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Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.

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Speaker 2: Hello and welcome to another episode of the Odd Lots Podcast.

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Speaker 3: I'm joll Wisenthal, and I'm Tracy all the way.

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Speaker 2: Tracy, you know, I can never get enough talking about

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Speaker 2: late nineties dot com.

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Speaker 3: I know you're just gifting episodes to yourself at this point,

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Speaker 3: but that's fine. I'm into it.

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Speaker 2: That's always been the case for all the years we've

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Speaker 2: done this podcast. I've made that comment here and there,

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Speaker 2: but you know, recently it has a particular salience because

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Speaker 2: people are trying to understand AI. We had that conversation

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Speaker 2: down in DC several weeks ago with Blair Levin talk

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Speaker 2: about some of the similarities and dissimilarities between AI and telecoms.

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Speaker 2: So at least we have an excuse for these conversations.

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Speaker 3: There is definitely a newspeg I'm looking at a chart

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Speaker 3: of super Micro right now. They just put out results

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Speaker 3: that I guess we're disappointing because the shares are down

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Speaker 3: about twenty percent. We're recording this on April thirtieth at

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Speaker 3: ten to oh four am. And Joe, can I just

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Speaker 3: say we can labor this intro as much as you

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Speaker 3: want about like similarities with the early two thousands tech bubble.

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Speaker 3: But I'm just excited to speak to your old boss.

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Speaker 3: That's all I want to get out of this conversation.

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Speaker 3: Just Joe stories.

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Speaker 2: Okay, that's fine. So this is an episode that I've

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Speaker 2: wanted to make happen for a very very long time,

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Speaker 2: and the timing is suddenly working out. I don't even

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Speaker 2: know what we're really going to talk about, but we'll

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Speaker 2: have a good conversation. Yes, we are speaking to my

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Speaker 2: old boss. So a couple of major caveats or disclaimers,

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Speaker 2: et cetera. I owe this guest a huge chunk for

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Speaker 2: my own career and the success and the good fortune

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Speaker 2: that I've had in my career. We're going to be speaking,

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Speaker 2: of course, to Henry Blodgett. He's the editor of a

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Speaker 2: new publication called Regenerator. It's gonna be focused on innovation

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Speaker 2: and business and news and tech and stuff like that.

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Speaker 2: Of course, the connection to me is that he is

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Speaker 2: the founder of Insider. When I joined, I think it

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Speaker 2: was called Silicon Alley Insider, and then Business Insider, and

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Speaker 2: then Insider. I'm not exactly sure what the final iteration

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Speaker 2: of the name was. And of course Prior to that,

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Speaker 2: several years earlier, he had been a tech analyst at

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Speaker 2: Merrill Lynch, one most famous analysts of the sort of

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Speaker 2: tech sector. And of course have to acknowledge the second

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Speaker 2: caveat or disclaimer here, which is he was famously or

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Speaker 2: infamously prevented afterwards from working on Wall Street. Have to

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Speaker 2: mention that maybe it'll come up. But with all of

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Speaker 2: this throat clearing out of the way, Henry thrilled to

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Speaker 2: have you on the podcast. Finally, this is a little weird.

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Speaker 2: I'm actually a little nervous, if I'm being totally honest,

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Speaker 2: I'm actually I don't usually get anxious ever in any

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Speaker 2: setting anymore. I'm a little anxious talking to my old boss.

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Speaker 4: Well, it is great to be here. It's a privilege.

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Speaker 4: You guys do an amazing job. And I would say

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Speaker 4: the student has become the master.

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Speaker 2: No, but for real, thank you so much for coming

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Speaker 2: on odd lot. It's really excited. I'm trying to think.

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Speaker 3: Oh, this is very sweet.

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Speaker 4: I know.

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Speaker 2: No, I'm like actually a little bit like a verklemped.

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Speaker 3: I'll ask a question, yeah, Tracy, the.

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Speaker 2: First question, want to collect myself.

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Speaker 3: How did you find Joe?

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Speaker 1: Oh?

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Speaker 4: I wonder if he remembers I was aware of Joe

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Speaker 4: at another publication. I can't remember what it was, and

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Speaker 4: I can't remember whether I hired Joe or Julie Hansen

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Speaker 4: hired Joe or somebody else. But there he was, and

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Speaker 4: we were in an environment where I was surrounded by

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Speaker 4: a newsroom full of very eager, excited folks. And again

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Speaker 4: and again and again the one who differentiated himself by

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Speaker 4: his incredible fascination with and mastery of all things. And

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Speaker 4: it's a big We were to write with an internet metabolism,

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Speaker 4: which is somewhere between talk radio and magazines, whereas a

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Speaker 4: lot of other folks wanted to come in and basically

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Speaker 4: recreate the New Yorker. And so we spotted your talent

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Speaker 4: very fast, and then your career took off like a

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Speaker 4: rocket ship, and we were lucky to have you as

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Speaker 4: long as we did.

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Speaker 3: I like the idea of people just not finding Joe,

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Speaker 3: but just being aware of Joe. It's sort of like

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Speaker 3: like the Mister Bean intro, where you just fall out

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Speaker 3: of the sky. Joe's just there and everyone kind of

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Speaker 3: became aware of it.

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Speaker 2: So there's actually a very elegant connection to all of this,

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Speaker 2: which was the first time we met was during you know,

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Speaker 2: it's like probably Tech Week in New York, and we

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Speaker 2: met at a party at Gracie Mansion when Michael Bloomberg

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Speaker 2: was the mayor and now we're here at Bloomberg and

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Speaker 2: so we met. I was at Paid Content. I was

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Speaker 2: covering earnings. You guys at Silicon Alley were covering earnings

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Speaker 2: and so forth, and we chatted, and then several months

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Speaker 2: later I joined all right, enough about all the personal stuff.

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Speaker 3: No, I'm gonna have more questions, but go on.

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Speaker 2: You know, I love talking about the late nineties, and

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Speaker 2: we'll get small picture, but big picture when you look

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Speaker 2: at this incredible enthusiasm for AI and it sort of

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Speaker 2: cooled off obviously in the market over the last several months,

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Speaker 2: but from a business perspective, it's tons and tons of

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Speaker 2: AI interest. You know, what reminds you of the late nineties,

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Speaker 2: whether it's telecom or just dot com, and what feels

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Speaker 2: dissimilar to you.

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Speaker 4: Well, stepping back, if you look at AI as a sector, yeah,

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Speaker 4: that is very reminiscent of what happened in the late nineties,

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Speaker 4: where in the mid nineties the Internet came along, everybody

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Speaker 4: knew it was going to be huge. Yeah, there was

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Speaker 4: suddenly a huge scrum of investment capital attracted to it.

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Speaker 4: We had this experimentation for five years where a lot

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Speaker 4: of people were making money hand over fist. Then we

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Speaker 4: went through a devastating crash, which is normally the pattern. Here.

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Speaker 4: The same thing is happening within the AI sector. But

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Speaker 4: I should step back and say, just to check, I

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Speaker 4: looked at the broader tech sector and we are categorically

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Speaker 4: not in a tech bubble right now. You look at

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Speaker 4: the big Magnificent seven, whatever you want to call them,

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Speaker 4: they are trading at high but arguably reasonable earnings multiple.

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Speaker 2: And that was the case say six months ago, two

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Speaker 2: before we had.

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Speaker 4: Some higher multiples, but still thirty times earnings or thirty

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Speaker 4: five times earnings for the video, which is the big

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Speaker 4: AI stock or the most direct way to play it.

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Speaker 4: But yes, if you look in the private markets, and

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Speaker 4: this is one thing that's very different is all of

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Speaker 4: this is happening in a private right now, So we

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Speaker 4: don't have a very good view of the financials of

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Speaker 4: these companies.

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Speaker 2: But all you need is like a PhD in a

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Speaker 2: white paper, you're getting like half a billion dollar valuations

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Speaker 2: for these starts.

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Speaker 4: That's right, Yes, it's extraordinary. And I think one thing

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Speaker 4: to look at to sort of check the sanity of

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Speaker 4: it is, let's look at the biggest one, open Ai. Ok,

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Speaker 4: they just did a huge round where they raised forty

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Speaker 4: billion dollars at a three hundred billion dollar value. Six

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Speaker 4: months to twelve months earlier, investors were being declared absolutely

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Speaker 4: insane for investing at one hundred billion and one hundred

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Speaker 4: and fifty and now here we are at three hundred

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Speaker 4: and So what does that mean? Is it clearly insanity? Well,

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Speaker 4: if you look at open AI's fundamental business based on

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Speaker 4: what we know, which is again very secondhand and so forth,

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Speaker 4: they are doing something like twelve billion dollars of revenue

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Speaker 4: this year. Now, stepping back, that is an incredible number

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Speaker 4: for a company that is five years old. This company

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Speaker 4: is growing a faster rate than pretty much any company

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Speaker 4: in history. And if you look at one of the

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Speaker 4: financing models from a year ago at one hundred and

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Speaker 4: fifty billion dollar valuation, apparently the projection was that they

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Speaker 4: would do one hundred billion dollars of revenue in twenty

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Speaker 4: twenty nine. If that is the case, and I would

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Speaker 4: assume that that number is probably higher now given that

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Speaker 4: they've jacked the valuation up, then we're looking at three

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Speaker 4: times revenue twenty nine erska. A lot has to go right.

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Speaker 4: But if you believe that open ai is going to

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Speaker 4: win this next wave in the same way that Google

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Speaker 4: or Amazon ultimately won the Internet wave, three times revenue

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Speaker 4: for that, even given that they're burning five billion dollars

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Speaker 4: a year, you know, you can see how professional investors

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Speaker 4: who really actually do know the numbers are getting there.

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Speaker 4: So I would just say if you look at that,

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Speaker 4: that is probably the justification. And then the other thing

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Speaker 4: that people forget, or at least I don't hear when

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Speaker 4: I hear this disgust, is that most professional investors are

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Speaker 4: investing in preferred stock. That's very different than public markets

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Speaker 4: where we're buying common because you have downside protection. Basically,

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Speaker 4: for soft Bank and the others who just invested in

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Speaker 4: open Ai at three hundred billion, to lose money, open

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Speaker 4: has to be liquidated at less than forty billion, Otherwise

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Speaker 4: they get all their money back off the top, and

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Speaker 4: they may even have provisions in the deal that give

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Speaker 4: them a ratchet on top of that that give them

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Speaker 4: a return. So it's very hard to really know what's

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Speaker 4: going on. But that's that's the thing. So stepping back again,

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Speaker 4: you look at that and you say, whoa based on

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Speaker 4: today's numbers, Yeah, that is a fantastical valuation, but this

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Speaker 4: is probably what investors are looking at now. Another point

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Speaker 4: that brad Gersner and others have made about this is

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Speaker 4: if you look back in the nineteen nineties, what happened

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Speaker 4: with the internet companies. We had the premier companies like

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Speaker 4: Amazon and Yahoo had these phenomenal valuations, and then there

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Speaker 4: were all of the secondary companies that looked similar, did

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Speaker 4: the same thing. We're in the same market, and a

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Speaker 4: lot of investors who missed the big ones came roaring

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Speaker 4: into I gotta get into Licosts or Excite or info

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Speaker 4: seek or CD now they're cheaper than Amazon. I will

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Speaker 4: just say that pretty much all of those companies went

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Speaker 4: to zero. So the idea now that you can escape

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Speaker 4: the incredibly high open AI valuation by investing in Anthropic

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Speaker 4: or groc or any of the secondary ones. Maybe that works.

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Speaker 4: Maybe there's room for dozens of companies, but if past

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Speaker 4: his prologue here, there's gonna be one winner, which and us.

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Speaker 4: The last thing I'll say is by the way, it

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Speaker 4: might not be open AI because if you look at

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Speaker 4: the big winners of the nineteen nineties, Yahoo would and

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Speaker 4: they got creamed by Google, which came in during the crash.

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Speaker 4: Amazon almost went bankrupt. You did not have to buy

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Speaker 4: it in the late nineteen nineties, although I did, and

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Speaker 4: then we wrote it down ninety something percent. It almost

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Speaker 4: went bankrupt, and then finally seven years later it went

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Speaker 4: to the moon. But these things play out. I do

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Speaker 4: think we'll have the same sort of pattern in this

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Speaker 4: sector that at some point will hit a peak everything

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Speaker 4: oh crater. Everyone will pile on and say, oh see

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Speaker 4: how stupid every one buddy was, and then a few

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Speaker 4: companies will go on and make all of the money

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Speaker 4: that was lost worth it for the folks who were

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Speaker 4: in the winners.

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Speaker 2: I'll just say two things. Having been worked at actually

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Speaker 2: two venture backed startups paid content which did sell for

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Speaker 2: a little bit to The Guardian and also Insider. I'm

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Speaker 2: very intimately familiar with the concept of preferred stock versus

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Speaker 2: common stock and how that gets treated in an acquisition.

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Speaker 2: And one thing Tracy that I was like working with Henry.

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Speaker 2: He actually knows numbers and remembers these details which I

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Speaker 2: appreciate in these conversations.

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Speaker 3: Yeah, I can tell. Okay, Henry, you just went through

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Speaker 3: all the AI stuff, So I'm just going to ask you,

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Speaker 3: what's your favorite memory of Joe?

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Speaker 2: No, okay, okay.

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Speaker 3: Okay, I won't, I want, I wont okay. On AI,

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Speaker 3: it strikes me that one of the big parallels, and

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Speaker 3: you just touched on it there. But it's the narrative, right,

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Speaker 3: and it's the idea that AI is going to change

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Speaker 3: the world. Back in the nineties, we had the whole

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Speaker 3: the Internet's going to change the world, which was true.

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Speaker 3: It was true that the Internet changed the world, just

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Speaker 3: potentially not in the way analysts had been forecasting at

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Speaker 3: that time. Talk to us about I guess the story

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Speaker 3: that is being built around AI. And as a former

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Speaker 3: Wall Street analyst, I imagine you are very, very familiar

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Speaker 3: with the importance of narrative slash stories in pitching some

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Speaker 3: of these investment ideas.

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Speaker 4: Yes, I think that if you look at the idea

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Speaker 4: behind what's happening with AIS, it's a revolutionary new technology

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Speaker 4: that will smash into the economy and have major changes.

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Speaker 4: And one of the theories that sounds right to me,

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Speaker 4: certainly based on the Internet and other technologies that have

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Speaker 4: come in, is that the economy will now adapt and

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Speaker 4: there will be three kinds of companies. There will be

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Speaker 4: traditional companies that refuse to use AI and ultimately lose

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Speaker 4: their competitive advantage, or maybe they are in a business

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Speaker 4: that has nothing to do with AI, maybe paint or

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Speaker 4: something like that, so it doesn't matter. There will be

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Speaker 4: companies that try to integrate AI into their traditional operations,

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Speaker 4: and those would be analogous to the clicks and mortar

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Speaker 4: companies back in the nineteen nineties and since. And then

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Speaker 4: there will be companies that are built around AI, so

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Speaker 4: they're not providing the technology, but they are using AI

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Speaker 4: in a new way, and that's giving them the ability

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Speaker 4: to be vastly more productive or grow at a much

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Speaker 4: greater rate. And so I think that that's the way

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Speaker 4: we'll see the economy adapt. And I do think the

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Speaker 4: storytelling it's not directly related to AI, although part of

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Speaker 4: it is one of the stocks that fascinates me right now.

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Speaker 4: And this will be the exception to my declaration there's

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Speaker 4: no bubble in broader technology. Is Tesla. Tesla has always

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Speaker 4: traded at a multiple that has almost nothing to do

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Speaker 4: with its current operations and everything.

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Speaker 2: To do with Elon some imagined future business that's going

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Speaker 2: to produce a mountain of cash, and it's always six

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Speaker 2: to eighteen months away.

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Speaker 4: People used to talk about Steve jobs ability to create

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Speaker 4: a reality distortion field. Elon Musk is much better at

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Speaker 4: it than Steve Jobs. Was to the point where he

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Speaker 4: can go on an earnings call on a disastrous quarter

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Speaker 4: like Tesla had, tell a story about robotaxis and humanoid

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Speaker 4: robots and trillions of dollars of revenue, and he's going

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Speaker 4: to go from spending less than a tiny percentage of

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Speaker 4: his time at Tesla to a little bit more of

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Speaker 4: his time at Tesla, And in the week since the

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Speaker 4: stock is up twenty percent. That is because of two things. One,

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Speaker 4: Elon's ability to tell an amazing story, and that is

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Speaker 4: what leaders have to do. They have to rally people

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Speaker 4: to work together to create a better future. And then two, importantly,

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Speaker 4: it's not just storytelling. Elon has done on the business

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Speaker 4: side some things that are simply astounding. One of the companies,

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Speaker 4: if you created only one of the companies he's created,

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Speaker 4: that would be a hall of fame performance for most entrepreneurs.

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Speaker 4: He's created a of them, the rocket company, the satellite

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Speaker 4: internet company, Tesla, which you people, forget, no new car

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Speaker 4: companies to survive for seventy five years, and suddenly he

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Speaker 4: builds one, and even now in its demolished state, Tesla

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Speaker 4: is still has the single best selling car on the planet.

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Speaker 4: It's amazing. So that's what storytelling is, and so much

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Speaker 4: of what I think Michael Moritz from Sequoia said this

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Speaker 4: the other day, so much of what he would teach

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Speaker 4: in business school if he were teaching a course, is

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Speaker 4: not finance or financial analysis or accounting, but how to

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Speaker 4: tell a story and get your not just your investors,

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Speaker 4: although that's important, but your employees on board and excited

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Speaker 4: about this great thing that you're going to build, and

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Speaker 4: the suspension of disbelief. And I do think that Elon

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Speaker 4: Musk is extraordinarily good at that, and by the way,

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Speaker 4: Sam Altman must be extraordinarily good at it too, or

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Speaker 4: they wouldn't be where they are, you.

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Speaker 2: Know, going back to the late nineties or I guess

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Speaker 2: the early two thousands. You know, obviously we remember Ao

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Speaker 2: well time Warner is the deal that we associate with

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Speaker 2: a peak of euphoria. But from a sort of actual

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Speaker 2: fundamental standpoint, what was the first sign to you that

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Speaker 2: a cool wind, a cool breeze was coming on. Do

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Speaker 2: you have a memory of like, oh, maybe some of

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Speaker 2: these growth forecast because when you think about, well, what

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Speaker 2: could dent private AI valuations or what could even dent

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Speaker 2: you know, public one, or what could invented tesla, was

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Speaker 2: there a moment is like, huh, is not quite living

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Speaker 2: up to what I thought in terms of some of

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Speaker 2: the numbers, et cetera.

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Speaker 4: Yes, definitely, But I should also say this benefits from

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Speaker 4: the twenty twenty hind side, sure, which is if you

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Speaker 4: wanted the one of the features of these periods of

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Speaker 4: market history, and if you look at all of them,

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Speaker 4: you go back to two lips. So you look at

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Speaker 4: the nineteen twenties or the PC bubble in the early

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Speaker 4: nineteen sixties or seventies I think, or eighties, you know,

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Speaker 4: they all share these features. And one of the things

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Speaker 4: that I remember very clearly about the nineteen nineties is

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Speaker 4: pretty much every year you had a deafening chorus of

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Speaker 4: people saying, this is lunacy, it's just a bubble, it's crazy,

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Speaker 4: it's a fad. And every year there was a pullback

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Speaker 4: of twenty to thirty percent, where everybody freaked out, and

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Speaker 4: you had enormous numbers of stories written saying, see, everyone

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Speaker 4: was a moron, they were all insane, and it's over now.

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Speaker 4: And then I like how.

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Speaker 3: Henry talks in business inside our headlined.

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Speaker 4: We would then roar off to new highs, and then

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Speaker 4: the same thing would happen the next year. So if

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Speaker 4: any one of those had led to the crash, we

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Speaker 4: would all look back and say, see that was the thing.

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Speaker 4: And I will say that the other thing you find

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Speaker 4: in these bubble periods is that they're two kinds of people.

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Speaker 4: There are the people who think that the world is

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Speaker 4: forever different and all the old valuation metrics can be

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Speaker 4: discarded because it's different this time and so forth. And

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Speaker 4: then they're the people who think, no, we are in

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Speaker 4: a bubble, but I'm going to ride the bubble right

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Speaker 4: to the end, and then I'm gonna get off right

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Speaker 4: at the top. Boddy else crashes. So I would say

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Speaker 4: that by nineteen ninety eight, and I wrote a lot

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Speaker 4: about this at the time, I was very much in

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Speaker 4: the we are in a bubble camp, but I was

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Speaker 4: also in the camp of the internets of profound technology

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Speaker 4: that's going to radically change things and create very huge companies.

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Speaker 4: So my investment recommendation early on at Merrill Lynch was, hey,

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Speaker 4: if you're good, by the way, don't touch these things,

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Speaker 4: if you're not incredibly risk tolerant, because there's just way

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Speaker 4: too much risk. But if you are, buy a few

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Speaker 4: of them so you have some diversification, and plan to

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Speaker 4: hold them for five to ten years. And that's what

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Speaker 4: I did myself. And I look back at in my

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Speaker 4: investment in AML, my investment in Yahoo and others, and say,

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Speaker 4: what on earth was I thinking? What an idiot wish

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Speaker 4: I hadn't. Fortunately, my investment in Amazon, despite almost going

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Speaker 4: to zero, that actually over ten years paid all back.

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Speaker 4: So that is the way to do it. And you know,

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Speaker 4: no public investors are investing in AI now, but if

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Speaker 4: you were going to, I think that sound and I

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Speaker 4: would even tighten the screen tighter, which is like, only

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Speaker 4: invest in the best ones because everybody else is going

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Speaker 4: to be toast. But with that big preamble, what was

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Speaker 4: the moment?

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Speaker 2: So in two.

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Speaker 4: Thousand, as I recall part of what it happened, part

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Speaker 4: of what was fueling the bubble. And you find this

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Speaker 4: in every bubble, is that there is something that is

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Speaker 4: goosing the fundamentals of the companies that is actually attached

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Speaker 4: to their valuations and what's happening in the markets. And

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Speaker 4: so I was really looking for that. And usually it's debt,

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Speaker 4: like people are borrowing margin dad or the dead and

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Speaker 4: in the telecom sector in the nineteen nineties, that's what

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Speaker 4: it was. All these telecom companies buying, borrowing so much money,

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Speaker 4: they're buying all the Cisco equipment, everything else. And eventually

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Speaker 4: that train stopped and crashed. But in the consumer internet sector,

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Speaker 4: which is where I was focused, like advertising, I was

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Speaker 4: looking for that leverage. I knew that the problem was

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Speaker 4: that you get embedded in the leverage in the system.

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Speaker 4: And in the star summer of two thousand it started

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Speaker 4: to break down, but I still didn't see what it was.

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Speaker 4: And you know what it was. What it was was

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Speaker 4: the incredible public market appetite for these securities, both on

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Speaker 4: the death side and the equity side. And so every

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Speaker 4: new company, as you said, I think there was something

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Speaker 4: like four hundred companies that went public in nineteen ninety nine,

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Speaker 4: just insane. Every new company would go out and raise

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Speaker 4: thirty million dollars. They would immediately spend five million on

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Speaker 4: a portal deal with Yahoo, and they'd spend five million

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Speaker 4: on Sun Microsystems servers, and they'd spend five million on

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Speaker 4: Oracle and so forth. And they were all losing huge

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Speaker 4: amounts of money. So what was actually happening was even

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Speaker 4: though they weren't borrowing money, they were getting money from

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Speaker 4: the public markets, and they were turning into actual spending with.

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Speaker 2: So i iwer an investor in an IPO that was

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Speaker 2: turned into revenue for Yahoo.

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Speaker 4: That's flattered Yahoo's revenue exactly. And then mean, in meantime,

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Speaker 4: you had this narrative that had been going on for years,

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Speaker 4: not a week, but years, where all of the old

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Speaker 4: economy companies and their management teams, we're getting totally shamed

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Speaker 4: by resisting the Internet. Meanwhile Amazon puts up these extraordinary

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Speaker 4: numbers every quarter. You know, it's not Barnes and Noble

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Speaker 4: is not going to kill them. In fact, they're going

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Speaker 4: to kill Barnes and Noble. That started to become clear.

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Speaker 4: So you have panic in the traditional economy saying we

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Speaker 4: are the train is leaving the station, and if I

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Speaker 4: don't get on that train or run after it, I'm

404
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Speaker 4: going to get fired. So even all those guys started

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Speaker 4: competing for the Yahoo deals and others, and so you

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Speaker 4: just just tremendous creation fundamental revenue. And then when the

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Speaker 4: ipo market closed and the debt markets start to close,

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Speaker 4: suddenly the tap got cut off. And within nine months, Yeah, Yahoo,

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Speaker 4: one of the best stocks in my sector, dropped I

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Speaker 4: think ninety three percent because all of its revenue disappeared.

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Speaker 4: And so that was the leverage. And so something will

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Speaker 4: be happening here that's like that. And maybe a lot

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Speaker 4: of companies are panic spending on AI because they don't

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Speaker 4: want to look like the behind the times. Maybe a

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Speaker 4: lot of consumers are trying AI and they're not going

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Speaker 4: to actually figure out how to use it in a

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Speaker 4: way that's profitable. So there may be a lot of

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Speaker 4: leverage getting built into the system. And by the way,

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Speaker 4: very obvious one is we have this theory right now

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Speaker 4: that open AI. You know, it's all about just building

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Speaker 4: bigger clusters, spending more on Capex and Microsoft. Now they're

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Speaker 4: all spending eighty billion dollars a year on Capex. We

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Speaker 4: may have another deep seek moment. Right It's suddenly like oh,

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Speaker 4: we can do it, but with a little software trades,

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Speaker 4: don't need to spend all that much on the chips,

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Speaker 4: and then everything's going to crash.

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Speaker 2: Tracy. I've been joking that if you're an investor in

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Speaker 2: a big tech company, you probably hate to see the

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Speaker 2: huge amount of capex being spent, But the only thing

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Speaker 2: worse would be a big decrease in the amount of

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Speaker 2: capex being spent, because that would be the actual signs

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Speaker 2: and to come.

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Speaker 3: Yeah, well, okay, so on this point, I mean, you

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Speaker 3: touched on this earlier when you were talking about how

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Speaker 3: a lot of the financing for AI right now is

436
00:22:58,520 --> 00:23:00,720
Speaker 3: coming from the private markets. But it seems to me

437
00:23:00,880 --> 00:23:05,159
Speaker 3: that the incestuousness in the tech industry, or maybe the

438
00:23:05,200 --> 00:23:08,000
Speaker 3: circularity is a better way of putting it, this is

439
00:23:08,040 --> 00:23:10,119
Speaker 3: the issue, right And when I see some of the

440
00:23:10,160 --> 00:23:13,239
Speaker 3: things going on right now, like for instance, you know,

441
00:23:13,320 --> 00:23:19,280
Speaker 3: hedge funds loaning core weave based on GPU GPUs, that's it.

442
00:23:19,720 --> 00:23:22,560
Speaker 2: Or in video yeah, investigative clue weave so that they

443
00:23:22,560 --> 00:23:24,480
Speaker 2: could buy in video chips exactly.

444
00:23:24,560 --> 00:23:29,159
Speaker 3: Yeah, this seems very like circular slash incestuous to me.

445
00:23:29,480 --> 00:23:31,560
Speaker 3: And at the same time, because so much of it

446
00:23:31,600 --> 00:23:34,040
Speaker 3: is happening in the private market between hedge funds and

447
00:23:34,040 --> 00:23:36,960
Speaker 3: private equity and these private deals, it seems very difficult

448
00:23:37,000 --> 00:23:37,399
Speaker 3: to track.

449
00:23:38,320 --> 00:23:41,679
Speaker 4: That's right, and that is absolutely happening. We're seeing it.

450
00:23:41,920 --> 00:23:44,359
Speaker 4: And then the other thing that I think people aren't

451
00:23:44,400 --> 00:23:45,920
Speaker 4: talking about it. I said it earlier, I said, I

452
00:23:45,960 --> 00:23:47,800
Speaker 4: hope Navidia, my goodness, it's one of the big the

453
00:23:47,800 --> 00:23:50,440
Speaker 4: pure playway to play AI. It's only trading at thirty

454
00:23:50,480 --> 00:23:55,040
Speaker 4: thirty five times earnings. That's reasonable, okay, But that's reasonable

455
00:23:55,040 --> 00:24:00,280
Speaker 4: based on Navidia having monopoly power, being the only hose

456
00:24:00,320 --> 00:24:04,240
Speaker 4: of these chips, just selling an extraordinary number of them

457
00:24:04,320 --> 00:24:07,240
Speaker 4: over the last year or two or three. And what

458
00:24:07,400 --> 00:24:10,600
Speaker 4: happens if demand for those chips drop or China vaults

459
00:24:10,640 --> 00:24:12,800
Speaker 4: past us and chips suddenly we don't need them anymore.

460
00:24:12,880 --> 00:24:15,120
Speaker 4: There's a better way to make AI other than buying

461
00:24:15,119 --> 00:24:17,800
Speaker 4: so many chips, then their earnings are gonna crash. And

462
00:24:17,920 --> 00:24:21,320
Speaker 4: maybe Navidi is actually trading at two hundred times next

463
00:24:21,400 --> 00:24:23,840
Speaker 4: year's earnings. We don't know yet. We just know in

464
00:24:23,920 --> 00:24:26,600
Speaker 4: hindsight and so forth. But to your point, that's exactly

465
00:24:26,680 --> 00:24:29,680
Speaker 4: the way to look at it. And I would say,

466
00:24:29,680 --> 00:24:34,160
Speaker 4: stepping back from it, We're still pretty early in terms

467
00:24:34,160 --> 00:24:36,879
Speaker 4: of time in this wave. We're only a couple of

468
00:24:36,920 --> 00:24:40,199
Speaker 4: years in where it's really getting going, and so you know,

469
00:24:40,320 --> 00:24:43,639
Speaker 4: maybe it's nineteen ninety seven as opposed to late nineteen

470
00:24:43,680 --> 00:24:45,919
Speaker 4: ninety nine. I don't know. And that's one thing I mean,

471
00:24:45,960 --> 00:24:47,800
Speaker 4: I'm one of the things I'm trying to figure out

472
00:24:47,920 --> 00:24:51,639
Speaker 4: is Okay, Navidia's edge, how long do they keep that?

473
00:24:51,920 --> 00:24:55,120
Speaker 4: And the reason the deep Seak announcement was so unsettling,

474
00:24:55,200 --> 00:24:57,879
Speaker 4: and by the way, Navidia stock has crashed and not

475
00:24:58,040 --> 00:25:01,679
Speaker 4: recovered since then, is that they seem to have figured

476
00:25:01,680 --> 00:25:06,439
Speaker 4: out a way to produce similar quality technology without the chips,

477
00:25:06,480 --> 00:25:08,239
Speaker 4: and then you have a lot of people coming back

478
00:25:08,320 --> 00:25:10,440
Speaker 4: and saying, oh, no, they bought them or they're using

479
00:25:10,440 --> 00:25:14,000
Speaker 4: them in Vietnam Jeff's paradox. Yeah, exactly. But that's why

480
00:25:14,080 --> 00:25:16,720
Speaker 4: Navidia is not recovered is because people don't believe that.

481
00:25:16,880 --> 00:25:19,920
Speaker 2: Yeah. And of course now people are also talking about

482
00:25:19,960 --> 00:25:23,439
Speaker 2: Huawei getting significantly better and that their chips could be

483
00:25:23,480 --> 00:25:27,119
Speaker 2: closed maybe one generation behind. So the prospect of further

484
00:25:27,280 --> 00:25:31,680
Speaker 2: deep seek moments, so to speak, is certainly out there,

485
00:25:31,680 --> 00:25:34,040
Speaker 2: and of course that could also threaten open eyes valuation

486
00:25:34,240 --> 00:25:37,240
Speaker 2: just given how much you know you know deep seek

487
00:25:37,320 --> 00:25:40,320
Speaker 2: is open source, and whether you can actually monetize that

488
00:25:40,480 --> 00:25:43,159
Speaker 2: AI edge that they have, presuming they still have an

489
00:25:43,200 --> 00:25:47,479
Speaker 2: AI ed lot of questions. I'm gonna throw a different

490
00:25:47,560 --> 00:25:51,800
Speaker 2: curve ball into the conversation. So you mentioned Elon mentioned Amazon,

491
00:25:52,359 --> 00:25:56,240
Speaker 2: Jeff Bezos was an investor in Insider, correctly. I don't

492
00:25:56,240 --> 00:25:58,840
Speaker 2: know if you ever talked to those guys anymore or whatever.

493
00:25:59,160 --> 00:26:04,439
Speaker 2: Elon obviously the most public phase of techs, you know,

494
00:26:04,600 --> 00:26:08,440
Speaker 2: warming towards Trump and Bezos to some extent. He was

495
00:26:08,480 --> 00:26:11,919
Speaker 2: at the inauguration too. I've asked this question to others

496
00:26:11,960 --> 00:26:14,879
Speaker 2: and I still don't what happened, not like, is it

497
00:26:14,920 --> 00:26:18,080
Speaker 2: wrong or right or whatever? What changed in tech from

498
00:26:18,119 --> 00:26:22,760
Speaker 2: your perspective such that these people who were extraordinarily successful

499
00:26:23,640 --> 00:26:26,880
Speaker 2: under the sort of existing way we think about economics

500
00:26:26,880 --> 00:26:31,320
Speaker 2: and politics, that they felt compelled to throw their support

501
00:26:31,359 --> 00:26:34,560
Speaker 2: to varying degrees by someone who, at a minimum setting

502
00:26:34,600 --> 00:26:38,360
Speaker 2: aside his success, really wants to change the system. Where

503
00:26:38,359 --> 00:26:39,080
Speaker 2: did that come from?

504
00:26:39,119 --> 00:26:40,879
Speaker 4: Do you think? I think it's a great question. I've

505
00:26:40,920 --> 00:26:43,720
Speaker 4: spent a lot of time actually looking into that and

506
00:26:43,800 --> 00:26:45,959
Speaker 4: talking to people and trying to figure it out. And

507
00:26:46,000 --> 00:26:49,440
Speaker 4: what I've been struck by is the level of personal

508
00:26:49,640 --> 00:26:54,360
Speaker 4: anger involved. Even after the election, after President Trump won,

509
00:26:54,960 --> 00:26:57,720
Speaker 4: there were what I would describe as victory laps taken

510
00:26:57,760 --> 00:27:01,440
Speaker 4: by some very powerful and influential folks in Silicon Valley,

511
00:27:01,480 --> 00:27:06,840
Speaker 4: and even then, like you just hear some seething anger

512
00:27:07,080 --> 00:27:10,960
Speaker 4: and desire for payback. And I think it's a few things. One,

513
00:27:11,480 --> 00:27:15,159
Speaker 4: I do think the Biden administration did not do a

514
00:27:15,200 --> 00:27:20,280
Speaker 4: good job of making the technology industry writ large. And again,

515
00:27:20,320 --> 00:27:23,520
Speaker 4: this is one of the United States most powerful, successful industries.

516
00:27:23,560 --> 00:27:27,399
Speaker 4: We had led the world not feel even a little

517
00:27:27,400 --> 00:27:31,800
Speaker 4: bit appreciated. In fact, the whole anti billionaire rhetoric where

518
00:27:31,840 --> 00:27:33,840
Speaker 4: we've got to get the pitchforks and so forth, it's

519
00:27:33,880 --> 00:27:37,320
Speaker 4: all bad Biden administration. You know, you really need to

520
00:27:37,400 --> 00:27:41,080
Speaker 4: diss Tesla back then and Elon Musk when he was

521
00:27:41,119 --> 00:27:43,159
Speaker 4: clearly waffling at that when we're in.

522
00:27:43,160 --> 00:27:45,600
Speaker 2: A period of we were saying that EV's are an

523
00:27:45,640 --> 00:27:48,360
Speaker 2: exist central part of America's not even invited.

524
00:27:47,920 --> 00:27:49,679
Speaker 4: To the conference or what it was, so so I

525
00:27:49,680 --> 00:27:51,439
Speaker 4: think that was part of it. I do think the

526
00:27:52,000 --> 00:27:53,639
Speaker 4: lack of a better way to describe it, the woke

527
00:27:53,800 --> 00:27:59,760
Speaker 4: wave and Silicon Valley companies feeling like they were being

528
00:28:00,080 --> 00:28:06,119
Speaker 4: were attempted takeovers by the employees over the CEOs. I

529
00:28:06,119 --> 00:28:09,520
Speaker 4: think there's a clap back effect there, and then I

530
00:28:09,560 --> 00:28:13,120
Speaker 4: think there's just a purely financial calculation, which is, look,

531
00:28:13,160 --> 00:28:15,040
Speaker 4: we have a job to We had to look out

532
00:28:15,080 --> 00:28:18,760
Speaker 4: for our companies and our investors and so forth, and listen,

533
00:28:18,840 --> 00:28:22,119
Speaker 4: this administration, referring to the Biden administration, is way too

534
00:28:22,200 --> 00:28:25,199
Speaker 4: much regulation and process and the clear they don't like

535
00:28:25,240 --> 00:28:30,080
Speaker 4: what we do. And at that point, ironically, most people

536
00:28:30,080 --> 00:28:32,679
Speaker 4: in business did think that the Trump administration would be

537
00:28:32,680 --> 00:28:35,600
Speaker 4: a pro business administration, and for a day it looks

538
00:28:35,680 --> 00:28:37,520
Speaker 4: that way, and now it does not. In fact, it

539
00:28:37,560 --> 00:28:41,600
Speaker 4: looks like the most anti United States business administration in

540
00:28:41,680 --> 00:28:44,720
Speaker 4: anybody's memory hundreds of years. So I think that's where

541
00:28:44,720 --> 00:28:47,240
Speaker 4: it came from. And I also look in Silicon Valley

542
00:28:47,320 --> 00:28:52,240
Speaker 4: also has an inherent kneejer contrarianism, and I think that

543
00:28:52,360 --> 00:28:55,160
Speaker 4: was at play also too. It's like, oh, everybody thinks something,

544
00:28:55,280 --> 00:28:57,360
Speaker 4: then why are they wrong? And what's the other way

545
00:28:57,400 --> 00:28:59,640
Speaker 4: of doing it? But I also do think it is

546
00:28:59,680 --> 00:29:03,280
Speaker 4: shifting back now, not to the point where anybody who

547
00:29:03,320 --> 00:29:06,880
Speaker 4: supported President Trump publicly or campaigned for him or whatever

548
00:29:07,040 --> 00:29:11,360
Speaker 4: is we'recanting. In fact, when that comes up, it's always, oh,

549
00:29:11,400 --> 00:29:13,920
Speaker 4: and look at the alternative we are. This universe is

550
00:29:14,000 --> 00:29:16,880
Speaker 4: so much better. But I will say they're saying it

551
00:29:16,880 --> 00:29:19,160
Speaker 4: a little bit less enthusiastically than they were.

552
00:29:19,040 --> 00:29:20,360
Speaker 3: A month ago, a little less loudly.

553
00:29:20,560 --> 00:29:24,280
Speaker 4: Yes, And I am starting to hear, well, you know,

554
00:29:24,360 --> 00:29:27,440
Speaker 4: maybe the tariffs, maybe it was good that we're highlighting

555
00:29:27,480 --> 00:29:29,560
Speaker 4: the problems in China, But like.

556
00:29:29,680 --> 00:29:30,920
Speaker 3: It's an expensive media.

557
00:29:31,040 --> 00:29:33,320
Speaker 4: Could there have been a better way to do it?

558
00:29:33,440 --> 00:29:36,680
Speaker 4: Could you have actually had a long term plan, and

559
00:29:36,760 --> 00:29:38,840
Speaker 4: could you have phased it in so you didn't go

560
00:29:38,920 --> 00:29:43,880
Speaker 4: and punch American companies in the mouth along with consumers?

561
00:29:44,920 --> 00:29:48,719
Speaker 4: Is there something behind the trade war? Because in the beginning,

562
00:29:48,960 --> 00:29:51,560
Speaker 4: remember it was all just hey, he's negotiating and shooting

563
00:29:51,560 --> 00:29:53,880
Speaker 4: from the hip. They're gonna be on their knees in

564
00:29:53,920 --> 00:29:56,920
Speaker 4: the office tomorrow morning. I don't hear that much anymore.

565
00:29:57,440 --> 00:30:00,920
Speaker 4: And I think actually folks who had thought that President

566
00:30:00,920 --> 00:30:03,920
Speaker 4: Trump is a quote free trader or actually realizing no, actually,

567
00:30:03,960 --> 00:30:04,480
Speaker 4: the guy who.

568
00:30:04,320 --> 00:30:08,200
Speaker 2: Loves you can't defend that one about tariffs for forty years.

569
00:30:08,240 --> 00:30:12,720
Speaker 4: You can't defend loves teriffs, and so I do hear that,

570
00:30:12,880 --> 00:30:16,280
Speaker 4: and I do hear fears that the longer this lasts,

571
00:30:16,320 --> 00:30:19,600
Speaker 4: it might have really lasting impact. And so I think

572
00:30:19,600 --> 00:30:20,320
Speaker 4: it's coming around.

573
00:30:20,440 --> 00:30:22,840
Speaker 3: So I assume you're still connected to a bunch of

574
00:30:23,160 --> 00:30:26,320
Speaker 3: startups and founders and you're working on your own new

575
00:30:26,360 --> 00:30:30,320
Speaker 3: thing right now, what's the funding environment like at the moment?

576
00:30:30,400 --> 00:30:33,760
Speaker 3: Are you seeing people that uncertainty around policies start to

577
00:30:33,800 --> 00:30:37,000
Speaker 3: feed into funding for you know, things that potentially are

578
00:30:37,040 --> 00:30:41,520
Speaker 3: not at all directly related to manufacturing or tariffs.

579
00:30:41,800 --> 00:30:44,479
Speaker 4: I don't know what's happened in the last month in

580
00:30:44,560 --> 00:30:47,600
Speaker 4: the venture market, especially the second year of the for

581
00:30:47,720 --> 00:30:50,719
Speaker 4: series A and so forth. My guess is the early

582
00:30:51,000 --> 00:30:53,600
Speaker 4: investing is pretty much fine as long as the capital

583
00:30:53,680 --> 00:30:56,560
Speaker 4: is there a company that has a small valuation, that's

584
00:30:56,560 --> 00:30:58,360
Speaker 4: probably there. But usually where you see it is in

585
00:30:58,440 --> 00:31:01,640
Speaker 4: Series A, Series B, series C. Because venture capitalists are

586
00:31:01,720 --> 00:31:04,640
Speaker 4: very tied to the exits. One of the real problems

587
00:31:04,680 --> 00:31:07,280
Speaker 4: in venture capital for the last really five ten years,

588
00:31:07,280 --> 00:31:09,720
Speaker 4: it's been the IPO market has been so sclerodic. You

589
00:31:09,880 --> 00:31:12,440
Speaker 4: have to be a colossal company, and so that's why

590
00:31:12,480 --> 00:31:14,120
Speaker 4: a lot of companies have looked for exits. But I

591
00:31:14,160 --> 00:31:18,440
Speaker 4: will say that one of the big problems with waging

592
00:31:18,520 --> 00:31:22,720
Speaker 4: a trade war this way, where literally overnight you decouple

593
00:31:23,120 --> 00:31:27,920
Speaker 4: two economies that are deeply interlinked, is that it is

594
00:31:27,960 --> 00:31:33,040
Speaker 4: impossible for companies to plan. And Apple is a very

595
00:31:33,080 --> 00:31:37,440
Speaker 4: good example. They spent decades building a world class global

596
00:31:37,440 --> 00:31:41,680
Speaker 4: supply chain that benefited the entire world, including the United

597
00:31:41,720 --> 00:31:45,560
Speaker 4: States consumers. We get these amazing iPhones for the price

598
00:31:45,600 --> 00:31:50,040
Speaker 4: we get them for. And to effectively say guys, you

599
00:31:50,120 --> 00:31:52,560
Speaker 4: got to put that supply chain on a ship and

600
00:31:52,600 --> 00:31:55,600
Speaker 4: get it to Texas by tomorrow morning is just not

601
00:31:55,680 --> 00:31:59,080
Speaker 4: going to happen. And so Apple is doing what any

602
00:31:59,480 --> 00:32:02,440
Speaker 4: intelligence company would do, which is saying, you know, look,

603
00:32:02,520 --> 00:32:05,120
Speaker 4: I do think that this there's gonna be this long

604
00:32:05,200 --> 00:32:07,600
Speaker 4: term pressure to a couple from China. We need to

605
00:32:07,600 --> 00:32:09,720
Speaker 4: diversify a little bit for a lot of reasons. So

606
00:32:09,800 --> 00:32:12,160
Speaker 4: what do they do. Do they move IP production for

607
00:32:12,160 --> 00:32:14,000
Speaker 4: the United States back to the United States.

608
00:32:14,040 --> 00:32:14,480
Speaker 2: They do not.

609
00:32:14,880 --> 00:32:19,640
Speaker 4: They moved to India, which someone will spike the football

610
00:32:19,720 --> 00:32:22,080
Speaker 4: and say that's exactly what we wanted to happen. India

611
00:32:22,120 --> 00:32:26,520
Speaker 4: is a friend, China's an enemy. I will appall most

612
00:32:26,520 --> 00:32:30,120
Speaker 4: of odd Lot's listeners by saying that I actually do

613
00:32:30,200 --> 00:32:37,120
Speaker 4: not believe that China's enemy, and I liked, I actually

614
00:32:37,280 --> 00:32:40,680
Speaker 4: liked the fact that our economies which super integrated. And yes,

615
00:32:41,560 --> 00:32:45,720
Speaker 4: the trade relationship is unfair, and yes, there are a

616
00:32:45,760 --> 00:32:48,840
Speaker 4: lot of things that America and the allies that used

617
00:32:48,840 --> 00:32:51,760
Speaker 4: to have could have done to bring China to the

618
00:32:51,760 --> 00:32:53,840
Speaker 4: table and make it fair and open up the markets.

619
00:32:54,040 --> 00:32:56,959
Speaker 4: But United States companies did a hell of a lot

620
00:32:57,000 --> 00:32:59,840
Speaker 4: of business in China and still do and that is

621
00:32:59,880 --> 00:33:02,680
Speaker 4: now at risk, along with our metals and everything else.

622
00:33:02,720 --> 00:33:06,280
Speaker 4: And by the way, again I understand from a political perspective,

623
00:33:07,080 --> 00:33:10,160
Speaker 4: the virtue of having an enemy. It's very easy with

624
00:33:10,320 --> 00:33:13,800
Speaker 4: divide the world. It's us versus them. But the more

625
00:33:13,840 --> 00:33:17,320
Speaker 4: we are enemies to me, the more risk we're eventually

626
00:33:17,360 --> 00:33:19,480
Speaker 4: going to actually end up in a real war. Not

627
00:33:19,600 --> 00:33:23,200
Speaker 4: just that I like the interlinkedness we live in a globalized,

628
00:33:23,240 --> 00:33:26,400
Speaker 4: integrated economy. I think imagining that the United States can

629
00:33:26,440 --> 00:33:29,120
Speaker 4: suddenly just decouple itself and we're thrilled, I think that

630
00:33:29,200 --> 00:33:30,560
Speaker 4: what's going to happen is the rest of the world's

631
00:33:30,560 --> 00:33:32,680
Speaker 4: going to knit together and go on without us. And

632
00:33:33,120 --> 00:33:36,280
Speaker 4: so even going back to the premise for the trade war,

633
00:33:36,400 --> 00:33:38,520
Speaker 4: I have issues Just.

634
00:33:38,480 --> 00:33:40,600
Speaker 2: To be clear, I don't think the you know, there

635
00:33:40,640 --> 00:33:43,040
Speaker 2: is no odd lots house of view on anything littlone

636
00:33:43,080 --> 00:33:45,440
Speaker 2: our listeners. I think if you know, if there is

637
00:33:45,480 --> 00:33:47,480
Speaker 2: something closed, it's actually quite a bit of.

638
00:33:47,960 --> 00:33:50,320
Speaker 4: Well, what I will say is in odd lots, yeah,

639
00:33:50,560 --> 00:33:53,000
Speaker 4: if we think, sure the same way, that's true. What

640
00:33:53,160 --> 00:33:55,080
Speaker 4: I hear when I talk to some of my friends, Yeah,

641
00:33:55,080 --> 00:33:58,680
Speaker 4: I really clad and is oh my god, listen, Oh

642
00:33:59,000 --> 00:34:03,560
Speaker 4: you are the most naive human in America. How can

643
00:34:03,600 --> 00:34:07,000
Speaker 4: you not understand that this is not a gladiatorial fight

644
00:34:07,280 --> 00:34:09,719
Speaker 4: to the death and China is our enemy and we

645
00:34:09,800 --> 00:34:12,719
Speaker 4: must sock it to them. I just simply do not.

646
00:34:13,000 --> 00:34:17,640
Speaker 4: That's interesting because is a cooperative activity. It's like a

647
00:34:17,680 --> 00:34:18,520
Speaker 4: potluck dinner.

648
00:34:18,600 --> 00:34:20,200
Speaker 2: This is a good So I would say, if there's

649
00:34:20,239 --> 00:34:23,080
Speaker 2: something close to a house view, which there is no

650
00:34:23,160 --> 00:34:26,960
Speaker 2: house view, it's a certain admiration, high level of admiration

651
00:34:27,120 --> 00:34:30,680
Speaker 2: for what's been accomplished technologically in China and economically over

652
00:34:30,680 --> 00:34:35,040
Speaker 2: the last several decades, and not a gladiatorial sense, but

653
00:34:35,360 --> 00:34:38,080
Speaker 2: there are areas where it creates risk. But I do

654
00:34:38,120 --> 00:34:41,440
Speaker 2: get the impression, especially in DC, that this is this

655
00:34:41,600 --> 00:34:44,360
Speaker 2: idea of US verse China. It's got to be the

656
00:34:44,360 --> 00:34:47,120
Speaker 2: most bipartisan view that there is in the world, you

657
00:34:47,120 --> 00:34:51,080
Speaker 2: would say, in your circles and tech and media that

658
00:34:51,320 --> 00:34:53,160
Speaker 2: shared that view absolutely.

659
00:34:53,320 --> 00:34:56,200
Speaker 4: And Ezra Klein and Tom Friedman of The New York

660
00:34:56,239 --> 00:34:58,759
Speaker 4: Times have a great podcast about this. Tom Friedman is

661
00:34:58,760 --> 00:35:02,200
Speaker 4: written about this. And another guy who's very outspoken from

662
00:35:02,200 --> 00:35:05,280
Speaker 4: the Silicon Valley community about it is Bill Gurley, formerly

663
00:35:05,320 --> 00:35:09,319
Speaker 4: a Benchmark who basically say this idea that we're going

664
00:35:09,400 --> 00:35:12,120
Speaker 4: to beat China in Ai and we're going to quote

665
00:35:12,160 --> 00:35:15,720
Speaker 4: win the Ai War, it's crazy, It's not gonna happen.

666
00:35:15,880 --> 00:35:18,440
Speaker 4: And that's the real message from Deep Seek. And here

667
00:35:18,480 --> 00:35:20,600
Speaker 4: we have all of this plotting, like how can we

668
00:35:20,680 --> 00:35:22,840
Speaker 4: keep the Navidia chips away from China? We got to

669
00:35:22,920 --> 00:35:26,400
Speaker 4: maintain our advantage and so forth. Meanwhile, all these companies

670
00:35:26,480 --> 00:35:29,560
Speaker 4: suddenly appear in Vietnam and everywhere else that the whole

671
00:35:29,680 --> 00:35:33,200
Speaker 4: lo and hold have huge data centers filled with Navidia

672
00:35:33,280 --> 00:35:36,000
Speaker 4: chips that anybody can use, and so forth, and we've

673
00:35:36,040 --> 00:35:38,440
Speaker 4: got to now agree we're going to send them less

674
00:35:38,520 --> 00:35:41,480
Speaker 4: powerful chips, although even President Trump's not thrown that out,

675
00:35:41,640 --> 00:35:45,279
Speaker 4: costing Navidia investors five billion dollars a year. I just

676
00:35:45,360 --> 00:35:48,920
Speaker 4: think again, the more integrated our economies are, the better.

677
00:35:49,360 --> 00:35:52,480
Speaker 4: I do think the best way to approach the China imbalances,

678
00:35:52,520 --> 00:35:56,040
Speaker 4: and they are real, would have been to get together

679
00:35:56,160 --> 00:35:58,640
Speaker 4: with Europe and a lot of other countries in Asia

680
00:35:58,680 --> 00:36:01,000
Speaker 4: and say, hey, guys, we love working with you, but

681
00:36:01,320 --> 00:36:02,800
Speaker 4: you got to change a few things. You got to

682
00:36:02,800 --> 00:36:04,840
Speaker 4: open the markets a little bit and so forth. And

683
00:36:04,920 --> 00:36:07,759
Speaker 4: I just I think one one thing I hope that

684
00:36:08,160 --> 00:36:11,360
Speaker 4: everybody in Washington, and I think Wall Street tends to

685
00:36:11,360 --> 00:36:14,040
Speaker 4: have a much more clear eye view of it is Listen,

686
00:36:15,640 --> 00:36:19,360
Speaker 4: China is going to be much bigger and more powerful

687
00:36:19,360 --> 00:36:24,960
Speaker 4: than the United States. They are. That's okay, we blew

688
00:36:25,120 --> 00:36:29,040
Speaker 4: past Europe seventy five years ago. You know what, people

689
00:36:29,080 --> 00:36:32,480
Speaker 4: still live in Europe. They still have culture, they have

690
00:36:32,520 --> 00:36:36,319
Speaker 4: good lives, they have good jobs, and you know what,

691
00:36:36,400 --> 00:36:39,240
Speaker 4: we're not fighting them. They're not fighting us because we've

692
00:36:39,280 --> 00:36:41,560
Speaker 4: got more powerful. So I think the United States has

693
00:36:41,560 --> 00:36:44,640
Speaker 4: got to get over this idea that we rule the

694
00:36:44,719 --> 00:36:48,200
Speaker 4: world forever and we got to keep down China. China.

695
00:36:48,360 --> 00:36:51,400
Speaker 4: I mean, look at it as a human being. Twenty

696
00:36:51,400 --> 00:36:56,759
Speaker 4: five years ago, poverty in China was appalling for hundreds

697
00:36:56,800 --> 00:36:59,560
Speaker 4: of millions of people, and they have now moved.

698
00:36:59,320 --> 00:37:00,400
Speaker 2: Out of product shortenary.

699
00:37:00,760 --> 00:37:04,160
Speaker 4: That is a good thing, not a bad thing. It's

700
00:37:04,200 --> 00:37:07,520
Speaker 4: a good thing. And the richer countries get, the less

701
00:37:07,680 --> 00:37:10,920
Speaker 4: likely they are to defend themselves with missiles and so forth.

702
00:37:11,000 --> 00:37:13,879
Speaker 4: So I just think we should step back and look

703
00:37:13,920 --> 00:37:16,080
Speaker 4: at this idea that's been created and as you say,

704
00:37:16,120 --> 00:37:20,000
Speaker 4: extraordinarily bipartisan in NBC in particular, that China is going

705
00:37:20,080 --> 00:37:21,919
Speaker 4: to be our enemy forever. We got to beat them.

706
00:37:22,000 --> 00:37:24,080
Speaker 4: We're not gonna beat them, it's not gonna happen. But

707
00:37:24,120 --> 00:37:26,680
Speaker 4: we can still take care of our own security, build

708
00:37:26,680 --> 00:37:31,120
Speaker 4: amazing companies, get richer, have a remarkable country, and coexist

709
00:37:31,120 --> 00:37:33,120
Speaker 4: and work with China. That's my view, and you can

710
00:37:33,160 --> 00:37:33,440
Speaker 4: tell me.

711
00:37:33,520 --> 00:37:36,720
Speaker 2: I like it, I like it, I like it.

712
00:37:51,560 --> 00:37:53,560
Speaker 3: Can I go back to one of the disclaimers in

713
00:37:53,600 --> 00:37:57,680
Speaker 3: the intro, not about Joe, the other one about you

714
00:37:57,760 --> 00:38:01,120
Speaker 3: being sort of excommunicated from wallst And part of that

715
00:38:01,280 --> 00:38:03,560
Speaker 3: was based on well all of it was based on

716
00:38:03,640 --> 00:38:07,600
Speaker 3: research from the tech bubble, right, And as a consequence

717
00:38:07,680 --> 00:38:10,360
Speaker 3: of the tech bubble, we saw lots of new regulation

718
00:38:10,520 --> 00:38:14,440
Speaker 3: around how analysts can actually publish research, and Chinese walls

719
00:38:14,760 --> 00:38:18,400
Speaker 3: in investment banks and things like that looking back on

720
00:38:18,480 --> 00:38:22,320
Speaker 3: what was published back then versus what's being published now

721
00:38:22,640 --> 00:38:26,640
Speaker 3: on AI, do you see similarities? Do you see improvements

722
00:38:26,719 --> 00:38:29,080
Speaker 3: as a result of some of those measures taken in

723
00:38:29,080 --> 00:38:30,640
Speaker 3: the early two thousands.

724
00:38:31,200 --> 00:38:35,000
Speaker 4: I think that the well, stepping back, yes, thank you

725
00:38:35,040 --> 00:38:39,719
Speaker 4: for bringing up my ex conversation, still just a mortifying

726
00:38:39,880 --> 00:38:42,879
Speaker 4: episode to me, and I am so grateful to you too,

727
00:38:43,239 --> 00:38:46,160
Speaker 4: And there so many other people in the last twenty

728
00:38:46,160 --> 00:38:49,160
Speaker 4: five years who've given me this second chance and so forth.

729
00:38:49,239 --> 00:38:51,680
Speaker 4: And you know, I learned a ton about that process.

730
00:38:51,800 --> 00:38:54,600
Speaker 4: Elliott Spitzer, who was the guy who went after me obviously,

731
00:38:54,680 --> 00:38:59,040
Speaker 4: and everybody we had our own thing afterwards, and suddenly

732
00:38:59,120 --> 00:39:01,160
Speaker 4: he had his own trouble, and then I was on

733
00:39:01,239 --> 00:39:03,239
Speaker 4: his show and he was on my show, and life

734
00:39:03,320 --> 00:39:05,080
Speaker 4: goes on, and we even had a lunch together at

735
00:39:05,120 --> 00:39:07,920
Speaker 4: one point. So life goes on, but a very much

736
00:39:08,040 --> 00:39:09,879
Speaker 4: learning experience. And by the way, because we talked about

737
00:39:09,880 --> 00:39:14,360
Speaker 4: bubbles earlier, that is the final feature of these episodes.

738
00:39:14,360 --> 00:39:17,439
Speaker 4: And John Kenneth Gallbraith has written about this, where there's

739
00:39:17,520 --> 00:39:20,799
Speaker 4: a huge backlash against the folks who were sort of

740
00:39:20,840 --> 00:39:23,759
Speaker 4: held up as being the geniuses and doing really well.

741
00:39:23,800 --> 00:39:26,919
Speaker 4: And that's how the society moves on and so forth.

742
00:39:26,960 --> 00:39:29,640
Speaker 4: So anyway, I wish I hadn't been in the middle

743
00:39:29,640 --> 00:39:31,640
Speaker 4: of that, but I was, and so forth, and it's

744
00:39:31,680 --> 00:39:33,680
Speaker 4: too bad because I love Wall Street. But anyway, you

745
00:39:33,719 --> 00:39:35,080
Speaker 4: look at research. I'll tell you what I think the

746
00:39:35,120 --> 00:39:37,879
Speaker 4: biggest thing that has been lost that sucks, and it's

747
00:39:37,920 --> 00:39:40,520
Speaker 4: not actually research. It's the fact that we don't have

748
00:39:40,520 --> 00:39:45,040
Speaker 4: an IPO market anymore. And my view at the time

749
00:39:45,440 --> 00:39:51,560
Speaker 4: and now is that the more opportunities investors have, the

750
00:39:51,640 --> 00:39:56,080
Speaker 4: better and early stage tech IPOs are highly risky. Most

751
00:39:56,080 --> 00:39:57,960
Speaker 4: of them end up going out of business. People lose

752
00:39:58,000 --> 00:40:00,480
Speaker 4: their shirts and so forth. But I I don't think

753
00:40:00,480 --> 00:40:03,360
Speaker 4: that necessarily the job of the public market is to

754
00:40:03,520 --> 00:40:07,200
Speaker 4: make it impossible for investors to lose their shirts. I

755
00:40:07,200 --> 00:40:10,280
Speaker 4: think actually it is to create a range of options.

756
00:40:10,320 --> 00:40:12,279
Speaker 4: We had this amazing you know, the public markets in

757
00:40:12,280 --> 00:40:14,920
Speaker 4: the nineteen nineties were terrific. You could raise a lot

758
00:40:14,960 --> 00:40:17,359
Speaker 4: of money and so forth. Now by the time you

759
00:40:17,400 --> 00:40:21,320
Speaker 4: go public, the vast majority of the gains have already

760
00:40:21,320 --> 00:40:26,800
Speaker 4: been grabbed by professional investors, and so you know, smaller

761
00:40:26,840 --> 00:40:29,080
Speaker 4: investors can't even get at them. So I would say

762
00:40:29,080 --> 00:40:31,479
Speaker 4: that I think the IPO market back then was better.

763
00:40:31,640 --> 00:40:35,080
Speaker 4: And I think the discipline of company going public is good.

764
00:40:35,120 --> 00:40:37,319
Speaker 4: Bill Gurley's talked a lot about this, So I think

765
00:40:37,360 --> 00:40:39,960
Speaker 4: that's too bad that we've lost that. And I think

766
00:40:39,960 --> 00:40:43,760
Speaker 4: in research, I don't look back. In the nineteen nineties,

767
00:40:44,000 --> 00:40:47,279
Speaker 4: analysts were asked to do lots of different jobs. There

768
00:40:47,280 --> 00:40:49,200
Speaker 4: were articles in Wall Street Journal all the way along.

769
00:40:49,239 --> 00:40:52,400
Speaker 4: You know, analysts wear two hats. They write about stocks,

770
00:40:52,400 --> 00:40:55,360
Speaker 4: and they also talk to companies about raising money, and

771
00:40:55,360 --> 00:40:57,360
Speaker 4: the companies have to like them, or of course they

772
00:40:57,360 --> 00:40:59,160
Speaker 4: would never choose the firm to take them.

773
00:40:59,280 --> 00:40:59,400
Speaker 1: Come.

774
00:41:00,000 --> 00:41:01,920
Speaker 4: Analysts were in a position where they're doing a lot,

775
00:41:01,960 --> 00:41:04,840
Speaker 4: and I would say, as an analyst, now okay, fine,

776
00:41:04,960 --> 00:41:07,800
Speaker 4: now it's just right about stocks and talk to investors

777
00:41:07,840 --> 00:41:11,080
Speaker 4: and so forth. But interestingly, one of the big things

778
00:41:11,080 --> 00:41:14,480
Speaker 4: that was cited is proof that there was some deep

779
00:41:14,520 --> 00:41:17,839
Speaker 4: corruption in research, which I do not believe there was,

780
00:41:17,840 --> 00:41:20,759
Speaker 4: was that so many of the ratings were positive, So

781
00:41:20,840 --> 00:41:22,920
Speaker 4: many of the ratings are still positive. And you know what,

782
00:41:23,160 --> 00:41:24,959
Speaker 4: h there are a lot of reasons for that. One,

783
00:41:25,080 --> 00:41:28,280
Speaker 4: analysts only cover the companies that they like. Generally, nobody

784
00:41:28,520 --> 00:41:30,480
Speaker 4: likes a beyar. You go out and just insult a

785
00:41:30,520 --> 00:41:33,680
Speaker 4: company all day you know, what are you doing? And

786
00:41:34,440 --> 00:41:36,840
Speaker 4: it's see when the markets are going up, especially in

787
00:41:36,880 --> 00:41:39,440
Speaker 4: a sector like this, you know, most stocks go up,

788
00:41:39,480 --> 00:41:41,319
Speaker 4: so there are a lot of reasons for it that

789
00:41:41,440 --> 00:41:43,960
Speaker 4: have something to do with something else, and it's just

790
00:41:44,040 --> 00:41:47,200
Speaker 4: been interesting to watch that that really hasn't changed that much.

791
00:41:48,160 --> 00:41:49,960
Speaker 2: You know, in a way, it feels like we kind

792
00:41:49,960 --> 00:41:52,240
Speaker 2: of have the worst of both worlds with early stage

793
00:41:52,280 --> 00:41:55,319
Speaker 2: investing because we don't have the sort of companies going

794
00:41:55,360 --> 00:41:57,920
Speaker 2: public when they're young. But I keep seeing you know,

795
00:41:57,960 --> 00:41:59,880
Speaker 2: you see them on the subway, like these ads like

796
00:42:00,080 --> 00:42:03,480
Speaker 2: invest in private companies through an app, and it's like

797
00:42:03,640 --> 00:42:06,640
Speaker 2: you're not getting any information, you have no idea what

798
00:42:06,719 --> 00:42:10,120
Speaker 2: valuations you're getting at. And so they they're finding these

799
00:42:10,160 --> 00:42:13,560
Speaker 2: ways to suck in retail money because they're attracted to

800
00:42:13,600 --> 00:42:16,800
Speaker 2: these ideas of or buy SpaceX on the secondary market

801
00:42:16,960 --> 00:42:20,080
Speaker 2: with no you know, no ten queues or anything. So

802
00:42:20,160 --> 00:42:22,879
Speaker 2: in a way, it feels like this sort of worst

803
00:42:22,920 --> 00:42:25,680
Speaker 2: of both worlds in terms of the public's access to

804
00:42:25,800 --> 00:42:27,600
Speaker 2: early stage company.

805
00:42:27,280 --> 00:42:30,240
Speaker 4: That is totally right. And in fact, when I first

806
00:42:30,400 --> 00:42:32,839
Speaker 4: saw the first one of those go by in some

807
00:42:32,960 --> 00:42:35,560
Speaker 4: feed or email, like oh, you can invest in this

808
00:42:35,640 --> 00:42:39,480
Speaker 4: new organic wine company where there's no booze and so

809
00:42:39,600 --> 00:42:42,000
Speaker 4: forth or whatever it happens to be. WHOA. I had

810
00:42:42,040 --> 00:42:45,200
Speaker 4: the same reaction that Gordon Gecko had when he got

811
00:42:45,200 --> 00:42:47,600
Speaker 4: out of jail in the Second Wall Street movie, where

812
00:42:47,600 --> 00:42:51,359
Speaker 4: he's like, my god, all this stuff is legal now. Yea,

813
00:42:51,480 --> 00:42:54,440
Speaker 4: so it's legal, and you're right, it's terrible all this

814
00:42:54,560 --> 00:42:57,200
Speaker 4: secondary trading where you have no idea what the company's

815
00:42:57,200 --> 00:43:00,560
Speaker 4: financials are, and you have no idea what the capital

816
00:43:00,800 --> 00:43:04,240
Speaker 4: stack looks like, and how much preferred stock is piled

817
00:43:04,280 --> 00:43:06,840
Speaker 4: on top of the crappy common stock that you're buying

818
00:43:06,840 --> 00:43:11,040
Speaker 4: from some employee. You have no idea. So yes, I

819
00:43:11,040 --> 00:43:13,399
Speaker 4: think we're much better off in the world where it's

820
00:43:13,480 --> 00:43:15,840
Speaker 4: just out there. And by the way, ninety five percent

821
00:43:15,840 --> 00:43:19,400
Speaker 4: of investors shouldn't go anywhere near early stage tech idea.

822
00:43:19,480 --> 00:43:22,080
Speaker 4: It's IPOs ever, no matter how much money your friends

823
00:43:22,120 --> 00:43:26,080
Speaker 4: are making. But there's a difference. Yeah, it's hard, but

824
00:43:26,120 --> 00:43:29,799
Speaker 4: there's a difference between having a choice like that and

825
00:43:29,960 --> 00:43:32,600
Speaker 4: just preventing it. And unfortunately that's where we are. And

826
00:43:32,640 --> 00:43:36,600
Speaker 4: I just don't think it's the financing pipes have rerouted.

827
00:43:36,800 --> 00:43:40,479
Speaker 4: Companies are getting money. That's great, but I think having

828
00:43:40,520 --> 00:43:43,000
Speaker 4: a little bit more ability to go public earlier would

829
00:43:43,000 --> 00:43:43,279
Speaker 4: be great.

830
00:43:43,960 --> 00:43:46,879
Speaker 2: There's so much we could talk about and we could,

831
00:43:47,000 --> 00:43:49,120
Speaker 2: you know, we could. We haven't talked at all about

832
00:43:49,160 --> 00:43:51,239
Speaker 2: the media business in part cause like I don't know,

833
00:43:51,320 --> 00:43:53,960
Speaker 2: it's a little naval gazing, etcetera. We could take that

834
00:43:54,000 --> 00:43:56,200
Speaker 2: in a million different directions. Let me just say this

835
00:43:56,239 --> 00:44:00,640
Speaker 2: simple question. Could you start a business insider today? Business

836
00:44:00,640 --> 00:44:03,920
Speaker 2: insider I think started two thousand and six, or was

837
00:44:04,000 --> 00:44:08,400
Speaker 2: ali insider now it's twenty twenty five. What's different today

838
00:44:08,440 --> 00:44:11,160
Speaker 2: that you either you could or you couldn't make that bet?

839
00:44:11,360 --> 00:44:14,320
Speaker 4: I think you could make it, I think far less

840
00:44:14,400 --> 00:44:16,319
Speaker 4: likely to be successful because if you look at a

841
00:44:16,360 --> 00:44:18,640
Speaker 4: media business, there are two pieces to it. There's the

842
00:44:18,800 --> 00:44:23,360
Speaker 4: editorial and there's the distribution. And really what the Internet

843
00:44:23,400 --> 00:44:27,640
Speaker 4: did and what enabled some new companies for a while,

844
00:44:27,680 --> 00:44:29,799
Speaker 4: a lot of new companies, but some new companies to

845
00:44:29,960 --> 00:44:32,160
Speaker 4: grab hold in a way that would have been much

846
00:44:32,160 --> 00:44:36,279
Speaker 4: more difficult before is distribution got completely blown up. You

847
00:44:36,320 --> 00:44:38,919
Speaker 4: look at newspapers, you look at cable, you look at

848
00:44:39,080 --> 00:44:42,640
Speaker 4: all these different legacy media businesses. They were all protected

849
00:44:42,960 --> 00:44:46,560
Speaker 4: by the technology of the time. Internet blew all of

850
00:44:46,560 --> 00:44:51,279
Speaker 4: that up and very importantly, it created eight hours during

851
00:44:51,320 --> 00:44:55,440
Speaker 4: the workday where you were between the morning newspaper and

852
00:44:55,480 --> 00:45:00,239
Speaker 4: the TV evening news where lots of cool things were happening. Hey,

853
00:45:00,239 --> 00:45:02,839
Speaker 4: you want to know what's happening, And suddenly you have

854
00:45:03,000 --> 00:45:06,080
Speaker 4: on your desktop Business Insider at Silicon Alli, Insider is

855
00:45:06,120 --> 00:45:08,160
Speaker 4: telling what's going on. And by the way, you have

856
00:45:08,160 --> 00:45:10,960
Speaker 4: four hundred and thirty two websites that are reporting different things.

857
00:45:10,960 --> 00:45:12,960
Speaker 4: It's very convenient to have it all brought into one

858
00:45:13,000 --> 00:45:16,480
Speaker 4: place for you, especially if it's adding analysis. It's like

859
00:45:16,560 --> 00:45:18,680
Speaker 4: having a TV host, or it's like having you guys,

860
00:45:18,960 --> 00:45:22,480
Speaker 4: but at your convenience on a website. So we early

861
00:45:22,520 --> 00:45:24,080
Speaker 4: on had a lot of people addicted to that. You

862
00:45:24,120 --> 00:45:27,480
Speaker 4: couldn't build that today because the web has been completely

863
00:45:27,520 --> 00:45:30,960
Speaker 4: deprecated in terms of its influence. Everything has moved to apps.

864
00:45:31,280 --> 00:45:35,160
Speaker 4: We're much more in a world where the media distribution

865
00:45:35,320 --> 00:45:38,080
Speaker 4: looks much more like what it did in the TV

866
00:45:38,280 --> 00:45:43,040
Speaker 4: and paper days, where it's controlled distribution. Shelf space matters,

867
00:45:43,120 --> 00:45:45,799
Speaker 4: you don't have very much, and so now the big

868
00:45:45,840 --> 00:45:47,920
Speaker 4: new companies that are being built are being built with

869
00:45:48,000 --> 00:45:51,840
Speaker 4: direct distribution like email and app and so forth. And

870
00:45:51,840 --> 00:45:54,840
Speaker 4: that's how my own media consumption has shifted. I was

871
00:45:54,880 --> 00:45:56,600
Speaker 4: a huge, diehard web guy.

872
00:45:56,680 --> 00:45:57,200
Speaker 2: Yeah, me too.

873
00:45:57,360 --> 00:46:00,960
Speaker 4: And now it's just with the paywall situation, which is brutal,

874
00:46:01,040 --> 00:46:03,759
Speaker 4: like you've got to sign into every site on every platform.

875
00:46:03,800 --> 00:46:05,960
Speaker 4: It's infuriating. It's much easier to just go to the app.

876
00:46:06,040 --> 00:46:08,480
Speaker 4: So things have changed. So the original model for businesses

877
00:46:08,600 --> 00:46:10,960
Speaker 4: it would not have worked. I do new models work,

878
00:46:11,080 --> 00:46:14,120
Speaker 4: and business owners do very well, very so proud of them.

879
00:46:14,400 --> 00:46:16,720
Speaker 4: Very hard to come through this period and survive.

880
00:46:16,880 --> 00:46:20,160
Speaker 2: And we are, by the way, Tracy, when I was

881
00:46:20,239 --> 00:46:23,799
Speaker 2: hired at Business Insider, the name of the vertical that

882
00:46:23,880 --> 00:46:26,720
Speaker 2: I originally worked for have been going fifty minutes without

883
00:46:26,760 --> 00:46:29,560
Speaker 2: saying it. There's the name that children not go mention

884
00:46:29,719 --> 00:46:31,640
Speaker 2: clusterstock dot com.

885
00:46:31,760 --> 00:46:33,919
Speaker 3: This is how I used to link to your work.

886
00:46:34,280 --> 00:46:36,359
Speaker 3: I wrote for Joe Clusterstock.

887
00:46:37,280 --> 00:46:40,120
Speaker 2: Henry Blodgett, thank you so much for coming on. Odd

888
00:46:40,160 --> 00:46:41,560
Speaker 2: lots could talk for a long time.

889
00:46:42,520 --> 00:46:49,200
Speaker 4: Let me a little of special bonuses, Tracy, What is

890
00:46:49,239 --> 00:46:52,359
Speaker 4: it about? Joe? Was like, what is so? I'll tell

891
00:46:52,360 --> 00:47:00,000
Speaker 4: you one, Tracy. When you're trying to build a startup

892
00:47:01,480 --> 00:47:05,879
Speaker 4: what has been described as hustle culture and since insulted

893
00:47:06,120 --> 00:47:08,759
Speaker 4: as hustle culture as we have this big backlash to

894
00:47:08,840 --> 00:47:12,160
Speaker 4: work life balance and oppressive bosses and all other stuff.

895
00:47:12,920 --> 00:47:16,800
Speaker 4: It actually really matters. You are running for your life.

896
00:47:17,080 --> 00:47:19,760
Speaker 4: And the way Jeff Bezos described it to me after

897
00:47:19,800 --> 00:47:25,040
Speaker 4: he invested was, you know, you guys have effectively created

898
00:47:25,080 --> 00:47:28,040
Speaker 4: this little flame that you hold in the palm of

899
00:47:28,080 --> 00:47:31,120
Speaker 4: your hand, and that is a huge accomplishment, Like you've

900
00:47:31,160 --> 00:47:35,000
Speaker 4: created fire out of nothing. But all around you the

901
00:47:35,040 --> 00:47:38,920
Speaker 4: winds are blowing. They're these huge forces that are threatening

902
00:47:38,960 --> 00:47:43,200
Speaker 4: to snuff it out. Like nurture that flame, protect it,

903
00:47:43,440 --> 00:47:46,560
Speaker 4: make it grow. Eventually, it's a fire. So to do

904
00:47:46,600 --> 00:47:50,120
Speaker 4: that you actually need people who are totally dedicated, and

905
00:47:50,880 --> 00:47:54,400
Speaker 4: Joe was extraordinarily dedicated. We had a team of a

906
00:47:54,440 --> 00:47:57,919
Speaker 4: few folks who are around Joe's age who really made

907
00:47:57,960 --> 00:48:01,080
Speaker 4: business inside are possible because they were so into it.

908
00:48:01,200 --> 00:48:05,080
Speaker 4: And then the other Joe Wisenthal attribute that I think

909
00:48:05,120 --> 00:48:08,239
Speaker 4: has contributed to alots becoming the thing that everybody has

910
00:48:08,280 --> 00:48:10,719
Speaker 4: to listen to and so forth is Joe has a

911
00:48:10,800 --> 00:48:17,200
Speaker 4: remarkable ability to inspire other people to get excited about

912
00:48:17,200 --> 00:48:20,040
Speaker 4: the way he sees the world and to work with him.

913
00:48:20,160 --> 00:48:22,600
Speaker 3: And the lines moving on the to.

914
00:48:22,400 --> 00:48:25,399
Speaker 4: The point where yes, the new York Times famously, back

915
00:48:25,400 --> 00:48:29,200
Speaker 4: in those early days, wrote a profile of Joe Wisenthal

916
00:48:29,320 --> 00:48:34,239
Speaker 4: which one could have interpreted as this poor man is

917
00:48:34,320 --> 00:48:37,600
Speaker 4: insane and he's going to drop dead, and this sounds

918
00:48:37,640 --> 00:48:40,280
Speaker 4: like hell on Earth, which is like twenty four hours

919
00:48:40,280 --> 00:48:43,120
Speaker 4: a day, I twitching waiting for the jobs report all

920
00:48:43,120 --> 00:48:47,480
Speaker 4: that stuff. But instead Joe turned it into this incredible

921
00:48:47,480 --> 00:48:50,680
Speaker 4: positive and everyone's like, oh my god, I want to

922
00:48:50,880 --> 00:48:53,759
Speaker 4: not only be like Joe, I want to work with

923
00:48:53,920 --> 00:48:57,360
Speaker 4: Joe and so forth. And I think your audience feels

924
00:48:57,400 --> 00:48:59,799
Speaker 4: that enthusiasm. One of the things you used to say

925
00:48:59,800 --> 00:49:04,560
Speaker 4: to me a lot, which I loved, was everything is interesting. Yeah,

926
00:49:04,680 --> 00:49:07,600
Speaker 4: and people like try to find the one thing that's interesting,

927
00:49:07,719 --> 00:49:09,480
Speaker 4: like when you really dive in. And so you've taught

928
00:49:09,480 --> 00:49:11,719
Speaker 4: yourself well about markets and stuff. So anyway, this is.

929
00:49:11,760 --> 00:49:15,200
Speaker 3: Actually the foundation of odd lots, that everything is interesting.

930
00:49:15,239 --> 00:49:16,920
Speaker 2: So all right, we gotta stuff. I can't hear anything.

931
00:49:16,960 --> 00:49:19,040
Speaker 2: All right, We're good, We're good, Thank you very much.

932
00:49:19,120 --> 00:49:20,799
Speaker 2: I'm just gonna say I, I don't know how many

933
00:49:20,800 --> 00:49:23,320
Speaker 2: people I've told this. I don't know if I've told you, Henry,

934
00:49:23,520 --> 00:49:27,000
Speaker 2: I've told my therapist only. There were weekends in like

935
00:49:27,080 --> 00:49:31,319
Speaker 2: twenty ten and twenty eleven. This is true where I

936
00:49:31,360 --> 00:49:35,680
Speaker 2: would like wake up on a Saturday. This is I mean,

937
00:49:35,719 --> 00:49:38,400
Speaker 2: this is like real disturbed, unbelling stuff. And something I

938
00:49:38,440 --> 00:49:40,480
Speaker 2: think is I couldn't have had children in those years.

939
00:49:40,480 --> 00:49:42,359
Speaker 2: I know I had children later had been really hard

940
00:49:42,560 --> 00:49:44,480
Speaker 2: and I would like wake up and I don't I

941
00:49:44,520 --> 00:49:46,000
Speaker 2: almost don't want to say this. I'd like want to

942
00:49:46,040 --> 00:49:48,000
Speaker 2: like punch a pillow because it was like so intense,

943
00:49:48,040 --> 00:49:49,960
Speaker 2: I need to get that out. And a few times

944
00:49:50,000 --> 00:49:52,520
Speaker 2: I started typing emails to you because I was like

945
00:49:52,560 --> 00:49:55,160
Speaker 2: so like upset, and then I was like, actually, have

946
00:49:55,160 --> 00:49:57,400
Speaker 2: nothing to be upset about, Like there was nothing specific.

947
00:49:57,600 --> 00:50:02,520
Speaker 2: Was just like anyway, very intense times and difficulty but

948
00:50:02,560 --> 00:50:05,279
Speaker 2: rewarding times. There was nothing wrong, but there was nothing wrong.

949
00:50:05,320 --> 00:50:06,960
Speaker 2: It was just like this was like this sort of

950
00:50:07,000 --> 00:50:10,280
Speaker 2: hot house called it's too much because.

951
00:50:10,040 --> 00:50:12,359
Speaker 4: You bring up a good point and maybe odd lots

952
00:50:12,400 --> 00:50:14,799
Speaker 4: listeners interested in this too, like we have in the

953
00:50:14,840 --> 00:50:16,120
Speaker 4: past five seven years.

954
00:50:16,160 --> 00:50:18,160
Speaker 2: Yeah, there's been this huge backlash. This is what again

955
00:50:18,960 --> 00:50:21,280
Speaker 2: to that because it was like sort of damage.

956
00:50:21,000 --> 00:50:25,040
Speaker 4: And oppressive businesses and these terrible sol jobs and so forth.

957
00:50:25,200 --> 00:50:27,200
Speaker 4: And what I will say is, and I think you

958
00:50:27,239 --> 00:50:29,360
Speaker 4: saw it too. Seeing it in my own life a

959
00:50:29,400 --> 00:50:33,879
Speaker 4: lot is that Actually work can be incredibly therapeutic when

960
00:50:33,920 --> 00:50:36,680
Speaker 4: you can find something that you can dive into. Yeah,

961
00:50:36,680 --> 00:50:38,640
Speaker 4: it becomes flow state. Not to the point where it's

962
00:50:38,640 --> 00:50:41,040
Speaker 4: totally obsessive and you're stressed all the time. That's terrible.

963
00:50:41,040 --> 00:50:43,040
Speaker 2: I guess what all I meant to say was it

964
00:50:43,080 --> 00:50:47,279
Speaker 2: was necessary and I get the backlash is absolutely it

965
00:50:47,320 --> 00:50:49,680
Speaker 2: was a necessary energy too much, and I get the

966
00:50:49,680 --> 00:50:52,399
Speaker 2: backlash anyway. Henry Blodgett, thank you so much for coming

967
00:50:52,400 --> 00:50:53,120
Speaker 2: on odd blods.

968
00:50:53,600 --> 00:50:55,480
Speaker 4: It's such a privilege to be here when you utilizes

969
00:50:55,520 --> 00:50:57,920
Speaker 4: do a great job, and I will keep listening.

970
00:50:58,000 --> 00:51:13,400
Speaker 2: Thank you so much. Tracy. I'm sort of like a

971
00:51:13,400 --> 00:51:17,319
Speaker 2: little emotionally rattled after that episode in a way I

972
00:51:17,440 --> 00:51:21,000
Speaker 2: usually don't get after recording our typical podcasts. I have

973
00:51:21,040 --> 00:51:22,040
Speaker 2: to admit, do you.

974
00:51:22,000 --> 00:51:24,359
Speaker 3: Think you impressed your old boss? I think you did.

975
00:51:24,520 --> 00:51:25,000
Speaker 4: I think so.

976
00:51:25,160 --> 00:51:27,360
Speaker 2: I think he's proud. I think I you know, yes,

977
00:51:27,600 --> 00:51:31,680
Speaker 2: Do I still have this really intense like memories of

978
00:51:31,719 --> 00:51:34,880
Speaker 2: like trying to surpass traffic goals and things like that

979
00:51:34,960 --> 00:51:38,480
Speaker 2: from those years. Absolutely, And I think that sits in

980
00:51:38,560 --> 00:51:41,520
Speaker 2: my mind still today when I look at like podcast

981
00:51:41,560 --> 00:51:44,399
Speaker 2: download numbers or the Apple business charts and stuff like that.

982
00:51:44,560 --> 00:51:46,759
Speaker 3: Yeah, And also, I mean I take the point that

983
00:51:46,800 --> 00:51:50,760
Speaker 3: if you're a startup, you're running towards a proverbial finish

984
00:51:50,800 --> 00:51:53,640
Speaker 3: line that actually never really comes, and so there's a

985
00:51:53,680 --> 00:51:57,719
Speaker 3: sense of urgency, but it's it's working at that was

986
00:51:57,719 --> 00:52:00,400
Speaker 3: clearly unsustainable, right, It's unhealthy.

987
00:52:00,040 --> 00:52:01,280
Speaker 2: Which I said I couldn't have had children.

988
00:52:01,400 --> 00:52:01,560
Speaker 4: Yeah.

989
00:52:01,920 --> 00:52:04,239
Speaker 3: Also, well, I was going to say it locks a

990
00:52:04,280 --> 00:52:09,080
Speaker 3: certain proportion of the population out of talking for that

991
00:52:09,120 --> 00:52:10,040
Speaker 3: particular market.

992
00:52:09,880 --> 00:52:15,920
Speaker 2: Which percent one hundred percent. You know, Tracy, you mentioned

993
00:52:16,440 --> 00:52:20,440
Speaker 2: that Henry sort of speaks and business insider headline. Business

994
00:52:20,440 --> 00:52:23,719
Speaker 2: insider headlines turned out to be very influential to headlines

995
00:52:23,760 --> 00:52:27,359
Speaker 2: all over them and so talking to Henry it is

996
00:52:27,600 --> 00:52:32,640
Speaker 2: sort of like seeing where to some extent, like modern

997
00:52:32,680 --> 00:52:35,360
Speaker 2: media came from. I mean, they were like a handful

998
00:52:35,400 --> 00:52:39,880
Speaker 2: of these, you know, BuzzFeed was obviously another one, et cetera, Gawker,

999
00:52:40,040 --> 00:52:42,439
Speaker 2: We've talked to Nick Denton. There were a handful of these,

1000
00:52:42,480 --> 00:52:46,239
Speaker 2: like really important media brands of that era that to

1001
00:52:46,320 --> 00:52:50,720
Speaker 2: this day, like their own influence right now probably diminished,

1002
00:52:50,719 --> 00:52:53,400
Speaker 2: but their influence more broadly on how like you know,

1003
00:52:53,520 --> 00:52:57,239
Speaker 2: reporting et cetera evolved is clearly evident to this day.

1004
00:52:57,719 --> 00:53:00,640
Speaker 3: Well, Henry's been influential in a number of right, like

1005
00:53:00,680 --> 00:53:02,680
Speaker 3: not just on media, but he ended up being very

1006
00:53:02,920 --> 00:53:06,799
Speaker 3: influential on Wall Street, And we talked a little bit

1007
00:53:06,840 --> 00:53:09,319
Speaker 3: about that. You know, what we should do once this

1008
00:53:09,400 --> 00:53:12,360
Speaker 3: episode publishes, we should look at the transcript and just

1009
00:53:12,440 --> 00:53:16,120
Speaker 3: pick out, like every sentence that would be a BIA headline.

1010
00:53:16,160 --> 00:53:19,000
Speaker 3: I bet you'd get like dozens, if not hundreds, that.

1011
00:53:18,960 --> 00:53:21,719
Speaker 2: Should be one of our newsletters when this Yeah, I

1012
00:53:21,760 --> 00:53:22,960
Speaker 2: think that would actually be really fun.

1013
00:53:23,000 --> 00:53:24,120
Speaker 3: All right, shall we leave it there.

1014
00:53:24,160 --> 00:53:24,839
Speaker 2: Let's leave it there.

1015
00:53:25,000 --> 00:53:27,600
Speaker 3: This has been another episode of the Audlots podcast. I'm

1016
00:53:27,640 --> 00:53:30,760
Speaker 3: Tracy Alloway. You can follow me at Tracy Alloway.

1017
00:53:30,440 --> 00:53:33,239
Speaker 2: And I'm Joe Wisenthal. You can follow me at the Stalwart.

1018
00:53:33,440 --> 00:53:36,880
Speaker 2: Follow our guest Henry Blodgett. He's at h Blodgett. Follow

1019
00:53:36,920 --> 00:53:40,400
Speaker 2: our producers Carman Rodriguez at Carman armand dash Ol Bennett

1020
00:53:40,440 --> 00:53:43,400
Speaker 2: at Dashbock and Kale Brooks at Kale Brooks. From our

1021
00:53:43,440 --> 00:53:46,440
Speaker 2: odd Lots content, go the Bloomberg dot com slash odd Lots.

1022
00:53:46,680 --> 00:53:49,040
Speaker 2: We have all of our episodes in a daily newsletter.

1023
00:53:49,320 --> 00:53:51,320
Speaker 2: And you can chat about all of these topics twenty

1024
00:53:51,320 --> 00:53:55,000
Speaker 2: four to seven in our discord discord dot gg slash

1025
00:53:55,000 --> 00:53:56,359
Speaker 2: odlines and if.

1026
00:53:56,280 --> 00:53:58,440
Speaker 3: You enjoy Odd Lots, if you like it when we

1027
00:53:58,480 --> 00:54:01,400
Speaker 3: talk to Joe's old bosses, please leave us a positive

1028
00:54:01,440 --> 00:54:04,680
Speaker 3: review on your favorite podcast platform. And remember, if you

1029
00:54:04,760 --> 00:54:07,279
Speaker 3: are a Bloomberg subscriber, you can listen to all of

1030
00:54:07,320 --> 00:54:10,279
Speaker 3: our episodes absolutely ad free. All you need to do

1031
00:54:10,360 --> 00:54:13,080
Speaker 3: is find the Bloomberg channel on Apple Podcasts and follow

1032
00:54:13,160 --> 00:54:15,200
Speaker 3: the instructions there. Thanks for listening,