Speaker 1: All Zone Media.
Speaker 2: Welcome to Better Offline. I'm your host ed zetron Today
Speaker 2: I am joined barcul Zone Media's Robert Evans, and he's
Speaker 2: joining me to talk more about the growth that all
Speaker 2: costs rot economy. It's the thing that's making your beloved
Speaker 2: tech products worse to make someone else hundreds of millions
Speaker 2: of dollars. And it's so good, Robert. We love it,
Speaker 2: don't we, folks.
Speaker 1: I'm having a great time. I love that I used
Speaker 1: to make a living teaching like people who would pay
Speaker 1: you to the company. I worked for huge amounts of
Speaker 1: money to be trained in like how to use Google
Speaker 1: more effectively, all these little dorks and stuff that allow
Speaker 1: you to like really specialize your search settings. And I
Speaker 1: love that. Just in the last couple of years, Google
Speaker 1: has placed a shot gun to the base of their
Speaker 1: searches engines. Skull pulled the trigger, and now a bunch
Speaker 1: of people are desperately trying to be like, oh, there's
Speaker 1: this new perperplexity AI or this other AI search engine,
Speaker 1: like it's much better. And it's like, no, it's slightly
Speaker 1: better than Google now, but they're all worse than Google
Speaker 1: used to be. None of this is a step forward.
Speaker 1: They're just pains in the ass.
Speaker 2: So one of the reasons that that's happening isn't just
Speaker 2: the public markets. The public markets are a big part
Speaker 2: of the problem, and they're the ones that incentivize this
Speaker 2: whole growth or costs phenomenon. But I actually want you
Speaker 2: to know that this has another cause, and it's private
Speaker 2: investing and venture capital. Those are the ones who are
Speaker 2: pretty much putting a thumb on the head of innovation
Speaker 2: that is stopping great companies being built by incentivizing well,
Speaker 2: kind of a form of slaughter, fattening up pigs to
Speaker 2: sell to the market, rather than making something innovative.
Speaker 1: Yeah, like like some sort of like a pig sheep
Speaker 1: hybrid like a peep.
Speaker 2: But you could eat the meat from there.
Speaker 1: Yeah yeah, I think it would probably be like like
Speaker 1: the like the clone from the fourth Alien movie that
Speaker 1: just is begging for you to kill it, but then
Speaker 1: you know, you get some sort of fucked up bacon.
Speaker 2: But instead of getting that fucked up bacon, what you
Speaker 2: actually get is more like the creature from the Thing,
Speaker 2: the weird spider creature, which is funny, scary, but not
Speaker 2: particularly useful.
Speaker 1: Yeah, probably not very tasty.
Speaker 2: So before companies like Uber reached the public markets. They're
Speaker 2: fueled by a much more violent and reckless form of funding,
Speaker 2: venture capital. Venture capitalists can be seed stage investors or
Speaker 2: regular guy putting ten grand into a company, all the
Speaker 2: way up to massive firms with hundreds of people like
Speaker 2: Andresen Horowitz, who invested early in Facebook and Airbnb.
Speaker 1: Yeah, Like the thing that I've always that I came
Speaker 1: to realize about like venture capital money just from studying scams,
Speaker 1: is you have like Corey Doctor talks about this a lot.
Speaker 1: But like in traditional scam terminology of this period called
Speaker 1: like the bezel right, which is the time between starting
Speaker 1: the scam when everybody else realizes it's a fucking scam.
Speaker 1: It's the period in which you're making a bunch of money,
Speaker 1: and like that's that's where all of these VC people
Speaker 1: like make their fortune. You know, some of the companies
Speaker 1: they back do turn out to be long term profitable,
Speaker 1: but they don't have to be. If you can just
Speaker 1: sort of get this IPO where everybody values it super
Speaker 1: highly for a while and cash out what you have
Speaker 1: in the company during that period of time. If the
Speaker 1: company fails a few years after its IPO, if it
Speaker 1: turns out that like it wasn't really a good business,
Speaker 1: you still get rich. Like the key thing is, it's
Speaker 1: great if you wind up making a successful business in
Speaker 1: their eyes, but you don't have to for them to
Speaker 1: make a lot of money, right, They just have to
Speaker 1: have to be able to get out before you know,
Speaker 1: the scam reaches its its conclusion, they.
Speaker 2: Have to reach a liquidity events, so either selling that
Speaker 2: company to someone else or taking it public. And a
Speaker 2: big thing is the venture capital. Yes, like all investment things,
Speaker 2: is always just evil at its core, but it used
Speaker 2: to be much smaller. Used to be maybe a billion
Speaker 2: dollars in a year that would go into tech startups.
Speaker 2: Now it's in twenty twenty two, it's like two hundred
Speaker 2: and forty billion dollars. And I'll get to why that's
Speaker 2: an obscene number later, specifically around crypto. But when it
Speaker 2: was smaller, investment wasn't done with these ideas of these five, ten,
Speaker 2: twenty x multipliers. It was I want to put money
Speaker 2: early into this company because I think they're making a
Speaker 2: good product that people will buy. The problem was companies
Speaker 2: like Google and Apple to a lesser extent, but really
Speaker 2: companies like Facebook getting these massive multi billion, hundred billion
Speaker 2: dollar valuations. Suddenly startups stopped needing ten twenty fifty one
Speaker 2: hundred grand at seed stage and started needing two to
Speaker 2: five to ten million dollars at the seed or even
Speaker 2: series A stage. And suddenly venture capitalists started moving away
Speaker 2: from this idea of good businesses that could last without them,
Speaker 2: and they started to go into a form of kind
Speaker 2: of of symbolic capital, investing in things that looked value
Speaker 2: but aren't necessarily valuable at their whole. As a result,
Speaker 2: they create this ecosystem where these companies go through this
Speaker 2: kind of volatile, irrosive cycle of growth, with the only
Speaker 2: goal being that they get to a stage when they
Speaker 2: become someone else's problem, either by listing on the public
Speaker 2: markets or selling to a much bigger company.
Speaker 1: Yeah, and the whole crypto industry is essentially taking that
Speaker 1: like it comes out of everyone. People who came to
Speaker 1: expect this and in a lot of cases got rich
Speaker 1: for the first time through this chunk of the tech
Speaker 1: industry and then realized, well, if we create a way
Speaker 1: to utilize some of these these psychological phenomenons and like
Speaker 1: some of these ideas without any kind of regulation, like
Speaker 1: that's where crypto comes from, right Like it's it's purely
Speaker 1: the scam aspects of this with none of the real businesses.
Speaker 2: And you're completely right, And I will shortly get to
Speaker 2: that as well, because yeah, here's let me set the
Speaker 2: scene of the current state of the value up emerges,
Speaker 2: they're considered the next big thing. They ideally reach unicorn status,
Speaker 2: which refers to them being worth a billion dollars, and
Speaker 2: they experience unprecedented growth, they explode, and nobody asks the question, hey,
Speaker 2: you make in more money than you're spending. Open Ai
Speaker 2: is a great example of this. Right now, they get
Speaker 2: these articles saying, oh, we've got over a billion dollars
Speaker 2: in revenue. No one's saying, are you how much you
Speaker 2: spending to get there? But suddenly, after all of this
Speaker 2: venture investment, after all of this hype, they're challenging the
Speaker 2: big dogs of their industry. They're getting in there and
Speaker 2: they raise more and more money, and then they buy
Speaker 2: up a few more companies and now they're at this big, fat,
Speaker 2: nasty penultimate stage when people begin to ask if it
Speaker 2: was a good business. And at this point they either
Speaker 2: have to sell it to someone else or take it public,
Speaker 2: So the destination may change, but the journey's always kind
Speaker 2: of the same. You grow, you grow, you try and
Speaker 2: find a business model, you grow a bit more, and
Speaker 2: then you face reality. The idea the deal state, by
Speaker 2: the way, for venture capital is before this point reality
Speaker 2: should not interfere with making money. So venture capital pumps
Speaker 2: millions and billions of dollars into these ideas that might
Speaker 2: kind of sell a product or a service, but really
Speaker 2: just resemble something that was worth something in the past.
Speaker 2: Perhaps the founder is a white guy who looks kind
Speaker 2: of like Mark Zuckerberg. This is literally a phenomena. In
Speaker 2: the twenty tens, it was guys who looked like Mark
Speaker 2: Zuckerberg wearing hoodies. Or maybe it's hey, Uber's a big company.
Speaker 2: What if you're the uber for something else, Uber for laundry,
Speaker 2: for example. Yeah, a lot of those companies die, and
Speaker 2: what they're trying to do is keep the dance going
Speaker 2: until someone is dumb enough to buy them, or they
Speaker 2: can convince Morgan Stanley to help them go public. And
Speaker 2: the real problem with the value right now is people
Speaker 2: are conflating the concept of great ideas with things they
Speaker 2: like and things that might sell, and the result is
Speaker 2: less innovative things are happening. These companies that are getting
Speaker 2: the money Open Aye, getting ten billion dollars mostly in
Speaker 2: cloud credits isn't making the world better. It's looking a
Speaker 2: major startup into being a customer of Microsoft and making
Speaker 2: a product that has yet to really prove itself.
Speaker 1: Yeah, I think people are surprised by that. But like
Speaker 1: what we mean is not that like you can't do
Speaker 1: things that are cool or surprising with this stuff, but
Speaker 1: that that does not could like that does not conclude
Speaker 1: with it being a great business. Right A bunch of
Speaker 1: people are flipping out about that new them the video generator.
Speaker 1: We can make a minute song video that kind of
Speaker 1: looks like a California boom town or whatever, and it's like, yeah,
Speaker 1: it's cool, but like, is this number one something that's
Speaker 1: realistically going to be used in some things? Yeah, I'm
Speaker 1: sure it'll be in some things. This is going to
Speaker 1: like replace actually making movies? Well, probably not. And that
Speaker 1: kind of means there's probably a pretty limited amount of
Speaker 1: money that you're going to make with this right now,
Speaker 1: Like it's it's it's something that could potentially be a
Speaker 1: business that is profitable, but could it be a business
Speaker 1: that is more profitable than the amount of money they
Speaker 1: are continuing to shovel and open AI. That actually is
Speaker 1: still an open question.
Speaker 2: And the problem is that I'm not even saying that
Speaker 2: venture capital shouldn't happen. I do think it is a
Speaker 2: necessary force to get some ideas off the ground. But
Speaker 2: the problem is it's controlling the valley now, and as
Speaker 2: a result, the things that are getting funded are the problem.
Speaker 2: It's not that there are no good ideas, it's not
Speaker 2: that there are no good founders. It's that the funding
Speaker 2: is coming from an increasingly more centralized group of people
Speaker 2: who are pretty much and I get everyone's profit seeking,
Speaker 2: every investor wants a return, But there are venture capitalists
Speaker 2: out there who just don't care about creating new things.
Speaker 2: In fact, they're very, very very focused on keeping the
Speaker 2: status quo going. And that's where Andreason Horowitz comes in.
Speaker 2: My absolute favorite venture capital firm. You may remember them
Speaker 2: from Facebook.
Speaker 1: Reason Yeah so.
Speaker 2: Andreason Horowitz is amazing because they are large firm and
Speaker 2: they have various partners who all walk around making speeches
Speaker 2: and they do their tweets vaguely saying like decentralization is
Speaker 2: the future and it's good because of that, and you're like,
Speaker 2: what does that mean? And then they don't want to
Speaker 2: talk to you any further. Chris Dixon being one of
Speaker 2: the more ugly ones, a partner that is entirely focused
Speaker 2: on cryptocurrency, which I'm shortly going to get to. And
Speaker 2: nowhere was Andrews and Horowitz more crooked than crypto. The
Speaker 2: scam that Andreson Horowitz pulled on the crypto markets in
Speaker 2: twenty twenty one and twenty twenty two should be studied
Speaker 2: as a financial crime, and indeed it should be one.
Speaker 2: What it actually is is a way that they managed
Speaker 2: to turn basically money into more money without ever creating
Speaker 2: anything of value. They pumped billions of dollars into these
Speaker 2: things called Web three companies, which were allegedly new companies
Speaker 2: that were decentralized, but they were really just shells for
Speaker 2: a cryptocurrency token that someone could then hype and sell
Speaker 2: before the sec got aware of the problem. And I
Speaker 2: really must be clear how few of these companies actually
Speaker 2: did anything. Let me take a step back, let me
Speaker 2: explain how cryptocurrency companies made their money in like twenty
Speaker 2: twenty one, twenty twenty two. They would put out some
Speaker 2: a website for the thing, and they would say, we're
Speaker 2: going to do a decentralized social network and we're going
Speaker 2: to have this token. This token will reward people for
Speaker 2: the contributions to the social network. There were like eighty
Speaker 2: different versions of this idea. That token would then get
Speaker 2: a financial valuation through trading on various different crypto exchanges
Speaker 2: Binance or coinbase in many cases. And at this point
Speaker 2: you think, cool, what does the company do? And that
Speaker 2: was the wrong question to ask. The companies don't really
Speaker 2: do anything, or they're just traditional companies that have created
Speaker 2: a token as a means of monetizing a market. What
Speaker 2: Andrews and Horoids would do was invest in these companies
Speaker 2: and then receive a massive amount of these tokens at
Speaker 2: this vastly discounted price, kind of like how it works
Speaker 2: with stock and startup, and then you would hope, in
Speaker 2: the case of the stock for the startup, that you
Speaker 2: could sell it on the public markets or perhaps you
Speaker 2: could sell to another company. This usually takes about five
Speaker 2: to ten years. But what was amazing about the crypto
Speaker 2: scam was Andrewson Horowitz only had to wait a few
Speaker 2: months for these tokens, which they had bought at massive
Speaker 2: discount to list on say coinbase, a major cryptocurrency exchange
Speaker 2: where Mark Andreson has a board seat. This allowed them
Speaker 2: to dump all of their investment, which they got at
Speaker 2: this remarkably small price, onto retail investors, believing that they
Speaker 2: were in the ground floor. They basically invested in the
Speaker 2: stock market, invested in Morgan Stanley, invested in every part,
Speaker 2: and just funneled money between places. It was completely insane,
Speaker 2: and they be billions of dollars doing this. I feel
Speaker 2: crazy whenever I read about this stuff, because it happened
Speaker 2: in broad daylight.
Speaker 1: It's it's you know, you can say what you will
Speaker 1: about like the ability of anyone to accumulate that much money,
Speaker 1: but it at least even with like I don't think
Speaker 1: Zuckerberg deserves certainly wouldn't say he deserves to have billions
Speaker 1: of dollars. But if you say, if you like, say, okay,
Speaker 1: this guy's crazy rich, he's worth this many billions.
Speaker 2: What did you do?
Speaker 1: Well, he made this thing that everybody uses. That is
Speaker 1: a thing, right, as opposed to like this, which is
Speaker 1: how did he become a billionaire? Well, he played a
Speaker 1: really really fancy version of the shell game they play
Speaker 1: on the street in New York and all those movies
Speaker 1: from the eighties.
Speaker 2: And it's crazy because there was one called Definity they
Speaker 2: invested in school. It had a token called ICP Internet Computer.
Speaker 2: I think it stand for that's not done anything. That
Speaker 2: company's never made anything, No one's using that, there are
Speaker 2: no users. But Andres and Horwitz made so much money
Speaker 2: off of it. At the beginning of the pandemic, Mark
Speaker 2: and Dreson did this big bloviating posting it's time to build.
Speaker 2: But I think the real fun scam of this, the
Speaker 2: thing that makes me laugh but also cry, is that
Speaker 2: there was a prolonged period where Andresen Horowitz and many
Speaker 2: venture capitalists invested in building nothing. They found these shell
Speaker 2: companies that they then filled full of venture dollars. In exchange,
Speaker 2: they got a bunch of tokens that they were allowed
Speaker 2: to dump onto the markets. They conned so many people.
Speaker 2: They invested in Yuga Labs, who makes the board ape
Speaker 2: Yacht Club.
Speaker 1: Ah, that one's gonna pay off. That investment's gonna pay off.
Speaker 1: I've seen their their bored ape world of Warcraft thing
Speaker 1: that they believe it's going to be the future of
Speaker 1: social networking or whatever.
Speaker 2: And this is the thing. These companies never really built anything.
Speaker 2: They invested. They got the early ape coin. I really
Speaker 2: hate saying this stuff out loud, very annoying. Yeah, they've
Speaker 2: got the ape coins and they were able to profit
Speaker 2: off of that, and then they have the temerity to
Speaker 2: say Christison went on hard Fork the New York Times
Speaker 2: podcast and said, oh, yeah, we don't invest in anyone
Speaker 2: who has their own tokens. It's just they're just fucking liars.
Speaker 2: They're just liars lying to us.
Speaker 1: All I do kind of wonder that one of the
Speaker 1: things that makes me makes me believe some sort of
Speaker 1: like universal spirit guiding reality, is that like Peter Jennings
Speaker 1: had to die when he did, we simply couldn't have
Speaker 1: had a world in which Peter Jennings was explaining ape
Speaker 1: coin to people over the television like that. That wouldn't
Speaker 1: have been allowed. Like that's simply unimaginable.
Speaker 2: And it's just having to sit there here and say, yeah,
Speaker 2: ape ape coin, that's how they made them money. Ape chain,
Speaker 2: Oh yeah, definity Ic. It's these things that sucked. But
Speaker 2: also as funny as this is, this was a prolonged
Speaker 2: period when nothing was created other than money for already
Speaker 2: rich guys. The people that were disadvantaged by dumping these
Speaker 2: tokens were regular investors who, in twenty twenty one to
Speaker 2: twenty twenty two believe that the crypto market was going
Speaker 2: to make them wildly rich and it didn't. Coinbase, who
Speaker 2: andresen Horitz invested in, they helped millions of people lose
Speaker 2: billions of dollars because they did a Super Bowl commercial
Speaker 2: in February twenty twenty two, which eventually led Well, I
Speaker 2: think if you invested on that day, if you waited
Speaker 2: to sell any later than March, you would have lost
Speaker 2: your shirt. You would have just been at a loss. However,
Speaker 2: if you'd wait it, it's now back up to sixty
Speaker 2: seven thousand, So who the fuck knows either way.
Speaker 1: Yeah.
Speaker 2: The big thing with the crypto craze was that it
Speaker 2: was the most pornographic version of the problem of venture
Speaker 2: capital today in that it was entirely symbolic value. It was, oh,
Speaker 2: a decentralized computer, what a novel idea? Are we building it?
Speaker 2: Who knows? But we have a token today. Yay, let's
Speaker 2: make some money. And in twenty twenty two, crypto startups
Speaker 2: raise thirty three billion dollars a venture capital, which is
Speaker 2: more than ten percent of the two hundred and forty
Speaker 2: one billion dollars that was invested in that entire year. Jeezuz,
Speaker 2: And none of them have made a real product. Yuga Labs.
Speaker 2: You laugh at the bored Apoch Club, but that is
Speaker 2: actually one of the few real products that actually launch.
Speaker 1: Yeah, they do seem to be making a video game.
Speaker 1: It looks like shit, but it does seem to be
Speaker 1: a video game.
Speaker 2: And I think that it's a symptom of a much
Speaker 2: larger problem, both in that they're not investing to actually
Speaker 2: make cool tech happen, but they're just trying to make
Speaker 2: as much money in the most lazy way possible. But
Speaker 2: I also think there's another problem. I don't think these
Speaker 2: freaks actually know what good looks like anymore. And nowhere
Speaker 2: else is that more obvious than Adam goddamn Newman. Yeah, baby,
Speaker 2: we love him so Adam Newman. For those of you
Speaker 2: who don't know round, a company called we Work. We
Speaker 2: Work's business model was that they would buy or lease
Speaker 2: a building and they would sub lease it to people,
Speaker 2: allowing them to run their company out of it or
Speaker 2: use a coworking space. Theoretically a good idea until you
Speaker 2: looked at the financials, where it constantly bled money almost
Speaker 2: immediately because real estate is a terrible investment. Yeah, and
Speaker 2: also it was way too cheap. It was way too
Speaker 2: cheap from the very beginning, so they were always operating
Speaker 2: a loss.
Speaker 1: Yeah, it's it's he Newman. The thing that's interesting about
Speaker 1: him because he and Elizabeth Holmes were kind of having
Speaker 1: their glory days around the same time, and they're both
Speaker 1: very similar figures. Newman was much smarter because he chose
Speaker 1: he picked a field where like no one was going
Speaker 1: to vengefully come after him for fucking up, because everyone
Speaker 1: in real estates some kind of con artist at that
Speaker 1: scale as opposed to trying to get into like blood science.
Speaker 2: But what's great about it is he turned a company
Speaker 2: that was at one point worth forty seven billion dollars
Speaker 2: into one worth ten point sixty five million dollars, and
Speaker 2: then the company died, it went into Chapter eleven bankruptcy.
Speaker 1: We all love it.
Speaker 2: And right now those cleaning up the mess, if we work,
Speaker 2: are just desperately trying to renegotiate its debts and just
Speaker 2: being like his company. I'm sorry I can't pay you
Speaker 2: due to this business model which I have inherited. At
Speaker 2: one point we work traded at five hundred or something
Speaker 2: dollars a share, and I believe right now it's like
Speaker 2: zero point zero five cents. See the thing thing now,
Speaker 2: there's been a show about we work with Jared Lito
Speaker 2: in it of Morebius fame, and this is one of
Speaker 2: the more legendary startups.
Speaker 1: And I tend to I choose to believe by the
Speaker 1: way that it is within the Morbius cannon, that this
Speaker 1: is what he's doing when his character is not unshowered
Speaker 1: in a hoodie fighting crime.
Speaker 2: Fighting Matt Smith from Doctor Who. So as we've established
Speaker 2: Adam Newman aka Morbius, he you'd think, Okay, this guy
Speaker 2: famously TV show about how bad he was at business,
Speaker 2: this guy'd be run out of town.
Speaker 3: Right wrong.
Speaker 2: Adam Newman managed to raise in August twenty twenty two
Speaker 2: three hundred and fifty million dollars for his new co
Speaker 2: company Flow Great.
Speaker 1: I love how people learn lessons.
Speaker 2: And what's great about Flow is when you go and
Speaker 2: look about actually what it is, no one can really
Speaker 2: tell you. It appears to be a rent to own
Speaker 2: apartment company, but it isn't obvious what the actual difference
Speaker 2: is between it and I don't know what BlackRock's been
Speaker 2: doing for years, what the asset management firms have been doing. Nevertheless,
Speaker 2: Mark Andresen absolutely busted. Is not everywhere to get three
Speaker 2: hundred and fifty million dollars into this company. They claim
Speaker 2: that there will be community oriented features and that there
Speaker 2: will be something special about being involved in Flow. Now
Speaker 2: you think that I'm just being vague. It's been like
Speaker 2: a year and a half since this company went out
Speaker 2: and there's really nothing that like out there for it.
Speaker 2: And I think it's because Adam Newman just was someone
Speaker 2: that Mark Andreson remembered.
Speaker 3: I'm not.
Speaker 2: I still cannot work out why this happened. He's always
Speaker 2: been full of shit. Just to be clear, because there
Speaker 2: was this, Andrews and Horowitz actually really used to video
Speaker 2: an interview with Adam Newman. He was describing home ownership
Speaker 2: and why home ownership was very special. He was saying,
Speaker 2: it's the difference between cooling your own building supert to
Speaker 2: unclogged the toilet or unclogging it yourself. And he was
Speaker 2: saying that doing so and I quote, shifts your thinking
Speaker 2: from being transactional to actually being part of a community
Speaker 2: and feeling like you own something, but you.
Speaker 1: Don't want them to own anything. You just want them
Speaker 1: to have to do shit that the landlord is supposed
Speaker 1: to do.
Speaker 2: But also, if I have to unclog my shitter, I'm
Speaker 2: not sitting there being like yeah, damn, I love the community.
Speaker 1: I'm like, what the hell right, Well, it's also like
Speaker 1: it's it's fucked up because like one of the I
Speaker 1: mean this is actually unclogging your toilet is always on
Speaker 1: the person using the toilet. That's not really saying that
Speaker 1: that that involves changes based on whether or not you're
Speaker 1: the landlord. But one of like the bit like renting.
Speaker 1: A lot of things that suck about renting, namely the
Speaker 1: fact that like it keeps getting more and more expensive.
Speaker 1: But one of the if it's of renting is that
Speaker 1: if something breaks, you're supposed to just be able to
Speaker 1: call the owner and they have to fix it. It's
Speaker 1: not on you if you're fucking ac breaks, it's on
Speaker 1: them to make it work. And he's saying that like, no,
Speaker 1: if you if you are responsible for fixing things but
Speaker 1: have absolutely no ownership of them, it's fine because that
Speaker 1: makes you part of a community, and that's that's nuts.
Speaker 2: But also that just to be clear, that quote is
Speaker 2: from an interview he gave at Andrew's and Horowitz at
Speaker 2: his investor. Yeah, if I was watching that as an investor,
Speaker 2: unless I was completely disconnected from humanity, I'd be like,
Speaker 2: this guy's never unclogged the toilet, this guy's never on
Speaker 2: this guy's never done home maintenance. Also, why would you
Speaker 2: call your super to unclog your toilet just just have
Speaker 2: a plunger unless Yeah, they nearly backed that bad boy up,
Speaker 2: and I have.
Speaker 1: To have done a lot more damage than that.
Speaker 2: Yeah, yeah, you're literally shitting bricks in this case. But
Speaker 2: I think it's more indicative of the fact that I
Speaker 2: don't think Adam Newman has had a normal human experience
Speaker 2: in quite some time, and I don't think Mark Andresen
Speaker 2: has either, And yet he just got this insane amount
Speaker 2: of money to address problems allegedly related to a thing
Speaker 2: he does not understand.
Speaker 1: Yeah, love to see, which.
Speaker 2: Is also something he's been proven to be bad at.
Speaker 2: Adam Newman lost billions of dollars of soft Bank's money,
Speaker 2: which is really funny when you think about it, and actually,
Speaker 2: do you want to hear a fun scam. He took
Speaker 2: a loan out on his stock at we Work and
Speaker 2: he actually had to put his stock from we Work
Speaker 2: out to soft Bank, took real money from them and
Speaker 2: leveraged his stock, and then soft Bank was like, hey,
Speaker 2: if you don't pay this back, we're going to take
Speaker 2: your stock. And he was like, yeah, sure, fuck you,
Speaker 2: I'll just I'll like that stock's worth like thirty dollars. Now,
Speaker 2: I'll just keep the real money and never repay ye
Speaker 2: see it, bitch. But this is the thing. This is why,
Speaker 2: And I think situations like this are where people are
Speaker 2: going to start really getting black pilled with the tech industry.
Speaker 2: So I think that you see things like this happening
Speaker 2: and you think, are they laughing at us? Yeah? Like,
Speaker 2: is this in a sane world? Adam Newman wouldn't see
Speaker 2: a single dollar for the rest of his life. Yeah,
Speaker 2: he got three hundred and fifty million goddamn dollars. It
Speaker 2: was immediately a billion dollar company before it done anything.
Speaker 2: And all they have to show for it is a
Speaker 2: six hundred and thirty nine unit apartment building for Lauderdale.
Speaker 1: Yeah. And when you see a guy with the record
Speaker 1: that Newman has get a company valued at that. What
Speaker 1: that means is that investors investors are not are are
Speaker 1: not valuing it that much because they think it will
Speaker 1: actually make that much money. They're valuing it that high
Speaker 1: because they think this guy is good at spin enough
Speaker 1: that we'll be able to flip this shit and get
Speaker 1: some money out of it before the company collapses. Right,
Speaker 1: we can do an IPO, our shares will be worth money,
Speaker 1: and then we cash the fuck out. That's what they're seeing,
Speaker 1: and they may be right. It may wind up being
Speaker 1: it like we work made some people a lot of money.
Speaker 2: But that's the thing. I actually wonder if that system
Speaker 2: work anymore. Yeah, I don't know when whether they're going
Speaker 2: to be able to get liquidity on this, because real
Speaker 2: estate is a fairly well it can be a variable asset,
Speaker 2: but it's also kind of an annoyingly real one. You
Speaker 2: can't really go to someone and be like, actually, this
Speaker 2: apartment building's worth fifty million dollars more because of the
Speaker 2: future of innovation. No, No, it's a fucking apartment.
Speaker 1: Yeah.
Speaker 2: And I just think that Venger Capital has completely lost
Speaker 2: the plot and has lost its ability to say what
Speaker 2: good is they just it's almost like there are some
Speaker 2: of them who are con artists feeding corn artists. Yeah,
Speaker 2: and some of the largest investment arounds the last few
Speaker 2: years have just gone into systems like this, gone into
Speaker 2: things that when you look at them, you're like this,
Speaker 2: this doesn't need this much money. Why are you doing this?
Speaker 2: And I think it's because they just are gamblers. I
Speaker 2: just think they're gambling, and they're gambling based on an
Speaker 2: increasingly small amount of information because it's been twenty years
Speaker 2: since they've done something. No there was a company called Noom,
Speaker 2: which was a weight loss app that connected with coaches
Speaker 2: and various things. They raised five hundred and forty million
Speaker 2: dollars in twenty twenty two. Not sustainable and not profitable either.
Speaker 2: But also the entire weight loss industry is worth about
Speaker 2: four billion dollars, So you're saying they are worth that much.
Speaker 1: Of an eighth of the whole industry. Yeah, right, And
Speaker 1: if I'm mathing right now, yeah.
Speaker 2: I was also failing to do the math in real
Speaker 2: time there, but oh whatever, people know, people know how
Speaker 2: dumn math good. Clubhouse is one of my favorites that
Speaker 2: I'm not sure if you remember Clubhouse. It was this
Speaker 2: audio app that grew during the pandemic, and everyone said
Speaker 2: this is the future, and what it was was it
Speaker 2: would be it's basically Twitter spaces. It's what we know
Speaker 2: as Twitter Space is now a live audio room where
Speaker 2: you can go in and have, in this case, extremely
Speaker 2: vacuous tech conversations. It was big during the pandemic because
Speaker 2: everyone was at home and you have people on Mark
Speaker 2: Andrews and who of course had invested, going on there
Speaker 2: and saying stuff like, oh, the future of technology is
Speaker 2: the future and I've won. Wow, Mark, thank you. And
Speaker 2: there was this weird period where almost every other almost
Speaker 2: every week, there was some kind of valuation story that
Speaker 2: would quote unquote league and it would be like, oh,
Speaker 2: it's worth two billion dollars. Oh, it's worth four billion
Speaker 2: dollars now. And then they started disappearing and nothing's really happening,
Speaker 2: and as people started leaving their houses again after the
Speaker 2: lockdowns ended, Clubhouse just kind of faded to black. The
Speaker 2: thing that pissed me off about that was the amount
Speaker 2: of stories in major media outlets claiming that Clubhouse was
Speaker 2: the future, the future specifically of radio, which is a
Speaker 2: twelve billion dollar industry. Totally yeah, that constantly has trouble
Speaker 2: making money, not that we know anything about that, but.
Speaker 1: I mean also, you know, the fun thing about that
Speaker 1: to me is that, like we know really well what
Speaker 1: like the issues that radio has with making money are
Speaker 1: like due in part to you know, ways in which
Speaker 1: advertising and stuff has changed, but like pretty durably, the
Speaker 1: things that people want out of radio are like people
Speaker 1: they like talking about things they're interested in. Right, initially
Speaker 1: that was like people DJs, they liked talking about the
Speaker 1: cool music. But it's expanded now beyond that. But it's
Speaker 1: never just been like random unscripted conversations between people who
Speaker 1: have mics of varying quality. Like that's not particularly a
Speaker 1: thing that folks have ever expressed a desire for. And
Speaker 1: it's weird to me that anyone thought that like Clubhouse
Speaker 1: was going to be interesting beyond a very specific subset
Speaker 1: of people that wanted to suck these these people's proverbial dicks.
Speaker 2: And it felt like a corn in real time as well,
Speaker 2: because they were pushing Andrew S Norwittz was pushing every
Speaker 2: partner they could to use it. They were paying celebrities
Speaker 2: to go on there, they were getting anyone they could
Speaker 2: to get on the platform, and they were very clearly
Speaker 2: behind the scenes trying to get someone to buy it.
Speaker 2: And then Twitter just built Twitter spaces that everyone's like, oh,
Speaker 2: we can just use this on a network that we use. Clubhouse, now,
Speaker 2: by the way, is really funny. It's ninety percent scams
Speaker 2: or ninety percent people doing manifestation stuff. It's amazing. But
Speaker 2: there was a brief period where the venture capital elite
Speaker 2: had spread around enough journalists and enough people on Twitter
Speaker 2: that they truly believed this was the future. But if
Speaker 2: you sat there and really thought about it, there was
Speaker 2: never a point where it could make money. Like you said,
Speaker 2: unscripted stuff, unscripted stuff's difficult. It's very difficult. Even when
Speaker 2: you have great, really great chemistry with someone, you can
Speaker 2: trip over stuff as I just did. There are numerous
Speaker 2: things that can go wrong. And let's just be honest.
Speaker 2: None of these tech people were particularly eloquent to begin with.
Speaker 2: Yet based on everyone's conversations, everyone's saying, this is the future,
Speaker 2: this is how what's our clubhouse strategy? What are we
Speaker 2: going to do on Clubhouse? Nothing? Nothing, because you're so boring.
Speaker 2: But it raised so much money. I think it raised
Speaker 2: over a billion. It was ridiculous. And yet this is
Speaker 2: what venture has become, pumping up these very shitty businesses,
Speaker 2: these non entities, these features rather than products, and the
Speaker 2: result is that the money is not going to actually
Speaker 2: innovative things. And I get it. The venture takes risks.
Speaker 2: The whole point of venture capital is it's risky money.
Speaker 2: That's why you buy a half percent or a percent
Speaker 2: of a company for I don't know, a million dollars
Speaker 2: just choosing random numbers. There there is a risk to air,
Speaker 2: and capital is required to get a company off the ground.
Speaker 2: But the massive, massive amounts of money going into these
Speaker 2: non entities, into these, in the case of Flow Adam
Speaker 2: Newman's thing, very boring remakes of already boring and kind
Speaker 2: of not profitable businesses to begin with. Yeah, the result
Speaker 2: is that you get a venture capital industry that makes
Speaker 2: startups require their existence. You get companies that cannot function
Speaker 2: without venture capital. You get lossy companies like Uber who
Speaker 2: get bigger and bigger without ever finding a business model
Speaker 2: because venture capital keeps them alive until they've completed the
Speaker 2: dance that less than go public or gets sold to
Speaker 2: someone else. And companies like Uber are actually a great
Speaker 2: example they're taking public and they get these massive windfors
Speaker 2: from vcs, yet they immediately find themselves in this horrible
Speaker 2: position where they have to start dancing for the real
Speaker 2: public markets. That's why Uber has become my chilge is
Speaker 2: get an Uber in some markets and it's much more expensive,
Speaker 2: yet the drivers are making less money. It's because we're
Speaker 2: in a situation where Uber now has to become a
Speaker 2: growth that all costs startup, rather than just a venture
Speaker 2: backed welfare recipient. And it's just it's a deeply depressing
Speaker 2: time because people making real companies, people making new ideas,
Speaker 2: people young people in the tech space are now going
Speaker 2: into this and seeing that the people getting money are
Speaker 2: just people that look like other people that have made
Speaker 2: money before, that have ideas that aren't even particularly good,
Speaker 2: but they sound like something you can flog. The amount
Speaker 2: of money going to AI right now for companies that
Speaker 2: have no business model at all, let alone a path
Speaker 2: to revenue, they just don't. They just trying to grow
Speaker 2: and grow and grow. It's just a deeply depressing time.
Speaker 2: VCS they put I think forty one billion dollars into
Speaker 2: crypto between Jerry twenty one and twenty twenty two, and
Speaker 2: that was all without Crypto ever having done anything. It's
Speaker 2: what twenty twenty four now, like I just had to
Speaker 2: ask that, and Crypto is still not doing anything. There's
Speaker 2: still nothing. There's still bitcoins worth sixty seven thousand dollars
Speaker 2: and there's still no crypto use case. The Metaverse, which
Speaker 2: you would by now have heard an episode about, did
Speaker 2: absolutely nothing other than rebrand something we'd had for upwards
Speaker 2: of fifteen years, and they raised one hundred and twenty
Speaker 2: billion dollars in twenty twenty two. These concepts are what
Speaker 2: are getting money. Innovation isn't Innovation is not enough to
Speaker 2: get you investment these days, and venture capitalists no, the
Speaker 2: thing that you want to do to a VC is
Speaker 2: find a way to get them in on a scam
Speaker 2: that you invented. And that's not going to help this world.
Speaker 2: It's going to destroy the tech ecosystem if we're not
Speaker 2: care for. And quite honestly, I have no idea what
Speaker 2: changes the tide on this other than a major startup dying.
Speaker 2: So when right in the rot economy, originally my mate
Speaker 2: Casey and I were talking about fire and how growth
Speaker 2: is like a fire if you build a nice, sustainable fire.
Speaker 2: It will keep you warm, cook your food, sustain your life.
Speaker 2: But if the only thing you care about is how
Speaker 2: big your fire is, then all it's going to do
Speaker 2: is set fire to everything around it, and it's going
Speaker 2: to require so much more to keep it burning. Eventually
Speaker 2: you'll have nothing left. But if you desperately desire that fire,
Speaker 2: you'll constantly have to find new things to burn, no
Speaker 2: matter what the cost is. And that's kind of where
Speaker 2: the markets are at this point. We've kind of turned
Speaker 2: the private and public markets over to arsonists. We've created
Speaker 2: the conditions where we celebrate people like Marc Andresen for
Speaker 2: making these big investments, these big bets, these big nasty
Speaker 2: companies that don't do anything, or the even bigger firms
Speaker 2: like Google and Meta who were just turning against their
Speaker 2: users and rightly turning against the people, the tens of
Speaker 2: thousands of people that they regularly fire. Venture capital and
Speaker 2: the public markets are no longer rewarding good businesses or
Speaker 2: good CEOs that run good sustainable companies. They're rewarding arsoness
Speaker 2: people that can steer the kind of growth that raises
Speaker 2: the value of an asset, even if that value isn't
Speaker 2: even attached to the value it provides to humanity. Elon
Speaker 2: Must's success, everything he's done with Tesla, didn't come from
Speaker 2: his love of science or that he ended the monopoly
Speaker 2: of the internal combustion engine. It came from his ability
Speaker 2: to manipulate symbolic value, his hypeerman mentality. He worked out
Speaker 2: in as early as twenty thirteen that anyone in the
Speaker 2: world in a media outlet would cover the fact that
Speaker 2: he spoke about anything.
Speaker 1: Mm hm.
Speaker 2: He's made so much money for him, and people buying
Speaker 2: Tesla stock pretty much do lies in half truths. There's
Speaker 2: always a good reason to buy Tesla for an idiot
Speaker 2: in the market because Elon Musk's always saying, oh yes, sir, now,
Speaker 2: Tesla's will now drive side to side. It doesn't matter
Speaker 2: if it's true, doesn't matter if it never happens. Elon
Speaker 2: Musk promised autopilot for years and years and years until
Speaker 2: it actually arrived, and then it would arrive in these
Speaker 2: little bits and chunks, and then it started killing people.
Speaker 2: Tesla isn't a good company. It's a good stock to buy,
Speaker 2: and that is a problem. That is where we are
Speaker 2: right now with the public markets and with the private markets.
Speaker 2: We're not far behind. So Google summed up a shy.
Speaker 2: He hasn't paid two hundred odd million dollars a year
Speaker 2: because he's a good CEO. Google's destroyed Search. We've been
Speaker 2: over that at nauseum, and it sucks. You'd think that
Speaker 2: someone who destroyed the most beloved tech used by billions
Speaker 2: of people, that has changed people's lives and will continue
Speaker 2: to do so. This is empirical fact, the damage he
Speaker 2: has done to the tech ecosystem and his core product,
Speaker 2: yet he's rewarded. He's paid this obscene amount of money.
Speaker 2: The fact that Google's core product is getting worse doesn't
Speaker 2: matter at all, because Bishai is paid because he finds
Speaker 2: new innovative ways to increase the growth of the company,
Speaker 2: even if doing so makes the product suck. And the
Speaker 2: consequences are that these companies will continue to invest in
Speaker 2: things that grow the overall revenue of the company or
Speaker 2: their market share over everything else. They will mass hire,
Speaker 2: they will mass fire, and they'll do so because there
Speaker 2: are no consequences from the market. They don't care. All
Speaker 2: they want to know is that the company will continue growing.
Speaker 2: Venture capitalists are just as bad. They don't mind as
Speaker 2: long as you have enough money to keep going to
Speaker 2: the next funding round. As long as you can keep
Speaker 2: growing this symbolic value. It doesn't matter if you hire
Speaker 2: and fire people around them. It doesn't matter if your
Speaker 2: product's kind of won key, as long as it's good
Speaker 2: enough to flog to someone else. Look at the AI industry,
Speaker 2: Look how bad chat GBT is at certain things, Look
Speaker 2: at how bad clawed anthropics one is. Doesn't really matter
Speaker 2: because AI is the future. We can make money off
Speaker 2: of that at some point. And I think that this
Speaker 2: is really the problem, and it's the thing that unites
Speaker 2: the private and the public markets. We're not building things
Speaker 2: for humans anymore. We're building things for humans that invest money.
Speaker 2: We're building symbolic capital. And when you do that, you
Speaker 2: will strangle innovation, and you'll do it at scale. You
Speaker 2: will build tech for nobody. You will build tech that
Speaker 2: sucks and doesn't do things and burns money, and in
Speaker 2: the case of AI, probably rainforests. And the result is
Speaker 2: just a shitty or worse world. Until we see a
Speaker 2: seismic shift in how investors treat the companies they invest in,
Speaker 2: both private and public. This cycle is going to continue,
Speaker 2: and it's going to make us dumber. I guarantee you
Speaker 2: that we're going to see every single one of the
Speaker 2: companies that you've recently seen lay off thousands of people
Speaker 2: do mass hiring in a year or two. They don't care.
Speaker 2: They're not punished for this. The labor markets in America
Speaker 2: don't punish them, the governments don't punish them. They will
Speaker 2: keep fucking with human capital as much as they can
Speaker 2: because they don't won't get punished for it. No one's
Speaker 2: going to hold it against any startup that's done massive layoffs,
Speaker 2: even if the CEOs are incredibly well paid and ran
Speaker 2: the company into the ground. Companies aren't structured anymore to
Speaker 2: evaluate whether a business is sustainable or good or make
Speaker 2: something useful. The only thing that they're interested in is
Speaker 2: making something they can flog.
Speaker 1: Yeah.
Speaker 2: Like.
Speaker 1: One of the important things to understand about how all
Speaker 1: of this fits together is that the actual business from
Speaker 1: most of these tech guys has very little, if not nothing,
Speaker 1: to do with producing a product or getting people to
Speaker 1: adopt a product, having any kind of impact on the
Speaker 1: way people actually use technology. The actual business is in
Speaker 1: conning other people to think that a business has a value, right, Yeah,
Speaker 1: Like that that's become the game which is you know,
Speaker 1: we're doing our episodes on Steve Jobs these next two weeks.
Speaker 1: A lot of bad things will have to say about him.
Speaker 1: But he actually did care about, like making a thing
Speaker 1: and convincing a lot of people to use that thing,
Speaker 1: and he was good at that. And it's become so
Speaker 1: abstracted and so much about just the bezel, just about
Speaker 1: tricking people so that you can make money before everyone
Speaker 1: realizes that it's a fucking god. I don't think it's
Speaker 1: I think it's probably bad for society that that's the
Speaker 1: best way to make money.
Speaker 2: And I think that you're exactly right. The way we
Speaker 2: look at companies, the way we value businesses, the way
Speaker 2: we value startups, public companies, it doesn't really matter, is
Speaker 2: just fundamentally broken. It's creating these really nasty cycles where
Speaker 2: humans are hired and fired, scale, where companies make products
Speaker 2: worse so that we use them more. Things become more
Speaker 2: difficult to enrich someone and make our lives worse. And
Speaker 2: it really is. It goes further than tech as well.
Speaker 2: It's at the center of everything. Look, why are so
Speaker 2: many bosses mad about you not coming back to the office.
Speaker 2: It's because they bought a bunch of real estate that
Speaker 2: they never needed or they've leased it, I guess. And
Speaker 2: then they were like, well, I don't do any real work.
Speaker 2: And I think what business looks like is when someone's
Speaker 2: at an office. Yeah, And it's because we don't really
Speaker 2: as a society understand what executives do, because we've never asked,
Speaker 2: We've never really sat and thought, why does an executive
Speaker 2: get paid so much more than others? What is it
Speaker 2: that they do? And I think the pandemic and the
Speaker 2: mass remote work we saw really highlighted that. I think
Speaker 2: it really showed everyone exactly how big that con was.
Speaker 2: But I think that I think that we're on the
Speaker 2: verge of an awakening to this kind of thing. I
Speaker 2: think as the labor market becomes so much worse, as
Speaker 2: so many game studios, for example, lay off so many people,
Speaker 2: they're going to start realizing the executives are making all
Speaker 2: the money while everyone does all the work, and none
Speaker 2: of these people are connected to the product, And we're
Speaker 2: going to keep building things for nobody other than investors
Speaker 2: until we're at a point where we have entire business
Speaker 2: ecosystems building for nobody. Just look at the crypto industry
Speaker 2: yea billions of dollars into Look at that. Look at
Speaker 2: the crypto industry. Look how big that con was. Look
Speaker 2: how much money went into nothing, went into creating nothing.
Speaker 2: Because that's where we are as a society, that's where
Speaker 2: innovation is today. In a real ecosystem, in a real
Speaker 2: tech ecosystem, the heads of the industry wouldn't be trying
Speaker 2: to find ways to crow bot ai or crypto or
Speaker 2: metaverse into it because the market's like it. They would
Speaker 2: be saying, I'm not sure that this is a thing,
Speaker 2: let alone a business model. None of these companies get
Speaker 2: bled for these bad decisions, and as long as they don't,
Speaker 2: they're going to keep making them. And I think it's
Speaker 2: going to and I have a wider theory I have
Speaker 2: that it's going to take one of the major tech
Speaker 2: firms dying to change something, and I think it's possible.
Speaker 2: I think Facebook is, weirdly enough, the one that I
Speaker 2: would call first, just because the ad models die. But
Speaker 2: until that happens, we're just going to keep having these
Speaker 2: cycles where the markets don't blame anyone for anything other
Speaker 2: than the consumer. The consumer is made to almost apologize
Speaker 2: to the vendor. It really sickens me. I think that
Speaker 2: this is really what this is the joke offying in
Speaker 2: real time that I get because I've been in the
Speaker 2: tech industry since two thousand and eight, and I've been
Speaker 2: right about games since like two thousand and four. So
Speaker 2: I've seen tech as a blob go from something that was, oh,
Speaker 2: you have nerdsy like tech, and people use laptops, to
Speaker 2: everyone has a phone, to everyone is on some level
Speaker 2: connected to the tech industry. Now it's impossible to remove
Speaker 2: from our lives. But now I look around and the
Speaker 2: things that are being created and the things that are
Speaker 2: being hyped up, they're not for people anymore. Yeah, and
Speaker 2: then the actions of the CEOs don't seem to actually
Speaker 2: mesh with reality. Why did nobody get fired for over
Speaker 2: hiring In twenty twenty two, so many companies one hundreds
Speaker 2: of thousands of tech workers were laid off. How did
Speaker 2: nobody get fired for just hoarding human capital? How did
Speaker 2: nobody get fired for that?
Speaker 1: Yeah, or for like I mean, if you want to
Speaker 1: see it, for the way that these people. How did
Speaker 1: nobody get fired for wasting tens of millions, hundreds of millions,
Speaker 1: billions of dollars in stockholders' money, right, Like, stuff that
Speaker 1: should have gone the way that they see things out
Speaker 1: in dividend payments was instead spent on people the company
Speaker 1: apparently didn't need. How does no one lose their job
Speaker 1: over that? If that's the way you're looking at things,
Speaker 1: that seems like the real problem.
Speaker 2: And the amount of layoffs that happened and the amount
Speaker 2: of well, I think it was Google spent a billion
Speaker 2: two billion on Severance alone. Yeah, how did sun Dar
Speaker 2: Pashai not get fired for that? Why did he get
Speaker 2: so much money? And I hate to say, I think
Speaker 2: the answer is people are not people in the eyes
Speaker 2: of the markets. They don't give a shit. It's just
Speaker 2: a fuel. This is just the cost of fuel. This
Speaker 2: is like oil to them, except there are sometimes annoying
Speaker 2: laws that stop me getting rid of the oil quite
Speaker 2: as fast. And I think what the tech industry really
Speaker 2: needs to realize is nothing lasts forever. Nothing lasts forever,
Speaker 2: and nothing grows forever other than a cancer. And at
Speaker 2: some point, this whole growth of all costs economy is
Speaker 2: working pretty well for now, but at some point the
Speaker 2: markets will turn on them, because at some point someone
Speaker 2: has to notice, somebody who is investing has to notice, Wait,
Speaker 2: are these actually good companies or are they just growing
Speaker 2: and then contracting, and then growing and contracting and just
Speaker 2: never really making anything within the pro It's just deeply worrying.
Speaker 2: I actually worry about the health of the tech ecosystem
Speaker 2: long term if we keep pursuing this. We have private
Speaker 2: companies that are building things to sell to large companies,
Speaker 2: and large companies that are building things to market their
Speaker 2: own stock to investors, and at some point a consumer
Speaker 2: gets served somewhere within that equation, but nowhere near to
Speaker 2: the level that it should dictate anyone's choices. A product
Speaker 2: may be profitable for a while, but there's a line
Speaker 2: at which profitability comes at the cost of functionality, and
Speaker 2: your company may simply not be able to grow anymore. Look,
Speaker 2: a business that can't generate profit isn't a good business,
Speaker 2: and a business that can never generate a profit deserves
Speaker 2: to die. These seem like obvious things, but they just
Speaker 2: don't apply to anyone other than regular people. And the
Speaker 2: net result of this rotten economy, this broken thing that
Speaker 2: rewards people that create symbolic capital, is that it kills innovation.
Speaker 2: If capital isn't invested in providing a good service by say,
Speaker 2: a profitable business, it will never sustain things that are
Speaker 2: actually useful to society. Companies aren't incentivized at the moment
Speaker 2: to provide better services or improve lives outside of the
Speaker 2: ways in which they can drain more and more blood
Speaker 2: and revenue and growth from customers, and right now the
Speaker 2: street doesn't care. Just look at Facebook and Instagram, two
Speaker 2: beloved products that have now grown exceedingly profitable while not
Speaker 2: providing the basic function that made them big. And frankly,
Speaker 2: look if capital wishes to call labor and title as
Speaker 2: they have so many times, if they wish to treat
Speaker 2: people like shit. As it stands, the private and public
Speaker 2: markets are not working for you. They're not building things
Speaker 2: for you. They're not building things for anyone. Google, as
Speaker 2: it stands, is forcing Gemini, their generator of AI, into
Speaker 2: every corner of their company, not because it's going to
Speaker 2: make your life better, but because it's going to make
Speaker 2: them seem more futuristic.
Speaker 1: YEP.
Speaker 2: As long as private businesses are funded by venture capitalists
Speaker 2: that are not interested in funding innovation and just want
Speaker 2: to find more ways to flog money to larger entities,
Speaker 2: we're not going to see a better world. We're not
Speaker 2: going to see cooler tech things. We're going to get
Speaker 2: increasingly more expensive and convoluted versions of things we're already
Speaker 2: paying for. I hope things can change, I really do,
Speaker 2: but with the current crop of venture capitalists, I'm not
Speaker 2: holding my breath. So thank you for listening to today's episode, Robert,
Speaker 2: thank you for joining me as well, YV. This wonderful,
Speaker 2: happy episode we've done. It's funny. It's in my day job,
Speaker 2: my PR firm, I do run into decent companies that
Speaker 2: are doing well, that actually make more money than their spending,
Speaker 2: that actually have business plans. But occasion I talk to
Speaker 2: someone who just throws like eight buzzwords at me, and
Speaker 2: they'll have raised this crazy amount of money and you
Speaker 2: look at them and you're like, am I in the
Speaker 2: wrong game? Should I be pot? There is this weird
Speaker 2: sense you're like, am I what am I missing here?
Speaker 2: And I think that that's what fuels a lot of this,
Speaker 2: that there are these people getting so rich or nothing.
Speaker 2: The people like they must they can't be lying.
Speaker 1: It has to be something. I have to be missing something,
Speaker 1: and it's like, no, you're you're not. The business is entirely.
Speaker 1: It's a confidence game. It's like, pretend you have the
Speaker 1: confidence that this is such a world changing product even
Speaker 1: though it's really just Uber for dry cleaning or whatever
Speaker 1: that Like, if you don't get in on the ground floor,
Speaker 1: you're going to be left behind, or like you know
Speaker 1: with crypto, this is the way all money is going
Speaker 1: to work, and you have to get in now or
Speaker 1: have fun being poor or yeah. Same basically the same
Speaker 1: shit about AI, right, it's always and honestly, whether or
Speaker 1: not there's actually a good product, it's always the same,
Speaker 1: the same thing, right, like you, Yeah, it's alf fomo.
Speaker 2: And it sucks because it can be better. There is
Speaker 2: a way. The thing that I always talk about is
Speaker 2: there is an alternate universe where Uber actually could have
Speaker 2: been probably the most disruptive company of all time. Had
Speaker 2: Uber tried to scale slower and charged more and had
Speaker 2: real employee benefits and a paycheck that they gave people,
Speaker 2: it would have had to grow very slowly and would
Speaker 2: have cost more in venture dollars, But I think that
Speaker 2: company would have worth been worth trillions and actually changed
Speaker 2: the world, like truly, had they used it as a
Speaker 2: way to actually create a bullwark for labor versus a
Speaker 2: way to screw workers again and again so venture capitalists
Speaker 2: can get rich. It could have been amazing, but that's
Speaker 2: not how these people are thinking. They're not thinking ten twenty, thirty,
Speaker 2: forty years. They're thinking five to ten years, so I
Speaker 2: can get the fuck out of this. Yeah, and it's
Speaker 2: so oh, it's so depressing because a better world as possible.
Speaker 1: That these people, because of the amount of money they've made,
Speaker 1: in large part in tech, they've taken over everything and
Speaker 1: so they're applying this lot. I mean, we could talk
Speaker 1: about journalism, right, they're applying this logic to the media
Speaker 1: properties they buy, which, like, that's not why you have
Speaker 1: a newspaper, right, Like, that's not the value of a
Speaker 1: newspaper is not its ability to like get a bunch
Speaker 1: of hype around it. And like we saw this with
Speaker 1: Vice where it was valued at billions and billions of
Speaker 1: dollars and then it collapsed. Because no, that's not how
Speaker 1: newspapers work, right, That's essentially what Vice was trying to be,
Speaker 1: And that's not the way that they're not worth money
Speaker 1: in that way doesn't mean you can't make money off
Speaker 1: of them. There's a number of papers like the New
Speaker 1: York Times that are very profitable institutions. It's just you can't.
Speaker 1: It's not gonna give you that kind of like astronomic
Speaker 1: or turn on investment that you do when somebody invents
Speaker 1: a fucking iPhone. It shouldn't have to.
Speaker 2: But what's crazy is like inventing the iPhone was very profitable,
Speaker 2: but Apple also is something with it. It's actually useful.
Speaker 1: Yes, yes, And I think understanding about what people wanted,
Speaker 1: you know, I.
Speaker 2: Think that that's the ultimate problem. I don't think that
Speaker 2: people running tech companies actually experience real people. They don't
Speaker 2: have real problems. But also they don't speak to real people.
Speaker 2: Adam Newman thinks, oh, my toilet's clogged. I will now
Speaker 2: call someone else to one clog it. Just I would
Speaker 2: never use a plunger. What's that? What is a plunger?
Speaker 2: I would actually love to ask him if he knows
Speaker 2: what a plunge. It looks like, yeah, it doesn't. But
Speaker 2: that's the thing. These people are disconnect.
Speaker 1: Kind of guy who just moves that happens.
Speaker 2: Yeah, can't use toilet anymore, go get rid of it.
Speaker 2: But I think, to wrap it up, it's there is
Speaker 2: this genuine sense throughout all of this through the original
Speaker 2: rock Economy piece. Everything I'm talking about, that these people
Speaker 2: don't experience real life, that they've made so much money,
Speaker 2: and that they think they've found a way to con
Speaker 2: money out of the world, that they just don't think
Speaker 2: about human beings and human problems anymore. And as long
Speaker 2: as these people are in power, Texit.
Speaker 1: Risk, yeah, so is everything else. Well this was fun.
Speaker 2: Yep, there we go. Robert, thank you so much for
Speaker 2: joining me.
Speaker 1: Yeah, thanks for having me on and thanks for being
Speaker 1: you know, the Shai Hallud of content. You know, just
Speaker 1: like the sandworm excrete spice which allows the navigators to
Speaker 1: live forever and navigate through faster than light travel. You
Speaker 1: also produce spice trying to shovel and dune references.
Speaker 3: Yeah, there we go.
Speaker 2: Re sponsored by Jim. Thank you so much. Thank you
Speaker 2: so much for listening.
Speaker 3: Everyone, Thank you.
Speaker 2: For listening to Better Offline. The editor and composer of
Speaker 2: the Better Offline theme song is Metosolski. You can check
Speaker 2: out more of his music and audio projects at mattaslsk
Speaker 2: dot com, m A T T O.
Speaker 3: S O W s Ki dot com.
Speaker 2: You can email me at easy at Better Offline dot
Speaker 2: com or check out Better Offline dot com to find
Speaker 2: my newsletter and more links to this podcast. Thank you
Speaker 2: so much for listening. Better Offline is a production of
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