WEBVTT - Twitter Hits Back at Musk 0:00:02.240 --> 0:00:05.600 From the heart of where innovation, money and power collive 0:00:06.360 --> 0:00:10.879 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.960 --> 0:00:27.440 Emily Jay. I'm Emily Chang in San Francisco, and this 0:00:27.480 --> 0:00:30.400 is Bloomberg Technology. Coming up in the next hour to court, 0:00:30.480 --> 0:00:34.440 Musk goes. Twitter's lawyers say his termination of the deal 0:00:34.600 --> 0:00:37.920 was wrongful. We will talk to a former Twitter insider 0:00:38.000 --> 0:00:42.600 about where the legal saga goes from here. Claus Peloton's 0:00:42.640 --> 0:00:46.159 uphill battle continues. The Connected fitness company will now stop 0:00:46.200 --> 0:00:49.040 making bikes in house shares jumping on the news. We're 0:00:49.080 --> 0:00:52.839 gonna have all the details and funding for crypto startups 0:00:52.880 --> 0:00:56.400 plummeted last quarter. We'll ask Light Speed Venture partners why 0:00:56.480 --> 0:00:59.760 they are planning to double down on the blockchain and 0:00:59.800 --> 0:01:01.959 so coy is Jess Lee will join us to talk 0:01:01.960 --> 0:01:04.200 about their new plan to hunt for what they call 0:01:04.400 --> 0:01:09.480 outliers and put one million dollars behind these new ideas. 0:01:09.520 --> 0:01:11.480 I want to bring in Jason Goldman, now one of 0:01:11.480 --> 0:01:14.600 the founding members of Twitter and former White House Chief 0:01:15.040 --> 0:01:19.000 Digital Officer under President Obama for some insider outsider perspective. Jason, 0:01:19.040 --> 0:01:23.560 your timing is impeccable. Um look officially this is headed 0:01:23.600 --> 0:01:27.000 to Delaware court. Does anybody win in the scenario? No 0:01:27.040 --> 0:01:30.920 matter what happens. Definitely the lawyers win. Uh. You know, 0:01:30.959 --> 0:01:33.240 the lawyers are excited when they describe a case as 0:01:33.280 --> 0:01:37.600 being unprecedented and complicated. That's definitely code for there's going 0:01:37.640 --> 0:01:41.240 to be unprecedented legal fees. So they're they're said, everyone 0:01:41.319 --> 0:01:43.399 else is a loser in this. For sure. Elana shown 0:01:43.440 --> 0:01:45.880 he can't be trusted to execute a signed deal. Uh. 0:01:46.000 --> 0:01:47.920 The board is shown that they have no confidence along 0:01:48.000 --> 0:01:49.880 term future of the company and are now going to 0:01:49.920 --> 0:01:53.160 Delaware to consummate a transaction with a bad faith actor, 0:01:53.440 --> 0:01:55.480 and the employees are left in limbo wondering what the 0:01:55.520 --> 0:01:59.080 future of the company will hold. So look last week 0:01:59.120 --> 0:02:01.800 when this happened, Att Taylor, the chairman of Twitter Boars, 0:02:02.000 --> 0:02:05.400 said that you know they're committed to closing the transaction. Uh, 0:02:05.440 --> 0:02:07.960 they plan to pursue legal action. Now here we are 0:02:08.480 --> 0:02:11.040 seeing them pursue this legal action. Then that Ev Williams 0:02:11.040 --> 0:02:13.160 getting into the frame. Obviously, I know you and have 0:02:13.280 --> 0:02:16.600 worked very closely together in those early days. Responding to 0:02:16.680 --> 0:02:19.160 Brett saying, I'm sure there are legal and fiduciary reasons 0:02:19.160 --> 0:02:21.360 you have to say that, But if I was still 0:02:21.360 --> 0:02:23.160 on the board, I'd be asking if we can just 0:02:23.240 --> 0:02:26.560 let this whole ugly episode blow over. Hopefully that's the 0:02:26.600 --> 0:02:29.960 plan and this is ceremony. What do you think the 0:02:30.000 --> 0:02:33.880 plan actually is? And is this ceremony? No? I mean 0:02:33.919 --> 0:02:36.400 at this point that the board has to sue and 0:02:36.440 --> 0:02:40.079 try to get the agreement agreed to enforce, like they 0:02:40.080 --> 0:02:41.960 they have no choice as the fiduciary is to do 0:02:42.000 --> 0:02:44.600 anything but that. Um. I think whatever is I think 0:02:44.600 --> 0:02:46.760 what I is expressing was I what was? What I 0:02:46.800 --> 0:02:48.920 agree as well is that I wish the board had 0:02:48.960 --> 0:02:51.960 had more insight at the beginning of this to realize 0:02:51.960 --> 0:02:54.119 that they were dealing with someone who just wasn't serious 0:02:54.560 --> 0:02:56.720 and didn't have a real plan for what to do 0:02:56.760 --> 0:02:59.480 with the company. Uh and staid led by Jack, they 0:02:59.560 --> 0:03:03.400 kind of became besotted with this idea of of Ellen 0:03:03.520 --> 0:03:05.959 on the company. Uh And you know, the first step 0:03:06.120 --> 0:03:08.480 of avoiding a trap is knowing that it's there, and 0:03:08.520 --> 0:03:10.600 the board just simply didn't realize that they were walking 0:03:10.600 --> 0:03:12.519 into one and striking and deal with Ellen in the 0:03:12.560 --> 0:03:15.920 first place. So why do you think Ellen actually did 0:03:15.919 --> 0:03:18.000 this in the first place. You know, there's one venture 0:03:18.000 --> 0:03:20.360 capitalists who pointed to the idea that he just wanted 0:03:20.360 --> 0:03:22.200 to sell some Tesla stock. What do you think the 0:03:22.200 --> 0:03:26.040 real motivation was. I think he enjoys using Twitter and 0:03:26.160 --> 0:03:28.320 is addicted to the service and thought for a while 0:03:28.360 --> 0:03:30.200 it would be it would be fun to own it. 0:03:30.400 --> 0:03:32.840 I also think if you look at the proxies filing 0:03:32.880 --> 0:03:35.960 statement that Twitter filed on the deal, that they were 0:03:36.160 --> 0:03:38.640 they had assigned agreement to just get Ellen on the 0:03:38.640 --> 0:03:40.680 board and have a standstill agreement where you would own 0:03:40.680 --> 0:03:43.520 more no more than fiftent of the company. Uh. And 0:03:43.520 --> 0:03:45.400 then he had a conversation with Jack on the same 0:03:45.480 --> 0:03:48.200 day that that agreement was announced, and it quickly pivoted 0:03:48.240 --> 0:03:50.240 to I should just own the company as a whole. 0:03:50.560 --> 0:03:52.240 I think that's one of the reasons why this deal 0:03:52.280 --> 0:03:54.560 is also likely to settle, is that there's probably a 0:03:54.600 --> 0:03:58.600 lot of conversations between Ellen and the company in the 0:03:58.680 --> 0:04:01.839 pre agree meant phase that they don't want to come 0:04:01.840 --> 0:04:04.880 out in discovery, and so this is something that ultimately 0:04:04.960 --> 0:04:06.800 I don't think will be decided by the courts, but 0:04:06.920 --> 0:04:10.080 will be decided in a settlement between lawyers. Okay, but 0:04:10.120 --> 0:04:13.000 I wonder how this plays out, you know, if Elon 0:04:13.120 --> 0:04:15.760 Musk still ends up having to hold up his end 0:04:15.760 --> 0:04:18.320 of the deal in Twitter quote unquote wins. Is that 0:04:18.360 --> 0:04:23.320 good for anyone? No, it's not good for anyone the price, 0:04:23.520 --> 0:04:26.760 it's not good for Twitter. If Elon ends up owning 0:04:26.760 --> 0:04:29.040 the company because he doesn't have a real plan for 0:04:29.080 --> 0:04:30.719 what he wants to do with it, he's revealed that 0:04:30.760 --> 0:04:33.200 over time. It's also worth noting that there were any 0:04:33.279 --> 0:04:37.240 number of Silicon Valley luminaries that lined up behind Elon 0:04:37.839 --> 0:04:41.600 owning the company uh and pledged to be equity partners. Uh. 0:04:41.720 --> 0:04:43.880 You know, whether that's Andrews and Horowitz or Sekoya or 0:04:43.960 --> 0:04:47.279 DFJ or Free Speech Advocate, the Guitar Sovereign Wealth Fund, 0:04:47.760 --> 0:04:50.520 all of those folks have gone remarkably silent in terms 0:04:50.520 --> 0:04:54.040 of their belief in Elon as the ultimate owner of 0:04:54.040 --> 0:04:57.200 this company, because in his conversations he showed he wasn't 0:04:57.240 --> 0:04:59.320 serious about what he would do with it. So Elon 0:04:59.400 --> 0:05:02.880 owning it is good. A settlement is unlikely to equal 0:05:03.080 --> 0:05:06.560 any amount of value that equals the damage done and 0:05:06.600 --> 0:05:10.000 the real the real problem is that there's actual employees 0:05:10.040 --> 0:05:12.039 who want to make a better product and want to 0:05:12.040 --> 0:05:14.000 make the company better for the future, but they just 0:05:14.040 --> 0:05:16.800 don't have the leadership that will enable them to do that. 0:05:17.400 --> 0:05:19.280 Let's be clear. I mean, there are so many users, 0:05:19.320 --> 0:05:23.280 including Elon Musk, who love Twitter, love using Twitter, but 0:05:23.400 --> 0:05:25.840 you know, Twitter over so many years, just hasn't been 0:05:25.880 --> 0:05:28.919 able to parlay that into a significantly bigger business. What 0:05:29.000 --> 0:05:33.920 would your plan be to increase engagement, to drive more revenue, 0:05:34.160 --> 0:05:37.520 to increase the number of users. Well, let's be clear, 0:05:37.520 --> 0:05:40.599 I'm not here auditioning for any any job at Twitter. 0:05:40.680 --> 0:05:42.719 I think what I think what the board needs to 0:05:42.760 --> 0:05:44.919 do at at this at the end of this juncture 0:05:45.000 --> 0:05:47.760 is find new leadership. That's not a job I'm auditioning for. 0:05:48.120 --> 0:05:49.800 What they I think they need to do is look 0:05:49.800 --> 0:05:53.080 at what users that have found tremendous value from it 0:05:53.160 --> 0:05:55.240 and build engagement around it. I don't think that the 0:05:55.279 --> 0:05:58.440 company is one silver bullet away or one feature away, 0:05:58.800 --> 0:06:01.360 UM from fixing that. You're three that it's on um, 0:06:01.400 --> 0:06:05.120 but it's it's it's obviously something that's always had cultural 0:06:05.240 --> 0:06:07.760 value and cultural residence, and it's something that I think 0:06:08.000 --> 0:06:10.920 UH continues to play a role in global politics, in 0:06:10.920 --> 0:06:13.400 the global conversation. You know, one one point on that 0:06:13.760 --> 0:06:17.720 is we've spent months arguing what Ellen has meant about 0:06:17.800 --> 0:06:21.640 free speech online, and he's slowly evolved that viewpoint from 0:06:21.680 --> 0:06:25.160 just being mean anything to comply with legal requirements and 0:06:25.200 --> 0:06:28.240 local regimes. In the meantime, while we've been debating trying 0:06:28.279 --> 0:06:30.640 to tease out any meaning from what Elon's position on 0:06:30.680 --> 0:06:33.679 free speech is, Twitter is actually in court in India 0:06:33.720 --> 0:06:37.520 trying to push back on an authoritarian an authoritarian creep 0:06:37.760 --> 0:06:41.040 into free speech laws in that country. And so there's actual, 0:06:41.160 --> 0:06:44.359 real stakes at play here, and the company is fighting 0:06:44.400 --> 0:06:47.159 good fights around the world. It's just that they're having 0:06:47.200 --> 0:06:51.240 to do so now under this cloud of Elon's acquisition. 0:06:52.000 --> 0:06:54.920 Real stakes. Indeed, Jason Goldman, one of the founding members 0:06:54.920 --> 0:06:57.640 of Twitter, Former White House Chief Digital Officer Jason as 0:06:57.680 --> 0:07:02.160 always thank you for your insights. Meantime, bargain hunters might 0:07:02.200 --> 0:07:05.039 be will underwhelmed by Amazon's two day Prime Day sale. 0:07:05.080 --> 0:07:09.159 The annual event began today, but many sellers are minimizing 0:07:09.200 --> 0:07:12.280 their discounts to cover their own soaring costs. Prime Day 0:07:12.280 --> 0:07:15.360 helps Amazon lock in shoppers before the holidays and deepen 0:07:15.480 --> 0:07:20.440 its relationships with existing customers with deals on Amazon gadgets 0:07:20.480 --> 0:07:32.680 like Echo Now, Peloton making a major strategic shift to 0:07:32.720 --> 0:07:35.760 cut costs and streamline its strategy. The company will stop 0:07:36.160 --> 0:07:39.280 building exercise bikes and treadmills at its own factories, a 0:07:39.320 --> 0:07:42.800 big bet of the former leadership team. Peloton making this 0:07:42.880 --> 0:07:45.760 change after several months of turmoil. Shares of the company 0:07:45.760 --> 0:07:50.240 are down so far this year. Bloomberg Smart German, who 0:07:50.280 --> 0:07:53.040 of course covers Peloton with us now for more so 0:07:53.120 --> 0:07:56.200 talk to us about the significance of a pretty dramatic 0:07:56.200 --> 0:07:59.560 shift here. Mark. This is an end to end overhaul 0:07:59.600 --> 0:08:01.680 of their all operation. So just to set the scene, 0:08:02.000 --> 0:08:04.680 let's look at Apple for a second. So Apple obviously 0:08:04.720 --> 0:08:07.640 designs the iPhone and their other products, but what most 0:08:07.640 --> 0:08:10.000 people don't know is that they have a third party 0:08:10.040 --> 0:08:13.560 called fox Con that manufactures it. Right, so Apple works 0:08:13.600 --> 0:08:15.840 hand in hand with Fox want to actually build those devices, 0:08:16.000 --> 0:08:19.360 They don't do it in house. Peloton, however, did both. 0:08:19.640 --> 0:08:22.160 They built a big portion of their bikes in house 0:08:22.240 --> 0:08:25.880 using their own facilities, and also contracted out another portion 0:08:25.920 --> 0:08:30.920 of their devices to different technology manufacturers in Asia, one 0:08:30.960 --> 0:08:34.880 called Rexon, one called Quanta, one called Pegatron. So what 0:08:34.920 --> 0:08:37.160 Peloton is now going to do is they're seizing their 0:08:37.200 --> 0:08:41.600 in house production operations and they're moving entirely to contract manufacturers. 0:08:41.760 --> 0:08:44.760 That's going to simplify their entire business model because instead 0:08:44.760 --> 0:08:47.760 of having two distinct supply chains, they're not gonna have 0:08:47.840 --> 0:08:50.920 one supply chain. They're also unfortunately laying off about five 0:08:51.360 --> 0:08:54.320 seventy workers at their in house facilities, and they also 0:08:54.360 --> 0:08:56.760 believe this is going to up product quality as there's 0:08:56.760 --> 0:08:59.320 been some issues there because all of the in house 0:08:59.400 --> 0:09:01.240 quality control role is going to be in one place. 0:09:01.520 --> 0:09:03.679 You're not going to be split between two different production 0:09:03.800 --> 0:09:09.720 development styles. So WILLNUS solve Peloton's problems? That's the question. Well, 0:09:09.760 --> 0:09:12.720 Peloton has many many problems. This will solve one of them, 0:09:12.720 --> 0:09:15.839 I think, right. One of their problems was the ability 0:09:15.920 --> 0:09:19.719 to gauge supply and demand and tie that to production. Right, So, 0:09:19.760 --> 0:09:23.640 as we know, Peloton's downfall really happened after they overestimated 0:09:23.880 --> 0:09:27.480 that demand would continue to occur even as the pandemic 0:09:27.559 --> 0:09:30.360 slowed down. That left them with an over abundance of 0:09:30.400 --> 0:09:33.559 inventory and nearly created the company into the ground. We 0:09:33.600 --> 0:09:36.120 see what's happened to their stock price. If they had 0:09:36.200 --> 0:09:39.840 had only contract manufacturers, that probably would have been easier 0:09:39.880 --> 0:09:42.880 to resolve because now they're not owning all that inventory 0:09:42.920 --> 0:09:45.079 in house. They're working with a third party and it 0:09:45.120 --> 0:09:47.559 will give them better supply and demand balance and allow 0:09:47.600 --> 0:09:51.080 them to better optimize their supply chain. But Peloton's problems 0:09:51.080 --> 0:09:54.160 go far beyond their supply chain. There's issues with pricing. 0:09:54.400 --> 0:09:57.600 There's issues with how much their subscription costs. There's issues 0:09:57.640 --> 0:10:00.000 of people not wanting to even just buy their equipment. 0:10:00.040 --> 0:10:03.480 And right there is competition, obviously, Apple Fitness Plus, there's 0:10:03.720 --> 0:10:07.320 Nordic Track, There's so many other companies. There's Tonal, there's 0:10:07.320 --> 0:10:09.360 the question if they're even hitting the market with the 0:10:09.400 --> 0:10:12.319 correct products. Their product development is taking a long time. 0:10:12.360 --> 0:10:15.000 They've been developing this rowing machine now for almost three 0:10:15.120 --> 0:10:18.120 or four years. The Peloton Guide their new TV connected 0:10:18.160 --> 0:10:20.000 device that has not gone off to a hot start. 0:10:20.080 --> 0:10:22.960 So to answer your question, this solves one of their problems, 0:10:23.080 --> 0:10:25.040 but there's many more to go. It's sort of like 0:10:25.080 --> 0:10:29.560 whack a mole, all right, Bloomberg, Smart German, thank you 0:10:29.880 --> 0:10:33.359 for sharing your insights there with us. Whack a mole. Indeed, Okay, 0:10:33.520 --> 0:10:37.480 Shares of Canoe starring at one point doubling in value 0:10:37.520 --> 0:10:40.480 in Tuesday's session. This after the struggling Electric Vehicles startup 0:10:40.520 --> 0:10:46.160 one an order for vans from Walmart. Canoe recently moved 0:10:46.200 --> 0:10:49.880 its headquarters to Walmart's hometown of Bentonville, Arkansas. In May, 0:10:50.000 --> 0:10:52.679 the company warned that there was substantial doubt about its 0:10:52.679 --> 0:10:56.520 long term future, but now at least some investors seem 0:10:56.559 --> 0:11:00.560 a little more optimistic coming up. There's been a major 0:11:00.600 --> 0:11:03.120 slowdown in crypto funding this year. We're gonna chat about that, 0:11:03.200 --> 0:11:06.760 with one venture capitalist doubling down with a new team 0:11:06.840 --> 0:11:32.240 focused solely on investing in the blockchain, a story we 0:11:32.280 --> 0:11:35.160 continue to watch. Delivery company go Puff is cutting ten 0:11:35.240 --> 0:11:39.000 percent of its workforce and closing dozens of warehouses. This 0:11:39.120 --> 0:11:41.959 an effort to conserve cash as the economy slows down. 0:11:42.320 --> 0:11:45.760 The job cuts will effect about people in corporate and 0:11:45.840 --> 0:11:48.800 warehouse jobs in the United States. Go Puff will shut 0:11:48.880 --> 0:11:55.040 seventy six warehouses, or about twelve percent of its network. Meantime, 0:11:55.080 --> 0:11:58.439 Lightspeed Venture Partners just raised seven billion dollars four and 0:11:58.880 --> 0:12:03.400 early and grow stage entrepreneurs. The firm also just announced 0:12:03.520 --> 0:12:07.479 light Speed Faction, a new team fully dedicated to blockchain investments. 0:12:07.800 --> 0:12:11.280 Venture capitalists have cooled on crypto recently, with Pitchbook reporting 0:12:11.400 --> 0:12:15.360 a thirty one quarterly decline in crypto investments through June. 0:12:15.800 --> 0:12:18.640 Bajel so Maya is a partner at light Speed Venture 0:12:18.640 --> 0:12:22.200 Partners and joins us now from New Delhi. So, obviously 0:12:22.240 --> 0:12:26.480 you just raised seven billion new dollars in fresh venture capital. 0:12:26.760 --> 0:12:29.600 You know, talk to us about the process of raising 0:12:29.600 --> 0:12:36.440 this funding, especially in a very very difficult macro environment. Yeah, thanks, Emily. Well, 0:12:36.520 --> 0:12:39.199 you know, I think getting getting this done is really 0:12:39.240 --> 0:12:43.000 a reflection of the strength of the franchise and and 0:12:43.040 --> 0:12:45.280 really the quality of founders that we've been fortunate to 0:12:45.320 --> 0:12:49.280 work with, and an LP base that sophisticated and has 0:12:49.840 --> 0:12:53.240 seen through multiple cycles, is very committed to the asset class. 0:12:53.920 --> 0:12:56.360 And so we're really fortunate to have raised this capital 0:12:56.400 --> 0:12:59.400 at a time that I think we'll hopefully prove to 0:12:59.440 --> 0:13:03.439 be a really good vintage for for venture and for 0:13:04.000 --> 0:13:06.440 founders at a building for the next seven to ten years. 0:13:07.240 --> 0:13:08.960 So where are you plan to deploy this and how 0:13:09.000 --> 0:13:15.080 fast given these tumultuous market conditions. Yeah, we typically target 0:13:15.600 --> 0:13:19.400 a three year new investment period for our funds, Emily, 0:13:19.559 --> 0:13:22.920 And you know, one of the reasons for the scale 0:13:22.920 --> 0:13:25.480 of this capital bases over the last twenty years really 0:13:25.480 --> 0:13:30.640 in two thousand. Light Speed believed that innovation and technology 0:13:30.720 --> 0:13:33.599 entrepreneurship would be a global phenomenon, and it was a 0:13:33.679 --> 0:13:36.280 little bit contrary at that time, but as a result, 0:13:36.800 --> 0:13:39.840 the firm has built a presence. Today we have seventy 0:13:39.840 --> 0:13:44.760 investors across twelve offices in six countries, and so there's 0:13:44.760 --> 0:13:48.280 a lot of opportunity globally. UM. The scope of the 0:13:48.320 --> 0:13:51.720 sectors that we invest in has also increased now with 0:13:52.040 --> 0:13:58.520 with pharma and biotech in addition to enterprise, consumer, fintech, crypto, 0:13:58.840 --> 0:14:01.600 UM and the growth practice, and so I think we're 0:14:01.600 --> 0:14:06.040 seeing a lot of opportunity in these areas. Undoubtedly, the 0:14:06.080 --> 0:14:08.720 market for growth is going to be is already slow 0:14:08.760 --> 0:14:12.000 and we think will remain that way, but but we'll 0:14:12.040 --> 0:14:15.400 be patient. So talk to us about the global trends 0:14:15.400 --> 0:14:19.920 you're seeing. For example, how are you seeing the you know, 0:14:20.160 --> 0:14:24.240 slow down impact to startups in India? Is it similar 0:14:24.320 --> 0:14:26.520 to what we're seeing here in the United States, or 0:14:27.240 --> 0:14:29.800 you know, are these macro conditions playing out differently around 0:14:29.840 --> 0:14:32.840 the globe. Yeah, it's a really interesting question. I think 0:14:32.840 --> 0:14:35.560 what we see is the macro conditions actually play out 0:14:35.600 --> 0:14:39.920 differently across sectors and differently across countries. So, for example, 0:14:39.960 --> 0:14:44.160 even within the US consumer has seen some impact really 0:14:44.200 --> 0:14:49.800 early on enterprise, not just yet. Obviously, sectors like pharmland 0:14:49.800 --> 0:14:54.120 biotech will have very different dynamics somewhat similar with countries. 0:14:54.200 --> 0:14:56.480 You know, in India, for example, I don't think we're 0:14:56.520 --> 0:14:59.280 going to see a recession. The country is growing at 0:14:59.280 --> 0:15:02.880 about seven a half percent UM. But what we are seeing, 0:15:02.920 --> 0:15:05.320 and and we've been used to inflation again in the 0:15:05.400 --> 0:15:09.240 high single digit UM figures, and and the central bank 0:15:09.360 --> 0:15:12.800 is somewhat used to managing that level of inflation. But 0:15:12.960 --> 0:15:17.320 what we are seeing is is an outflow of foreign investment, 0:15:17.400 --> 0:15:20.280 as capital moves out of what have perceived as risk 0:15:20.320 --> 0:15:23.600 your countries and emerging markets, and that has an impact 0:15:24.040 --> 0:15:28.440 on the financing environment. Four startups more so right now 0:15:28.480 --> 0:15:32.160 than the macro's light speeds, invested in thirty some companies 0:15:32.240 --> 0:15:34.160 that are now public companies. How long do you think 0:15:34.160 --> 0:15:37.600 this downturn lasts? When does the I p O window reopen? 0:15:37.640 --> 0:15:40.320 We have thirty seconds. I wish we had a crystal ball. 0:15:40.400 --> 0:15:43.960 Feels like it's gonna be longer than the previous downturns 0:15:44.160 --> 0:15:47.920 given the multitude of factors that play emily, So you 0:15:47.960 --> 0:15:53.960 know we're thinking certainly well into interesting. All right, Bajel Somya, 0:15:54.080 --> 0:15:56.000 thank you for joining us. I know it's a very 0:15:56.040 --> 0:15:59.200 early morning for you there in New Delhi. Appreciate you 0:15:59.640 --> 0:16:11.280 wake up. Light Speed Venture Partners will keep watching. Welcome 0:16:11.280 --> 0:16:13.400 back to Bark Technology, Emily Changing in San Francisco. I 0:16:13.480 --> 0:16:15.120 want to get back to the latest on Twitter and 0:16:15.160 --> 0:16:18.000 Elon Musk. In the last hour, Twitter has sued Musk 0:16:18.080 --> 0:16:20.680 and moved to force the world, which is man to 0:16:20.680 --> 0:16:23.920 consummate is proposed forty four billion dollar buyout of the 0:16:23.960 --> 0:16:26.920 social media platform. Are at Ludlow back here with the headline. 0:16:26.960 --> 0:16:29.480 So we've read some of the fine print. Now what 0:16:29.560 --> 0:16:32.120 is Twitter arguing in this fine Yeah, they're basically saying 0:16:32.200 --> 0:16:34.000 Musk does not have a right to walk away to 0:16:34.040 --> 0:16:36.560 an agreement that had very few conditions. They're saying he 0:16:36.600 --> 0:16:38.920 agreed to fifty four dollars twenty cents to share forty 0:16:38.960 --> 0:16:41.960 four billion dollar takeover and that he can't walk away. 0:16:42.000 --> 0:16:43.720 We have this quote from the court fighting we can 0:16:43.720 --> 0:16:46.920 bring up on screen. Musk apparently believes that he, unlike 0:16:47.000 --> 0:16:50.000 every other party subject of Delaware contract law, is free 0:16:50.040 --> 0:16:53.000 to change his mind trash the company disrupt its operations, 0:16:53.080 --> 0:16:55.920 destroy stockholder value, and walk away in twitters basically pointing 0:16:55.920 --> 0:16:59.480 out words fighting words and just because the stocks generally 0:16:59.480 --> 0:17:01.520 have fallen down in the sector, including social media socks, 0:17:01.520 --> 0:17:04.080 he can't just have buyer's remorse is their basic arguments. 0:17:04.119 --> 0:17:07.720 So does Twitter have a case or who is better? Right? 0:17:07.920 --> 0:17:10.600 So most lawyers that were spoken to a Boomberg think 0:17:10.640 --> 0:17:13.520 that Twitter do. It comes down to material adverse effect. 0:17:13.680 --> 0:17:17.120 Must's argument is that there wasn't enough information handed over 0:17:17.200 --> 0:17:19.040 on bots, and this is where the court case is 0:17:19.080 --> 0:17:20.879 going to be fought. Did they or did they not 0:17:20.960 --> 0:17:24.600 share enough data? Material adverse effect? Meaning did them withholding 0:17:24.680 --> 0:17:26.639 data on bots or not sharing enough or what they 0:17:26.680 --> 0:17:28.760 did share actually alter the value of the deal, and 0:17:28.800 --> 0:17:31.440 if it did, the musque could win. But I think 0:17:31.480 --> 0:17:33.600 most lawyers would see Twitter has a good chance here. 0:17:33.840 --> 0:17:38.480 All right, thank you for meantime. Sequoia Capital may have 0:17:38.680 --> 0:17:41.480 a million dollars for your idea the story. Adventure capital 0:17:41.480 --> 0:17:45.159 firm is now accepting applications for its deed stage catalysts 0:17:45.240 --> 0:17:48.840 called ARC. They say they're looking to fund outlier founders 0:17:48.880 --> 0:17:51.760 and teach them how to make their ideas a reality. 0:17:51.840 --> 0:17:54.239 Justly as a partner at Sequoia Capital and joins us 0:17:54.240 --> 0:17:56.439 now to tell us more. Just great to have you 0:17:56.560 --> 0:17:58.840 with us. So walk us through the vision for ARC 0:17:58.880 --> 0:18:01.440 and how you think this sets apart what Sequoia is 0:18:01.480 --> 0:18:05.440 trying to do here. Thanks for having the Emily. ARC 0:18:05.520 --> 0:18:08.439 is Sequoia's new seed stage catalyst for outlier founders. We 0:18:08.480 --> 0:18:11.840 offer three things. A million dollar investment from Sequoia as 0:18:11.880 --> 0:18:15.440 well as seven weeks of programming on foundational company building topics. 0:18:15.720 --> 0:18:19.040 And you're working alongside a cohort, a community of really 0:18:19.080 --> 0:18:22.240 exceptional people around at the same stage as you. Um. 0:18:22.240 --> 0:18:24.000 The reason we're doing this is we know it takes 0:18:24.040 --> 0:18:26.240 a lot more than just money to create a category 0:18:26.240 --> 0:18:29.320 defining company, and we know founders want company building help 0:18:29.440 --> 0:18:31.760 and Sequoia has had the privilege of working for over 0:18:31.840 --> 0:18:34.400 fifty years with some of the best founders. We've tried 0:18:34.440 --> 0:18:37.160 to do is take all those lessons, all those mistakes, 0:18:37.720 --> 0:18:40.399 the journey of all the other founders that we've worked with, 0:18:40.480 --> 0:18:43.840 and boiled them down into foundational company building concepts, everything 0:18:43.920 --> 0:18:47.760 from product to customer obsession to culture to how to hire. 0:18:48.280 --> 0:18:51.520 And so that's the seven weeks of of Jampack programming 0:18:51.520 --> 0:18:56.200 for arc what you can outlier founder and right abbligations 0:18:56.200 --> 0:19:00.960 are open now until July. That's right, all right, so 0:19:01.000 --> 0:19:02.560 you've got a few more days. So when you say 0:19:02.560 --> 0:19:05.239 outlier founders, what exactly do you mean? Sekoia has done 0:19:05.280 --> 0:19:07.800 a lot of really innovative things in the past, for example, 0:19:07.840 --> 0:19:11.120 your Scout program to try to find you know, unearthed 0:19:11.119 --> 0:19:13.840 new entrepreneurs and new ideas. You know, why do you 0:19:13.840 --> 0:19:15.879 think you need to do this as well to find 0:19:15.920 --> 0:19:21.000 those outliers? Hm? You know, the venture market has been 0:19:21.000 --> 0:19:24.280 continuously evolving over the years, and I think there are 0:19:24.320 --> 0:19:27.240 a lot more founders coming into the space as investors 0:19:27.440 --> 0:19:30.960 and a lot more product thinking and innovation. What can 0:19:31.000 --> 0:19:35.199 affirm offer beyond money which is actually a commodity and 0:19:35.240 --> 0:19:37.280 a board member? And so we often think about what 0:19:37.359 --> 0:19:40.000 do founders need? There are customers, how we work backwards 0:19:40.000 --> 0:19:41.960 from that and figure out what they need help with 0:19:42.040 --> 0:19:43.960 and the number one request we get and the number 0:19:43.960 --> 0:19:47.200 one thing I think Sequoia delivers is help with actual 0:19:47.240 --> 0:19:50.480 company building. And so we really tried to boil down 0:19:50.600 --> 0:19:53.080 everything that we've learned over the years through working with 0:19:53.119 --> 0:19:55.760 some of the best into the core things that you 0:19:55.840 --> 0:19:58.639 kind of for example, when I was a founder. There 0:19:58.640 --> 0:20:00.320 are things I wish I could have one back in 0:20:00.400 --> 0:20:02.680 time and told my younger self about how to run 0:20:02.680 --> 0:20:06.240 a company. That is a lot of what ARC teaches. Now, 0:20:06.280 --> 0:20:09.639 every company gets a million dollars, what is Sequoia's stake 0:20:09.920 --> 0:20:14.239 and what is the chance for follow on funding? Uh? 0:20:14.359 --> 0:20:17.720 So the it varies from a company to company where work. 0:20:17.800 --> 0:20:20.720 Some are precede to people with an idea uh and 0:20:20.760 --> 0:20:23.160 then some are actually a little bit further along and 0:20:23.200 --> 0:20:25.760 we put one million dollars into their existing seed round 0:20:25.760 --> 0:20:27.600 that maybe they've already rang a race. So it's it's 0:20:27.640 --> 0:20:30.520 a little bit of a range, um. But the focus 0:20:30.560 --> 0:20:34.000 is really on the how to build an enduring company, 0:20:34.000 --> 0:20:36.879 a company that lasts for decades, not just you know, 0:20:36.880 --> 0:20:38.239 how to get to the next quarter or the next 0:20:38.280 --> 0:20:41.000 fundraising milestone. Um. So there's a little bit of of 0:20:41.080 --> 0:20:45.639 a range. So, given this very tumultuous macro environment that 0:20:45.640 --> 0:20:48.400 we now find ourselves in, how is that changing what 0:20:48.480 --> 0:20:51.280 you're looking for, what you're looking to fund at the 0:20:51.320 --> 0:20:53.760 stage stage or the early stage or the growth stage. 0:20:53.760 --> 0:20:58.040 I mean, Sequoia really runs the gamut. Yeah, I would 0:20:58.080 --> 0:21:03.320 say that we've seen um multiple compression and valuations come down. 0:21:04.240 --> 0:21:07.280 I don't think we've seen earnings compression yet, and really 0:21:07.640 --> 0:21:09.920 I think consumers are feeling poorer and that's going to 0:21:10.000 --> 0:21:12.560 trickle down into the way people spend, in the behavior 0:21:12.720 --> 0:21:16.119 of UM buyers, both on the consumer side and the 0:21:16.240 --> 0:21:20.119 enterprise side. That said, Sequoia has been designed to outlast 0:21:20.280 --> 0:21:23.080 the cycles in the tech industry. The purposes of our 0:21:23.119 --> 0:21:26.280 firm is to look beyond those short term fluctuations, and 0:21:26.320 --> 0:21:29.480 so we're looking for the same thing we were looking 0:21:29.520 --> 0:21:34.359 for before, which is founders that have a unique insight, 0:21:35.119 --> 0:21:37.440 who have a lot of grit to endure these ups 0:21:37.480 --> 0:21:39.680 and downs, as well as just the difficult journey of 0:21:39.680 --> 0:21:42.960 of starting a company. And we're looking for large markets 0:21:43.000 --> 0:21:44.919 where you think you can build almost like define a 0:21:44.960 --> 0:21:48.399 category from scratch, create a new one. What does Sequoias 0:21:48.480 --> 0:21:51.240 read on the macro environment right now and how bad 0:21:51.320 --> 0:21:55.119 this will be for tech? I don't have a crystal ball. 0:21:55.440 --> 0:21:59.040 That said, I do think that, like I said, we've 0:21:59.119 --> 0:22:02.959 just started to see multiple compression and not yet earnings compression. 0:22:02.960 --> 0:22:07.680 I really think people are um. You know, we basically 0:22:08.200 --> 0:22:12.399 the public market has returned to historical valuations, the revenue multiples, 0:22:12.800 --> 0:22:16.119