make

1106
01:08:11,920 --> 01:08:15,919
Speaker 2: you good at the future. And I don't think it's

1107
01:08:16,600 --> 01:08:18,160
Speaker 2: I need to start a business and make a lot

1108
01:08:18,200 --> 01:08:20,599
Speaker 2: of money and I can't wait four years because there's

1109
01:08:20,600 --> 01:08:23,400
Speaker 2: always going to be a problem worth solving. I think

1110
01:08:23,400 --> 01:08:27,920
Speaker 2: it's what experiences are you collecting and where are you

1111
01:08:28,040 --> 01:08:30,920
Speaker 2: learning these lessons? And how are you learning them? Do

1112
01:08:30,960 --> 01:08:35,439
Speaker 2: you have the discipline to roll that yourself? Are you

1113
01:08:35,520 --> 01:08:38,280
Speaker 2: willing to read a book a week every week for

1114
01:08:38,320 --> 01:08:40,920
Speaker 2: the next four years instead of going to college? Because

1115
01:08:40,960 --> 01:08:45,960
Speaker 2: if you need high school discipline to get smarter, then

1116
01:08:46,040 --> 01:08:48,240
Speaker 2: doing it on your own is probably going to be

1117
01:08:48,240 --> 01:08:51,439
Speaker 2: a mistake because you're gonna get stuck in that rut.

1118
01:08:52,600 --> 01:08:56,679
Speaker 2: And so what I challenge people to do is two things. One,

1119
01:08:57,560 --> 01:09:00,160
Speaker 2: I think almost everyone should take a gap year. They

1120
01:09:00,200 --> 01:09:03,280
Speaker 2: should take a year to do a hard project with

1121
01:09:03,760 --> 01:09:07,720
Speaker 2: some supervision, to grow up and to discover what it's

1122
01:09:07,800 --> 01:09:10,040
Speaker 2: like in the real world to understand that college isn't

1123
01:09:10,479 --> 01:09:13,000
Speaker 2: like high school, but with more binge drinking, it can

1124
01:09:13,040 --> 01:09:16,160
Speaker 2: be something different than that. And then the second thing

1125
01:09:16,880 --> 01:09:22,240
Speaker 2: is to go to the cheapest, good enough school and

1126
01:09:22,400 --> 01:09:26,640
Speaker 2: use the money to create experiences and a curriculum for

1127
01:09:26,680 --> 01:09:30,840
Speaker 2: yourself so that you learn way more, way faster than

1128
01:09:30,880 --> 01:09:34,840
Speaker 2: your peers. And most of those things require discipline, and

1129
01:09:34,960 --> 01:09:39,800
Speaker 2: unfortunately that's hard to find. But if you can do that,

1130
01:09:39,960 --> 01:09:41,120
Speaker 2: I think you come out ahead.

1131
01:09:42,640 --> 01:09:44,640
Speaker 1: Tell me about the hard project that you might do

1132
01:09:44,680 --> 01:09:46,320
Speaker 1: in a gap year.

1133
01:09:47,160 --> 01:09:51,200
Speaker 2: So a friend of the family came to me years

1134
01:09:51,200 --> 01:09:53,880
Speaker 2: ago and said I'd never met him. He said, my

1135
01:09:54,000 --> 01:09:56,280
Speaker 2: dad knows you. He said you could tell me how

1136
01:09:56,320 --> 01:09:59,280
Speaker 2: to get into Yale, And so I gave him ten

1137
01:09:59,520 --> 01:10:02,000
Speaker 2: projects you could do, and one of them was fly

1138
01:10:02,120 --> 01:10:04,040
Speaker 2: to India and figure out how to make enough money

1139
01:10:04,040 --> 01:10:07,720
Speaker 2: to get home. Now, the problem with that project is

1140
01:10:07,800 --> 01:10:10,400
Speaker 2: it doesn't take a year, and it's not particularly generous.

1141
01:10:10,920 --> 01:10:12,000
Speaker 3: But if you.

1142
01:10:12,160 --> 01:10:17,160
Speaker 2: Find a nonprofit that is working deep in a community

1143
01:10:17,320 --> 01:10:20,160
Speaker 2: to help transform that community for the better, and you

1144
01:10:20,320 --> 01:10:22,599
Speaker 2: commit to spending a year with them, you don't need

1145
01:10:22,600 --> 01:10:24,360
Speaker 2: the Peace Corps to send you somewhere. You can do

1146
01:10:24,439 --> 01:10:28,840
Speaker 2: that tomorrow. If you decide to start a record label,

1147
01:10:28,880 --> 01:10:31,320
Speaker 2: which I did years ago, you can start a record

1148
01:10:31,360 --> 01:10:35,760
Speaker 2: label tomorrow, run it for a year fully online, see

1149
01:10:35,760 --> 01:10:39,800
Speaker 2: what happens right that. If you're doing that and you

1150
01:10:39,920 --> 01:10:41,680
Speaker 2: know that you don't have to make money doing it,

1151
01:10:41,720 --> 01:10:44,559
Speaker 2: you have to make a difference doing it, you will

1152
01:10:44,640 --> 01:10:48,800
Speaker 2: learn an enormous amount compared to going tow NYU and

1153
01:10:48,840 --> 01:10:50,680
Speaker 2: taking a class in music production.

1154
01:10:53,240 --> 01:10:56,080
Speaker 1: You know you're talking about. Let you know, let's say

1155
01:10:56,200 --> 01:10:58,920
Speaker 1: I take the path where I'm not going to go

1156
01:10:58,960 --> 01:11:01,800
Speaker 1: to college. I read a week, I do this. I

1157
01:11:01,920 --> 01:11:06,040
Speaker 1: have found amongst the people I know, other than the

1158
01:11:06,200 --> 01:11:09,519
Speaker 1: very successful people I know who I know, no one

1159
01:11:09,560 --> 01:11:10,920
Speaker 1: has this level of discipline.

1160
01:11:12,600 --> 01:11:16,120
Speaker 2: Yeah, so where's the discipline come from? How long do

1161
01:11:16,200 --> 01:11:20,840
Speaker 2: you need external discipline before you'll understand internal discipline? And

1162
01:11:21,320 --> 01:11:23,959
Speaker 2: how can you practice it the same way you practice

1163
01:11:23,960 --> 01:11:27,360
Speaker 2: the trumpet? Because I think you can practice discipline for

1164
01:11:27,400 --> 01:11:30,120
Speaker 2: a week at a time. And so if you're asking

1165
01:11:30,120 --> 01:11:32,080
Speaker 2: what I would say to a sixteen year old family friend,

1166
01:11:33,120 --> 01:11:35,200
Speaker 2: the woman down the street who I worked with, she

1167
01:11:35,280 --> 01:11:40,040
Speaker 2: put on a massive climate conference for high school students

1168
01:11:40,040 --> 01:11:44,000
Speaker 2: in our county and over one hundred people came. She

1169
01:11:44,120 --> 01:11:47,599
Speaker 2: had guest speakers. She got a grant on her own

1170
01:11:47,680 --> 01:11:50,479
Speaker 2: from the Bloomberg Philanthropies, and she put this thing on.

1171
01:11:51,800 --> 01:11:54,240
Speaker 2: If I look at what she did compared to all

1172
01:11:54,240 --> 01:11:56,240
Speaker 2: the other students in her high school class, there's no

1173
01:11:56,240 --> 01:11:59,360
Speaker 2: comparison how she spent the last six weeks. She's going

1174
01:11:59,439 --> 01:12:03,240
Speaker 2: to remember this forever. She discovered she's not a fraud,

1175
01:12:03,560 --> 01:12:06,920
Speaker 2: and she's discovered all the things that don't work and

1176
01:12:07,000 --> 01:12:11,680
Speaker 2: some things that do. So no, don't skip college and

1177
01:12:11,880 --> 01:12:13,759
Speaker 2: commit to a four year thing out of the blue.

1178
01:12:14,520 --> 01:12:15,479
Speaker 1: But show me a one.

1179
01:12:15,320 --> 01:12:17,640
Speaker 2: Week project, and then a three week project, and then

1180
01:12:17,640 --> 01:12:19,800
Speaker 2: a five week project, and then go to a gap year.

1181
01:12:20,080 --> 01:12:21,000
Speaker 3: And if you have no.

1182
01:12:22,600 --> 01:12:25,759
Speaker 2: Self control whatsoever, yes, please go to the most famous

1183
01:12:25,760 --> 01:12:28,080
Speaker 2: college you can pay for. Get on the track of

1184
01:12:28,120 --> 01:12:30,400
Speaker 2: getting one of those scarce jobs where someone tells you.

1185
01:12:30,320 --> 01:12:30,760
Speaker 3: What to do.

1186
01:12:31,720 --> 01:12:36,480
Speaker 2: But for almost everybody else, it's this combination of generous persistence,

1187
01:12:37,120 --> 01:12:41,000
Speaker 2: self discipline and solving an interesting problem, because if you

1188
01:12:41,080 --> 01:12:44,040
Speaker 2: get good at solving interesting problems, you're never going to

1189
01:12:44,360 --> 01:12:45,720
Speaker 2: need to go get a job.

1190
01:12:47,439 --> 01:12:51,920
Speaker 1: Now. Ultra successful people, let's not talk about someone who

1191
01:12:51,960 --> 01:12:54,760
Speaker 1: worked their way up at Procter and Gamble and is

1192
01:12:54,800 --> 01:12:57,920
Speaker 1: now on their private jet people who have a more

1193
01:12:58,240 --> 01:13:03,840
Speaker 1: entrepreneurial path. Are they all inherently using the vernacular fucked

1194
01:13:03,920 --> 01:13:07,559
Speaker 1: up trying to fill some hole? Is that what drives?

1195
01:13:07,680 --> 01:13:10,400
Speaker 1: Are there any well adjusted? I mean, look at someone

1196
01:13:10,439 --> 01:13:14,080
Speaker 1: like Elon Musk, certainly a lot of success, but he's

1197
01:13:14,080 --> 01:13:17,519
Speaker 1: evidence seeing the issues in his personality right out in public.

1198
01:13:18,080 --> 01:13:21,720
Speaker 1: Does that go with the territory?

1199
01:13:22,640 --> 01:13:25,519
Speaker 2: I would like to leave out of the discussion the

1200
01:13:26,960 --> 01:13:29,759
Speaker 2: few handfuls of people who are in the media because

1201
01:13:30,280 --> 01:13:34,519
Speaker 2: a lack of boundaries and media attention are a very

1202
01:13:34,840 --> 01:13:39,960
Speaker 2: challenging problem for everybody else. And I know a lot

1203
01:13:40,520 --> 01:13:44,280
Speaker 2: of people who have succeeded on their own with projects

1204
01:13:44,320 --> 01:13:50,200
Speaker 2: as entrepreneurs. Most of them are well adjusted. There's a

1205
01:13:50,240 --> 01:13:53,920
Speaker 2: game being played here and they don't take it too seriously,

1206
01:13:54,080 --> 01:13:55,599
Speaker 2: and they see the game.

1207
01:13:56,800 --> 01:13:58,400
Speaker 1: And when I.

1208
01:13:58,479 --> 01:14:01,960
Speaker 2: Started, I took it all personally. And when you take

1209
01:14:02,000 --> 01:14:04,640
Speaker 2: it personally, it doesn't feel like a game. When you

1210
01:14:04,680 --> 01:14:07,479
Speaker 2: take it personally, you get rejected. I get eight hundred

1211
01:14:07,479 --> 01:14:10,320
Speaker 2: rejections in a row from New York publishers. It feels

1212
01:14:10,360 --> 01:14:13,479
Speaker 2: like they are rejecting you, and it takes a while

1213
01:14:13,560 --> 01:14:16,640
Speaker 2: to realize they don't know me. They're just rejecting what

1214
01:14:16,760 --> 01:14:23,280
Speaker 2: I sent them. What we have now is this weird

1215
01:14:23,760 --> 01:14:26,519
Speaker 2: media structure where you're supposed to be vulnerable and you're

1216
01:14:26,560 --> 01:14:29,720
Speaker 2: supposed to be authentic, which I think is nonsense if

1217
01:14:29,760 --> 01:14:32,400
Speaker 2: you're trying to strangers and then when it doesn't work,

1218
01:14:32,760 --> 01:14:35,839
Speaker 2: you end up in a ball on the floor instead

1219
01:14:35,880 --> 01:14:38,479
Speaker 2: of saying this was the move. I brought this to

1220
01:14:38,560 --> 01:14:41,639
Speaker 2: the world. That happened. How do I do it differently

1221
01:14:41,760 --> 01:14:45,040
Speaker 2: next time? And I believe that's what great musicians do,

1222
01:14:45,439 --> 01:14:49,120
Speaker 2: particularly jazz musicians. You watch a jazz musician and they

1223
01:14:49,280 --> 01:14:52,439
Speaker 2: know when they're launching into the next lick that in

1224
01:14:52,479 --> 01:14:55,320
Speaker 2: this setting, in this room, it's going to work. And

1225
01:14:55,360 --> 01:14:58,080
Speaker 2: the reason they know that is because they've done it

1226
01:14:58,560 --> 01:15:01,639
Speaker 2: before and they see the difference in the room between

1227
01:15:01,640 --> 01:15:04,559
Speaker 2: one that's going to work and one that doesn't. And

1228
01:15:04,960 --> 01:15:09,720
Speaker 2: that's the opportunity amidst all the chaos and mailstroam that

1229
01:15:09,760 --> 01:15:13,160
Speaker 2: we're in of solving interesting problems. Is you can practice

1230
01:15:13,200 --> 01:15:16,160
Speaker 2: without a medical degree, without a legal degree, without a

1231
01:15:16,160 --> 01:15:19,880
Speaker 2: business degree. You can practice human interaction and get better

1232
01:15:19,920 --> 01:15:20,200
Speaker 2: at it.

1233
01:15:21,960 --> 01:15:26,280
Speaker 1: Switching gears. Once again, there are different This is streaming

1234
01:15:26,360 --> 01:15:31,679
Speaker 1: television Netflick releases all episodes of the series at Once

1235
01:15:33,880 --> 01:15:37,000
Speaker 1: Prime used to do that sort of at this point,

1236
01:15:37,040 --> 01:15:42,200
Speaker 1: but the other competitors, Disney, Paramount, Apple do not. What's

1237
01:15:42,240 --> 01:15:43,280
Speaker 1: your insight there?

1238
01:15:43,800 --> 01:15:44,639
Speaker 3: Yeah, I read.

1239
01:15:44,439 --> 01:15:46,280
Speaker 2: You were ranting about this the other day. You and

1240
01:15:46,320 --> 01:15:49,960
Speaker 2: I disagree, which happens from time to time. I was

1241
01:15:49,960 --> 01:15:52,680
Speaker 2: talking to Ted Sarandos at Netflix. I said, Ted, I

1242
01:15:52,680 --> 01:15:56,920
Speaker 2: only want to ask you one question. I completely understand

1243
01:15:57,200 --> 01:16:02,000
Speaker 2: why you started with binging, and the reason is this.

1244
01:16:03,240 --> 01:16:07,000
Speaker 2: What Ted and Reid figured out how to do was

1245
01:16:07,080 --> 01:16:11,560
Speaker 2: use stock market money to send a signal to Hollywood

1246
01:16:11,640 --> 01:16:15,280
Speaker 2: and to viewers that you couldn't live without Netflix. And

1247
01:16:15,320 --> 01:16:19,000
Speaker 2: the way they differentiated themselves from every other way you

1248
01:16:19,040 --> 01:16:23,080
Speaker 2: could watch television is they weren't gonna hold TV hostage.

1249
01:16:23,439 --> 01:16:25,880
Speaker 2: You can have all you wanted. The only way you

1250
01:16:25,880 --> 01:16:27,799
Speaker 2: can do that is if you have an enormous amount

1251
01:16:27,800 --> 01:16:31,240
Speaker 2: of money, because you blow through one hundred million dollars

1252
01:16:31,320 --> 01:16:36,200
Speaker 2: TV series in a day. Right, So it was brilliant,

1253
01:16:37,160 --> 01:16:42,400
Speaker 2: but now they won, and once they won, it's not

1254
01:16:42,560 --> 01:16:45,040
Speaker 2: in their interest to keep allowing people to do this.

1255
01:16:45,640 --> 01:16:48,800
Speaker 2: And the reason is what they gave up was the

1256
01:16:48,800 --> 01:16:53,320
Speaker 2: water cooler conversation. Because if you've seen seven episodes of

1257
01:16:53,400 --> 01:16:55,880
Speaker 2: Lydia poet, and I've seen one. If you talk to

1258
01:16:55,920 --> 01:16:57,559
Speaker 2: me about it, you're going to ruin it for me.

1259
01:16:58,040 --> 01:16:59,800
Speaker 2: So you don't talk about it the way you would

1260
01:16:59,840 --> 01:17:04,360
Speaker 2: if it was on every Monday. And so I said, ted,

1261
01:17:04,400 --> 01:17:08,400
Speaker 2: why do you keep doing this? And it was fascinating

1262
01:17:08,920 --> 01:17:13,200
Speaker 2: because I thought he would have a detailed, nuanced database

1263
01:17:13,800 --> 01:17:16,920
Speaker 2: research answer. And he said, because that's what we do.

1264
01:17:18,280 --> 01:17:21,080
Speaker 2: It's been built into the culture. But I can show

1265
01:17:21,120 --> 01:17:23,439
Speaker 2: you the economics of it. They should stop, and I

1266
01:17:23,439 --> 01:17:29,519
Speaker 2: think they will because they can't keep burning shareholder money

1267
01:17:29,560 --> 01:17:33,040
Speaker 2: the way they were and the game theory of it

1268
01:17:33,080 --> 01:17:33,880
Speaker 2: doesn't make sense.

1269
01:17:34,640 --> 01:17:37,000
Speaker 1: Tell me more about the game theory and game theory

1270
01:17:37,040 --> 01:17:38,599
Speaker 1: in general in business.

1271
01:17:38,720 --> 01:17:41,360
Speaker 2: Okay, So game theory has nothing to do with monopoly

1272
01:17:41,400 --> 01:17:45,920
Speaker 2: and everything to do with understanding what people do when

1273
01:17:45,960 --> 01:17:52,400
Speaker 2: they each seek to maximize their benefit. So everyone understands

1274
01:17:52,439 --> 01:17:54,880
Speaker 2: tic tac toe, and we understand you shouldn't go in

1275
01:17:54,920 --> 01:17:56,439
Speaker 2: one of the side pieces, you should go in the

1276
01:17:56,479 --> 01:17:59,519
Speaker 2: center because that forces the other person to go certain ways.

1277
01:18:00,240 --> 01:18:03,400
Speaker 2: So Netflix looks at the world a lot of entrenched players,

1278
01:18:03,479 --> 01:18:06,200
Speaker 2: people with lots of backlists and lots of libraries, and say,

1279
01:18:06,680 --> 01:18:11,439
Speaker 2: we can't possibly make enough really really good shows in

1280
01:18:11,479 --> 01:18:14,960
Speaker 2: a very short period of time that will get people

1281
01:18:15,479 --> 01:18:17,720
Speaker 2: to join us for money when they could watch these

1282
01:18:17,720 --> 01:18:21,200
Speaker 2: other things on television for free. So what we're going

1283
01:18:21,280 --> 01:18:24,360
Speaker 2: to do is play a game they can't play. And

1284
01:18:24,400 --> 01:18:26,599
Speaker 2: this is the key to strategy, playing a game your

1285
01:18:26,680 --> 01:18:30,160
Speaker 2: competitors can't or won't play. And the game they could

1286
01:18:30,160 --> 01:18:33,200
Speaker 2: play is they could sell more stock anytime they wanted.

1287
01:18:33,200 --> 01:18:35,599
Speaker 2: They could lose as much money as they wanted as

1288
01:18:35,600 --> 01:18:39,040
Speaker 2: long as they were getting new subscribers. And by saying

1289
01:18:39,720 --> 01:18:44,679
Speaker 2: to NBC or HBO, we're going to break your cardinal rule.

1290
01:18:44,760 --> 01:18:47,160
Speaker 2: We're gonna take our best show and just blow it

1291
01:18:47,240 --> 01:18:52,519
Speaker 2: all in one day, the opposition couldn't respond because they

1292
01:18:52,520 --> 01:18:55,640
Speaker 2: didn't have enough money or inventory to catch up to

1293
01:18:55,720 --> 01:18:59,479
Speaker 2: that game. So they redefine the game the same way.

1294
01:19:00,840 --> 01:19:05,799
Speaker 2: When you look at Hotmail, which revolutionized viral marketing, everybody

1295
01:19:05,800 --> 01:19:09,320
Speaker 2: else was charging for email accounts. Hotmail built a company

1296
01:19:09,360 --> 01:19:11,719
Speaker 2: that was structured so they could give it away for free.

1297
01:19:12,400 --> 01:19:15,400
Speaker 2: By making that move, they undid the game that everyone

1298
01:19:15,400 --> 01:19:18,840
Speaker 2: else had no choice but to play. So what we

1299
01:19:19,000 --> 01:19:23,920
Speaker 2: you know? And when Rick Rubin leaned into hip hop,

1300
01:19:24,439 --> 01:19:28,360
Speaker 2: he was making the bet that the big guys weren't

1301
01:19:28,400 --> 01:19:31,439
Speaker 2: willing to go where he was going to go, and

1302
01:19:32,160 --> 01:19:34,400
Speaker 2: he was right. It took them a very long time

1303
01:19:34,800 --> 01:19:37,800
Speaker 2: for the people who were running those labels to get

1304
01:19:37,840 --> 01:19:41,599
Speaker 2: comfortable bringing out the music he was bringing out because

1305
01:19:41,600 --> 01:19:46,200
Speaker 2: of their upbringing compared to his moment in time. So again,

1306
01:19:46,240 --> 01:19:49,559
Speaker 2: what we're seeking to do with game theory is understand

1307
01:19:49,560 --> 01:19:52,320
Speaker 2: the rules of the game and then make moves that

1308
01:19:52,439 --> 01:19:55,280
Speaker 2: either box out the other people or moves that they

1309
01:19:55,280 --> 01:19:56,280
Speaker 2: are unwilling to make.

1310
01:20:04,000 --> 01:20:08,080
Speaker 1: Okay, staying on streaming television, Apple uses the old model

1311
01:20:08,160 --> 01:20:14,479
Speaker 1: of an episode a week, right, financial disaster. Okay, Now

1312
01:20:14,520 --> 01:20:19,599
Speaker 1: they're leaving intentionally certain low hanging exploitative fruit on the ground.

1313
01:20:19,720 --> 01:20:22,839
Speaker 1: It's like they won't just do something with titillation, nudity.

1314
01:20:23,000 --> 01:20:29,800
Speaker 1: Whatever they do these high cost productions, there is no catalog,

1315
01:20:30,000 --> 01:20:36,880
Speaker 1: no backlist like Netflix licenses or now actually owns. Sir,

1316
01:20:38,640 --> 01:20:39,719
Speaker 1: what would you tell Apple?

1317
01:20:40,400 --> 01:20:43,599
Speaker 2: Okay, So let's be clear. Apple TV does not exist

1318
01:20:43,600 --> 01:20:47,120
Speaker 2: to make a profit, and if you are looking at

1319
01:20:47,160 --> 01:20:50,400
Speaker 2: it through the lens of making a profit, it would

1320
01:20:50,600 --> 01:20:55,680
Speaker 2: it seems like a mystery. Apple TV exists to be

1321
01:20:56,520 --> 01:21:00,720
Speaker 2: a branded arm of a luxury goods company. Apple is

1322
01:21:00,760 --> 01:21:04,360
Speaker 2: the most successful luxury goods company of all time. You

1323
01:21:04,400 --> 01:21:08,960
Speaker 2: can buy a phone that does almost everything an iPhone

1324
01:21:09,000 --> 01:21:12,240
Speaker 2: does for a lot less money. The one thing it

1325
01:21:12,360 --> 01:21:16,080
Speaker 2: doesn't do is give you the blue bubble and the

1326
01:21:16,080 --> 01:21:23,479
Speaker 2: Apple logo, and so that is supported by the halo

1327
01:21:23,760 --> 01:21:27,519
Speaker 2: of something like Apple TV. So what Apple needs to

1328
01:21:27,640 --> 01:21:33,080
Speaker 2: keep doing is create this reality distortion field around the

1329
01:21:33,240 --> 01:21:36,880
Speaker 2: value of what they make and sell people identity.

1330
01:21:39,040 --> 01:21:42,320
Speaker 1: Staying with Apple for a second, Steve Jobs famously did

1331
01:21:42,479 --> 01:21:46,800
Speaker 1: no market research. What's your view on market research? Well,

1332
01:21:46,840 --> 01:21:49,519
Speaker 1: Steve did a lot of market research. What he didn't

1333
01:21:49,520 --> 01:21:55,280
Speaker 1: do was pay consultants for traditional market research. What Steve

1334
01:21:55,400 --> 01:22:01,440
Speaker 1: did was he had an intuitive understanding of the needs, desires,

1335
01:22:01,479 --> 01:22:05,120
Speaker 1: and identity of the people who would propel his thing forward,

1336
01:22:06,160 --> 01:22:09,800
Speaker 1: and he played it like a violin. He totally understood

1337
01:22:10,240 --> 01:22:13,640
Speaker 1: status roles and how to turn this thing that was

1338
01:22:13,680 --> 01:22:18,120
Speaker 1: for geeks into a luxury good. Most market research, most

1339
01:22:18,160 --> 01:22:23,719
Speaker 1: focus groups exist to make the committee happy. They don't

1340
01:22:23,760 --> 01:22:31,480
Speaker 1: exist to lead to hard decisions, and corporations are organizations

1341
01:22:31,520 --> 01:22:34,559
Speaker 1: that stick around for a while, and there's a lot

1342
01:22:34,800 --> 01:22:39,040
Speaker 1: of soft tissue in between the various people and market

1343
01:22:39,080 --> 01:22:42,240
Speaker 1: research can be used as a tool a lever to

1344
01:22:42,320 --> 01:22:45,280
Speaker 1: help people empower stay in power, but it is not

1345
01:22:45,560 --> 01:22:53,240
Speaker 1: often used to help them make better decisions. Okay, on

1346
01:22:53,439 --> 01:23:03,160
Speaker 1: the same point here with making decisions. Ultimately, let me

1347
01:23:03,200 --> 01:23:07,559
Speaker 1: put it down. A mature business, Okay, skiing. Skiing in

1348
01:23:07,600 --> 01:23:12,360
Speaker 1: the sixties, it was a middle class sport. Everybody did it. Okay.

1349
01:23:12,439 --> 01:23:14,920
Speaker 1: Starting in the late eighties they put in these high

1350
01:23:15,000 --> 01:23:19,599
Speaker 1: speed lists, which costs a lot of money, improve the experience. Okay.

1351
01:23:20,160 --> 01:23:24,759
Speaker 1: Now there's been consolidation. There's two major companies which actually

1352
01:23:24,800 --> 01:23:28,160
Speaker 1: are spreading from the United States to internationally. Now a

1353
01:23:28,320 --> 01:23:33,719
Speaker 1: there's a perception problem because skiing is never been cheaper

1354
01:23:33,920 --> 01:23:37,120
Speaker 1: to actually do, never mind the number of lodging and food,

1355
01:23:37,160 --> 01:23:40,880
Speaker 1: et cetera. But it's a mature business. Where does a

1356
01:23:40,920 --> 01:23:45,000
Speaker 1: mature business go from here? They're not Sierra Club. You

1357
01:23:45,040 --> 01:23:49,960
Speaker 1: can't build more ski areas, concert promotion. We have Live

1358
01:23:50,120 --> 01:23:54,160
Speaker 1: Nation in aeg Okay, used to be the land of renegades.

1359
01:23:54,200 --> 01:23:57,960
Speaker 1: When you have a mature business, what happens next?

1360
01:23:58,680 --> 01:24:02,400
Speaker 2: So, uh, your rant on this with Zach Cune was brilliant.

1361
01:24:02,479 --> 01:24:03,680
Speaker 2: I loved listening to it.

1362
01:24:03,840 --> 01:24:04,080
Speaker 3: Zach.

1363
01:24:04,360 --> 01:24:05,479
Speaker 2: I don't know if he told you it was my

1364
01:24:05,520 --> 01:24:08,200
Speaker 2: next door neighbor, so I watched him grow up. He

1365
01:24:08,200 --> 01:24:12,559
Speaker 2: doesn't live in New York anymore, but skiing is, and

1366
01:24:12,640 --> 01:24:14,240
Speaker 2: I did it for a very long time until I

1367
01:24:14,240 --> 01:24:18,759
Speaker 2: directed both my shoulders. Skiing is clearly a mature industry,

1368
01:24:18,760 --> 01:24:22,200
Speaker 2: but it's also a luxury good. It's a luxury good

1369
01:24:23,040 --> 01:24:31,679
Speaker 2: because it costs way more for the actual athletic moments

1370
01:24:31,720 --> 01:24:36,720
Speaker 2: of it then it's worth. What you're paying for is

1371
01:24:37,479 --> 01:24:39,360
Speaker 2: the way it feels to go, the way it feels

1372
01:24:39,360 --> 01:24:41,960
Speaker 2: to talk about it, the way it feels to put

1373
01:24:42,000 --> 01:24:43,760
Speaker 2: on the equipment, the way it feels to be in

1374
01:24:43,800 --> 01:24:47,439
Speaker 2: the lodge. That is what is actually for sale. The

1375
01:24:47,520 --> 01:24:50,000
Speaker 2: data I saw a few years ago is that the

1376
01:24:50,080 --> 01:24:53,160
Speaker 2: typical visitor to Veil was on the slopes for less

1377
01:24:53,160 --> 01:24:57,439
Speaker 2: than forty five minutes a day. Because that's just a

1378
01:24:57,520 --> 01:25:01,000
Speaker 2: tiny part of what is for sale the nation skiing

1379
01:25:02,280 --> 01:25:05,240
Speaker 2: I went. I grew up skiing at Kissing Bridge in Buffalo,

1380
01:25:05,320 --> 01:25:07,559
Speaker 2: which is basically a big hill, and you could do

1381
01:25:07,600 --> 01:25:10,920
Speaker 2: thirteen runs in an hour. And so the people who

1382
01:25:10,920 --> 01:25:14,760
Speaker 2: went there to ski, they were skiing, they weren't partaking

1383
01:25:14,800 --> 01:25:19,559
Speaker 2: in the luxury lifestyle of skiing. So what to be done, well,

1384
01:25:20,040 --> 01:25:27,840
Speaker 2: what's always done with an end of cycle. Stable businesses

1385
01:25:28,040 --> 01:25:31,639
Speaker 2: is you raise the price for the people who are

1386
01:25:31,680 --> 01:25:38,360
Speaker 2: committed to going. It is really, really difficult to capture

1387
01:25:38,400 --> 01:25:44,240
Speaker 2: the next generation because you don't have the network effect,

1388
01:25:44,280 --> 01:25:48,040
Speaker 2: the viral connection that causes the next generation to come

1389
01:25:48,120 --> 01:25:50,599
Speaker 2: in the numbers. You need them to come to keep

1390
01:25:50,640 --> 01:25:54,640
Speaker 2: the business going on in the way you wanted it

1391
01:25:54,680 --> 01:25:58,960
Speaker 2: to go, the same way if you had you know,

1392
01:25:59,120 --> 01:26:02,080
Speaker 2: whether it's Georgia or Armani or Heart Shaftner and Marx

1393
01:26:02,680 --> 01:26:05,600
Speaker 2: hart Schafter in Marx doesn't have a prayer of capturing

1394
01:26:05,640 --> 01:26:08,360
Speaker 2: people who are twenty years old. People are twenty years

1395
01:26:08,400 --> 01:26:11,600
Speaker 2: old are never gonna wear three piece suits. It's not

1396
01:26:11,720 --> 01:26:16,520
Speaker 2: coming back. And so what I think it's worth embracing

1397
01:26:16,560 --> 01:26:21,840
Speaker 2: is Schumpeter's creative destruction. There's nothing that says this particular

1398
01:26:21,920 --> 01:26:25,680
Speaker 2: corporation is entitled to last. And the half life of

1399
01:26:25,720 --> 01:26:31,080
Speaker 2: American corporations keeps getting shorter because people stick around, but

1400
01:26:31,680 --> 01:26:35,360
Speaker 2: brands and corporate entities they're designed to be disposable.

1401
01:26:36,720 --> 01:26:40,280
Speaker 1: Well, staying on that same point, antitrust, I have a

1402
01:26:40,320 --> 01:26:43,680
Speaker 1: friend who is a liberal who does not believe in

1403
01:26:43,760 --> 01:26:49,640
Speaker 1: the antitrust enforcement, believing that the marketplace will always ultimately

1404
01:26:50,680 --> 01:26:52,280
Speaker 1: come into competition.

1405
01:26:53,120 --> 01:26:53,360
Speaker 3: He is.

1406
01:26:53,520 --> 01:26:56,760
Speaker 1: Example would be I'm gonna ask your take.

1407
01:26:57,040 --> 01:27:00,719
Speaker 3: That's why having trouble with keeping my take to myself.

1408
01:27:00,720 --> 01:27:02,680
Speaker 3: But go ahead, yes, no, no, I want to hear your take.

1409
01:27:02,720 --> 01:27:07,200
Speaker 1: Okay. He we know Google's search has now been challenged

1410
01:27:07,200 --> 01:27:11,799
Speaker 1: by Amazon by TikTok have by the same token. Google

1411
01:27:11,920 --> 01:27:15,800
Speaker 1: is being sued because they have monopoly on advertising. What

1412
01:27:15,960 --> 01:27:18,800
Speaker 1: is your belief in the anti trust and monopoly?

1413
01:27:19,400 --> 01:27:19,879
Speaker 3: Okay?

1414
01:27:20,160 --> 01:27:23,960
Speaker 2: So we begin with Adam Smith, who I think everyone

1415
01:27:24,000 --> 01:27:28,599
Speaker 2: can agree is the known father of capitalism. He has

1416
01:27:29,400 --> 01:27:34,839
Speaker 2: many lines that say the biggest defect in capitalism is monopoly.

1417
01:27:35,479 --> 01:27:40,880
Speaker 2: Monopoly is broken capitalism. And the reason is simple because

1418
01:27:41,120 --> 01:27:45,559
Speaker 2: once a company gets to a certain scale, the single

1419
01:27:45,640 --> 01:27:49,800
Speaker 2: most profitable thing they can do is create the conditions

1420
01:27:49,920 --> 01:27:54,720
Speaker 2: to have no competition, to lock people in. And if

1421
01:27:54,760 --> 01:27:58,240
Speaker 2: they do that again, the math is super easy to show.

1422
01:27:59,000 --> 01:28:05,760
Speaker 2: The consumers do not benefit that it harms everyone involved.

1423
01:28:06,280 --> 01:28:14,040
Speaker 2: And so what we need is what Coreydoctor calls adversarial interoperability.

1424
01:28:14,600 --> 01:28:18,519
Speaker 2: Adversarial interoperability says, go ahead, get as big as you want,

1425
01:28:18,760 --> 01:28:24,519
Speaker 2: but you must build doorways so that competitors can play

1426
01:28:25,040 --> 01:28:28,920
Speaker 2: in a way that gives customers a choice, because the market,

1427
01:28:28,960 --> 01:28:32,960
Speaker 2: when it works, is about giving customers a choice. Now,

1428
01:28:33,520 --> 01:28:38,000
Speaker 2: what ended up happening here when antitrust began to get

1429
01:28:38,160 --> 01:28:44,719
Speaker 2: corrupted in the seventies and the eighties is simple. Milton

1430
01:28:44,720 --> 01:28:48,800
Speaker 2: Friedman plus others started trying to persuade us that the

1431
01:28:48,840 --> 01:28:52,880
Speaker 2: purpose of our culture is to enable capitalism. They got

1432
01:28:52,880 --> 01:28:57,280
Speaker 2: it backwards. The purpose of capitalism is to enable our culture.

1433
01:28:58,320 --> 01:29:02,000
Speaker 2: And as long as the market is actually free, where

1434
01:29:02,040 --> 01:29:05,519
Speaker 2: people can make a choice, that is more likely to happen.

1435
01:29:06,080 --> 01:29:10,439
Speaker 2: But when monopolists are unfettered and can lock people in

1436
01:29:11,080 --> 01:29:16,280
Speaker 2: their choices, go away, and nobody benefits except the monopolist,

1437
01:29:16,360 --> 01:29:18,160
Speaker 2: and in the long run, the monopolist doesn't do as

1438
01:29:18,160 --> 01:29:20,960
Speaker 2: well either. If Microsoft had agreed to be broken up

1439
01:29:21,000 --> 01:29:24,599
Speaker 2: all those years ago, or IBM, both those companies would

1440
01:29:24,600 --> 01:29:26,760
Speaker 2: be doing better today than if they had fought as

1441
01:29:26,800 --> 01:29:28,080
Speaker 2: hard as they did to stay.

1442
01:29:27,880 --> 01:29:32,880
Speaker 1: Together, giving IBM just staying with Microsoft. What would Microsoft

1443
01:29:32,920 --> 01:29:34,400
Speaker 1: look like today if you've been broken out?

1444
01:29:34,960 --> 01:29:38,639
Speaker 2: So Microsoft got in trouble and I was a victim

1445
01:29:38,640 --> 01:29:41,280
Speaker 2: of one of their hijinks years and years ago, because

1446
01:29:41,320 --> 01:29:45,200
Speaker 2: they owned the operating system, they owned the web browser,

1447
01:29:45,680 --> 01:29:49,040
Speaker 2: they owned the software stack, and they kept feeding them

1448
01:29:49,040 --> 01:29:51,759
Speaker 2: one into the other into the other. So for example,

1449
01:29:51,880 --> 01:29:54,960
Speaker 2: you click on a link in word and you had

1450
01:29:54,960 --> 01:29:57,599
Speaker 2: no choice but to have Internet Explorer to be able

1451
01:29:57,640 --> 01:30:00,160
Speaker 2: to look at what it had. So you can seeeople

1452
01:30:00,160 --> 01:30:02,160
Speaker 2: would suffer because there's no incentive to make a better

1453
01:30:02,640 --> 01:30:07,519
Speaker 2: web browser if the it doesn't hook up right. And

1454
01:30:08,520 --> 01:30:13,920
Speaker 2: if the shareholders end up with each one of the platforms,

1455
01:30:14,760 --> 01:30:18,800
Speaker 2: then the amount of value that's produced for consumers goes up.

1456
01:30:19,320 --> 01:30:21,840
Speaker 2: And when the amount of value that's produced goes up,

1457
01:30:22,200 --> 01:30:24,040
Speaker 2: each one of those companies, even if they're not going

1458
01:30:24,080 --> 01:30:27,040
Speaker 2: to have one hundred percent share, will end up being

1459
01:30:27,040 --> 01:30:31,599
Speaker 2: more resilient and do better over time. And so when

1460
01:30:31,640 --> 01:30:34,360
Speaker 2: they broke up at and T and built the baby Bells,

1461
01:30:34,720 --> 01:30:37,280
Speaker 2: I think, I mean, we didn't have mobile phones. Fax

1462
01:30:37,360 --> 01:30:40,160
Speaker 2: machines were pain in the neck. Think about the explosion

1463
01:30:40,840 --> 01:30:45,639
Speaker 2: in what we could do with telecommunications once different companies

1464
01:30:45,640 --> 01:30:49,600
Speaker 2: could play in a different way. And so instead of

1465
01:30:49,600 --> 01:30:52,679
Speaker 2: spending all that time and money having an existential fight

1466
01:30:52,880 --> 01:30:54,960
Speaker 2: about breaking up, if they said, all right, we're going

1467
01:30:55,000 --> 01:30:57,240
Speaker 2: to build the breast browser in the world, and now

1468
01:30:57,280 --> 01:30:59,439
Speaker 2: it's going to work with every word processor, and we're

1469
01:30:59,439 --> 01:31:01,360
Speaker 2: going to build the best software stack in the world,

1470
01:31:01,400 --> 01:31:03,880
Speaker 2: but now it's going to work with every operating system

1471
01:31:03,920 --> 01:31:06,639
Speaker 2: and on and on and on. They would have ended

1472
01:31:06,720 --> 01:31:11,040
Speaker 2: up way ahead of the game. And that's that's largely

1473
01:31:11,080 --> 01:31:11,840
Speaker 2: what they're trying to do.

1474
01:31:11,960 --> 01:31:17,879
Speaker 1: Now, let's be very specific with Google, which has almost

1475
01:31:18,000 --> 01:31:21,320
Speaker 1: all the market share and conventional search. Yeah, what would

1476
01:31:21,360 --> 01:31:23,520
Speaker 1: be the best solution there for everybody?

1477
01:31:24,160 --> 01:31:28,479
Speaker 2: Okay, So I built a company to raise money for

1478
01:31:28,600 --> 01:31:31,880
Speaker 2: charity called squid Doo before social media really caught on.

1479
01:31:32,000 --> 01:31:35,040
Speaker 2: We were the fortieth biggest website in the entire country.

1480
01:31:35,160 --> 01:31:38,559
Speaker 2: I had eight employees. There were three hundred thousand people

1481
01:31:38,680 --> 01:31:42,320
Speaker 2: building websites. Most of the money they were value they

1482
01:31:42,320 --> 01:31:46,200
Speaker 2: were creating was going to charity, and again we were fortieth.

1483
01:31:46,720 --> 01:31:50,040
Speaker 2: One day, Google did the math and realized that we

1484
01:31:50,040 --> 01:31:54,400
Speaker 2: were sending a lot of traffic to Amazon, and Amazon

1485
01:31:54,720 --> 01:31:56,680
Speaker 2: if they were getting traffic from us, wouldn't have to

1486
01:31:56,680 --> 01:32:00,920
Speaker 2: pay Google as their largest advertiser for promotion. So our

1487
01:32:01,000 --> 01:32:04,320
Speaker 2: traffic in one day went from being the fortieth biggest

1488
01:32:04,320 --> 01:32:07,959
Speaker 2: website in the world to forty millionth They turned.

1489
01:32:07,760 --> 01:32:10,679
Speaker 3: Us off just like that, flip the switch.

1490
01:32:11,320 --> 01:32:13,599
Speaker 2: So even though it hurt me, in three hundred thousand

1491
01:32:13,680 --> 01:32:17,479
Speaker 2: other people. That's not my point. My point is when

1492
01:32:17,479 --> 01:32:21,719
Speaker 2: you have one person who has the switch, they can't

1493
01:32:21,720 --> 01:32:24,559
Speaker 2: help it as a public company, but to keep flipping it,

1494
01:32:24,680 --> 01:32:27,000
Speaker 2: to keep pushing. So you may remember the old days

1495
01:32:27,000 --> 01:32:30,840
Speaker 2: of Google, the homepage would have maybe one ad on it,

1496
01:32:30,880 --> 01:32:33,479
Speaker 2: maybe a few on the side, and now there's almost

1497
01:32:33,479 --> 01:32:36,559
Speaker 2: no links whatsoever because they said to the people in

1498
01:32:36,600 --> 01:32:39,160
Speaker 2: the ad business, make as much money as you can

1499
01:32:39,240 --> 01:32:43,439
Speaker 2: by any means necessary. So this doesn't help consumers. It

1500
01:32:43,479 --> 01:32:47,160
Speaker 2: also doesn't really help advertisers, and it doesn't help the

1501
01:32:47,240 --> 01:32:51,520
Speaker 2: ecosystem that's being built. So there are lots of suggestions

1502
01:32:51,560 --> 01:32:54,040
Speaker 2: as to how a company like this could work. But

1503
01:32:54,160 --> 01:32:59,719
Speaker 2: imagine the following. You've got Google, the search core, which

1504
01:32:59,880 --> 01:33:03,080
Speaker 2: likes this is itself to anybody who wants to start

1505
01:33:03,120 --> 01:33:05,800
Speaker 2: an ad network, and you've got all these different ad

1506
01:33:05,840 --> 01:33:10,120
Speaker 2: networks that work together with different search engines and different

1507
01:33:10,240 --> 01:33:14,400
Speaker 2: interfaces to create different experiences for different kinds of users.

1508
01:33:15,360 --> 01:33:18,760
Speaker 2: The end result would be the market would decide which

1509
01:33:18,840 --> 01:33:22,320
Speaker 2: kind of interface and experience they wanted when they were searching,

1510
01:33:22,680 --> 01:33:26,360
Speaker 2: and the ones that weren't serving their consumers well would

1511
01:33:26,360 --> 01:33:30,320
Speaker 2: fade away. Advertisers would want to pay extra to go

1512
01:33:30,400 --> 01:33:33,559
Speaker 2: to places that work better for them and the consumers, etc.

1513
01:33:33,840 --> 01:33:36,800
Speaker 2: It wouldn't be one organization saying how do we make

1514
01:33:36,840 --> 01:33:43,240
Speaker 2: this quarter's numbers? It would instead be an ecosystem of solutions.

1515
01:33:44,240 --> 01:33:48,000
Speaker 2: And I was at Yahoo when Yahoo tried to be

1516
01:33:48,080 --> 01:33:51,759
Speaker 2: the monopoly that Google is today, and it's really toxic

1517
01:33:51,840 --> 01:33:54,920
Speaker 2: in the end because you have to make compromises that

1518
01:33:54,960 --> 01:33:55,680
Speaker 2: you're not proud of.

1519
01:33:58,960 --> 01:34:02,560
Speaker 1: Okay, just taking me with the ads, The user experience

1520
01:34:02,640 --> 01:34:05,760
Speaker 1: on Amazon is terrible. Now you can't find what you're

1521
01:34:05,800 --> 01:34:10,679
Speaker 1: looking for. Is their room for a competitor? What advice

1522
01:34:10,720 --> 01:34:13,400
Speaker 1: would you give to Amazon itself? Right?

1523
01:34:13,520 --> 01:34:18,160
Speaker 2: So Amazon only makes a little bit of their money

1524
01:34:18,400 --> 01:34:22,800
Speaker 2: by selling things like books, and they make billions of

1525
01:34:22,800 --> 01:34:25,400
Speaker 2: dollars selling the ads. So how does this work?

1526
01:34:25,920 --> 01:34:26,240
Speaker 1: Well?

1527
01:34:27,080 --> 01:34:29,560
Speaker 2: For many products, the only way that you're going to

1528
01:34:29,600 --> 01:34:31,800
Speaker 2: get any clicks at all is by buying ads because

1529
01:34:31,840 --> 01:34:34,479
Speaker 2: that's what people see. So how do you pay for

1530
01:34:34,560 --> 01:34:37,840
Speaker 2: the ads? Well, Amazon has a policy that you have

1531
01:34:37,880 --> 01:34:40,799
Speaker 2: to offer the lowest price you offer anywhere on Amazon.

1532
01:34:41,479 --> 01:34:44,439
Speaker 2: So instead these companies raise their price on other sites

1533
01:34:44,760 --> 01:34:48,439
Speaker 2: to make enough money to have their ads run on Amazon,

1534
01:34:48,479 --> 01:34:52,160
Speaker 2: which means that Amazon becomes more attractive to consumers because

1535
01:34:52,320 --> 01:34:55,320
Speaker 2: the price of the thing everywhere else is higher. So

1536
01:34:55,360 --> 01:34:59,919
Speaker 2: this is a death spiral that doesn't help anybody except Amazon.

1537
01:35:00,920 --> 01:35:04,320
Speaker 2: And their thesis would be, well, if it's legal, we

1538
01:35:04,400 --> 01:35:08,479
Speaker 2: can do it. And community action is the spirit of

1539
01:35:08,479 --> 01:35:10,519
Speaker 2: saying yeah, but we're the community and we are coming

1540
01:35:10,560 --> 01:35:16,160
Speaker 2: together saying you can't do that anymore. And Amazon is

1541
01:35:16,160 --> 01:35:19,040
Speaker 2: filled with some very smart people who can solve problems

1542
01:35:19,080 --> 01:35:21,920
Speaker 2: when you give them constraints. And so there are plenty

1543
01:35:21,920 --> 01:35:25,320
Speaker 2: of constraints. I can imagine where you can say there

1544
01:35:25,320 --> 01:35:29,320
Speaker 2: are different ways that the algorithm can be used, different

1545
01:35:29,439 --> 01:35:32,400
Speaker 2: sorts that could be available, different kinds of experiences you

1546
01:35:32,439 --> 01:35:34,519
Speaker 2: can have. And there's a warehouse company that knows how

1547
01:35:34,560 --> 01:35:37,320
Speaker 2: to ship stuff, and there's a website company that knows

1548
01:35:37,320 --> 01:35:39,120
Speaker 2: how to run things on the web.

1549
01:35:39,720 --> 01:35:40,519
Speaker 3: But having it.

1550
01:35:40,479 --> 01:35:43,439
Speaker 2: All in one place with a tiny group deciding what

1551
01:35:43,479 --> 01:35:46,720
Speaker 2: will make them the most money this week, I don't

1552
01:35:46,720 --> 01:35:50,080
Speaker 2: see any data that says that's good for all of us.

1553
01:35:49,920 --> 01:35:51,799
Speaker 2: It's not. It's not good for any of us except

1554
01:35:52,160 --> 01:35:54,280
Speaker 2: the people who need to make the stock price go up.

1555
01:35:54,680 --> 01:35:57,799
Speaker 1: Okay, so at one point, if one forgetting the changes

1556
01:35:57,840 --> 01:36:00,800
Speaker 1: in government we have Leni Khan now won't enter in

1557
01:36:00,840 --> 01:36:04,599
Speaker 1: the new administration. At what point do you say you're

1558
01:36:04,640 --> 01:36:09,080
Speaker 1: a monopoly and we should take action? What is the trigger?

1559
01:36:10,360 --> 01:36:13,080
Speaker 2: Okay, so I need to reiterate I am not an

1560
01:36:13,120 --> 01:36:15,400
Speaker 2: expert in any of this. I know people who are,

1561
01:36:15,880 --> 01:36:19,960
Speaker 2: but people who are conservative should and many of them

1562
01:36:19,960 --> 01:36:24,960
Speaker 2: are opposed to monopoly power because it's the opposite of

1563
01:36:25,400 --> 01:36:29,360
Speaker 2: this idea of small markets and people taking responsibility for

1564
01:36:29,400 --> 01:36:33,559
Speaker 2: what they do. And Robert Work and others worked very

1565
01:36:33,600 --> 01:36:38,040
Speaker 2: hard to change the definition of what made something a monopoly.

1566
01:36:39,200 --> 01:36:43,400
Speaker 2: In the old days, the definition was, by definition, if

1567
01:36:43,439 --> 01:36:48,040
Speaker 2: you control a big chunk of something limiting people's choice,

1568
01:36:48,240 --> 01:36:53,640
Speaker 2: you're a monopoly. The new definition eventually became, if prices

1569
01:36:53,960 --> 01:36:57,800
Speaker 2: are going up, consumers aren't benefiting, now we're going to

1570
01:36:57,840 --> 01:37:02,200
Speaker 2: take action. That's not the reason it's not valid is

1571
01:37:02,360 --> 01:37:06,240
Speaker 2: prices for some people might go down, but you still

1572
01:37:06,320 --> 01:37:09,920
Speaker 2: have all of the hard to measure effects that come

1573
01:37:09,960 --> 01:37:13,519
Speaker 2: from a lack of choice. So it is harder today,

1574
01:37:13,560 --> 01:37:17,479
Speaker 2: for example, to somebody, for somebody to build a business

1575
01:37:17,479 --> 01:37:20,920
Speaker 2: online unless they're going to get an unreasonable amount of

1576
01:37:20,920 --> 01:37:24,479
Speaker 2: traffic from Google, so people don't even try, right, It

1577
01:37:24,560 --> 01:37:28,360
Speaker 2: is hard today for someone to build an alternative to

1578
01:37:28,439 --> 01:37:33,280
Speaker 2: YouTube because they know that it's so deeply ingrained in

1579
01:37:33,360 --> 01:37:37,040
Speaker 2: the Google infrastructure that they're never going to get the

1580
01:37:37,040 --> 01:37:40,360
Speaker 2: traffic that they need, so they don't try. And what

1581
01:37:40,439 --> 01:37:45,519
Speaker 2: we're looking for in a civilized, industrialized world is the

1582
01:37:45,640 --> 01:37:51,120
Speaker 2: churn that comes from these innovations. Patents aren't the answer,

1583
01:37:51,560 --> 01:37:56,679
Speaker 2: Monopoly power isn't the answer. The answer is people solving

1584
01:37:56,800 --> 01:38:01,720
Speaker 2: other people's problems and getting paid for it. And you know,

1585
01:38:01,880 --> 01:38:04,400
Speaker 2: we saw what would happen when someone tried to corner

1586
01:38:04,439 --> 01:38:07,000
Speaker 2: the market in music. They try every few years. It

1587
01:38:07,000 --> 01:38:09,280
Speaker 2: doesn't help anybody except for the person who's trying to

1588
01:38:09,280 --> 01:38:10,000
Speaker 2: corner the market.

1589
01:38:10,960 --> 01:38:14,320
Speaker 1: Well, staying in music, we have the government suing for

1590
01:38:14,400 --> 01:38:19,200
Speaker 1: a breakup in Live Nation and ticket Master. Now, if

1591
01:38:19,240 --> 01:38:23,799
Speaker 1: you use the definition of pricing, it will not affect

1592
01:38:23,840 --> 01:38:30,200
Speaker 1: price whatsoever. The government's position in the modern era would be, well,

1593
01:38:30,240 --> 01:38:35,040
Speaker 1: if you divide them up, it will stimulate innovation. What

1594
01:38:35,200 --> 01:38:36,080
Speaker 1: is your thought there?

1595
01:38:36,880 --> 01:38:40,760
Speaker 2: Yeah, So the scalping thing is this fascinating understanding of

1596
01:38:40,840 --> 01:38:44,360
Speaker 2: supply and demand. And back to this idea of monopoly

1597
01:38:44,800 --> 01:38:49,000
Speaker 2: that when only one person is allowed to sell the tickets,

1598
01:38:49,479 --> 01:38:52,559
Speaker 2: you have this interesting dilemma that they have. So I

1599
01:38:52,600 --> 01:38:54,920
Speaker 2: talked to Bill Graham when he came to Stanford in

1600
01:38:55,000 --> 01:38:57,439
Speaker 2: nineteen eighty three, and I was like this young whipper snapper,

1601
01:38:57,439 --> 01:38:58,880
Speaker 2: and I raised my hand and he says, what do

1602
01:38:58,880 --> 01:39:02,360
Speaker 2: you got? And I said, but you got Springsteen coming

1603
01:39:02,400 --> 01:39:05,360
Speaker 2: to San Francisco. You're only charging eighteen dollars a ticket.

1604
01:39:06,560 --> 01:39:08,519
Speaker 2: Why are you leaving so much money on the table.

1605
01:39:09,080 --> 01:39:12,600
Speaker 2: You could get a hundred, and he said, because I

1606
01:39:12,640 --> 01:39:14,960
Speaker 2: book all the concerts in San Francisco. And yeah, I

1607
01:39:14,960 --> 01:39:17,759
Speaker 2: could get a hundred for Bruce, but then my customers

1608
01:39:17,760 --> 01:39:20,040
Speaker 2: would be out of money by the time we got

1609
01:39:20,080 --> 01:39:24,080
Speaker 2: to March. So I'm taking this long view, and I've

1610
01:39:24,120 --> 01:39:28,080
Speaker 2: remembered that for a long time, because you're right, when

1611
01:39:28,120 --> 01:39:32,040
Speaker 2: you write about the scalpers, someone is gonna charge extra.

1612
01:39:32,200 --> 01:39:36,559
Speaker 2: It's this whole lottery mindset doesn't make any sense. But

1613
01:39:36,600 --> 01:39:41,080
Speaker 2: that's I don't think at the heart of why you

1614
01:39:41,160 --> 01:39:43,840
Speaker 2: want to think about monopoly power with someone like Live

1615
01:39:43,960 --> 01:39:46,599
Speaker 2: Nation and Ticketmaster. You're correct, it's not how to get

1616
01:39:46,680 --> 01:39:49,679
Speaker 2: rid of the problem of scalpers, even though it makes

1617
01:39:51,520 --> 01:39:54,200
Speaker 2: good sense politically to go after it. When you've got

1618
01:39:54,200 --> 01:39:56,920
Speaker 2: young people who are obsessed, who are insensed because they

1619
01:39:56,920 --> 01:39:59,679
Speaker 2: have to pay so much. I think what we're talking

1620
01:39:59,720 --> 01:40:04,519
Speaker 2: about here is what kind of choices and innovations will

1621
01:40:04,520 --> 01:40:09,200
Speaker 2: come from those choices when people who are behind the

1622
01:40:09,200 --> 01:40:12,519
Speaker 2: scenes here have a choice when they play folks against

1623
01:40:12,520 --> 01:40:17,320
Speaker 2: each other. Would Ticketmaster have to lean harder into its

1624
01:40:17,360 --> 01:40:21,439
Speaker 2: technology stack to come up with innovative ways to deal

1625
01:40:21,479 --> 01:40:25,000
Speaker 2: with scalping if there was someone breathing down their neck?

1626
01:40:26,200 --> 01:40:30,360
Speaker 2: And I think history would say yes they would. And

1627
01:40:30,880 --> 01:40:36,400
Speaker 2: when you've locked up all the useful venues and contractually

1628
01:40:36,439 --> 01:40:38,920
Speaker 2: people can't compete with you, I don't see how that

1629
01:40:38,920 --> 01:40:45,600
Speaker 2: comes out in favor of the artists or the fans.

1630
01:40:50,840 --> 01:40:55,640
Speaker 1: Staying on the same subject of the touring, one of

1631
01:40:55,640 --> 01:40:58,559
Speaker 1: the reasons we have this gap and all this problem

1632
01:40:58,600 --> 01:41:02,280
Speaker 1: is the acts believe that if they charge what the

1633
01:41:02,360 --> 01:41:06,480
Speaker 1: ticket is worth, they will be perceived in a negative

1634
01:41:06,520 --> 01:41:10,240
Speaker 1: way by the fan. What would you tell the act?

1635
01:41:12,479 --> 01:41:12,839
Speaker 3: Okay?

1636
01:41:12,880 --> 01:41:19,759
Speaker 2: So the principle of permission marketing is delivering anticipated, personal

1637
01:41:19,800 --> 01:41:22,479
Speaker 2: and relevant messages that people who want to get them.

1638
01:41:22,880 --> 01:41:23,519
Speaker 3: Is the future.

1639
01:41:25,640 --> 01:41:29,320
Speaker 2: A lot of what people are interpreting when it comes

1640
01:41:29,320 --> 01:41:33,639
Speaker 2: to this ticketing thing is that the artist has no

1641
01:41:34,000 --> 01:41:37,840
Speaker 2: understanding of who the fan is. That I gave a

1642
01:41:37,880 --> 01:41:41,320
Speaker 2: talk at Columbia Records a few years ago and I

1643
01:41:41,320 --> 01:41:43,720
Speaker 2: held up a Dylan album from sixty five and at

1644
01:41:43,720 --> 01:41:47,160
Speaker 2: the back it said you could write to Bob at

1645
01:41:47,160 --> 01:41:52,400
Speaker 2: this address. They threw all the letters in the trash.

1646
01:41:53,080 --> 01:41:54,760
Speaker 2: Of course they did, what were they going to do

1647
01:41:54,800 --> 01:42:00,000
Speaker 2: with them? But now artists can directly connect to fans.

1648
01:42:02,080 --> 01:42:06,200
Speaker 2: If you can imagine a scenario where fans that are

1649
01:42:06,240 --> 01:42:09,479
Speaker 2: connected to the artists for the long haul and demonstrate it,

1650
01:42:10,200 --> 01:42:13,719
Speaker 2: get tickets at a price that makes sense for them,

1651
01:42:13,960 --> 01:42:17,080
Speaker 2: you have differentiated the audience. If some of them want

1652
01:42:17,120 --> 01:42:19,559
Speaker 2: to turn around and scalp it, well they got a

1653
01:42:19,560 --> 01:42:21,920
Speaker 2: prize for being a fan for a long time. But

1654
01:42:22,400 --> 01:42:25,080
Speaker 2: most of them won't, and so you will end up

1655
01:42:25,080 --> 01:42:28,320
Speaker 2: with the right people in the room who know that

1656
01:42:28,680 --> 01:42:31,800
Speaker 2: the ticket was worth a lot because someone offered them

1657
01:42:31,840 --> 01:42:33,839
Speaker 2: a bunch of money on their way in. That builds

1658
01:42:34,160 --> 01:42:37,760
Speaker 2: your fan base for the long haul. But what I'm

1659
01:42:38,000 --> 01:42:40,439
Speaker 2: trying to highlight here is there's a technology thing that's

1660
01:42:40,520 --> 01:42:42,960
Speaker 2: new that's missing from the old way of thinking about it,

1661
01:42:43,000 --> 01:42:46,000
Speaker 2: which is, instead of finding fans for my music, let

1662
01:42:46,000 --> 01:42:49,160
Speaker 2: me find music for my fans. And if a fan

1663
01:42:49,280 --> 01:42:51,960
Speaker 2: can demonstrate that they're really a fan and I can

1664
01:42:52,479 --> 01:42:56,200
Speaker 2: take them on that journey that benefits all of us.

1665
01:42:56,720 --> 01:43:00,680
Speaker 2: And so I don't know practically how I would do it,

1666
01:43:00,720 --> 01:43:03,120
Speaker 2: particularly for up and coming groups, but I would imagine

1667
01:43:03,120 --> 01:43:07,840
Speaker 2: it would be something like, there's a talking heads to

1668
01:43:07,920 --> 01:43:11,120
Speaker 2: our coming dire straits is going to open for them.

1669
01:43:11,520 --> 01:43:14,000
Speaker 2: As a result, they get to piggyback along on that

1670
01:43:14,080 --> 01:43:17,720
Speaker 2: attention and that trust, and so the artists become more

1671
01:43:17,720 --> 01:43:22,160
Speaker 2: of a kingmaker because their taste extends and their circles

1672
01:43:22,200 --> 01:43:27,400
Speaker 2: grow again. We've taken out the selfish middleman and flattened

1673
01:43:27,439 --> 01:43:29,280
Speaker 2: it a little bit. But I'm making all this up.

1674
01:43:29,360 --> 01:43:32,439
Speaker 1: I don't know, Okay, going something more in your air

1675
01:43:32,479 --> 01:43:36,559
Speaker 1: of expertise. Clayton Christensen, who's no longer with us, wrote

1676
01:43:36,600 --> 01:43:41,719
Speaker 1: the book Innovator's Dilemma, which was about disrupting yourself before

1677
01:43:41,920 --> 01:43:46,240
Speaker 1: you are disrupted. Now, just staying this a little inside baseball,

1678
01:43:47,000 --> 01:43:51,080
Speaker 1: there was professor at Harvard said, there's no such thing

1679
01:43:51,120 --> 01:43:54,360
Speaker 1: really as disruption. So what's your take on all of this?

1680
01:43:55,080 --> 01:43:57,000
Speaker 2: He said, there's no such thing as disruption?

1681
01:43:57,960 --> 01:44:02,679
Speaker 1: She went. He said, yes, I believe that's the woman,

1682
01:44:02,800 --> 01:44:06,439
Speaker 1: But I don't want to saying that. If you look

1683
01:44:06,520 --> 01:44:09,960
Speaker 1: back at history, all these companies that they said were

1684
01:44:10,000 --> 01:44:15,120
Speaker 1: disrupted ultimately one in the end. Let's leave that aside. Okay,

1685
01:44:15,640 --> 01:44:20,160
Speaker 1: let's talk about Clayton Christensen. Do you believe his philosophy

1686
01:44:20,400 --> 01:44:24,280
Speaker 1: was correct?

1687
01:44:24,960 --> 01:44:27,280
Speaker 2: Western Union had the chance to buy AT and T

1688
01:44:28,680 --> 01:44:32,960
Speaker 2: and they didn't. They made better telegrams instead. And I

1689
01:44:33,000 --> 01:44:34,720
Speaker 2: was at Yahoo when they had the chance to buy

1690
01:44:34,720 --> 01:44:41,759
Speaker 2: Google for ten million dollars and they didn't. The reason

1691
01:44:42,760 --> 01:44:48,200
Speaker 2: there's this challenge is that innovations at first always suck,

1692
01:44:49,479 --> 01:44:54,320
Speaker 2: and compared to the polished, perfect and profitable thing you've

1693
01:44:54,320 --> 01:44:57,200
Speaker 2: already got, it's very hard to say, oh, no, no,

1694
01:44:57,240 --> 01:44:59,400
Speaker 2: we're going to do that. It's very hard for GM

1695
01:44:59,840 --> 01:45:02,280
Speaker 2: to say we're going to make the first generation of

1696
01:45:02,320 --> 01:45:05,759
Speaker 2: electric cars because it doesn't match their culture, it doesn't

1697
01:45:05,800 --> 01:45:08,720
Speaker 2: match their strategy, and so you end up going to

1698
01:45:08,760 --> 01:45:11,760
Speaker 2: all these meetings where you have to justify it. It

1699
01:45:11,800 --> 01:45:15,200
Speaker 2: gets dumbed down, averaged out, and someone else with less

1700
01:45:15,200 --> 01:45:20,040
Speaker 2: to lose goes ahead and does it instead of you.

1701
01:45:20,960 --> 01:45:26,360
Speaker 2: And this challenge happens over and over and over again,

1702
01:45:27,200 --> 01:45:32,320
Speaker 2: and being willing to start with it in a way

1703
01:45:32,960 --> 01:45:38,360
Speaker 2: that makes the powerful people uncomfortable is very tricky. So

1704
01:45:38,479 --> 01:45:43,400
Speaker 2: another Netflix story, so Ted and Reid decide after they've

1705
01:45:43,400 --> 01:45:48,439
Speaker 2: beaten Blockbuster that the only threat that Netflix has for

1706
01:45:48,560 --> 01:45:52,040
Speaker 2: the near future is streaming because Netflix is making all

1707
01:45:52,040 --> 01:45:56,000
Speaker 2: those DVDs in the red envelopes they want, but someone

1708
01:45:56,200 --> 01:45:58,599
Speaker 2: they believe is going to come up with a streaming

1709
01:45:58,600 --> 01:46:02,880
Speaker 2: solution and wipe them out. So they decide they're going

1710
01:46:02,960 --> 01:46:06,320
Speaker 2: to do it. And this is a classic innovator's dilemma

1711
01:46:06,400 --> 01:46:11,519
Speaker 2: problem because remember DVDs, they're perfect, the video is really

1712
01:46:11,560 --> 01:46:14,519
Speaker 2: high quality, the technology has all worked out. They know

1713
01:46:14,600 --> 01:46:16,839
Speaker 2: exactly what to do. They're buying them from the studios

1714
01:46:16,880 --> 01:46:20,880
Speaker 2: and they're making a fortune. So Ted and Reid start

1715
01:46:20,920 --> 01:46:25,120
Speaker 2: this project. And the first rule is this. No one

1716
01:46:25,520 --> 01:46:28,920
Speaker 2: in the DVD division at Netflix, which accounts for one

1717
01:46:29,040 --> 01:46:32,280
Speaker 2: hundred percent of their profit, no one is allowed from

1718
01:46:32,320 --> 01:46:34,679
Speaker 2: that division to come to the meetings.

1719
01:46:35,280 --> 01:46:37,000
Speaker 3: Think about that.

1720
01:46:37,000 --> 01:46:40,160
Speaker 2: That's when Netflix became Netflix. That was an act of

1721
01:46:40,200 --> 01:46:43,840
Speaker 2: brilliance because they knew that the DVD people were in

1722
01:46:43,880 --> 01:46:47,160
Speaker 2: the room. They'd have to average it out, dumb it down,

1723
01:46:47,400 --> 01:46:50,559
Speaker 2: keep it small, and they yeah, it doesn't look as

1724
01:46:50,600 --> 01:46:52,559
Speaker 2: good as a DVD, and we're not gonna make as

1725
01:46:52,640 --> 01:46:55,439
Speaker 2: much money as a DVD. But they didn't have to

1726
01:46:55,520 --> 01:46:57,560
Speaker 2: have those meetings because they weren't involved.

1727
01:46:58,720 --> 01:47:01,479
Speaker 1: Well, staying on that same point point is one would

1728
01:47:01,560 --> 01:47:05,400
Speaker 1: remember the transition. They announced that they were streaming company.

1729
01:47:06,120 --> 01:47:10,400
Speaker 1: They were ahead of the consumer. The consumer revolted, then

1730
01:47:10,479 --> 01:47:14,800
Speaker 1: they blinked, then they went back to streaming. If you

1731
01:47:15,160 --> 01:47:18,120
Speaker 1: are a company, you know, I look at streaming music.

1732
01:47:19,000 --> 01:47:23,080
Speaker 1: Streaming Music when it launched in America was way ahead

1733
01:47:23,120 --> 01:47:26,759
Speaker 1: forgetting Rhapsody before, but Spotify, which really changed the game.

1734
01:47:27,320 --> 01:47:32,160
Speaker 1: It was ahead of what the public wanted. So to

1735
01:47:32,240 --> 01:47:35,400
Speaker 1: what degree do you consider the public? To what degree

1736
01:47:35,439 --> 01:47:37,719
Speaker 1: do you plan to get the public in your hand?

1737
01:47:38,080 --> 01:47:39,040
Speaker 1: What are your thoughts on that?

1738
01:47:40,280 --> 01:47:43,559
Speaker 2: Which public? Which public? Is the key to all of

1739
01:47:43,600 --> 01:47:47,880
Speaker 2: these things. So I got online in nineteen seventy six.

1740
01:47:48,479 --> 01:47:52,040
Speaker 2: I was Prodigy's first contractor in the nineteen eighties, and

1741
01:47:52,120 --> 01:47:56,160
Speaker 2: I showed Prodigy to people and they said, that's stupid,

1742
01:47:56,680 --> 01:48:01,479
Speaker 2: that'll never work. And if Prodigy hadn't shan changed, that's correct,

1743
01:48:01,560 --> 01:48:06,040
Speaker 2: it never would have worked. But which people? There were

1744
01:48:06,240 --> 01:48:09,000
Speaker 2: some people who said this is for me, and I'm

1745
01:48:09,040 --> 01:48:12,040
Speaker 2: going to tell other people, particularly as it grows, because

1746
01:48:13,160 --> 01:48:16,880
Speaker 2: what you're not trying to solve is what's the expression

1747
01:48:16,960 --> 01:48:21,440
Speaker 2: of the solution. You're trying to identify what's the insatiable

1748
01:48:22,280 --> 01:48:26,559
Speaker 2: whole the project, the problem that I can begin to

1749
01:48:26,760 --> 01:48:30,640
Speaker 2: solve for customers. If I can begin to solve it,

1750
01:48:30,760 --> 01:48:35,240
Speaker 2: I get traction, and customer traction is the key. If

1751
01:48:35,240 --> 01:48:38,080
Speaker 2: you're an A and R person, what you want to

1752
01:48:38,120 --> 01:48:42,200
Speaker 2: know is the fans of this band. How often do

1753
01:48:42,240 --> 01:48:44,439
Speaker 2: they come back? Not how many fans do they have,

1754
01:48:45,080 --> 01:48:46,760
Speaker 2: how often do they come back, and who do they

1755
01:48:46,760 --> 01:48:49,280
Speaker 2: bring with them? Because if the answer is they don't

1756
01:48:49,280 --> 01:48:51,160
Speaker 2: come back and they don't bring anyone with them, it's

1757
01:48:51,200 --> 01:48:54,840
Speaker 2: a stiff. But even if they only have a thousand fans,

1758
01:48:55,320 --> 01:48:57,680
Speaker 2: but they can't stop showing up and talking about it,

1759
01:48:58,840 --> 01:49:00,360
Speaker 2: Now you have something that's in an innovation.

1760
01:49:02,640 --> 01:49:06,080
Speaker 1: Okay, when did you decide that you were going to

1761
01:49:06,160 --> 01:49:07,800
Speaker 1: blog every day?

1762
01:49:09,840 --> 01:49:13,240
Speaker 2: So I started blogging on a platform before this one

1763
01:49:13,360 --> 01:49:18,360
Speaker 2: and before that one in the nineteen nineties or just

1764
01:49:18,400 --> 01:49:22,880
Speaker 2: around two thousand and It was just a way of

1765
01:49:22,920 --> 01:49:25,680
Speaker 2: telling the skeptical people I was related to that I

1766
01:49:25,760 --> 01:49:28,760
Speaker 2: wasn't doing nothing all day. It was just like an

1767
01:49:28,840 --> 01:49:30,160
Speaker 2: update as to what was going on.

1768
01:49:30,920 --> 01:49:35,400
Speaker 1: Wait, let's slow down, my Literally, the skeptical people you

1769
01:49:35,439 --> 01:49:39,960
Speaker 1: were related to, meaning you were family, were they down

1770
01:49:40,040 --> 01:49:42,679
Speaker 1: on you because it was a dip in your career,

1771
01:49:42,840 --> 01:49:46,919
Speaker 1: or they couldn't understand the whole world of the internet.

1772
01:49:47,080 --> 01:49:47,920
Speaker 1: What was going on?

1773
01:49:48,080 --> 01:49:50,160
Speaker 2: Yeah, I mean it began as an email newsletter in

1774
01:49:50,200 --> 01:49:53,519
Speaker 2: the nineties. It was I had no no, no, what

1775
01:49:53,720 --> 01:49:57,240
Speaker 2: was going on in your family? No, I'm getting driven right, Okay, okay.

1776
01:49:57,600 --> 01:50:02,280
Speaker 2: I hadn't sold my company. It was struggle. I didn't

1777
01:50:02,280 --> 01:50:04,799
Speaker 2: have a job with a name, and there were plenty

1778
01:50:04,800 --> 01:50:05,639
Speaker 2: of people who were.

1779
01:50:05,479 --> 01:50:06,360
Speaker 3: Like, what do you do?

1780
01:50:06,720 --> 01:50:10,559
Speaker 2: So I could write these letters. These not that different

1781
01:50:10,600 --> 01:50:13,679
Speaker 2: than I left this letter to people saying is this

1782
01:50:13,760 --> 01:50:16,960
Speaker 2: I tried this, this didn't work, blah blah blah. And

1783
01:50:17,000 --> 01:50:20,400
Speaker 2: then sometimes I was Once I had this new platform,

1784
01:50:20,479 --> 01:50:21,880
Speaker 2: I was doing it two or three times a day,

1785
01:50:23,160 --> 01:50:29,960
Speaker 2: and I discovered that there was a voice that sounded

1786
01:50:30,120 --> 01:50:33,160
Speaker 2: like my blog voice. The first one hundred posts, I

1787
01:50:33,160 --> 01:50:35,760
Speaker 2: probably only had two that sounded like me. If you

1788
01:50:35,840 --> 01:50:37,800
Speaker 2: go back and you look at the one on my

1789
01:50:37,880 --> 01:50:41,320
Speaker 2: visit to the Apple Store, that's the one where I thought, oh,

1790
01:50:41,360 --> 01:50:45,240
Speaker 2: I sound like this now on my blog. And what

1791
01:50:45,360 --> 01:50:50,600
Speaker 2: I didn't want to do was regularly decide if a

1792
01:50:50,640 --> 01:50:54,120
Speaker 2: blog post was good enough to post. So I made

1793
01:50:54,160 --> 01:50:57,400
Speaker 2: the decision once that there's gonna be a blog post

1794
01:50:57,439 --> 01:51:01,000
Speaker 2: tomorrow now because it's my best but because it's tomorrow.

1795
01:51:01,880 --> 01:51:05,880
Speaker 2: And once I made that decision once, oh, it was

1796
01:51:05,960 --> 01:51:08,640
Speaker 2: so great because then all day you're imagining what are

1797
01:51:08,640 --> 01:51:10,599
Speaker 2: you going to do for tomorrow's post because there's going

1798
01:51:10,680 --> 01:51:13,920
Speaker 2: to be a post, and having that hole to fill

1799
01:51:15,040 --> 01:51:18,559
Speaker 2: transform my writing, and it transformed the ability I had

1800
01:51:18,640 --> 01:51:21,519
Speaker 2: to have a conversation in front of people.

1801
01:51:22,240 --> 01:51:24,800
Speaker 1: But that can be a burden. You can wake up

1802
01:51:24,840 --> 01:51:26,559
Speaker 1: and you can say, well, I got to have something

1803
01:51:26,600 --> 01:51:29,080
Speaker 1: for tomorrow. If I knock it off at ten am,

1804
01:51:29,439 --> 01:51:31,720
Speaker 1: I'm free for the rest of the day. If it's

1805
01:51:31,760 --> 01:51:34,360
Speaker 1: eight pm and I haven't written anything yet, what am

1806
01:51:34,400 --> 01:51:34,880
Speaker 1: I going to do?

1807
01:51:35,600 --> 01:51:36,080
Speaker 3: Yeah?

1808
01:51:36,160 --> 01:51:40,040
Speaker 2: And so that burden is called work, and that's what

1809
01:51:40,080 --> 01:51:43,080
Speaker 2: I wanted was to sign up for it. I needed

1810
01:51:43,080 --> 01:51:45,880
Speaker 2: a hack once I got to a thousand, because when

1811
01:51:45,880 --> 01:51:47,439
Speaker 2: they got to a thousand and I went, oh, I

1812
01:51:47,479 --> 01:51:50,360
Speaker 2: have a streak here. Now I'm up to almost ten thousand.

1813
01:51:50,360 --> 01:51:52,400
Speaker 2: I have a streak here. I don't want to get

1814
01:51:52,439 --> 01:51:55,559
Speaker 2: the flu and blow my streak. So I figure out

1815
01:51:55,600 --> 01:51:59,240
Speaker 2: how to queum up. So now I can take a

1816
01:51:59,280 --> 01:52:00,680
Speaker 2: day or two. Often there's still going to be a

1817
01:52:00,680 --> 01:52:04,040
Speaker 2: post tomorrow. But what I do is every night before

1818
01:52:04,040 --> 01:52:07,080
Speaker 2: I go to bed, I read tomorrow's post. At about

1819
01:52:07,080 --> 01:52:09,280
Speaker 2: one out of five times, I delete it and just

1820
01:52:09,320 --> 01:52:10,120
Speaker 2: write a whole new thing.

1821
01:52:11,840 --> 01:52:17,879
Speaker 1: Okay, how do you feel about repeating concepts and ideas?

1822
01:52:18,800 --> 01:52:21,760
Speaker 2: If I'm not doing that, I'm making a mistake. I

1823
01:52:21,800 --> 01:52:24,040
Speaker 2: gotta be repeating ideas and concepts.

1824
01:52:24,080 --> 01:52:24,680
Speaker 3: This is not.

1825
01:52:26,760 --> 01:52:29,479
Speaker 2: A demonstration of how creative I am. This is me

1826
01:52:29,640 --> 01:52:38,599
Speaker 2: Teaching and pedagogy is about repetition, consistency, frequency, and helping

1827
01:52:38,680 --> 01:52:41,240
Speaker 2: people like My best blog posts are very simple. My

1828
01:52:41,320 --> 01:52:43,599
Speaker 2: best blog posts are I tell you something you already

1829
01:52:43,600 --> 01:52:45,720
Speaker 2: know in a way that makes it easy for you

1830
01:52:45,800 --> 01:52:47,000
Speaker 2: to tell your friends.

1831
01:52:47,479 --> 01:52:48,479
Speaker 3: That's what I'm trying to do.

1832
01:52:49,240 --> 01:52:51,200
Speaker 1: But every once in a while, I mean, I have

1833
01:52:51,400 --> 01:52:56,880
Speaker 1: still have bookmarked your original permission marketing post, and you

1834
01:52:56,920 --> 01:52:58,840
Speaker 1: wrote one a couple of weeks ago that I wrote

1835
01:52:58,880 --> 01:53:01,599
Speaker 1: about that really made a huge impact. What is it

1836
01:53:01,720 --> 01:53:03,720
Speaker 1: like when you do this is something I don't know.

1837
01:53:03,720 --> 01:53:06,200
Speaker 1: Maybe you'll agree with me, maybe you won't. When you

1838
01:53:06,280 --> 01:53:10,400
Speaker 1: do something that's in eleven, you know you've been doing

1839
01:53:10,439 --> 01:53:13,760
Speaker 1: it so long you're never gonna write something terrible. But

1840
01:53:14,000 --> 01:53:16,519
Speaker 1: every once in a while, you write something transcend, it's

1841
01:53:16,520 --> 01:53:19,880
Speaker 1: the nature of doing it. Does it bother you that

1842
01:53:19,960 --> 01:53:22,040
Speaker 1: you sort of can only do it once. If you're

1843
01:53:22,080 --> 01:53:23,800
Speaker 1: a musician, if you write a hit song, you go

1844
01:53:23,840 --> 01:53:26,759
Speaker 1: on the road for forty years and play that song. Okay,

1845
01:53:27,400 --> 01:53:29,439
Speaker 1: do you ever feel I wrote it? It was great,

1846
01:53:29,920 --> 01:53:31,720
Speaker 1: and now tomorrow it's another thing?

1847
01:53:33,120 --> 01:53:35,479
Speaker 2: You know, Bob, There's two answers to this. The first

1848
01:53:35,520 --> 01:53:40,360
Speaker 2: part is I will write an eleven and no one

1849
01:53:40,360 --> 01:53:41,040
Speaker 2: else will know.

1850
01:53:42,560 --> 01:53:42,640
Speaker 3: That.

1851
01:53:42,800 --> 01:53:46,959
Speaker 2: I have no clue which posts people.

1852
01:53:46,760 --> 01:53:47,360
Speaker 3: Are gonna love.

1853
01:53:47,960 --> 01:53:49,120
Speaker 1: None.

1854
01:53:49,760 --> 01:53:53,919
Speaker 2: And the second one is when I do write something

1855
01:53:54,200 --> 01:53:58,920
Speaker 2: that resonates, I don't forget it. It shows up on podcasts,

1856
01:53:59,000 --> 01:54:01,479
Speaker 2: it shows up when I'm on stage, it shows up

1857
01:54:01,479 --> 01:54:05,960
Speaker 2: in a book, And so I'm you know, no, I

1858
01:54:05,960 --> 01:54:07,840
Speaker 2: don't get to play free Bird all the time. But

1859
01:54:07,920 --> 01:54:09,519
Speaker 2: I also don't have the problem of having to play

1860
01:54:09,520 --> 01:54:14,120
Speaker 2: free Bird all the time. But I have riffs that

1861
01:54:14,240 --> 01:54:18,160
Speaker 2: become the fabric of the foundational thing I'm talking about,

1862
01:54:18,840 --> 01:54:21,040
Speaker 2: And when I'm on stage and I know, I get

1863
01:54:21,080 --> 01:54:22,600
Speaker 2: to bring up the next one because I don't have

1864
01:54:22,640 --> 01:54:25,240
Speaker 2: a script. When I bring it, I'm like, oh, this

1865
01:54:25,360 --> 01:54:29,200
Speaker 2: is great. And every once in a while it'll stop

1866
01:54:29,240 --> 01:54:32,400
Speaker 2: working and oh I love that one. It's gone now,

1867
01:54:33,040 --> 01:54:36,280
Speaker 2: So there's that. But I disagree. I don't know when

1868
01:54:36,280 --> 01:54:37,360
Speaker 2: I write an eleven, I.

1869
01:54:37,240 --> 01:54:41,280
Speaker 1: Wrote, okay, to what degree does feedback affect you?

1870
01:54:43,320 --> 01:54:45,400
Speaker 2: So there's no comments on my blog There used to

1871
01:54:45,440 --> 01:54:50,200
Speaker 2: be comments. What I found was within a week I

1872
01:54:50,280 --> 01:54:54,520
Speaker 2: was writing differently because I was anticipating the comments and

1873
01:54:54,680 --> 01:54:58,840
Speaker 2: writing to avoid that criticism. Whatever I thought would happen,

1874
01:54:59,320 --> 01:55:03,320
Speaker 2: and my writing went to shit. And so I said,

1875
01:55:03,360 --> 01:55:05,360
Speaker 2: I'm not gonna have true choices. I can either have

1876
01:55:06,320 --> 01:55:09,600
Speaker 2: a blog with comments and no blog posts or a

1877
01:55:09,640 --> 01:55:12,520
Speaker 2: blog with blog posts and no comments. And I went

1878
01:55:12,600 --> 01:55:14,960
Speaker 2: with blog posts. And I don't regret it one bit.

1879
01:55:15,160 --> 01:55:17,160
Speaker 2: I don't know how you do what you do. It's

1880
01:55:17,160 --> 01:55:20,600
Speaker 2: a miracle. You and I are completely different in this respect.

1881
01:55:21,040 --> 01:55:27,000
Speaker 2: And then Amazon reviews, A one star review from an

1882
01:55:27,040 --> 01:55:32,560
Speaker 2: anonymous person who didn't get the joke would really unsettle me,

1883
01:55:32,600 --> 01:55:34,880
Speaker 2: because a one star review doesn't mean it I didn't

1884
01:55:34,920 --> 01:55:36,880
Speaker 2: do a good job. It means it wasn't for them,

1885
01:55:38,120 --> 01:55:42,200
Speaker 2: and I haven't learned anything from that. So I stopped

1886
01:55:42,200 --> 01:55:44,480
Speaker 2: reading my one star reviews. But if you didn't do that,

1887
01:55:44,520 --> 01:55:46,520
Speaker 2: you have to stop reading your five star reviews. So

1888
01:55:46,560 --> 01:55:49,040
Speaker 2: I haven't read an Amazon review in seven or ten

1889
01:55:49,120 --> 01:55:52,480
Speaker 2: years unless someone emails it to me, which I don't want.

1890
01:55:52,280 --> 01:55:52,760
Speaker 3: Them to do.

1891
01:55:53,520 --> 01:55:56,320
Speaker 1: Okay, but you're not someone who lives in complete isolation.

1892
01:55:56,920 --> 01:56:02,160
Speaker 1: You're out doing gigs whatever. There are some greatest hits.

1893
01:56:02,200 --> 01:56:04,720
Speaker 1: I'm sure people come up to you and go, you

1894
01:56:04,760 --> 01:56:09,120
Speaker 1: know what you wrote about X. Yeah, I read Okay,

1895
01:56:09,200 --> 01:56:11,880
Speaker 1: Purple Cow, Yes, which you've been. But my point is

1896
01:56:12,400 --> 01:56:16,680
Speaker 1: just go because I'm interested. You don't know when you

1897
01:56:16,760 --> 01:56:18,280
Speaker 1: hit it way out of the park.

1898
01:56:18,920 --> 01:56:22,480
Speaker 2: When it's just me in my underwear, no idea. So

1899
01:56:23,560 --> 01:56:26,800
Speaker 2: I don't talk about evolution on stage anymore, and I

1900
01:56:26,840 --> 01:56:29,000
Speaker 2: hardly blog about it. I wrote a book it took

1901
01:56:29,080 --> 01:56:33,280
Speaker 2: me nine hours a day for a year called Survival

1902
01:56:33,360 --> 01:56:36,480
Speaker 2: Is Not Enough. Charles Darwin wrote the forward. I am

1903
01:56:36,680 --> 01:56:40,600
Speaker 2: super proud of that book. And whenever I start talking

1904
01:56:40,600 --> 01:56:43,760
Speaker 2: about sexual selection and mutation and all the stuff that

1905
01:56:43,800 --> 01:56:47,800
Speaker 2: I know a lot about crickets, just the room, just

1906
01:56:48,320 --> 01:56:51,560
Speaker 2: people's eyes glaze over. They do not want to go

1907
01:56:51,640 --> 01:56:55,120
Speaker 2: to the next level of understanding how ideas are like

1908
01:56:55,280 --> 01:56:58,760
Speaker 2: jeans and all that stuff. And I get talk about

1909
01:56:58,760 --> 01:57:00,800
Speaker 2: it all day and people don't want me to.

1910
01:57:00,840 --> 01:57:03,760
Speaker 3: So I don't. It's done. But when I wrote it,

1911
01:57:03,800 --> 01:57:04,240
Speaker 3: I was like.

1912
01:57:04,720 --> 01:57:08,120
Speaker 2: This is Nobel prize stuff, this is this is an eleven.

1913
01:57:09,320 --> 01:57:09,640
Speaker 3: Nothing.

1914
01:57:10,960 --> 01:57:15,800
Speaker 1: Okay, you know in my particular case, certainly when it

1915
01:57:15,840 --> 01:57:18,760
Speaker 1: comes to politics in the national vibe, I get that

1916
01:57:18,920 --> 01:57:23,080
Speaker 1: from the feedback. Having said that, I understand your concept completely.

1917
01:57:23,160 --> 01:57:26,560
Speaker 1: It is inhibiting getting the feedback and wrestling with that

1918
01:57:27,360 --> 01:57:31,480
Speaker 1: all of the time. So how do you put your

1919
01:57:31,560 --> 01:57:34,920
Speaker 1: finger on the pulse? How do you take the temperature?

1920
01:57:35,000 --> 01:57:37,840
Speaker 1: What is your input?

1921
01:57:38,640 --> 01:57:41,680
Speaker 2: So I mean, I'm meeting hundreds of blog posts a day,

1922
01:57:42,080 --> 01:57:45,160
Speaker 2: and I'm in the world and I talk to people.

1923
01:57:45,360 --> 01:57:49,960
Speaker 2: But here's my thesis. Most people have been indoctrinated if

1924
01:57:50,000 --> 01:57:53,280
Speaker 2: they see something they don't understand to just walk on by.

1925
01:57:54,640 --> 01:57:57,520
Speaker 2: If there's something in the world that is illogical to

1926
01:57:57,600 --> 01:58:00,120
Speaker 2: me that is working, but I don't think it should work.

1927
01:58:00,560 --> 01:58:03,360
Speaker 2: That isn't working, but I think it should work. I

1928
01:58:03,400 --> 01:58:05,920
Speaker 2: can't let it go. I have to sit and look

1929
01:58:06,000 --> 01:58:11,200
Speaker 2: and look and look until I have a thesis. And

1930
01:58:11,360 --> 01:58:17,360
Speaker 2: that exploration is the fuel for a lot of my work.

1931
01:58:17,760 --> 01:58:20,880
Speaker 2: Please explain to me how the culture ended up like.

1932
01:58:20,840 --> 01:58:25,240
Speaker 1: This, and before we know, what's the status of your stereo?

1933
01:58:26,200 --> 01:58:31,680
Speaker 2: So I built speakers and some two A three two

1934
01:58:31,720 --> 01:58:36,920
Speaker 2: bamps that I got that are handmade, and of course

1935
01:58:36,920 --> 01:58:40,320
Speaker 2: Paul McGowan built all the stack on the streaming side.

1936
01:58:40,720 --> 01:58:45,360
Speaker 2: But these speakers, which I painted in Evecline blue, combined

1937
01:58:45,400 --> 01:58:49,880
Speaker 2: with the three watt per channel amps. Just like I

1938
01:58:49,960 --> 01:58:52,560
Speaker 2: used to buy you speakers a new set every three

1939
01:58:52,560 --> 01:58:56,120
Speaker 2: to five months on audio Gone done with that, I

1940
01:58:56,120 --> 01:58:59,560
Speaker 2: haven't had a new set of speakers in three years.

1941
01:58:59,080 --> 01:59:02,800
Speaker 2: It's I was listening last night to O brother and

1942
01:59:03,600 --> 01:59:05,760
Speaker 2: what a genius t bone was is?

1943
01:59:07,160 --> 01:59:09,960
Speaker 3: They sound great? It makes me very happy.

1944
01:59:10,160 --> 01:59:15,560
Speaker 1: Okay, Well, in the chain the sound is affected definitively

1945
01:59:16,080 --> 01:59:18,240
Speaker 1: by the speaker. We can talk about everything that comes

1946
01:59:18,280 --> 01:59:24,760
Speaker 1: before that will colors, but every speaker inherently sounds different. Correct, Okay,

1947
01:59:25,360 --> 01:59:28,080
Speaker 1: So what is it about these speakers that, with all

1948
01:59:28,120 --> 01:59:31,839
Speaker 1: the experiences you've had, you finally decide this is the one?

1949
01:59:32,280 --> 01:59:32,600
Speaker 1: All right?

1950
01:59:32,640 --> 01:59:34,120
Speaker 2: So the most I ever spent on a pair of

1951
01:59:34,160 --> 01:59:38,280
Speaker 2: speakers was sixty thousand dollars. And the cool thing about

1952
01:59:38,320 --> 01:59:40,800
Speaker 2: Audiogon is you can buy a used pair of speakers

1953
01:59:41,120 --> 01:59:43,120
Speaker 2: and sell them for what you pay for them. So

1954
01:59:43,160 --> 01:59:45,400
Speaker 2: I've actually broken even pretty much on all of my

1955
01:59:45,480 --> 01:59:50,600
Speaker 2: speaker adventures. These speakers are baffleous, which means there's no box.

1956
01:59:51,160 --> 01:59:53,360
Speaker 2: You've got the driver, which is a hole in a

1957
01:59:53,400 --> 01:59:57,600
Speaker 2: big sheet of butcher block, and this the front and

1958
01:59:57,640 --> 02:00:00,680
Speaker 2: the back are both exposed to the outside world. And

1959
02:00:01,360 --> 02:00:05,080
Speaker 2: that means they're super fast because they're not pushing against

1960
02:00:05,160 --> 02:00:09,960
Speaker 2: the compressed air inside the box. And because they're so

1961
02:00:10,040 --> 02:00:13,600
Speaker 2: efficient ninety eight dB efficient, I only have to give

1962
02:00:13,640 --> 02:00:16,360
Speaker 2: them a little tiny bit of power. And the thing

1963
02:00:16,400 --> 02:00:20,720
Speaker 2: about amplification is two bamps of the fifties were better

1964
02:00:20,760 --> 02:00:23,040
Speaker 2: than almost any ant made today, but they couldn't get

1965
02:00:23,200 --> 02:00:27,360
Speaker 2: very loud because they only have a few watts per channel.

1966
02:00:27,440 --> 02:00:31,680
Speaker 2: So when the transistor came along, the manufacturers loved it

1967
02:00:31,680 --> 02:00:33,280
Speaker 2: because they could give you one hundred two hundred, four

1968
02:00:33,320 --> 02:00:35,880
Speaker 2: hundred wats and it only cost them four bucks. So

1969
02:00:37,440 --> 02:00:40,440
Speaker 2: by going backwards with the tubes, I got the chance

1970
02:00:40,480 --> 02:00:44,320
Speaker 2: to get that sweetness. Maybe it's not completely realistic, but

1971
02:00:44,400 --> 02:00:48,680
Speaker 2: it sounds so nice. So it's the bafflus, it's the

1972
02:00:48,760 --> 02:00:52,880
Speaker 2: high efficiency, it's the quick speed, and it's the fact

1973
02:00:52,920 --> 02:00:55,480
Speaker 2: that I'm in the sweet spot of what the tube

1974
02:00:55,480 --> 02:00:55,840
Speaker 2: can do.

1975
02:00:56,680 --> 02:01:02,360
Speaker 1: Okay, you built your own speakers, who designed them, who

1976
02:01:02,440 --> 02:01:07,080
Speaker 1: decided on the components, right, So there's only one driver,

1977
02:01:07,920 --> 02:01:12,320
Speaker 1: and there's no crossover, so the tweeter, the woofer, the midrange,

1978
02:01:12,360 --> 02:01:16,760
Speaker 1: they're all one thing. And it's two brothers in China

1979
02:01:16,880 --> 02:01:21,240
Speaker 1: who are audiophiles who decided to use Chinese ability to

1980
02:01:21,400 --> 02:01:24,200
Speaker 1: make things much cheaper than they should be, but to

1981
02:01:24,240 --> 02:01:27,720
Speaker 1: spend a lot to make these drivers. So the drivers

1982
02:01:27,760 --> 02:01:33,520
Speaker 1: cost six hundred dollars a pair, and if they were

1983
02:01:33,560 --> 02:01:36,480
Speaker 1: made in the US, they would probably cost twenty thousand

1984
02:01:36,520 --> 02:01:38,800
Speaker 1: dollars a pair. So about the six hundred dollars pair

1985
02:01:38,800 --> 02:01:43,280
Speaker 1: of drivers and everything else is just me screwing things together. Okay,

1986
02:01:43,640 --> 02:01:48,040
Speaker 1: so they're full spectrum one driver fuir spectrum. Can I

1987
02:01:48,040 --> 02:01:50,000
Speaker 1: ask how many inches they are across?

1988
02:01:50,160 --> 02:01:50,920
Speaker 3: Twelve inches?

1989
02:01:51,960 --> 02:01:55,240
Speaker 2: And I'm looking on my web here to tell you

1990
02:01:55,280 --> 02:02:01,839
Speaker 2: the name of the company because it's been a little while. Aldo, Okay,

1991
02:02:02,000 --> 02:02:08,600
Speaker 2: it's called Lee Song l II, And what you're looking

1992
02:02:08,640 --> 02:02:11,720
Speaker 2: for is, oh, they're down to three hundred and ninety

1993
02:02:11,760 --> 02:02:16,000
Speaker 2: nine dollars. They're the Lie Song fifteen inch full range

1994
02:02:16,040 --> 02:02:16,680
Speaker 2: speaker driver.

1995
02:02:18,400 --> 02:02:21,360
Speaker 1: And then you decided how large a piece of wood

1996
02:02:21,400 --> 02:02:22,960
Speaker 1: and how to installment or they get tell.

1997
02:02:22,840 --> 02:02:24,960
Speaker 2: You, no, I built a whole enclosure and I tried

1998
02:02:25,000 --> 02:02:30,560
Speaker 2: different approaches and it's not that hard because there aren't

1999
02:02:30,560 --> 02:02:31,360
Speaker 2: that many choices.

2000
02:02:32,520 --> 02:02:34,640
Speaker 1: And then what do you use for source?

2001
02:02:35,480 --> 02:02:41,480
Speaker 2: So I used to have a huge collection of CDs,

2002
02:02:41,520 --> 02:02:43,680
Speaker 2: and then for a while I got into vinyl, but

2003
02:02:43,760 --> 02:02:47,320
Speaker 2: I found I kept coming back to streaming using Rune,

2004
02:02:48,120 --> 02:02:50,400
Speaker 2: which is a piece of software that everybody who loves

2005
02:02:50,440 --> 02:02:54,480
Speaker 2: music should have. Are n And what Rone does is

2006
02:02:54,520 --> 02:02:59,680
Speaker 2: it's the interface between title and cobas as your sources

2007
02:03:00,480 --> 02:03:05,920
Speaker 2: and the streaming box. And it's this beautiful interface that

2008
02:03:06,000 --> 02:03:08,720
Speaker 2: lets you see album art and all about the album.

2009
02:03:08,960 --> 02:03:12,360
Speaker 2: It's really lovely. It makes listening to music more fun

2010
02:03:12,560 --> 02:03:15,480
Speaker 2: and it also suggests the next song I want to

2011
02:03:15,520 --> 02:03:17,720
Speaker 2: listen to, and it's very smart about that. It's not

2012
02:03:17,760 --> 02:03:20,200
Speaker 2: being used against me because I paid for it. There's

2013
02:03:20,200 --> 02:03:26,160
Speaker 2: no ADS, there's no nobody's getting payola. It just works.

2014
02:03:26,560 --> 02:03:29,680
Speaker 2: And so I've got that thing running next to a

2015
02:03:29,720 --> 02:03:33,760
Speaker 2: box from PS Audio, and the PS audio box is

2016
02:03:33,760 --> 02:03:39,560
Speaker 2: the thing that takes the Ethernet cable and turns it

2017
02:03:39,640 --> 02:03:45,360
Speaker 2: into an analog signal, and then that analog signal goes

2018
02:03:45,840 --> 02:03:49,600
Speaker 2: to an amp. Now, the thing about the amps. The

2019
02:03:49,640 --> 02:03:53,640
Speaker 2: amps come from a website called hi Fi Shark, which

2020
02:03:53,680 --> 02:03:57,520
Speaker 2: I also strongly recommend everybody. High Fi Shark is where

2021
02:03:57,560 --> 02:04:00,720
Speaker 2: all the people who are into this trade use stuff

2022
02:04:00,880 --> 02:04:05,920
Speaker 2: back and forth with each other, and it collects all

2023
02:04:05,960 --> 02:04:08,240
Speaker 2: of these different sites that have stuff. So you can

2024
02:04:08,280 --> 02:04:12,040
Speaker 2: set a search inside Hi Fi Shark that will send

2025
02:04:12,080 --> 02:04:16,240
Speaker 2: you an email every time one of these things comes

2026
02:04:16,280 --> 02:04:19,240
Speaker 2: up for sale. And so I'm looking now and I

2027
02:04:19,280 --> 02:04:23,760
Speaker 2: can see Bottlehead makes. There's one there, here's an audio

2028
02:04:23,800 --> 02:04:28,360
Speaker 2: note one that's super fancy, and I like to find

2029
02:04:28,480 --> 02:04:32,240
Speaker 2: the ones that are mostly hand built by hobbyists. But

2030
02:04:32,400 --> 02:04:35,160
Speaker 2: building at two a three am outside of my area

2031
02:04:35,160 --> 02:04:38,280
Speaker 2: of expertise is something that a really good hobbyist has

2032
02:04:38,320 --> 02:04:39,040
Speaker 2: no trouble doing.

2033
02:04:40,840 --> 02:04:44,680
Speaker 1: And just because you mentioned about the ads, what do

2034
02:04:44,760 --> 02:04:48,600
Speaker 1: you believe about Netflix adding an advertising tier?

2035
02:04:49,600 --> 02:04:51,480
Speaker 2: Okay, so what Netflix is trying to do now is

2036
02:04:51,640 --> 02:04:54,160
Speaker 2: pick up all the crumbs they might have missed first

2037
02:04:54,160 --> 02:04:57,360
Speaker 2: time around. And what they're going to have to do

2038
02:04:57,640 --> 02:05:00,240
Speaker 2: to make sure they do it in an intelligent way

2039
02:05:00,880 --> 02:05:07,040
Speaker 2: is cripple the ad experience enough that people can afford

2040
02:05:07,120 --> 02:05:10,960
Speaker 2: and want to pay for. Netflix will because they'll always

2041
02:05:11,000 --> 02:05:13,440
Speaker 2: make more money from that than they will from ads,

2042
02:05:14,280 --> 02:05:18,760
Speaker 2: and then get enough people to watch the ad part

2043
02:05:19,240 --> 02:05:21,960
Speaker 2: that they can get enough advertisers who will pay extra.

2044
02:05:22,840 --> 02:05:27,480
Speaker 2: And this is critical because bottom fishing ads the kind

2045
02:05:27,520 --> 02:05:31,520
Speaker 2: you see on late night TV wreck the viewing experience,

2046
02:05:31,560 --> 02:05:34,000
Speaker 2: which means fewer people watch them, which means that they

2047
02:05:34,000 --> 02:05:34,760
Speaker 2: wreck it further down.

2048
02:05:34,760 --> 02:05:35,480
Speaker 3: It's a race to the.

2049
02:05:35,400 --> 02:05:39,400
Speaker 2: Bottom where you want to super Bowl ads, where advertisers

2050
02:05:39,440 --> 02:05:42,120
Speaker 2: pay extra to be in front of a lot of people.

2051
02:05:42,960 --> 02:05:47,280
Speaker 2: So I think Netflix's plan is to keep differentiating so

2052
02:05:47,320 --> 02:05:50,200
Speaker 2: that people like me and maybe you will pay their

2053
02:05:50,240 --> 02:05:53,680
Speaker 2: twenty or thirty bucks a month and then build a

2054
02:05:53,720 --> 02:05:57,520
Speaker 2: big enough audience that you won't see YouTube ads, you'll

2055
02:05:57,520 --> 02:06:00,320
Speaker 2: see super Bowl ads on the rest.

2056
02:06:00,680 --> 02:06:05,680
Speaker 1: Well, if we you know, basically Netflix blinked after a

2057
02:06:05,720 --> 02:06:09,680
Speaker 1: bad quarter, if we we wound the tape, do you

2058
02:06:09,800 --> 02:06:12,840
Speaker 1: think adding an advertising tier was wise?

2059
02:06:14,800 --> 02:06:17,400
Speaker 2: Again, I guess it comes down to what kind of

2060
02:06:17,440 --> 02:06:19,720
Speaker 2: company do you want to build? And you know, as

2061
02:06:19,760 --> 02:06:23,120
Speaker 2: we bring this around to this where we started, if

2062
02:06:23,160 --> 02:06:25,760
Speaker 2: you're going to be owned by short term thinkers in

2063
02:06:25,800 --> 02:06:28,760
Speaker 2: the stock market, you have really dumb people as your bosses.

2064
02:06:29,720 --> 02:06:34,800
Speaker 2: And Netflix enjoyed this really significant and rapid rise. They're

2065
02:06:34,880 --> 02:06:37,000
Speaker 2: much better at something like that than I would ever be.

2066
02:06:37,960 --> 02:06:41,120
Speaker 2: But if you want to build a company you're proud of.

2067
02:06:42,120 --> 02:06:44,880
Speaker 2: I don't think you want advertisers, and I don't think

2068
02:06:44,920 --> 02:06:49,120
Speaker 2: you want short term owners. I think you want to

2069
02:06:49,120 --> 02:06:52,560
Speaker 2: be able to say we are beholden not to advertisers,

2070
02:06:52,960 --> 02:06:56,640
Speaker 2: but to our viewers who are paying us, and we

2071
02:06:56,680 --> 02:06:59,280
Speaker 2: want owners that are going to stick around so that

2072
02:06:59,320 --> 02:07:02,600
Speaker 2: we can build that Because the goal of a company

2073
02:07:02,600 --> 02:07:05,360
Speaker 2: shouldn't be to make as much money as possible for

2074
02:07:05,400 --> 02:07:07,840
Speaker 2: the people who own it today. It should be to

2075
02:07:07,840 --> 02:07:08,720
Speaker 2: do work you're proud of.

2076
02:07:11,160 --> 02:07:15,840
Speaker 1: And I'm proud of the wisdom you've dropped on us today, Seth.

2077
02:07:15,880 --> 02:07:17,800
Speaker 1: I want to thank you so much for taking this

2078
02:07:18,000 --> 02:07:20,160
Speaker 1: time spending it with my audience.

2079
02:07:20,560 --> 02:07:23,200
Speaker 2: Bob, you are such a mention. You are a national treasure.

2080
02:07:23,760 --> 02:07:27,040
Speaker 2: And to find someone who I like so much, who

2081
02:07:27,040 --> 02:07:29,840
Speaker 2: thinks so differently from me, what a treat. Thank you

2082
02:07:29,920 --> 02:07:31,560
Speaker 2: for having me. There's a bucket list item.

2083
02:07:31,720 --> 02:07:33,800
Speaker 1: Well, now you're raising a lot of questions, but that'll

2084
02:07:33,840 --> 02:07:36,480
Speaker 1: be another time in terms of thinking differently in any event,

2085
02:07:36,600 --> 02:07:53,400
Speaker 1: until next time, this is Bob Luff sets