ABOUT THIS EPISODE

Social Capital CEO Chamath Palihapitiya talks with Recode's Kara Swisher about the future of capitalism and investing, which he says will look less and less like traditional venture capital, as firms like his embed themselves at a deep operational level in their companies. Palihapitiya also discusses why investors delude themselves into believing their own bravado, what he thinks of James Damore's Google memo and why Silicon Valley needs to deal with more than just the "low-hanging fruit" of sexual harassment. He evaluates the biggest tech companies of today — including Twitter, Amazon and Facebook — and predicts that the new CEO of Uber will have one of the most important jobs in the country. 

English
United States

TRANSCRIPT

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00:00:44download the app from the apple store or Google play once again that's transfer wise dot com transfer as in I need to transfer money to another country why spell W. I SP transfer wise dot com recode radio presents Rico to decode it coming to you from the vox
00:01:03media podcast network I am caris wisher executive editor of recode you may know me as the person who ignores all of your slack messages but in my spare time I talk tech and you're listening to Rico decode a podcast about tech and media is key players big ideas
00:01:19and how they're changing the world we live in you can find more episodes of Rico decode on apple podcast Spotify Google play music or ever you listen to your podcast we're just visit Rico dot net slash podcast for more today in the red chair is Jamaat's poly happened
00:01:35tia the CEO of social capital what's up what's up in one of our most popular podcasters guests essentially I can't believe that just add your giant ego when too much came on Rico decode in March of two thousand sixteen we talked about rich douche bags in companies behaving
00:01:51badly in Silicon Valley so clearly nothing ever changes he's also an owner of a part owner of the Golden State Warriors which I'm told is a pretty good basketball team and in his spare time he does investing and just you know just mounting office sensually right which is
00:02:05my favorite part welcome batch a month thank you you know you are one of my favorite people don't tell anyone else here in Silicon Valley but I enjoyed talking to you about these things there's so much to talk about but first let's talk about what you're doing because
00:02:16you're you I've written a couple stories it recently about things change as you're making it social capital %HESITATION when we go over those and talk about where your company said well here's the best way I think the frame will take a step back right it's like what does
00:02:32analysts what function do they serve right in a well functioning economy right you have these two things that should come together you have an economic model and you have a political model right and so the economic model that's worked for centuries as far as we can tell is
00:02:48capitalism and the political model that's worked in scale is democracy right yes %HESITATION often well together often well when they're both combined is where you have these amazing outcomes like now the problem is that a bunch of these things are taking in fact now we see both are
00:03:02taking and capitalists I think have a very important job to do which is they vote with their money about what they want to exist in the future and when they vote for rockets SpaceX exists and when they vote for other things that are not nearly as interesting as
00:03:18rockets than those things can exist right the way that we do our job there was capitalists despite now all of the complexity that you have to deal with hasn't changed so if you think about the thousands of years leading up to nineteen maybe eighty five you had mostly
00:03:33dudes making decisions with the sum total of a pencil and a piece of paper and some combination of an abacus or a calculator not very much information and so but now not to take anything away from how decisions are made back then but an investor or a capitalist
00:03:52could actually do their job because the complexity of the businesses and the things that they had to figure out was actually not that meaningful right okay these things weren't dynamic they were changing then somewhere in nineteen eighty five like the whole world changed and capitalism completely changed and
00:04:08the reason was because of this weird little tool called excel right and if you really think about like the advent of the mortgage back industry the savings and loan industry than the savings and loan crisis in the great financial crisis the boom in hedge funds the boom in
00:04:24private equity what is that what that was was a migration from a person two teams of people and from paper and pencil and a calculator impugning to excel right and the way that I think about it is well that was fine for the last thirty to forty years
00:04:41but now things are even more complicated right how do you excelled your way to understanding for example a company like test it's impossible you have to have a more profound operational sense of what they're doing and you have to look at fundamentally leading indicators and when you boil
00:04:57things down to a cell and try to get a numerical answer to really dynamic companies do tend to have bad outcomes right so how do you determine so my perspective is our job is increasingly more important because at the same time as companies are more dynamic the other
00:05:15side of the equation the governance model is breaking right so we actually have an even more important job to do if the government is not gonna fix healthcare we need to fix it if they're not gonna fix education we need to do it so how do you do
00:05:26it my perspective is instead of teams a financial analyst you now have to have teams of really skilled operators people who have built companies instead of using excel you have to use the thing that other great companies used to build great outcomes which is really now software data
00:05:43science machine learning right and so my whole orientation about our organization is one where I'm asking ourselves okay the next generation great financial services organization the next great form of capitalism right will be folks like myself and Tony Bates and Mike to far in Argentina the folks that
00:06:01have run businesses figuring out how to put money to work backed by a deep operational understanding of how to build companies right and that does not come you're talking about being a company yourself like mobs not not being here is I mean I was just telling someone earlier
00:06:17that someone I was talking to venture caps and one of them call himself a seller of money %HESITATION he struck a horribly that's how it's been easy that's how bad but it's not untrue like that's would venture capital event like take my money over your money over that
00:06:31person's money because I have this to offer that's been the way it's been description yeah I think that historical artifact was fine for awhile but think of like now what is possible this what I'm saying is like I guess you could continue to do your job that way
00:06:44but that's just to me like so bland and and lack such courage because what you could otherwise be saying is the following okay here's a great entrepreneur who wants to help who wants to go and change something in the world and do something really interesting here we are
00:06:57as folks that have kind of been in their shoes at one point in the past and at the same time not only can we give the money but the expertise of that shirt which is frankly the same but now there's something else you can give which is to
00:07:07say Hey we've spent time deploying code aggregating data deep inside the bowels of hundreds of companies thousands of companies before you and what that's left us with are these artifacts it's a knowledge base that basically says when you try this it works when you try this it doesn't
00:07:25work across sectors stage geography now all of a sudden you can actually get people like a list of literally like a punch list of things to help make their business better but you can only do that with software right you can only do that with machine learning distance
00:07:40to it the idea that these ideas are so analog that they just come out of the top of your head you know there is the added persistent that's a joke I know but it is the persistent elders as these entrepreneurs of these great ideas that push their way
00:07:53you know like or like or like you know to build on what you're saying it's like you know Steve Jobs was there you know dropping acid and that's how the iPhone came to be that's not true right or Facebook just created itself that's not true it was iterated
00:08:08to perfection right I'll give you one example so I don't own an apple watch but someone who owns the watch was telling me this story about a feature that they released because it was publicized where they had a way to like determine like that sometimes the the band
00:08:22would cause your phone depiction ya on your wrist and they had a way of adjusting for it so that it didn't like trick your accelerometer whatever the only way a feature like that ever gets to market is because it was measured it was understood to be a problem
00:08:38and then it was fixed and then they knew that people actually leaving Lee had that as an issue so then you marketed it right that's a data driven process of iteration sure so the idea that if the best companies are doing it it's not right for the smallest
00:08:52companies to me is insanity right to your talking about the idea of using giving people all the signals that creating a better cap that does something much different than just selling money to them here I'm Jamaat's I'm smart because I did this at Facebook or blank or AOL
00:09:06or whatever so but the pitch is always been all its base and it's a knowledge base that grows independent out and out lives any current set of partners that may work at social capital and that's the key because like if you have that kind of a system a
00:09:20Kotex right what we need you yeah and and frankly I don't view but I don't view my role as instrumental I view my role as part of a process of creating that artifact and fifteen or twenty years from now they'll be an entire you know suite of employees
00:09:34and partners at social capital that then continue to build that knowledge base and then fifty years in a hundred years from now because the output of that will be better entrepreneurship the odds of success go up your ability to now differentiate yourself goes up and then going back
00:09:49to how we started it then does the job not just of capitalism but of governance to the extent that governments continues to be great who has a different and it you know gloaming a consulting company onto a money company like a money getting company %HESITATION well I think
00:10:03economically actually it behave the same way in the following way like this is part and parcel of like a comment about what you said earlier as well wire Vesey's reticent to do it it's a money game when you have nine people running ten billion dollars that's way better
00:10:17than having ninety people one ten billion dollars because the fee income is so dry Norma's that you'd rather just chop it up amongst my people so if you go to the entrenched you know establishment and say Hey you know what I think what's in the best interest of
00:10:30the entrepreneur is not that you make eight million Bucks a year but instead that you hire a bunch of machine learning and data science people to actually help support them the answer is yes in theory that's right but you know what they should do that on their own
00:10:42right okay well the problem is I can't do it on their own individual and and and it's not their fault you know why the problem why they can't do it just in the last five years you know much money's gone into Silicon Valley in China now tell one
00:10:53trillion dollars how does one trillion dollars find a home without the following market conditions emerging a bunch of companies getting over funded many who should otherwise be going out of business so that the talent can then be attracted to the winners now instead of like a two year
00:11:11life cycle from starting to failure now you have a four five or six year life cycle where the outcome is the same right so any one company now just statistically isn't gonna make it so healthcare that's a much lower chance of getting that talent they need to solve
00:11:25these problems were as what I can say is you know what that infrastructure that can help you do massive amounts of machine learning on top of massive amounts of data to drive real outcomes existent three companies Facebook Google Amazon it just so happens that I was at the
00:11:41worst case an accidental tourist that helped build one of them and so I can attract the same kinds of people who work with us across fifty companies what does that make you now of it so you could explain what you're doing you can announce right now you're Europe's
00:11:55transforming this into something else and people are watching they're like oh he's just talking in a I mean like they want to stay in that same old way in any given point in time right now you know we are parsing through hundreds of terabytes of data in real
00:12:07time learning now hundreds of terabytes of data is frankly not that much data in the grand scheme of things but you know six months ago or you know two years ago it was a lot less and six months in two years from now it'll be exponentially greater I
00:12:22feel like what I felt like two thousand seven eight Facebook which is that we have stumbled into something here that has deep profound value and I think over other investors and why I think what we do at the end of the day the investment decision is a fundamental
00:12:38byproduct of learning whereas I think investors typically think that they make investment decisions and then they learn right but when you flip it on its head there are huge ramifications so one is compensation right right because you need to have all these other people and to its hierarchy
00:12:53you are now putting engineers and product managers data scientists machine learning at the center of an organization right were as you know the McKinsey and I'll MBA blah blah blah person is now sort of at the shore the venture capitals where they have these except for they are
00:13:07not right you put the arteries gets over indexed for their talent and what they contribute I mean most of these partners in in mostly from some never worked anywhere right you know there are historical artifacts of operational like credibility of zero not exist there like I said they
00:13:22want to be a school I'm in before that they work at some fancy investment banker consulting firm they don't haven't done anything right so that's why I think if you have people that have done things and then you combine that with engineers and PM's and data scientists who
00:13:36then find insights of how to do things better what you get is again is like a blueprint that you can give to not prayer that says we understand what makes companies fail out and win right we understand the difference between a false positive and false NATO it can
00:13:50be all down to data give I'll give you another example you know we have I think the most sophisticated understanding of network effects in the entire world why what myself my team help exploit it to massive affected Facebook to a scale that's unprecedented and underneath that we built
00:14:07a lot of very nuanced ways of understanding you know network effects I put it in the air quotes because it's so over used but I think we really do understand so when we look at a business like slack like why would be so bullish on the company it
00:14:20had nothing to do with like how we thought about it from a very superficial top down perspective this is all about a bottoms up understanding about how it was completely re writing the way work was done how we got to the ground truth was through the data and
00:14:35because we were that some amazing insight you had jogging or doing you know we stumbled into a yoga your hot yoga although I do do that now I figured it out no but it was because we stumbled into something which is we are like wait a minute this
00:14:50thing is being used across companies what we call intra company educate you at network edges and we see this massive growth in it and then we were able to think about how that was going to change that business that's why we're so constructed on what do we need
00:15:02to enter cables for you don't you don't you don't guess what you need are people with insights right so that they can partner with these entrepreneurs and it just so happens that you know typically if you are like a quarter Kobe I company you'd forced the company to
00:15:16pay you in this weird twist of fate what we do is we take all of our insights and we pay the company to be able to give it to them rice even better right right you give the money and the and so that's what we're building right that
00:15:25is what do you call it what do you calling it that I mean I think it's not a venture a modern it's like a modern Berkshire Hathaway you know writing like what is Berkshire right Berkshire has the ability to come to an alternate say we will be with
00:15:36you through thick and thin we have a massive ballot sheet will start at the you know whenever we start and will never sell similarly for us we have this version of that which is we do seed venture growth we do equity we can do dat we do private
00:15:50and public but the most important thing is once we've made a decision to be beside you we will never go away we will deploy code we will deploy people we will help you every day understand your business better we will find things as we find things will help
00:16:07you exploit those things so that you are building an edge so you didn't know this but let us give you this insight exactly two is that venture capital it is that I think it's the you that's what Israel has to be go I think yeah and I think
00:16:19the reason is because that that is what modern capitalism should be which is about learning because again the historical artifact beyond like putting investing before learning that we want to re wire is also what you want to re wire is a psychological bias of investing so when you
00:16:35do that what what are you gonna do you can invest based on pattern recognition what what is the negative by product of that dudes dudes people that don't look like they could be entrepreneurs business models that look like they can't work all of these things that psychologically tell
00:16:50you to say no right should actually be a reason to say yes if you actually had ground within right so they're they're basing their decisions on analog it's analog it's an analog world in it and if you do that and you allow people to divorce himself from psychological
00:17:03bias you have a more functionally complete form of capital to the missing a lot of talent the absolute as interesting as I was just talking before I was in Kentucky and West Virginia looking at these programs to train track here sourcing all this other stuff last week and
00:17:17one of the things that was interesting about it is I kept thinking who here is the next billion dollar idea that's utterly getting messed I'm sure they're here I'm sure there's town here or in a you know a country in Africa or their hair builders yes please I
00:17:30just I sit there and like I know they're here I have like I don't know who they are I suspect that if you really unpacked it right that let's you lets users like an analogy people understand there's always the had the course of the tale for anything there
00:17:43are probably an unbelievable number of entrepreneurs in the torso in detail everywhere in the world building all kinds of businesses that we think may or may not work but that probably will work and their ability to get escape velocity or be noticed is really impaired right now capsule
00:18:05and if there is a way to unlock it what I suspect you would be shocked by exactly what you said that the complexion and the type in the ambition right people would just blow us away have frankly con honest like it's not like kind of what we need
00:18:18right now which is a little like kind of like faith in human nature and humanity and like we need a little bit of that right we need like not just kids in hoodies but we need all kinds of interesting people taking the world into their own hands fixing
00:18:32what's broken making it better but you need a constructive form of capitalism to support them right right and I think it is this process what is this because I let that it's odd that we're talking these days that when I was yesterday and saw him I talked a
00:18:44bunch of adventure travel some like this has to end the way they're doing it it doesn't make any sense whatsoever I mean that's that age I know it is a worry to the two it was like my lizard brain that this can't continue the way the way they're
00:18:54making decisions that we're talking about how they solve for the sexual resin from them like the whole system has changed in June and I will get to that but the whole system is broken in that regard Sunnybrook and never was right it was it was never right now
00:19:07you know you could take the stance which I think is a made a lot of great companies that and also that you know what they were participants in the system and they were trying to to win a game and they're doing that okay so be it that's right
00:19:19but every now and then you need a couple of us to walk in there and say now let's lob a grenade in your blow it up and we started and I think this is our moment how are people taking because they love that kind of stuff for me
00:19:30to so engineers product managers designers entrepreneurs they love eight heated up and because that's what they're doing they see something fundamentally broken and misaligned and they're like great I'm gonna fix it and they look at us and not only am I trying to fix it carbon literally like
00:19:46every dollar that is not nailed down I will put into this to make this work so that's like to me like I know I just feel really honor bound by that and I think that other people who work into that same struggle say it may or may not
00:20:01work but man that takes a lot of balls and I respect that so providing investment in any level right switch usual eventual firms don't let's be clear for people to understand it usually they focus on one area growth their seat or something like that so any time you'll
00:20:16be able to service absolutely up to and including the last stage investments right in fact as a public bus to write as a public business okay visor in terms of data like this is what's working this here's the million companies we've looked at this is what happens when
00:20:30this yeah so as an example like you know I'm not gonna name these companies just for confidentiality but you know we deployed data scientists and machine learning folks and they'll spend two to three days a week inside some of our best companies helping them get better every day
00:20:43and this is not to take away from the work that they do it's but it's the it's to complement that right because it just gives them the CBO shop yeah I give them a level of human capital leverage its like for example like you know we can shop
00:20:55and save what you're the gentleman that built the entire data infrastructure for Facebook he can comment today and help you do the same thing here's a person that basically designed the entire network model for Facebook and Instagram they can help you do the following things here's a person
00:21:09who is otherwise about to go and spent her entire life like fixing a multitude of you know health issues in Africa who will now come in like help you figure out a whole bunch of very complicated nuanced parts of your go to market and so those kinds of
00:21:22resources are rare I think that many of the people that you know I get the chance to work with every day are these kinds of ten X. contributors and so our organization I think can be very effective operationally and it also just the lines as in the way
00:21:36we behave in the way we compensate in our values and what our expectations are we don't look like a venture firm we don't operate like one would you call yourself I think it's it think it's sort of like a modern you know we're like a helper like we're
00:21:50I think what we are is a W. S. but for money okay you know like what Amazon do right what is a W. S. really do you take a very complex and necessary part of building a company but it's not sufficient to us mass necessary right yeah yeah
00:22:02and it's something that you never thought you would give away to people right you have to do it yourself like I remember Facebook we were racking servers and now the idea of like rocking this river just seems completely right alright let's move that along though so what I
00:22:16would like to be that for the flow of capital so that an organization says you know there's an infrastructure that I can plug into that allows them to understand us that gives us deep insights about how to improve its built on top of a knowledge base where you
00:22:31know the entire system gets better as more companies participate and along the way they can now give us differentiated capital and by the way here's what's even better for the October or cost of capital now becomes cheaper because we more profoundly understand the business is a typical series
00:22:45be is like %HESITATION all invest fifteen million dollars at a hundred posts well I could invest fifteen million dollars at a hundred three that's better for you right right %HESITATION or if you can do a combination of debt and equity that's even better for you right over the
00:22:58arch prelates like you get insights and then you get more ownership right it's kind of a win would you have to be their partner at all times a lot of them don't want necessarily partners you know and in fact like our our goal is like you know there
00:23:10there there is two kinds of influence that happens in a company one is sort of the you know what happens at the board level and one happens operationally you know we're happy to engage as deeply as they want if they don't want to help people out if they
00:23:22want us to disengage if they wanted to re engage we're very **** you provide them anything it's just those resources that we think are really the critical ground truth people that matter and then we complement them with boards because at the early stages it's a very emotionally fragile
00:23:36relationship when you're trying to get a company to product market and so we want to support infrastructure there but we're also very happy with you finding an independent finding somebody else because as long as the ground truth exists we can empower a lot of different kinds of people
00:23:51that you feel comfortable with it you're not you're not governance side but you're not like those member but couple years many years ago there was all this and keep it incubators never they had never built the gross yet he had like there was a station for PR that
00:24:05that's not as we do with this I use common center raiders were they mean the other historical fact isn't right you don't I mean like I think that they had signed accused the are now move over like you were getting like a salad it was crazy and I
00:24:19know for us it's more like Hey you know what your these like fifteen AB test we think you should run and if you want us to we can run them for you and actually like tell you how the right right so or you know not exactly here's a
00:24:32huge price elasticity framework or right you know what can we in Jackson Java script so that we can you know across five of our companies figure out how much overlap the reason like lead generation right you know like why would you spend money on Google and Facebook if
00:24:44we could tell you thirty percent of those leads we are lazy free right or waste of time alright really get into the idea of what happens and the venture capitalists I hope they'll go away in my opinion but it'll be interesting to see what happens to them we're
00:24:55here with show mas poly happened tia I think you're just a month from now on the outside like a like Beyonce say like I feel like you've become that in lots of ways I think she's an amazing she is amazing anyway when we get back we'll be talking
00:25:08about that and more to see her latest set of pictures on his right now I did not she's incredible this show is brought to you by ziprecruiter are you hiring do you know where to post your job to find the best candidates was ziprecruiter you can post your
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00:26:08it for free good eserver cruder dot com slash decode I'd also like to tell you about recode media with Peter Kafka many arc and I ran into Peter Kafka omega care of seeing you again I know I know I was I was enjoying some lovely free snacks here
00:26:24at vox media and there you were smart for your listeners I did so tell me about what you talk about this week on your show recode media with the gentleman you are familiar with many roses are familiar with them Tim Armstrong what former Google revenue boss from so
00:26:40I like to call you love he promised to cover with a beard and he is now the something something of both CEO I think zero votes he runs the thing that is AOL and Yahoo switch to get worse name ever anything did you discuss that too much to
00:26:54loosen the stuff I'd read about in the past so I don't want to be extreme though you might be asked me a product that I read that article or such like and right at all hours there like like the one little thing in there like you hurt my
00:27:07feelings so we tried to talk about why it makes sense for Verizon to own two internet companies and that was somewhat free to work it out now but he was great was talking about how he got to Google how it built up Google %HESITATION what he did right
00:27:21at AOL very screwed up early yet anyway some degree of of candor from him which accounted for **** while he's that he can be like that a lot of fun cool can't wait to listen thanks you can find recode media on apple podcast Spotify Google play music or
00:27:36whatever you listen to your podcast we're here talking with Jim off the stern I'm going to college and I love it now it's perfect like the Madonna or whatever women that have single names interesting is so we were just about changing what you're doing at social capital is
00:27:50different and you're not a venture capital firm really though you make investments the way you're describing I think was perfect is that you you would provide money but also information and all kinds of other services using data scientist knows what's happening in the venture situation in Silicon Valley
00:28:05it's like rocked by sexual harassment scandals which is one end of the spectrum that you know criticized for a lack of diversity which this seems to solve or or is a step in that direction because the way they make decisions on who they invest in who day get
00:28:18as partners what is happening and what do you think has to happen when he when you look at across the spectrum of things I think there's a huge sort of rude awakening that's going to exist in the venture landscape and it goes along the following lines most of
00:28:32the practitioners exactly as you said I think are dated both in their philosophy their framework in their capability right these are people that grew up in a different time where the social signaling of where they went to school mattered enough where they could get these very prestigious quote
00:28:48unquote procedures jobs the problem is that it's not a prestigious job it's a critical job and so the people who get prestige versus the people who get criticality are very different kinds of people so the rude awakening is going to be the following which is that when you
00:29:00look across a venture landscape you have a bunch of people who are frankly ill suited to do what they're doing and so as a result they feed off historical bias they kind of focus on the things that they know the best which will result ultimately in a bunch
00:29:13of marginal investments right most of which will go in our most of which will go nowhere at the same time what happens is the public markets provide them a provides the investor in this case the LP a very reasonable way of actually getting almost the same return if
00:29:29not in many cases an equivalent to better returns and so now the LP in these funds have to ask the following question well I can lock up my money for what is effectively ninety dollars yet ten twelve years now because these companies take longer just eight and get
00:29:45basically the same return I can for being in a highly liquid public market security so from any sort of logical risk based assessment for a limited partner I think what happens is there will be a culling and any of these folks that can't have differentiated returns you are
00:30:00not going to take on the risk of being a liquid especially if you think about in a world that is probably going to become more complex more dynamic you would be less stable you want to have massive amounts of liquidity because you don't know when the dislocation is
00:30:15going to happen and so in a world like that I think like all of these kind of like middling also ran firms go away right to to a million on firms are the hired even the hard no I I think it's your respective available just folks whose whose
00:30:26approach is sort of just dated and not come to our office enjoy our khakis you know where you know we were nine people were gonna try to raise the next on we're gonna chop it up amongst ourselves %HESITATION it's about us and we you know we make the
00:30:40best decisions we can't which again is okay but again I think LP's really start to push back separately what happens is you can have different folks who have different approaches I suspect actually the the most destructive entrant into the venture capital landscape can probably be Google Microsoft and
00:30:54Amazon white because most of the businesses are built on top of them and so it doesn't take much logic to actually view a world where Amazon's like well I'm sorry I'm renting you the you know computer I'm renting you the storage of renting you the algorithms I'm renting
00:31:08you all of the stuff all just give you some money along the way as more and they do that you know with credits but they don't really take it to the next level that's something that's so he knows a corporate venture capital no no this is would be
00:31:19like it's almost like a by these companies and the functioning of US like it should just be a thing in a marketplace it's like here's your cost of capital and there's probably a place on a website you can go to where you know every third party seller on
00:31:30Amazon can understand his or her quality you know how are the relative to all the other sellers on Amazon which is probably how Amazon decides how to want is what's not an artisanal business by the way Amazon is like billions of dollars to these companies so what's the
00:31:44difference between them in a venture capitalist nothing right so except they do it systematically quantitatively are notionally right right and so then as a result they get a lot more people in the game so my whole point of view here is that in the next five to ten
00:31:57years all of that comes home to roost massive balance sheets Amazon Facebook Google apple Microsoft potentially apple all the Chinese big internet companies folks like us who are providing key insight based on some of not a proprietary data whether it's clean for me W. S. whether it's clean
00:32:16from server logs that you proactively give to an investor everybody that isn't that the LP say well wait you have it not you have an undifferentiated product which forces then you to invest in the marginal outcomes which now ties up my money for a shitty return relative to
00:32:32write and get in the public markets and so that's what happens to venture capital right right and then they go because treat artisan like there's a special sauce they bring if you have this particular venture capitalists joke yeah yeah total sellout well hindsight biased navel gazing bullshit yeah
00:32:48so why how to compliment works for so long because there was never any competition yeah and now there is and also there was never supposed to be a guy like me with a couple billion dollars that should not happen right yes that's the last thing they want right
00:33:01some doubt about kids with a lot of money you know who frankly is going to build whatever he wants yelled right and enough I'm not saying I have a lot but enough credibility to get enough critical people to get it passed that existential product market fifties right which
00:33:14we are right and then what happens is all these days investors who otherwise where you know they were not sure I was a cultural fit for I wasn't sure they were a cultural thing for her they all capitulate so is so it's a little like everything in Moneyball
00:33:28or whatever when he came in and started doing gated to it rather than the god of the people that watch people on what what's the quote it's like you know it was a Billy being collected we're not hiring these guys how they fill out their genes like retiring
00:33:39them for like you know a part of statistical right why does that hold got thing persist I think now that I think that that is more of a physiological bias of man which is that there is this guy there's just and there's a need in her to act
00:33:55with bravado especially when you have power I think men treat power very differently frankly than women do and I think men have a very %HESITATION kind of like a very hierarchical way in which the impose power so it's kind of hard power and I and I think they
00:34:12love the bravado of that idea of like a Mike got told me this and I do believe that like your limbic system is a very powerful at this is that correct kid I knew it at the time but but it's like the idea that like you just knew
00:34:22it at the time it's a good story I mean it sounds cute yeah nobody yeah yeah simply speaking that it leads to bad outcomes such as what's going on with the sexual harassment stuff how do you solve that or you just they just need to go away just
00:34:35like dinosaurs or what I think that there's a couple things one is like you know when these things happen so I I actually think like about I I don't know I I hope that this first wave of the obvious stuff I mean there's a terrible way to describe
00:34:51it hanging fruit of sexual harassment great but maybe we've dealt with that here's what's much more insidious and I'll have to down on the other end gets all of the conscious and unconscious bias it's all the little snide remarks all the ways we apple or I agreed and
00:35:04excluded that's the stuff that super corrosive and so how do you overcome that well one is you have to have people to give a **** and when you see it you rooted out right fast and you act decisively it does not matter how important a person is how
00:35:17they behave in the past how much money they've made you you put him on ice and you put on a path to get better you kick him out period end of story number one number two is that on the other side of that you have to have a
00:35:28support infrastructure that creates a different way of giving these people an outlet so that they feel supported so for example you know there are so many great people and why appeal but there's so many great people who don't believe like that's a great fit for them right so
00:35:44you know do we need other forms of that absolutely should they be by definition more inclusive absolutely should they include you know people that are not necessarily see ya so that you get more inclusive group absolutely these are like obvious things right and so if you have that
00:35:59you have like a mechanism now to like I to support people and then you have a mechanism to teach people and then separately like when you find like these like small edge cases it's just so easy to let it go the way that somebody said something the way
00:36:12that somebody does something and we all do it right and the question is can we all not become a little bit more empathetic and say you know what we're all gonna find ourselves where against something or somebody or some group of people we all have been carried my
00:36:25latent bias absolutely well somebody else thoughtfully and say Hey listen just FYI blah blah blah and then you learn and then in the same way you repay that favor in a way that's non threat right it would be interesting is they they become real hot button issues like
00:36:40look what's happening at Google with James tomorrow and you know who keep saying one appalling thing after the next every time is interviewed it so you can tell me if this is true and I and I mean I'm not completely up to speed on this and I didn't
00:36:51read it but my understanding is that he was part of a group of Google actually asked him to write this thing is that true now okay not that I understand you know this reminds me no because Google's been one is place where people just get to say what
00:37:03they want all that I mean I've been in meetings are they discuss survey shirt and insulted so it you know I've been in those early this reminds me of when it Facebook I took four months off and I wrote my unified theory of of relativity and that no
00:37:16one read it actually sorry I didn't happen because I was **** working so in a part of this is like what what I mean like if I want to understand the views of like so much Ahmad I mean like walking memo I mean Jesus Christ I'm working right
00:37:30now I get it no but they have like nine places for people to do this stuff they do they just get they get to say whatever they want at any time they want and now they're used to it and when you actually say oh by the way you
00:37:42be fired for some of it yet real mad be honest like I have less of an issue with you saying it it's just kind of like like where's the operational control so that you can just bumble around for months working on some branded them right like what you're
00:37:54supposed to be hard to be an engineer in the out yeah **** yeah yeah they will think of jobs jobs today jobs are on the side that just doesn't you know many people would want that job yep now I get it to code I get it coat yeah
00:38:07I think code and the writing on your spare time yeah I guess it's really it's really it's very interesting but at how many people came to his defense about that was interesting and I was sort of like you can you can say on the corner of on Charlton
00:38:18road but not right inside of Google it was interest it was an interesting thing how much support he did have until he went sort of all right in and then it went off the rails he I think all these people should we be doing our job set up
00:38:30right yeah just **** get I mean I just have no tolerance for the hit he fired that's all yeah yeah so what what what it is that is that like a product of sort of excess in Silicon Valley now is that these they get to do whatever they
00:38:45want they're not doing their you know I I I've always acquitted sort of what I call alignment like a tree right alignment in a company is like is like rings of a tree so if you could be cut down a huge red wood what you notice is there's
00:38:55like you know many thousands of rings and that that pretty much is sort of like embodies how a company works which is brought the center you have the founders and the core sort of like a hundred two hundred zealots and they are a hundred percent align right and
00:39:09when you think about like you know that original group at Google what in master class of technical him just yet absolutely unbelievable right Facebook same situation on believe they're still together there too which a lot of yeah yeah but then as you hire more more people you basically
00:39:25have less and less a line of people and then that thousand three which is your seventy fifth thousandth employee there at best ten percent or twenty percent aligned and what that speaks to is the fact that you just have really a very difficult way of having operational control
00:39:40over values and culture at scale that's really what it's because you and so you know you start things for example at the twenty percent time was probably for like George Terry to have anybody knows is an absolutely fantastic he is he's a superstar of superstars go it probably
00:39:53was like where George is like you know one day a week coming up because this other thing that also change the world for Google right but by the seventy thousand employees twenty percent time is kind of like well you know I'm gonna write memos and I'm in a
00:40:04bill that you know I mean so I so I think there's a decay that just naturally happens in organizations and it just takes a very special kind of discipline and focus to want to fix it right arm and I think that's what it really speaks to in the
00:40:18valley which is that %HESITATION at the end of the day once these businesses become commercial enterprises there like every other business right and right they effectively do decay which is what causes them to eventually be to sure but when you're talking about what you're trying to sort of
00:40:30distrust and unease from disrupt the venture is to change the interest rate how do you then destructors culture because it you know it seems that the lot of the stuff is happening because they don't know anything else to do like it's just like go to lunch at her
00:40:43as a woman like essentially what one of the things that we really believe strongly in is sort of the power of our trainers outside of Silicon Valley so everything that happens here is this is magical and it's it's your your raw lucky to kind of be a part
00:40:56of it but the reality is the people that are not here tend to be dramatically more earnest and open minded %HESITATION in the people that are here because after some number of years of being in you know being Kristin this mail you become jaded yeah your live in
00:41:11Westeros yeah exactly every startup castrate I've heard of every mission statement possible become fatigued right and you become a little cynical and so one of the things we do is we try to go outside because you can find all these really interesting people and if you can celebrate
00:41:25them and you know they'll they'll their psych ways in which I think we can do that which would be really interesting at some point to talk to about men like that's like some special stuff that I think we you brought in explain to you brought and mark and
00:41:37and and and separately what we do is internally within our organization we really try to cut check who's at the table right and so was I mean like for us we love operators we love folks that have kind of been in the grind doing stuff we also love
00:41:50folks who have worked gone through like you know they have latches on their backs it didn't all work right so you learn things from them they have a certain kind of humility about them that's really helpful and then they are more open minded about the types of people
00:42:05that they're willing to coach and mentor and then you have a different class of young people that you can bring in and bring into the organization you know we just hired this which had this amazing data scientist name is Kelly sang and she was a Stanford and she
00:42:19was graduating and you know she kind of had to pick a job and she was going to go back and do a lot of nonprofit work in Africa and she done some amazing work and she's data such as like a star and we were able to convince her
00:42:30like a give us a shot and you know what will be able to do is you'll be able to come in again helped build this knowledge base that helps all kinds of entrepreneurs in right looting of these entrepreneurs in Africa but in order for her to be successful
00:42:42here we had on board her in the right way we have to give her the right mentor we had to give her the right drivability that's tough killing people is really it's not bringing them and keeping them off to do and right and I have found that having
00:42:54other operators who have gone through this process empathize with that struggle and then they take more care %HESITATION and they're willing to make sacrifices so that at the edges you know like me Tony twenty eight Tony Bates mark ms vin ski you know Michael fari Arjun set the
00:43:15if we had to make sacrifices in compensation to bring somebody in I think we all what one would do it instantly and I just think like that's like just to know that it's not we're never going to have to do it but to no it's like it's like
00:43:27okay what else will they do that I can count the count on them to do one of them is mentorship and guidance and and so we as an organization are actually like pretty cool like we're good people right arm if you do say so yourself I think we
00:43:42really are and and also like you know we check ourselves like like when **** goes south there's behaviors that we don't like we get together we talk about it and we fix it and that's also hard you know we do these all hands and this is like their
00:43:55complicated because we get into these deeply nuanced decisions you know and like for example like hard decisions are really important because the knock on effects are huge awhile here's this great business and we decided that actually it went from great to not so great and we have tried
00:44:08our best and we could support them and you know what we do in these situations these are complex things and we have to explain to our team white right the why of how you make these decisions is critical so there's all these things are going to building a
00:44:20good organization we do it weeks while we try to do the best we can internally and then separately so what we try to go outside of Silicon Valley to find these entrepreneurs we can celebrate next so why isn't that happening so complex it does feel like there's a
00:44:32danger of sort of detail snake eating its tail this point I think it's like I said it's easier if you are so five six seven eight nine guys sitting around a table making millions of dollars a year to not **** with what's working right and really like think
00:44:47about it in the following week or like you know if you're an ad sales person back in like the you know early two thousand you could probably see that your ad sales job is probably going to get impacted by Google and then on the Facebook at Centro like
00:44:59let's say you're single pages but the way you make your decision about your careers like the following I suspect which is well listen you know my kids are injured right grade eight grade nine you know I got five or six more years I still think the industry is
00:45:11going to be reasonable by then you know I'll get to where I need to be and I don't really have to contemplate channel career change and I can kind of like live the lifestyle I want for the rest of my life for my kids to go to college
00:45:21there's like all these other things that come into decision making a version of that although much higher class problem exists among the species which is why they just don't need to they're gonna buy their time and then they're gonna get out like they're just they're firms a blog
00:45:34I think about that like Hollywood a lot like wire and Hollywood change of just because their careers Hollywood isn't a perfect example that you had a bunch of people unbelievably ego driven eagle written eagle felt right power brokers power mongers you know but traders controllers like all these
00:45:50people sitting on top of what really wasn't a huge industry gonna make industry but it was but it had like a lot of social capital yeah right yeah you know to be a producer like meant something and then he how this company of like a few hundred people
00:46:04now a few thousand people who are like yeah I'm just gonna charge eight Bucks a month and I'm just gonna completely **** blow it up %HESITATION and so when it happens it happens fast and maybe we're the version of the eight dollars a month right this is advice
00:46:16for them yeah yeah right yeah %HESITATION and so I remember when I kept saying it but over here and then I realized they liked wearing their suits in their cars and there they just like and they were gonna charge and what they're doing is on it tap out
00:46:28like and I really so much that they are they like eight years left they probably will just that there's a reason for them to change their egos are very kind of you goes a very powerful thing right so because it can empower you to do things but eagles
00:46:39a very corrosive thing which is that it can take you can entrench you in a set of decisions that fundamentally about outsiders perceptions of you first is your true north internals night or if you want to do much or maybe just lazy alright we're here with Jamaat's of
00:46:53socio social capital we're talking about all kinds of things we get back we're gonna talk about all these companies are going to dish and all the companies you ready to go yum yum okay today's show is brought to you by Amazon web services developers love docker containers because
00:47:08they give applications portability inconsistency all the way from your laptop into production Amazon easy to container service from Amazon web services makes it easy to run docker apps in the cloud deploying operating and stealing your infrastructure happens automatically with Amazon easy to container service best of all you
00:47:26only pay for the a W. S. compute and storage resources you use but Amazon easy to container service you can focus on building apps not managing your container infrastructure learn more at ease CS dot eight W. S. I also to tell you about too embarrassed to ask my
00:47:43other podcasts which I hosted born good from the first test me hello hello there every Friday we answer questions about consumer tech warrant we talked with some very important this week out we talked about online content moderation and freedom of speech on the internet with the CEO of
00:47:56cloudflare Matthew prints and executive director of the F. pass any Colin and they happen to be right here so I'm with her from their own mouths we talked about the responsibility of tech companies to think about when they take speech down and when they let it go up
00:48:10and ask you how important do processes especially if you're running infrastructure that brings you can write you internet people you need to pay attention to get great responsibility with great power comes great responsibility it was a great discussion we'll hope you'll go listen to it you can find
00:48:23too embarrassed to ask on apple podcast school play music or ever you listen to podcasts that's too embarrassed to ask see you there we're here with that show moth the CEO of social capital so we've been talking a lot of different things have interest gonna change and and
00:48:38people's behaviors but let's go through some companies all right now because you like that you know of that last time we focus on Twitter let's just quick Twitter what is going on there it's unfortunately now past a point of interest and what I mean by that is never
00:48:53been more relevant though everyone's using everyone Charlotte's will communicate on Twitter the president uses it all the time its biggest problem right now is the decaying human capital that's happening within that organization and there are just too many other interesting good companies that one can go work at
00:49:09if you are very credible talented contributor Twitter and the problem is in the absence of them completely kind of like you know figuring out their true northern star metric and like the next version of product market fit it's a thing that just kind of like stagnates and just
00:49:24kind of Decatur product engineering talent and then eventually that seeps into the quality of the business right so what happens it does not make sense with respect to how you could do either a %HESITATION take private or hostile yet I think like the stock price needs to get
00:49:38to sort of like the eleven to twelve dollar issue range to go private and I think you need to have one or two of the existing large shareholders so what that really means is an institutional and or Steve Balmer basically decide that he can they want to participate
00:49:52in a strategy to fix it isn't fixable absolutely would be a fun thing to do absolutely would be valuable for the world absolutely could you make a lot of money absolutely but I think it requires like day to day full time leadership and vision and it's that probably
00:50:06best in my opinion comes from the outside in at this process is a private most people think you have to take a private I think yeah yeah I think so but never more relevant fascinating yeah and in terms of like information consumption I think it's great I just
00:50:18think like from the product perspective it is now one generation behind the times that I mean at least does this summer I really started to get into stories for the first time mostly because of what Instagram brilliantly merchandise that to me and then I would switch back and
00:50:31forth between it and snap just to kind of really figure out the use case and what I realized is like it's just completely changing information consumption and so the thing that Twitter has to be very careful of is all of those users are also probably Twitter users and
00:50:42it's not that complicated for you to have one or two turns the dial and I think discover on Snapchat shows you what that looks like where a more visually interactive Snapple form of Twitter becomes absolutely take that right there was first out the gate with the there's nothing
00:50:57Romans was just moments not it was but it was the right directionally was correct no because it was too curated to cure it yeah so it should have been more like bottoms up bottoms up all right snap seen some troubles and their IPO so here's here's where I
00:51:10think snapped really he got bamboozled I think by the I PO bankers into a really thick **** to appeal process I love bimbos and for cocked in one sentence okay thank you and the reason is because you know like what Morgan Stanley did in my opinion is unconscionable
00:51:24which is like you know when you spend weeks with the management team and then you come out right you generate a model and you put a price target and then you take them out public you had the most access to that company think anybody in the world and
00:51:38you put a price target on it twenty eight twenty nine Bucks a share and then they missed earnings by four million dollars and then you're like we made a mistake and the price target to sixteen and the trade another fifteen to twenty percent believe that price now I
00:51:50think you know so so that to me is just like I just like I can they knew I I like who I just I just I feel bad for the company so where otherwise what they should be left to be doing because whatever you say about that company
00:52:04they have created innovation pressure not unbelievable awareness and understanding of how to consume information and they're gonna continue to push that now whether that means that they'll never you know really get a moat because Facebook copies it that's less of my concern my concern more is like how
00:52:23does a tax the creativity of those people right can they come up with that I have to deal with this kind of distraction right so I think the biggest takeaway to me from snap is that the fundamental process of getting public just needs to be completely fixed because
00:52:38it is corrupt yeah yeah I agree with you on this but I think it's a really interesting business that has some great assets and you know I would love to get into the bowels of the company and really figure out how to make it grow I think we
00:52:48could do some pretty cool things I've never I've never met events I can't even have had a conversation but can they can they fight off the face yeah remote cross if we help them that we could easily Ahmad is offering your services seven but you feel like that
00:53:02that's what'll happen or what now that there's a stuck in this position of being Public Enemy to be distracted by that part so I think I think the whole equity story now is a distraction that they have to overcome meanwhile they have to land the next great product
00:53:15innovation have how many hits can you have a very I mean they've proven pretty was yeah they are they really are and he seems at least on the outside in pretty thoughtful creative person my my only hope for them is a they get more quantitative and data driven
00:53:29because I think you can help at the edges and then be that they can figure out a narrative so that the the public equity part of their story kind of doesn't distract rather than getting dirty water position yeah they are at you know away from the day to
00:53:44think there is an element of creativity and your tongue with Beyonce say there's a creativity that is deep within that company seems like yeah I mean listen what was that you can't do a data thing about some well you can you can't you're right I see you I
00:53:57know what you mean I mean like look we I'll tell you some stories that that are kind of crazy but like some of the most creative people in the world literally and I'm not gonna say who he is but he isn't unbelievably well known comedian who has landed
00:54:08some of the most interesting content of the last ten years AB tests every everything and this is a person who does it manually manually AB tests five to ten thousand jokes and skits and not just the jokes themselves the timing how he lands and when you see it
00:54:25up close you think that this guy just woke up about that is just funny font of creativity font and they are created because to come up with the ten thousand scenarios takes true creativity but to really understand the psychological reaction of a cause consumer to it that is
00:54:40what you test right it's like apple can create a beautiful watch but to realize that the thing shelters around on your wrist and to adjust for the doll is quantitative right absolutely not your icon to browse all right so going from step Facebook your old stomping grounds just
00:54:55unstoppable I mean I think that the thing for the thing that Facebook and Google will both have to contend with is regulatory headwinds specifically starting in Europe yeah at the end of the day what they both of those two companies Amazon to lasso and all and I can
00:55:10tell you why are Facebook and Google more than anything else now are a psychological map of humanity your behaviors your patterns what you do what you say where you go and to have that amount of knowledge that can be learned on concentrating to for profit companies can be
00:55:31in the eyes of governments extremely scary and so at scaled this becomes a huge issue as people realize the actual scope and scale of their ability to predict your behavior %HESITATION so I'll just leave it at that but I cannot give really deeply about this issue and that
00:55:49is the government its government intervention for both of those two businesses starting in Europe trying different moving here somewhere said move it moves from there quite quickly right Amazon is different because their fundamental market is dramatically more Taman constrained than Facebook and Google like Facebook and Google ultimately
00:56:10is Facebook is basically about consumption advertising and Google is about intent in advertising closer to our bounded market center in the mid hundreds of billions big markets okay Amazon at scale is fundamentally about consumption which is effectively geographical and that's really you're talking global GDP is what eighty
00:56:30trillion Amazon is a hundred billion it's literally a drop in the bucket it's in a relevant company in that context whereas Google Facebook are more than fifty to sixty percent of the market I'm thinking more you know I always think we'll talk about trouble deciding downtown has a
00:56:44lizard brain of understanding where things are going and he's attacking is on for the wrong reasons I think you'll see a lot more tax on them because of job loss round retail replacing companies I think they'll be a lot of attacks by their competitors that are more than
00:56:59he's even more incumbent on Amazon to figure out how they add capital also as a service to their offering right right as if they can then also say on the other side helping create job degradation of retail there exactly there font for entrepreneurship they've solved no I know
00:57:14they're gonna at the at the MC a warm fuzzy Jeff phases of that they're going to have to be very creative yeah but it's just I just think that the I think they're easy to attack by do evil that's exactly what the regulatory headwind structural headwinds to them
00:57:25no but they're easy to attack and they get mired in that for the longest time like again I always found it really does have a sense of how you could make that narrative around Amazon running main street Galleria mall Mart it out right he's trying yeah I know
00:57:40but it's he's he's aiming at the right the Washington post which is not that which is not the point yeah did at the death of retail jobs is really like that's you know Amazon most people feel like he's just like it is just you know like I mean
00:57:52like I I took a lot of Flack it there was a lot of emotional stern drug amongst my coworkers at Facebook and I. because I treated it up and I probably should have done it but you know and I think it was in two thousand thirteen or fourteen
00:58:05I basically moved most of my equity holdings in Facebook into Amazon and I did it mostly because I felt too emotionally links to Facebook I thought I could not make good decisions right but also when I look across the landscape and I spent almost a year and a
00:58:18half two years trying to figure out where Ike what I could on it to me is just the most unbelievably profoundly interesting company in terms of the scope of data what they're learning %HESITATION and their ability to fill it and to do it again and I mean you
00:58:34you bring up a good point but I still think fundamentally where they will get massive more one way they'll be much much bigger before they get the level of scrutiny that Facebook and Google and so I'm just a huge bowl on the company I'm also a huge bowl
00:58:48on the culture and I think that again all I have is my perception of what it's like on the outside in but it seems to be a place that is willing to fail because feeling equals learning and I really respect the phone number the phone my gosh yeah
00:59:02and like and then it came out when we talk about that all the time our job is to learn yet but you know what that's like kind of like blood makes like man what is it like a cave failed **** socks I suck I want to quit is
00:59:14like no no no you learn is like now shut up we feel I mean it's hard to really exited out covered from its phone yes you were involved in right Amazon it right on and Alexa right why didn't Google and apple do that I mean really I mean
00:59:27I've said this before but I think that was a period okay fluff again note found saying the counter factual data for me a personal creativity that I was the most proud of the state ideas that I was kind of cooking up most number just utterly cockamamie her but
00:59:40it was a great time that I wish I wish Facebook had a phone I think yeah great yeah so what what are the products all of those companies should focus in on they are they are there and they are but I think I I think apples and move
00:59:53head on into a are I I actually think like the manifestations of the things that they're gonna do around machine learning a probably much more profound and important than any of that stuff right I mean that stuff is like interesting it's kind of cute though also be able
01:00:05to help other businesses if they do that in a way that's I think we materially misunderstand right now I think that's exactly what they take it in a WSS and and like again like you you're you're changing like deterministic software right like if this then that you know
01:00:19do this while this happens before this thing and you're replacing with high could be this could be the probably there is some more and then you know the ad and I mean I seen it coming old Jewish man I've always been that I just kind of it's just
01:00:35kind of a male Colin is killing me alright speaking cold killing me over come on to me what the hell are you the new CEO you know I fun I think there would be there isn't just there is an obvious person who should be CEO of that company
01:00:55she's not gonna take it she said she doesn't want it that's okay is that I mean I think we can guess sure all Hey I didn't say I think she's going to do it I think sometimes you trolls makes like I just take the job of Hoover's I
01:01:08think she would just be such a slam dunk block buster it wastes your beautiful meditation on that because it's a really important company as you know that yeah she can work anywhere she wants a chance to sit there and make money yeah I did that but I think
01:01:24from an impact perspective I think uber can be really credible like if you think that whoever becomes a CEO will immediately become the largest employer in the United States wow that's a big statement second thing is that they become an enabler of GDP and commerce and vitality for
01:01:42lower and middle income people than anything else the government could ever do while that's an amazing thing in the thirties you save lives and you can really create something special in a world were you know %HESITATION metonymy I thought about like that that's actually take those three things
01:01:57those to me are like those are pillar does our president who should be the CEO of well I mean I've had this site shall not feeling you know the current course and speed I guess is is Jeff Immelt that it and you know I don't know him from
01:02:09a hole in the ground so I have no idea %HESITATION I would want someone that was dynamic and entrepreneurial and the reason is because this company's best days are not yet at hand and I think that it needs a combination of a steady hand but but like real
01:02:26like stewardship increase someone at Travis two point that's what he talks about you know I think the history will always ask the question should he have cured what we don't know care though is what was in the report and what really went down any by the way that's
01:02:41a little shocking thing where I've just thought I just thought that hold hold a report you'd even be in your hands I'm waiting lists and their whole they're not that I'm trying I'll get it you know it I mean it must be bad just really bad if I
01:02:54might add parts or an incomplete let me just defend the the partners a benchmark I know them all you know I've worked with one I'm very close to another these are good people they are not there to like get in the muck and mire of this so clearly
01:03:08there's just an entire story that none of us now and I agree it's as what I wrote about dusty there's there's a real story that something is not and eventually will get arts of it have gotten out to us and others but it I mean in it but
01:03:21I think it all kind of all roads lead back to hold report in my suspicion what did you think about the loss of a lot of people are slap and benchmark for that for doing that and I keep thinking what must they have seen that they let the
01:03:32something had to do it this is something they don't weigh wouldn't do it on their own if you know them at all you know I know they're not the jumpy like that they're not yet and they're and they're kind of like in it for the long term yeah
01:03:44you know and they're great with the companies that they work with and there you know unbelievably supportive and they tend to be quite relentlessly on the ranch make Travis look like a victim all something fresh of the of like the whole generation of the seas like to me
01:03:58they're the ones that I frankly respect the most under the most credible so it is beyond shocking that it happened which means that it must be really that right so what do you think they're gonna be affected by having done the lawsuit and they still did it that's
01:04:13to me like what happened golden that then you get into the game theory of like does it really matter because if you really Land Rover and make it successful and it's a you know a hundred billion dollar company in the in the U. due to carry water falling
01:04:24you do all the profit distributions and then you think about snapping you think about we work it may not matter what happens after this anyways economically they'll do okay yeah beyond okay so that may not be what it's about it's really than the question of like what do
01:04:38the ultimate what is the ultimate impact to deal flow and not really just depends on the the the founder psyche dues the incremental founder think that he or she will be more or less protected or they will be more less supportive or do they believe all that's the
01:04:54kind of objective stuff that I would want right it's very much more I'm as bad as Travis her my as bad as whatever team whatever happened there I think that you know the the propensity will be again if you get counseled by %HESITATION angel investors otherwise is you
01:05:07know find the most benign supporter who will basically let you have run of the place I think the right answer is actually you want to have some intellectual tension not moral and ethical but intellectual tension dark probably creates the best outcomes right for this and so then the
01:05:23question is like you know if they believe that they can still get the right intellectual tension a benchmark but you can be a line then it won't hurt you want but if enough though to whispering in young people's minds or ears rather Hey listen they're easier ways to
01:05:35skin a cat here then I will have a long term effect there are definite guidelines they're smart and so they put they probably went through that risk calculus yeah and again the fact that they still did it should mean that hand and prime thank god these guys who
01:05:49I guess from their both sides going to arbitration so we'll never we'll never find out unless he gets weak to you and then you write I'm trying and then I read it %HESITATION but man that's just so I'll get my hands on I know I want to see
01:06:01what the delicious I think if you get it right I mean I'm not gonna get a notice yeah yeah yeah I was like thinking of the human Arianna's house pretending I'm bringing cookies and then wandered through in the yeah you know it's sitting right there on the night
01:06:18stand on my god how funny would that be you know that where is is is right under bad it's got a bunch of dog tags on more highlighted by guys like if it were that easy I know and have a good guy and I think I think of
01:06:32every way I can get my hands on and I just it's I'd love to see that I'm just I have no idea why they did this why they did the lawsuit but could he travels to point out coming back there absolutely big house so what do you do
01:06:45to make him look at me like I think what you cannot take away from him is that just how good he is and how dog he is right now I don't know if he's billion or not but tell me how dog yeah and so the the the real
01:06:57thing is like if he can re factor the part that I kind of direct that towards all the negative stuff instead replaces it with a more constructive kind of like you know the way behaving my name is why not yeah I mean he that there is clearly an
01:07:14institutional knowledge that he has which is fundamentally unique and then also the ability to lead those people is not unique when right the iconic founder that doesn't mean that you know that should be what happens but %HESITATION I saw this tweeted you know Jeff Immelt equal Scully to
01:07:30point out I saw that and I thought well that's a really interesting analog hopefully that's not how it plays out because I think you would want to do well true but I don't think jobs be had had this much bad management or no I think I think it
01:07:42was more about commenting about yes I get with their duty after I get doing it but Steve Jobs didn't preside over so much bad management true all over the place I mean brilliance aside and all these great instincts there's like a list of other something market and also
01:07:57but just bad management how did it get to that level of toxicity and not just gender just everything like there's so much activity everywhere so yeah so someone's ignoring something needs help needs help in some way but I see what you mean distill down valleys all about redeeming
01:08:12right that's what I mean I only we always argue she's like are you a new test of Old Testament I am new testament I'm like yeah I'm all testimony you know in in in fairness you actually there isn't a lot of redemptions wise in the valley there aren't
01:08:24just got shot not true they always live for the jobs one's job is just jobs everyone else gone the gun because you know honestly like it's like at some point they realized how my god I hit the jackpot I got unbelievably lucky yeah and when they really internalize
01:08:38that I'm **** idea yeah take money or else they're just dropped out they get threatened people get drummed out people forget that they love that jobs thing and I'm always like you not jobs that to him there's only one there can be only one like Highlander our last
01:08:51question to month what is the most ridiculous thing right now it's driving you crazy lots of things drive you crazy I'm over hyped just like are you kidding me no to be honest with you I think I think it's like what I'm what what is really driving me
01:09:07crazy right now is we have not done a good job of divorcing ourselves from the bull **** in Silicon Valley and there's all layers of bullshit you know like we talked about some earlier like %HESITATION I just came up with this thing was divine intervention that's a crock
01:09:26of worship UL I knew this entrepreneur from day one that's a crock of **** %HESITATION I knew this thing would work and that thing would fail that's a crock of **** so they're just layers and all I found this thing and I mean there's so there's layers and
01:09:40layers of the stuff and the problem that it creates I think is that it just it doesn't make it a fun place to be after awhile because everybody in dealing with it they all near like wait a minute you're blushing you're pushing your budgeting they all become incrementally
01:09:56more mercenary and then when that happens because right because you have to put up a shield right you're less sympathetic you're less connected to the people around you and then you put you just like yours it's just it's just not great yeah %HESITATION so to me like what
01:10:10what what is driving me crazy is that I would like for this to be like what it was and now I'd like some like some nostalgia again back to the seven year old us like what it was like like you know that first bubble there is a kind
01:10:25of communal sense of they're all trying you know and we were all grinding and when somebody would when we would be like wow that's great now I feel it's more zero sum of your winning and losing your equity that you're getting always taking away from my equity right
01:10:38that I should be correct and so on that frustrates me I do think a change because I think the world is crashing in on Silicon Valley in a way that never had not just the culture wars but everything liked it the immigration stuff the real stuff and you
01:10:51have a government that's spinning out of control and like you said someone has to take responsibility for it stopping in your little so the self absorbed bubble like if we could end by basic went back to the beginning like peace and prosperity comes from a combination of great
01:11:09governance and great capitalism democracy and capitalism and in a world where we see what's happening on the government side we have to take sort of things into our own hands and just build the things we need but in order to do that people shouldn't be job hopping every
01:11:27two years people should take bets on folks people should trust folks at their well intentioned people should try to learn from their past mistakes all of these things can be more systematic and if you do that then you got a chance and so that's what that's what I
01:11:40would hope for %HESITATION because I think we need it more than ever and there are folks that will put a lot of our own money behind trying to make it so and then along the way it's gonna boil a bunch of people and it's a lot of people
01:11:52off but it's the right thing to do and how should tell him I reacted trump I mean they've been sort of milk toasty to made some of them have been more outspoken than others I think we again if this is good to me it goes back to the
01:12:03James Dean or thing we can be tweeting and we can be writing or we can be building we are builders and when we build things that need to get built we tend to do the right things and there's so much more progress and so I just think that
01:12:17like what however Europe kind of like what you believe about him it's fine to do in your spare time I get a lot of like it's popcorn material reading Twitter I mean it's great but at the end of the day care of Mike Monday morning I'm there to
01:12:29grind and to build and to help others you can't force yourself from the impact you have like self driving cars in effect jobs that's gonna push populism or you know I mean it does if it's not properly allocated this is what I mean by like conventional capitalism will
01:12:44exacerbate these issues right a modern form of compassionate for like ethical capitalism will do it in a very different way but in order to do it you have to first get these businesses to success right and then have the partnership with an entrepreneur with they respect you for
01:12:58having helped them where you can have this conversation okay how do we allocate anonymous cars right how are these markets built is it's sort of like the zero sum game where we take everything to zero and only you when there's so many different ways where you can construct
01:13:12markets but those nuances we don't have time for because he or she doesn't have a partner so the first step is get these companies to actually win and then the second is because you have that social and political capital to basically cash it in and have those discussions
01:13:26that is what we need to do yes I think should run for office but you will be answered she's brilliant press of highlight maybe she could run over my god I thought you gonna say president Oprah Oprah would be amazing I built for Oprah would you vote for
01:13:41over half of rope and I think she's she's pretty but about Cheryl Cheryl maybe will get his bat as a vote for her yes vote for Oprah I vote for era you know it was good I was gonna say somebody that has a magazine we are about to
01:13:56take it back we didn't hear it alright to month as usual this is great thank you for coming back show your little fights are now it's nice I like it I turn forty did you what did you do for for his birthday %HESITATION to be honest with you
01:14:09I guess I would lie to me please got sleeved what what are these Japanese tattoo artist who has a heart and I got sleeve really you can show it to me later right what's on there it's basically like symbols of myself my children my wow religion but isn't
01:14:24sleeved you gonna get the obsolete perhaps the bicep up to shoulder and back I'm gonna see this I want to see this you know I have had tattoos for years yeah yeah yeah not too many not a sleeve I might have to get some like I was like
01:14:37an awakening of sound is so dirty and that is just a tap to set all right so much as usual was great talking to you tattooed crazy man if you enjoy the interview as much as I did the shirt described the show be the first listen a future
01:14:51episode to catch up on previous episodes include some really fantastic interviews I've done with transparent creator Jill Soloway Instagram CEO Kevin Systrom and the authors of built for growth Christine and John Danner just to name a few you find all those episodes and more wherever you found this
01:15:06one or on our website Rico dot net slash podcast now that you're done with this check out one of our other shows on recode media with Peter Kafka you hear no B. as interviews with some of the smartest people in media and entertainment I also was too embarrassed
01:15:18to ask along with Lauren good of the verge where we answer all your questions about consumer tech and recode replace confined audio from all over because live events including the code conference thanks for listening thanks also to death o'connor interprets Basil and thank you to our producer Eric
01:15:33Johnson this is been another episode of Rico decode I'll be back here on Monday with another great guest and I'll have two months until they get to be a thank you hi I'm learning crash space reporter for the virgin I want to tell you about my new series
01:15:50spacecraft has a daughter rocket scientists I've been around face my whole life first time ever what it takes to train like an from the physical demands of the job to try it on a Mars species and then I'm going to spend new episodes of spacecraft dot com slash
01:16:11the virgin in honor of birch science based

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