WEBVTT - How Growth Is Killing Tech's Innovation, ft. Robert Evans 0:00:02.440 --> 0:00:03.560 All Zone Media. 0:00:05.080 --> 0:00:19.800 Welcome to Better Offline. I'm your host ed zetron Today 0:00:19.800 --> 0:00:23.479 I am joined barcul Zone Media's Robert Evans, and he's 0:00:23.600 --> 0:00:26.000 joining me to talk more about the growth that all 0:00:26.040 --> 0:00:28.960 costs rot economy. It's the thing that's making your beloved 0:00:29.040 --> 0:00:33.159 tech products worse to make someone else hundreds of millions 0:00:33.159 --> 0:00:35.440 of dollars. And it's so good, Robert. We love it, 0:00:35.479 --> 0:00:36.200 don't we, folks. 0:00:36.440 --> 0:00:38.720 I'm having a great time. I love that I used 0:00:38.760 --> 0:00:43.040 to make a living teaching like people who would pay 0:00:43.560 --> 0:00:45.680 you to the company. I worked for huge amounts of 0:00:45.720 --> 0:00:48.120 money to be trained in like how to use Google 0:00:48.600 --> 0:00:51.240 more effectively, all these little dorks and stuff that allow 0:00:51.280 --> 0:00:55.440 you to like really specialize your search settings. And I 0:00:56.000 --> 0:00:58.880 love that. Just in the last couple of years, Google 0:00:58.960 --> 0:01:01.440 has placed a shot gun to the base of their 0:01:01.480 --> 0:01:05.600 searches engines. Skull pulled the trigger, and now a bunch 0:01:05.640 --> 0:01:08.000 of people are desperately trying to be like, oh, there's 0:01:08.040 --> 0:01:11.399 this new perperplexity AI or this other AI search engine, 0:01:11.480 --> 0:01:14.240 like it's much better. And it's like, no, it's slightly 0:01:14.280 --> 0:01:16.639 better than Google now, but they're all worse than Google 0:01:16.760 --> 0:01:19.240 used to be. None of this is a step forward. 0:01:19.240 --> 0:01:20.640 They're just pains in the ass. 0:01:21.400 --> 0:01:24.560 So one of the reasons that that's happening isn't just 0:01:24.640 --> 0:01:27.399 the public markets. The public markets are a big part 0:01:27.400 --> 0:01:29.440 of the problem, and they're the ones that incentivize this 0:01:29.480 --> 0:01:33.640 whole growth or costs phenomenon. But I actually want you 0:01:33.720 --> 0:01:37.360 to know that this has another cause, and it's private 0:01:37.440 --> 0:01:41.240 investing and venture capital. Those are the ones who are 0:01:41.959 --> 0:01:44.960 pretty much putting a thumb on the head of innovation 0:01:45.319 --> 0:01:50.080 that is stopping great companies being built by incentivizing well, 0:01:50.720 --> 0:01:53.280 kind of a form of slaughter, fattening up pigs to 0:01:53.400 --> 0:01:56.560 sell to the market, rather than making something innovative. 0:01:57.320 --> 0:02:00.320 Yeah, like like some sort of like a pig sheep 0:02:00.440 --> 0:02:02.280 hybrid like a peep. 0:02:02.400 --> 0:02:04.120 But you could eat the meat from there. 0:02:04.760 --> 0:02:07.520 Yeah yeah, I think it would probably be like like 0:02:07.600 --> 0:02:10.520 the like the clone from the fourth Alien movie that 0:02:10.639 --> 0:02:12.600 just is begging for you to kill it, but then 0:02:13.000 --> 0:02:15.280 you know, you get some sort of fucked up bacon. 0:02:15.880 --> 0:02:17.840 But instead of getting that fucked up bacon, what you 0:02:17.880 --> 0:02:20.079 actually get is more like the creature from the Thing, 0:02:20.840 --> 0:02:24.040 the weird spider creature, which is funny, scary, but not 0:02:24.080 --> 0:02:24.959 particularly useful. 0:02:25.040 --> 0:02:26.320 Yeah, probably not very tasty. 0:02:26.880 --> 0:02:29.600 So before companies like Uber reached the public markets. They're 0:02:29.600 --> 0:02:32.800 fueled by a much more violent and reckless form of funding, 0:02:32.960 --> 0:02:37.079 venture capital. Venture capitalists can be seed stage investors or 0:02:37.160 --> 0:02:39.600 regular guy putting ten grand into a company, all the 0:02:39.639 --> 0:02:41.960 way up to massive firms with hundreds of people like 0:02:42.120 --> 0:02:45.280 Andresen Horowitz, who invested early in Facebook and Airbnb. 0:02:45.600 --> 0:02:47.960 Yeah, Like the thing that I've always that I came 0:02:48.000 --> 0:02:51.680 to realize about like venture capital money just from studying scams, 0:02:51.840 --> 0:02:54.560 is you have like Corey Doctor talks about this a lot. 0:02:54.600 --> 0:02:57.320 But like in traditional scam terminology of this period called 0:02:57.360 --> 0:03:00.720 like the bezel right, which is the time between starting 0:03:00.760 --> 0:03:03.639 the scam when everybody else realizes it's a fucking scam. 0:03:03.680 --> 0:03:05.720 It's the period in which you're making a bunch of money, 0:03:06.040 --> 0:03:09.520 and like that's that's where all of these VC people 0:03:09.800 --> 0:03:11.880 like make their fortune. You know, some of the companies 0:03:11.919 --> 0:03:14.040 they back do turn out to be long term profitable, 0:03:14.040 --> 0:03:16.440 but they don't have to be. If you can just 0:03:16.480 --> 0:03:19.720 sort of get this IPO where everybody values it super 0:03:19.800 --> 0:03:23.000 highly for a while and cash out what you have 0:03:23.160 --> 0:03:25.480 in the company during that period of time. If the 0:03:25.520 --> 0:03:28.360 company fails a few years after its IPO, if it 0:03:28.400 --> 0:03:30.600 turns out that like it wasn't really a good business, 0:03:30.880 --> 0:03:33.760 you still get rich. Like the key thing is, it's 0:03:33.760 --> 0:03:36.240 great if you wind up making a successful business in 0:03:36.280 --> 0:03:38.320 their eyes, but you don't have to for them to 0:03:38.320 --> 0:03:40.080 make a lot of money, right, They just have to 0:03:40.520 --> 0:03:43.000 have to be able to get out before you know, 0:03:43.320 --> 0:03:45.960 the scam reaches its its conclusion, they. 0:03:45.960 --> 0:03:48.200 Have to reach a liquidity events, so either selling that 0:03:48.280 --> 0:03:51.600 company to someone else or taking it public. And a 0:03:51.640 --> 0:03:55.800 big thing is the venture capital. Yes, like all investment things, 0:03:55.960 --> 0:03:58.440 is always just evil at its core, but it used 0:03:58.480 --> 0:04:00.880 to be much smaller. Used to be maybe a billion 0:04:00.920 --> 0:04:03.200 dollars in a year that would go into tech startups. 0:04:03.520 --> 0:04:05.880 Now it's in twenty twenty two, it's like two hundred 0:04:05.920 --> 0:04:09.680 and forty billion dollars. And I'll get to why that's 0:04:09.680 --> 0:04:13.160 an obscene number later, specifically around crypto. But when it 0:04:13.200 --> 0:04:17.880 was smaller, investment wasn't done with these ideas of these five, ten, 0:04:18.040 --> 0:04:21.320 twenty x multipliers. It was I want to put money 0:04:21.360 --> 0:04:23.159 early into this company because I think they're making a 0:04:23.160 --> 0:04:26.880 good product that people will buy. The problem was companies 0:04:27.040 --> 0:04:31.680 like Google and Apple to a lesser extent, but really 0:04:31.720 --> 0:04:36.440 companies like Facebook getting these massive multi billion, hundred billion 0:04:36.480 --> 0:04:42.560 dollar valuations. Suddenly startups stopped needing ten twenty fifty one 0:04:42.640 --> 0:04:45.479 hundred grand at seed stage and started needing two to 0:04:45.600 --> 0:04:49.040 five to ten million dollars at the seed or even 0:04:49.120 --> 0:04:53.440 series A stage. And suddenly venture capitalists started moving away 0:04:53.440 --> 0:04:56.920 from this idea of good businesses that could last without them, 0:04:57.320 --> 0:04:59.839 and they started to go into a form of kind 0:04:59.880 --> 0:05:03.960 of of symbolic capital, investing in things that looked value 0:05:04.080 --> 0:05:07.799 but aren't necessarily valuable at their whole. As a result, 0:05:08.240 --> 0:05:10.880 they create this ecosystem where these companies go through this 0:05:11.000 --> 0:05:15.039 kind of volatile, irrosive cycle of growth, with the only 0:05:15.160 --> 0:05:17.400 goal being that they get to a stage when they 0:05:17.400 --> 0:05:20.360 become someone else's problem, either by listing on the public 0:05:20.400 --> 0:05:22.839 markets or selling to a much bigger company. 0:05:23.800 --> 0:05:26.800 Yeah, and the whole crypto industry is essentially taking that 0:05:27.000 --> 0:05:29.440 like it comes out of everyone. People who came to 0:05:29.520 --> 0:05:31.920 expect this and in a lot of cases got rich 0:05:32.120 --> 0:05:34.640 for the first time through this chunk of the tech 0:05:34.680 --> 0:05:37.400 industry and then realized, well, if we create a way 0:05:37.440 --> 0:05:41.520 to utilize some of these these psychological phenomenons and like 0:05:41.560 --> 0:05:45.200 some of these ideas without any kind of regulation, like 0:05:45.240 --> 0:05:48.320 that's where crypto comes from, right Like it's it's purely 0:05:48.360 --> 0:05:51.160 the scam aspects of this with none of the real businesses. 0:05:51.600 --> 0:05:54.000 And you're completely right, And I will shortly get to 0:05:54.040 --> 0:05:57.039 that as well, because yeah, here's let me set the 0:05:57.040 --> 0:06:00.840 scene of the current state of the value up emerges, 0:06:01.000 --> 0:06:05.560 they're considered the next big thing. They ideally reach unicorn status, 0:06:05.560 --> 0:06:08.120 which refers to them being worth a billion dollars, and 0:06:08.200 --> 0:06:13.760 they experience unprecedented growth, they explode, and nobody asks the question, hey, 0:06:14.000 --> 0:06:16.640 you make in more money than you're spending. Open Ai 0:06:16.760 --> 0:06:18.920 is a great example of this. Right now, they get 0:06:18.920 --> 0:06:21.000 these articles saying, oh, we've got over a billion dollars 0:06:21.080 --> 0:06:24.760 in revenue. No one's saying, are you how much you 0:06:24.880 --> 0:06:29.000 spending to get there? But suddenly, after all of this 0:06:29.160 --> 0:06:32.960 venture investment, after all of this hype, they're challenging the 0:06:33.000 --> 0:06:35.159 big dogs of their industry. They're getting in there and 0:06:35.200 --> 0:06:37.920 they raise more and more money, and then they buy 0:06:38.040 --> 0:06:41.120 up a few more companies and now they're at this big, fat, 0:06:41.440 --> 0:06:45.080 nasty penultimate stage when people begin to ask if it 0:06:45.120 --> 0:06:47.960 was a good business. And at this point they either 0:06:47.960 --> 0:06:50.279 have to sell it to someone else or take it public, 0:06:50.760 --> 0:06:53.600 So the destination may change, but the journey's always kind 0:06:53.600 --> 0:06:56.120 of the same. You grow, you grow, you try and 0:06:56.160 --> 0:06:58.400 find a business model, you grow a bit more, and 0:06:58.440 --> 0:07:01.080 then you face reality. The idea the deal state, by 0:07:01.080 --> 0:07:04.040 the way, for venture capital is before this point reality 0:07:04.040 --> 0:07:08.000 should not interfere with making money. So venture capital pumps 0:07:08.080 --> 0:07:11.520 millions and billions of dollars into these ideas that might 0:07:11.800 --> 0:07:13.880 kind of sell a product or a service, but really 0:07:13.960 --> 0:07:17.280 just resemble something that was worth something in the past. 0:07:17.960 --> 0:07:20.680 Perhaps the founder is a white guy who looks kind 0:07:20.680 --> 0:07:23.120 of like Mark Zuckerberg. This is literally a phenomena. In 0:07:23.160 --> 0:07:25.280 the twenty tens, it was guys who looked like Mark 0:07:25.360 --> 0:07:29.200 Zuckerberg wearing hoodies. Or maybe it's hey, Uber's a big company. 0:07:29.200 --> 0:07:31.880 What if you're the uber for something else, Uber for laundry, 0:07:31.920 --> 0:07:35.720 for example. Yeah, a lot of those companies die, and 0:07:35.800 --> 0:07:38.440 what they're trying to do is keep the dance going 0:07:38.600 --> 0:07:41.440 until someone is dumb enough to buy them, or they 0:07:41.440 --> 0:07:45.320 can convince Morgan Stanley to help them go public. And 0:07:45.720 --> 0:07:47.640 the real problem with the value right now is people 0:07:47.680 --> 0:07:51.560 are conflating the concept of great ideas with things they 0:07:51.760 --> 0:07:55.840 like and things that might sell, and the result is 0:07:55.920 --> 0:08:00.120 less innovative things are happening. These companies that are getting 0:08:00.160 --> 0:08:03.240 the money Open Aye, getting ten billion dollars mostly in 0:08:03.280 --> 0:08:07.280 cloud credits isn't making the world better. It's looking a 0:08:07.600 --> 0:08:11.280 major startup into being a customer of Microsoft and making 0:08:11.280 --> 0:08:14.120 a product that has yet to really prove itself. 0:08:14.600 --> 0:08:17.160 Yeah, I think people are surprised by that. But like 0:08:17.200 --> 0:08:18.960 what we mean is not that like you can't do 0:08:19.120 --> 0:08:22.240 things that are cool or surprising with this stuff, but 0:08:22.280 --> 0:08:25.360 that that does not could like that does not conclude 0:08:25.400 --> 0:08:27.840 with it being a great business. Right A bunch of 0:08:27.880 --> 0:08:31.240 people are flipping out about that new them the video generator. 0:08:31.280 --> 0:08:33.079 We can make a minute song video that kind of 0:08:33.120 --> 0:08:36.880 looks like a California boom town or whatever, and it's like, yeah, 0:08:36.920 --> 0:08:40.400 it's cool, but like, is this number one something that's 0:08:40.440 --> 0:08:43.480 realistically going to be used in some things? Yeah, I'm 0:08:43.520 --> 0:08:45.120 sure it'll be in some things. This is going to 0:08:45.240 --> 0:08:49.640 like replace actually making movies? Well, probably not. And that 0:08:49.760 --> 0:08:52.320 kind of means there's probably a pretty limited amount of 0:08:52.360 --> 0:08:54.840 money that you're going to make with this right now, 0:08:54.920 --> 0:08:57.960 Like it's it's it's something that could potentially be a 0:08:58.040 --> 0:09:00.800 business that is profitable, but could it be a business 0:09:00.840 --> 0:09:02.760 that is more profitable than the amount of money they 0:09:02.760 --> 0:09:05.960 are continuing to shovel and open AI. That actually is 0:09:05.960 --> 0:09:07.040 still an open question. 0:09:08.000 --> 0:09:10.760 And the problem is that I'm not even saying that 0:09:10.840 --> 0:09:13.120 venture capital shouldn't happen. I do think it is a 0:09:13.200 --> 0:09:15.880 necessary force to get some ideas off the ground. But 0:09:15.920 --> 0:09:19.199 the problem is it's controlling the valley now, and as 0:09:19.200 --> 0:09:22.360 a result, the things that are getting funded are the problem. 0:09:22.760 --> 0:09:24.920 It's not that there are no good ideas, it's not 0:09:25.000 --> 0:09:27.440 that there are no good founders. It's that the funding 0:09:27.520 --> 0:09:30.640 is coming from an increasingly more centralized group of people 0:09:31.520 --> 0:09:34.400 who are pretty much and I get everyone's profit seeking, 0:09:34.400 --> 0:09:38.000 every investor wants a return, But there are venture capitalists 0:09:38.040 --> 0:09:41.320 out there who just don't care about creating new things. 0:09:41.360 --> 0:09:44.920 In fact, they're very, very very focused on keeping the 0:09:44.960 --> 0:09:48.720 status quo going. And that's where Andreason Horowitz comes in. 0:09:49.000 --> 0:09:52.560 My absolute favorite venture capital firm. You may remember them 0:09:52.600 --> 0:09:53.240 from Facebook. 0:09:55.080 --> 0:09:57.000 Reason Yeah so. 0:09:57.800 --> 0:10:00.920 Andreason Horowitz is amazing because they are large firm and 0:10:00.920 --> 0:10:04.959 they have various partners who all walk around making speeches 0:10:05.000 --> 0:10:07.839 and they do their tweets vaguely saying like decentralization is 0:10:07.880 --> 0:10:10.640 the future and it's good because of that, and you're like, 0:10:10.679 --> 0:10:12.319 what does that mean? And then they don't want to 0:10:12.360 --> 0:10:14.840 talk to you any further. Chris Dixon being one of 0:10:14.880 --> 0:10:18.600 the more ugly ones, a partner that is entirely focused 0:10:18.640 --> 0:10:21.960 on cryptocurrency, which I'm shortly going to get to. And 0:10:22.080 --> 0:10:26.080 nowhere was Andrews and Horowitz more crooked than crypto. The 0:10:26.240 --> 0:10:30.000 scam that Andreson Horowitz pulled on the crypto markets in 0:10:30.040 --> 0:10:32.680 twenty twenty one and twenty twenty two should be studied 0:10:32.720 --> 0:10:35.120 as a financial crime, and indeed it should be one. 0:10:35.240 --> 0:10:37.080 What it actually is is a way that they managed 0:10:37.120 --> 0:10:40.560 to turn basically money into more money without ever creating 0:10:40.640 --> 0:10:43.880 anything of value. They pumped billions of dollars into these 0:10:43.880 --> 0:10:48.960 things called Web three companies, which were allegedly new companies 0:10:48.960 --> 0:10:52.880 that were decentralized, but they were really just shells for 0:10:52.920 --> 0:10:56.400 a cryptocurrency token that someone could then hype and sell 0:10:56.480 --> 0:11:02.040 before the sec got aware of the problem. And I 0:11:02.120 --> 0:11:04.600 really must be clear how few of these companies actually 0:11:04.600 --> 0:11:07.040 did anything. Let me take a step back, let me 0:11:07.080 --> 0:11:10.320 explain how cryptocurrency companies made their money in like twenty 0:11:10.320 --> 0:11:13.000 twenty one, twenty twenty two. They would put out some 0:11:13.320 --> 0:11:15.000 a website for the thing, and they would say, we're 0:11:15.040 --> 0:11:17.600 going to do a decentralized social network and we're going 0:11:17.679 --> 0:11:21.000 to have this token. This token will reward people for 0:11:21.120 --> 0:11:24.000 the contributions to the social network. There were like eighty 0:11:24.040 --> 0:11:28.000 different versions of this idea. That token would then get 0:11:28.000 --> 0:11:32.160 a financial valuation through trading on various different crypto exchanges 0:11:32.200 --> 0:11:36.080 Binance or coinbase in many cases. And at this point 0:11:36.160 --> 0:11:38.760 you think, cool, what does the company do? And that 0:11:38.960 --> 0:11:41.959 was the wrong question to ask. The companies don't really 0:11:41.960 --> 0:11:45.120 do anything, or they're just traditional companies that have created 0:11:45.120 --> 0:11:48.440 a token as a means of monetizing a market. What 0:11:48.559 --> 0:11:51.680 Andrews and Horoids would do was invest in these companies 0:11:51.720 --> 0:11:55.520 and then receive a massive amount of these tokens at 0:11:55.559 --> 0:11:58.720 this vastly discounted price, kind of like how it works 0:11:58.760 --> 0:12:02.080 with stock and startup, and then you would hope, in 0:12:02.120 --> 0:12:03.760 the case of the stock for the startup, that you 0:12:03.760 --> 0:12:05.760 could sell it on the public markets or perhaps you 0:12:05.760 --> 0:12:09.000 could sell to another company. This usually takes about five 0:12:09.040 --> 0:12:11.880 to ten years. But what was amazing about the crypto 0:12:11.960 --> 0:12:14.600 scam was Andrewson Horowitz only had to wait a few 0:12:14.679 --> 0:12:17.680 months for these tokens, which they had bought at massive 0:12:17.679 --> 0:12:22.240 discount to list on say coinbase, a major cryptocurrency exchange 0:12:22.280 --> 0:12:25.719 where Mark Andreson has a board seat. This allowed them 0:12:25.720 --> 0:12:28.319 to dump all of their investment, which they got at 0:12:28.320 --> 0:12:32.160 this remarkably small price, onto retail investors, believing that they 0:12:32.160 --> 0:12:35.360 were in the ground floor. They basically invested in the 0:12:35.400 --> 0:12:39.200 stock market, invested in Morgan Stanley, invested in every part, 0:12:39.240 --> 0:12:42.840 and just funneled money between places. It was completely insane, 0:12:44.679 --> 0:12:48.720 and they be billions of dollars doing this. I feel 0:12:48.760 --> 0:12:51.760 crazy whenever I read about this stuff, because it happened 0:12:51.760 --> 0:12:52.640 in broad daylight. 0:12:53.520 --> 0:12:56.120 It's it's you know, you can say what you will 0:12:56.160 --> 0:12:59.760 about like the ability of anyone to accumulate that much money, 0:12:59.640 --> 0:13:02.120 but it at least even with like I don't think 0:13:02.200 --> 0:13:05.240 Zuckerberg deserves certainly wouldn't say he deserves to have billions 0:13:05.280 --> 0:13:08.480 of dollars. But if you say, if you like, say, okay, 0:13:08.520 --> 0:13:10.800 this guy's crazy rich, he's worth this many billions. 0:13:10.840 --> 0:13:11.280 What did you do? 0:13:11.360 --> 0:13:13.559 Well, he made this thing that everybody uses. That is 0:13:13.600 --> 0:13:17.000 a thing, right, as opposed to like this, which is 0:13:17.040 --> 0:13:19.280 how did he become a billionaire? Well, he played a 0:13:19.320 --> 0:13:22.000 really really fancy version of the shell game they play 0:13:22.040 --> 0:13:24.040 on the street in New York and all those movies 0:13:24.080 --> 0:13:24.760 from the eighties. 0:13:25.080 --> 0:13:28.360 And it's crazy because there was one called Definity they 0:13:28.400 --> 0:13:31.960 invested in school. It had a token called ICP Internet Computer. 0:13:32.080 --> 0:13:34.800 I think it stand for that's not done anything. That 0:13:34.840 --> 0:13:37.560 company's never made anything, No one's using that, there are 0:13:37.600 --> 0:13:41.160 no users. But Andres and Horwitz made so much money 0:13:41.160 --> 0:13:44.280 off of it. At the beginning of the pandemic, Mark 0:13:44.320 --> 0:13:47.440 and Dreson did this big bloviating posting it's time to build. 0:13:48.920 --> 0:13:51.400 But I think the real fun scam of this, the 0:13:51.440 --> 0:13:54.800 thing that makes me laugh but also cry, is that 0:13:54.880 --> 0:13:58.199 there was a prolonged period where Andresen Horowitz and many 0:13:58.320 --> 0:14:01.840 venture capitalists invested in building nothing. They found these shell 0:14:01.960 --> 0:14:06.640 companies that they then filled full of venture dollars. In exchange, 0:14:06.640 --> 0:14:08.360 they got a bunch of tokens that they were allowed 0:14:08.360 --> 0:14:12.240 to dump onto the markets. They conned so many people. 0:14:12.480 --> 0:14:14.840 They invested in Yuga Labs, who makes the board ape 0:14:14.920 --> 0:14:15.520 Yacht Club. 0:14:15.720 --> 0:14:20.520 Ah, that one's gonna pay off. That investment's gonna pay off. 0:14:20.800 --> 0:14:24.160 I've seen their their bored ape world of Warcraft thing 0:14:24.240 --> 0:14:26.280 that they believe it's going to be the future of 0:14:26.400 --> 0:14:28.040 social networking or whatever. 0:14:28.600 --> 0:14:31.560 And this is the thing. These companies never really built anything. 0:14:32.480 --> 0:14:35.240 They invested. They got the early ape coin. I really 0:14:35.320 --> 0:14:38.400 hate saying this stuff out loud, very annoying. Yeah, they've 0:14:38.400 --> 0:14:41.280 got the ape coins and they were able to profit 0:14:41.320 --> 0:14:44.760 off of that, and then they have the temerity to 0:14:44.840 --> 0:14:47.480 say Christison went on hard Fork the New York Times 0:14:47.480 --> 0:14:49.480 podcast and said, oh, yeah, we don't invest in anyone 0:14:49.520 --> 0:14:53.080 who has their own tokens. It's just they're just fucking liars. 0:14:53.640 --> 0:14:55.120 They're just liars lying to us. 0:14:55.120 --> 0:14:58.080 All I do kind of wonder that one of the 0:14:58.080 --> 0:15:00.600 things that makes me makes me believe some sort of 0:15:00.640 --> 0:15:04.680 like universal spirit guiding reality, is that like Peter Jennings 0:15:04.680 --> 0:15:06.880 had to die when he did, we simply couldn't have 0:15:06.920 --> 0:15:09.560 had a world in which Peter Jennings was explaining ape 0:15:09.560 --> 0:15:12.640 coin to people over the television like that. That wouldn't 0:15:12.640 --> 0:15:15.240 have been allowed. Like that's simply unimaginable. 0:15:15.960 --> 0:15:20.600 And it's just having to sit there here and say, yeah, 0:15:20.800 --> 0:15:24.040 ape ape coin, that's how they made them money. Ape chain, 0:15:24.680 --> 0:15:29.360 Oh yeah, definity Ic. It's these things that sucked. But 0:15:29.480 --> 0:15:32.680 also as funny as this is, this was a prolonged 0:15:32.680 --> 0:15:35.640 period when nothing was created other than money for already 0:15:35.720 --> 0:15:39.240 rich guys. The people that were disadvantaged by dumping these 0:15:39.280 --> 0:15:42.040 tokens were regular investors who, in twenty twenty one to 0:15:42.080 --> 0:15:45.240 twenty twenty two believe that the crypto market was going 0:15:45.280 --> 0:15:48.840 to make them wildly rich and it didn't. Coinbase, who 0:15:48.880 --> 0:15:53.000 andresen Horitz invested in, they helped millions of people lose 0:15:53.280 --> 0:15:56.160 billions of dollars because they did a Super Bowl commercial 0:15:56.200 --> 0:15:59.920 in February twenty twenty two, which eventually led Well, I 0:16:00.080 --> 0:16:03.040 think if you invested on that day, if you waited 0:16:03.040 --> 0:16:05.280 to sell any later than March, you would have lost 0:16:05.280 --> 0:16:07.600 your shirt. You would have just been at a loss. However, 0:16:07.600 --> 0:16:09.480 if you'd wait it, it's now back up to sixty 0:16:09.520 --> 0:16:13.560 seven thousand, So who the fuck knows either way. 0:16:13.880 --> 0:16:14.600 Yeah. 0:16:15.040 --> 0:16:17.600 The big thing with the crypto craze was that it 0:16:17.760 --> 0:16:21.040 was the most pornographic version of the problem of venture 0:16:21.040 --> 0:16:25.280 capital today in that it was entirely symbolic value. It was, oh, 0:16:25.720 --> 0:16:29.680 a decentralized computer, what a novel idea? Are we building it? 0:16:29.720 --> 0:16:32.200 Who knows? But we have a token today. Yay, let's 0:16:32.200 --> 0:16:35.400 make some money. And in twenty twenty two, crypto startups 0:16:35.480 --> 0:16:38.360 raise thirty three billion dollars a venture capital, which is 0:16:38.360 --> 0:16:41.200 more than ten percent of the two hundred and forty 0:16:41.240 --> 0:16:44.640 one billion dollars that was invested in that entire year. Jeezuz, 0:16:44.640 --> 0:16:48.120 And none of them have made a real product. Yuga Labs. 0:16:48.160 --> 0:16:50.440 You laugh at the bored Apoch Club, but that is 0:16:50.520 --> 0:16:53.680 actually one of the few real products that actually launch. 0:16:54.040 --> 0:16:56.520 Yeah, they do seem to be making a video game. 0:16:56.560 --> 0:16:58.920 It looks like shit, but it does seem to be 0:16:58.960 --> 0:16:59.840 a video game. 0:17:09.440 --> 0:17:12.359 And I think that it's a symptom of a much 0:17:12.480 --> 0:17:16.679 larger problem, both in that they're not investing to actually 0:17:16.720 --> 0:17:19.040 make cool tech happen, but they're just trying to make 0:17:19.080 --> 0:17:21.840 as much money in the most lazy way possible. But 0:17:21.880 --> 0:17:24.640 I also think there's another problem. I don't think these 0:17:24.680 --> 0:17:30.360 freaks actually know what good looks like anymore. And nowhere 0:17:30.440 --> 0:17:37.119 else is that more obvious than Adam goddamn Newman. Yeah, baby, 0:17:37.720 --> 0:17:40.679 we love him so Adam Newman. For those of you 0:17:40.720 --> 0:17:43.040 who don't know round, a company called we Work. We 0:17:43.160 --> 0:17:46.359 Work's business model was that they would buy or lease 0:17:46.440 --> 0:17:48.800 a building and they would sub lease it to people, 0:17:48.920 --> 0:17:51.320 allowing them to run their company out of it or 0:17:51.440 --> 0:17:54.639 use a coworking space. Theoretically a good idea until you 0:17:54.680 --> 0:17:58.679 looked at the financials, where it constantly bled money almost 0:17:58.680 --> 0:18:02.840 immediately because real estate is a terrible investment. Yeah, and 0:18:02.920 --> 0:18:05.399 also it was way too cheap. It was way too 0:18:05.480 --> 0:18:08.440 cheap from the very beginning, so they were always operating 0:18:08.480 --> 0:18:09.080 a loss. 0:18:09.680 --> 0:18:12.880 Yeah, it's it's he Newman. The thing that's interesting about 0:18:12.920 --> 0:18:15.359 him because he and Elizabeth Holmes were kind of having 0:18:15.359 --> 0:18:18.840 their glory days around the same time, and they're both 0:18:19.000 --> 0:18:23.399 very similar figures. Newman was much smarter because he chose 0:18:23.480 --> 0:18:25.840 he picked a field where like no one was going 0:18:25.880 --> 0:18:29.040 to vengefully come after him for fucking up, because everyone 0:18:29.080 --> 0:18:31.439 in real estates some kind of con artist at that 0:18:31.520 --> 0:18:34.960 scale as opposed to trying to get into like blood science. 0:18:36.760 --> 0:18:39.880 But what's great about it is he turned a company 0:18:39.880 --> 0:18:42.359 that was at one point worth forty seven billion dollars 0:18:42.640 --> 0:18:47.280 into one worth ten point sixty five million dollars, and 0:18:47.320 --> 0:18:50.640 then the company died, it went into Chapter eleven bankruptcy. 0:18:50.920 --> 0:18:51.600 We all love it. 0:18:52.320 --> 0:18:55.920 And right now those cleaning up the mess, if we work, 0:18:56.080 --> 0:18:59.439 are just desperately trying to renegotiate its debts and just 0:18:59.480 --> 0:19:02.280 being like his company. I'm sorry I can't pay you 0:19:02.359 --> 0:19:05.760 due to this business model which I have inherited. At 0:19:05.760 --> 0:19:09.280 one point we work traded at five hundred or something 0:19:09.680 --> 0:19:12.359 dollars a share, and I believe right now it's like 0:19:12.520 --> 0:19:17.040 zero point zero five cents. See the thing thing now, 0:19:17.040 --> 0:19:20.000 there's been a show about we work with Jared Lito 0:19:20.080 --> 0:19:23.320 in it of Morebius fame, and this is one of 0:19:23.320 --> 0:19:26.600 the more legendary startups. 0:19:25.880 --> 0:19:28.520 And I tend to I choose to believe by the 0:19:28.560 --> 0:19:30.919 way that it is within the Morbius cannon, that this 0:19:31.000 --> 0:19:33.480 is what he's doing when his character is not unshowered 0:19:33.520 --> 0:19:35.800 in a hoodie fighting crime. 0:19:35.960 --> 0:19:40.480 Fighting Matt Smith from Doctor Who. So as we've established 0:19:40.480 --> 0:19:45.080 Adam Newman aka Morbius, he you'd think, Okay, this guy 0:19:45.320 --> 0:19:48.200 famously TV show about how bad he was at business, 0:19:48.440 --> 0:19:49.800 this guy'd be run out of town. 0:19:49.920 --> 0:19:51.280 Right wrong. 0:19:52.320 --> 0:19:55.800 Adam Newman managed to raise in August twenty twenty two 0:19:55.960 --> 0:19:59.840 three hundred and fifty million dollars for his new co 0:20:00.000 --> 0:20:01.080 company Flow Great. 0:20:01.880 --> 0:20:03.960 I love how people learn lessons. 0:20:04.720 --> 0:20:07.040 And what's great about Flow is when you go and 0:20:07.040 --> 0:20:10.119 look about actually what it is, no one can really 0:20:10.160 --> 0:20:12.480 tell you. It appears to be a rent to own 0:20:12.520 --> 0:20:17.040 apartment company, but it isn't obvious what the actual difference 0:20:17.119 --> 0:20:19.880 is between it and I don't know what BlackRock's been 0:20:19.920 --> 0:20:23.240 doing for years, what the asset management firms have been doing. Nevertheless, 0:20:23.240 --> 0:20:27.239 Mark Andresen absolutely busted. Is not everywhere to get three 0:20:27.359 --> 0:20:30.919 hundred and fifty million dollars into this company. They claim 0:20:31.119 --> 0:20:34.119 that there will be community oriented features and that there 0:20:34.160 --> 0:20:37.160 will be something special about being involved in Flow. Now 0:20:37.200 --> 0:20:40.639 you think that I'm just being vague. It's been like 0:20:40.720 --> 0:20:42.720 a year and a half since this company went out 0:20:42.800 --> 0:20:45.560 and there's really nothing that like out there for it. 0:20:46.200 --> 0:20:49.000 And I think it's because Adam Newman just was someone 0:20:49.000 --> 0:20:50.440 that Mark Andreson remembered. 0:20:50.760 --> 0:20:51.040 I'm not. 0:20:51.200 --> 0:20:54.640 I still cannot work out why this happened. He's always 0:20:54.880 --> 0:20:57.479 been full of shit. Just to be clear, because there 0:20:57.520 --> 0:21:00.639 was this, Andrews and Horowitz actually really used to video 0:21:01.119 --> 0:21:04.560 an interview with Adam Newman. He was describing home ownership 0:21:04.960 --> 0:21:08.600 and why home ownership was very special. He was saying, 0:21:08.880 --> 0:21:11.399