The hills we’ll die on

0:05Today on Great Chat, we're talking about what hills we would actually die on in this era of hot takes loosely held. I'm Ashley and I'm joined by Angela and Helen. Great Chat is brought to you by Mercury, radically different banking led by over 300 ,000 entrepreneurs. We use Mercury to run this podcast and love recommending it to other founders and fund managers. It's free to get started. Try it for yourself. Visit mercury.com to learn more and apply online in minutes. Hey, everyone. Hi. Hello from Palm Springs, where Helen and I are both attending a conference. Yes, we're here for Coachella. No, I retired from Coachella with the Beyonce set.

0:50So that was my last one to go out on top. I've never been, but I think 40 is the year that I embraced Coachella. So I feel like Katy Perry and Justin Trudeau like made Coachella hip at any age. So Angela, they've paved the way specifically for you. Katy Perry, it always comes back to her. Didn't he tweet something really serious and then have like everybody on the internet say, did you just tweet that from Coachella? I think he posted something about like some geopolitical issue. And it's like, did you just tweet that from Coachella? I did think that was kind of an iconic photo. and he he looked really good he looked young and it was just uh it was good vibes i also just thought it was interesting that coachella generated so much discussion about the like music industry business model like the amount of posts i saw dissecting justin bieber's royalties or selling his masters like it was i felt like i was in business school class reading all the twitter posts about his performance or madonna and sabrina carpenter being on stage together but then there was a lot of commentary about the crowd and how they were kind of soulless and just filming and not like into the music.

2:02So I feel like it was actually, it's probably catnip for older people to be like, we did this differently. Young people are doing Coachella wrong. The lineup is always so funny because it is always, there's definitely like this little bit for everyone sort of model, right? And they really try to span all ages. So I actually think the Coachella crowd. Maybe I'm just ignoring the younger cohorts that go there, but I think of this Coachella crowd as this aging crowd of the same people that I was going to Coachella with 20 years ago or something. Coachella is a fashion event, and it is a fashion event for the young, as much as it is a music event.

2:42So that's a perfectly natural transition to Tim Cook. of course of course our fashion icon um gen z no but i mean angela i think you were saying it feels like the end of an era but like what is the era yeah it feels like the end of an era but i don't know what era but it still feels like the end of one well tim cook really did feel like an extension of like the steve jobs era in many ways right like i mean steve jobs iconic leader but like he he passed the baton to Tim Cook and they were so different. It felt like this was like, you know, this was Steve's plan for the company. And now there's, there's been a lot of time and there's a new person in the mix.

3:22And so I don't know, I wonder if that is some of the nostalgia for if we're mourning Steve Jobs all over again. So I saw somebody break this down on like the why do these, you know, iconic founder CEOs pass the baton to people who are like, you know, less aggressive maybe like are more going to be like charismatic or just like they're going to carry out the plan that was already set forth right and somebody mentioned like Andy Jassy and like and there were a couple of other other examples you know I think of I was trying to think like okay the Steve Jobs era what will it be marked by and it's like I could think of the the the watch you mean the Tim Cook era excuse me the Tim Cook era you actually kind of made your point Yeah.

4:08So like the watch, the failed VR headset and TV shows. And I feel like TV shows are missing from the discourse here because, you know, like Apple TV really grew up and they became like, you know, a production company and, you know, media property. And I think that like that piece is probably more significant than we give credit to when we're just thinking about like the hardware. But I think that the big thing that people are discussing right now is that how arguably Apple was poised to really win an AI era when they've got so much user data, right, on hardware devices and sort of like they're not part of the conversation or how much they missed out on, you know, sort of like what the model companies have been able to do.

4:54I kind of agree. I was going to say, I wonder if you'll also be remembered for the things that didn't work out, like Project Titan and building their own car. There were all these initiatives. What's Project Titan? Well, Apple was going to build its own self-driving car and they were going to do all these other big bets, I think, that never really took off in the way that people had expected them for better or for worse. But I think of him simultaneously for those things that you mentioned and the things that they didn't roll into and AI being, of course, like the biggest one. I would just say on AI, I feel like that is still an open question.

5:29Apple is not a company that tells a story that's ahead of the products, right? They let the product launches tell the story about the future. And so, you know, maybe if they were out here talking about why, like, on-device AI is going to be the future and how the models are like, like Apple has the distribution. There are people who are Apple bulls. And I think this really came up during the CapEx debate when you, like, look at what the big players are spending versus Apple, which was historically the bigger sort of CapEx culprit. And it's, you know, relative, like been relatively stable. And so they might just be playing a very different game.

6:05And we won't get to see what that game is until later. But I think it's still an unknown. But certainly they are not a leader today in the AI wave. That is very clear. It's just a question of will they be tomorrow? The promotion from within is also really interesting because I feel like Apple is one of, you know, still one of the companies where like these executives are, you know, like they're homegrown, right? I think somebody zoomed in on his LinkedIn profile and said, this is the one of two companies he's ever worked for in his entire career. And the only commentary I've really heard about him is that he's a really nice guy.

6:40No, it's funny. It was like his LinkedIn is like four years as an engineer somewhere than 24 years at Apple. And it's like, oh, holy shit. But actually, when you think about it, that's a recipe for a lot of successful big company CEO transitions, I feel. I mean, wasn't Satya Nadella at Microsoft for quite some time and wasn't Sundar. That's right. I was just thinking both of those. And Andy Jassy also was at Amazon for quite some. I feel like with these big companies, like that institutional knowledge is so critical that would probably be really, I mean, it might be shinier to bring in an outsider, but I wonder, it's interesting.

7:16It kind of flies in the face of maybe how we think about career transitions and mobility and promotion. but it actually does seem to be a bit of a pattern for some of these transitions that have gone well. I think we talk about startups so often that startups really can't home grow in the same way when they haven't been around for more than like five years, right? So I think that that's when you see sort of the folks from the outside come in and then join for maybe another couple decades. But yes, there's so much commentary around him being a nice guy. And I was your comment about Justin Trudeau.

7:49See how it all ties together? It's interesting, you know, in the face of Twitter being so aggressive and everyone needing to have hot takes and all this. Like, yes, nice guys still can finish. Finish first. Yeah. I think you need reminders of that every now and then. So I don't know. That's something that I thought about because I think someone was saying like, Like, why is the best thing anybody can say about him is just that he was a nice guy? Like, I think people are almost like bracing themselves for like another Tim Cook era. But, you know, on the innovation front, I think that's where we're going to wait and see.

8:29He has a hardware engineering background, right? So he was like head of hardware. So, yeah, we'll see. I like this. If we're entering the nice guy era, I'm like, I'm here for it. But I think we're saying we're exiting. We're exiting the nice guy era. Maybe that was the era of Tim Cook was the nice guy era. And maybe that's what it's the end of. No, but this new guy is a nice guy. And actually, this kind of brings us to another thing we were talking about, which is maybe in the wake of like the attacks on Sam Altman's home and the craziness at OpenAI. We've seen people floating this idea of like maybe Sam doesn't want to be CEO.

9:05I mean, he's already brought in Fiji as a like a second CEO. and people were talking about Brett Taylor, who is currently running Sierra, but was previously at Salesforce post-acquisition of Quip, worked with Helen back in the day at Meta slash Facebook. And he is also someone who consistently references as just a really great guy. What did you guys think about the Brett Taylor sort of speculation? I think a lot of people think that that's very possible. And I think he would be great. My experience with him, we acquired friend feed while I was at Facebook. And then Brett became CTO as part of that.

9:46And yes, super nice guy, super tall. I think that at the time, the thing he was most famous. Very tall. And he's known for like creating Google Maps, right? Like that was the big contribution he made at Google. And so somewhat of a narrative violation is like, Like Brett's like a big tech guy and does startups. And I think we think of like cracked engineers who dropped out of college as this new sort of like archetype of ideal founder. And I feel like Brett is, he's got a really great balance of having, you know, been in leadership roles at incredible, large, you know, tech companies. And then, you know, starting something and then it getting acquired and starting something and it getting acquired.

10:29And so, you know, I think that that's a nice reminder and a nice like sort of balance, I think. And the thing that I remember most actually about the FriendFeed acquisition and Brett Taylor is that like he attracts really incredible talent. Like I think the entire FriendFeed team was amazing. And I was actually just like stalking some of them to see like where they are today. And they're like, you know, not making a ton of noise, but they're out doing like awesome stuff. I remember there was one woman there. I was so young. and I remember asking her if she'd been a mentor and she was like, okay.

11:03So Anna Yang, if you're out there, I still remember you. But like the team was like incredible and I think that, you know, that is evergreen in terms of like great leadership, right? That you bring people along and you're able to attract and retain really incredible talent. So when you look at Quip and people who stayed there for a really long time or Friendfeet, you know, staying through multiple iterations of the company, you know, even when they're absorbed by another company, I think that that would be something really good for open AI. Totally. And it is right. You sort of alluded to this, but it is very rare for someone to be both good at zero to one and scale of startup building and then also be able to navigate an internal.

11:42I mean, and I'm just trying to imagine like Facebook, probably not an easy culture to figure out and scale with. Salesforce, a very different culture to figure out and scale with. And my sister worked at Slap, which was acquired by Salesforce. And she said Brett was just like universally loved. That's such a fascinating thing because he doesn't have much of an external persona. I mean, he's been doing a few more podcasts these days. And, you know, he's out there a little bit more because he's building Sierra in this time when AI is the story. But I would say his reputation speaks for him much more than he speaks for himself.

12:18So maybe we're in like the nice and like quiet guy era. That would be insane. I love it. You heard it here first. You heard it here first. That would be crazy. Also very much in my feed over the past week, although hard to say how much of this is like an insider narrative versus broader, is just seeing a bit of a narrative shift with Anthropic. I think like we've talked a lot on this pod about their advantage as the challenger brand in like the open AI versus Anthropic. You know, they were the number two for so long and that gave them a lot of flexibility and also made it easier for people to root for them.

12:58And I think part of this is just Anthropic has been so successful lately. It's growing so quickly. A lot of its investments are like compounding. People have pointed to like its focus versus open AI doing a lot of things and then having to clean up some of those side quests as a real advantage. And so part of this is just like, it feels like sometimes if you, there's, I think it was Aaron Zamos, former, former. The time. Were you thinking about the time clock? Yes. And also he wrote a second post around like narrative gravity. It's like you can be on the rise and that at some point the rise will no longer be the interesting story.

13:37And people will be looking for ways to sort of poke holes. And that seems to be what's happening with Anthropic right now. And it felt like the inflection point was the Mythos launch, where the narrative around that was like, we have to release this privately because it's too powerful. And everyone was like, oh, my gosh, like, this is crazy. And then now the sort of counter narrative to that is actually Anthropic doesn't have enough compute. And, of course, OpenAI has made very much of a bet on amassing as much compute as possible. and so now people are starting to question the anthropic narrative because they're so good at storytelling and so good at marketing and so anyways it's just interesting to see these things change and they'll continue to change and so it's like how much should we get caught up in the fluctuations but I think the more interesting question that I'm always asking myself is how much of this is happening organically versus how much of this is being seeded by the competition it's such a hard way to read news now right it's like you know anytime I see a huge Twitter account do like a take right I think yesterday there was one that did a take on Anthropic, kind of similar to what you were just saying.

14:42And I was like, oh, he probably works at OpenAI. Like, I'm just so jaded now where it's like, I don't know what's organic whatsoever. And so I just assume everything is, you know, pay to play. I've seen the takes in the articles, but I'm curious if you guys feel like it's actually sticking or creating a narrative shift. It feels almost to me like Anthropic is kind of just hubromaining its way through it, you know, like the articles are out there, but they're not really gaining steam or changing the vibe shift as much as we saw with OpenAI earlier. And so I'm curious to see what happens from here, right?

15:22Like it's sort of like there isn't that like wholesale sense of, oh no, things are going wrong or something's really terrible here. It's like there's a take here, an article there, and they just kind of keep chugging along. Yeah, I think Angela, it's a good point. I definitely don't think this has been existential for Anthropic unless you believe they made fundamentally the wrong bet around compute and that they're screwed because of that, which I think is a narrative that some people are like trying to push. But to me, it actually more seems like the commentary is much more meta than that. And it's like, oh, Anthropik's a really good storyteller.

15:57Like they're just really good at marketing. And the mythos launched, they were like too good. And, you know, the reality is probably something a little bit more nuanced. And that's a very insider type of commentary. And it's less about the business and more about how clever the people at the business are and the architects of like the of the broader Anthropik story. So I would agree with you that this does not feel like a big shift for Anthropic. And I think the second they drop their latest ARR numbers, it'll like wipe out a lot of the haters and a lot of that commentary because like the growth is the answer to everyone's narrative problems to some degree.

16:42And so for Anthropic just keeps putting up insane growth numbers. I think my like hot take on Anthropic is that safety historically has never worked as a lasting differentiator and way to win. And I say this coming from a very weird place. Like I worked on the Audi of America account for a long time. And there were all of the these like models that won like NHTSA's like top safety rating. And it's we would do everyone have these ideas like let's do these safety campaigns. Like literally no one gives a fuck. They would rather drive a much, much more dangerous, sexy car. Yes, cars are. It's like we had the same.

17:22My mom was like we had a Volvo because safety. Like I always felt like that would resonate with like families. But that's kind of sad if it doesn't. Sure. But I think that I would argue that this is a really huge race. Anthropic is not trying to find the families with the mom that cares about the kids. They are trying to. These are the AI races, right? And like you have to do broad appeal. And, you know, I think OpenAI being first with ChatGPT, like I position them as like the default. And so Anthropic, as you said, is like the challenger. And it's got to be something I don't think safe is going to be the way that they win.

18:00They're already grouped in with all of the other AI companies. Like what does the average person think about Anthropic? Not, oh, they're the good guys, they're safe. It's they bucket them into, oh, just another AI company, tech bros, you know, tech billionaires like out to like take all our jobs and like ruin the world. And so saying, oh, no, we're actually safe within that is like you're talking to no one. I feel like they haven't been pushing the safety thing very much. Like it hasn't been the main message for a while. But the thing that made the Mythos launch so interesting or like non-launch so interesting was that it wasn't a message around safety.

18:38It was a message on, like, we are so powerful, but we're also responsible. But that is safe. I would say that that's safe. While people were believing that story, that gave them so much cred. It was, like, the sexiest thing to, like, not be able to launch a product because it was too powerful. Like, I actually felt like that, no, people were, like, losing their minds over the mythos. like the first the first wave of the mythos narrative was like was very like I think it really landed because it wasn't a message around safety it was a message around like power um and like I don't know so I I guess like I thought that that was a way that you could wrap safety in like uh in a more appealing a more appeal everyone's like I want mythos because I can't have it because it's too powerful so I don't know I feel like that's going to be anthropics anthropics like new safety platform is actually just like, you're lucky we're good guys, because we could just wipe you all out.

19:40I'm so jaded because I read that and I was like, this is very clearly like, oh, yeah, my girlfriend goes to another school vibes like, oh, you wouldn't know her. You know, it's just like, you know, it doesn't exist. We have very different feeds. I think there's they're always waves right and so the first wave was like ah the second wave was like people you know poking holes in the story and then the third wave is is like everyone's sort of like probably nuanced right like it's a little bit of both it's like this probably is a really powerful model and it probably is smart to like shore up you know our cyber security defenses and also anthropic maybe overstating its power and there may be some other reasons why they're not making it publicly available.

20:26But I do think one of the really interesting questions coming out of this is, what if we're entering an era where most people and maybe even enterprise customers don't get the most powerful models? What if the labs hold those back or give more exclusive access? Because we are just kind of used to being able to play with the latest thing and have the most powerful tools at our fingertips as they come out. And also all of the application layer startups that are wrappers on these models are used to having an upgrade every time you get the new latest and greatest model. And I think it will introduce a really interesting competitive dynamic if the frontier labs start to hold back on some of their more powerful, powerful models and don't make those broadly available.

21:15So that's like a less of a sort of moral or narrative question, more of a strategic question, but it could very much change like the sort of dynamic make we're all accustomed to. Guys, remember when Anthropic was running coffee shops? Like how long ago was that? Wasn't that just like a few months ago? Not even that long ago. Yeah, exactly. It was not even that long ago. It was like the fall, right? It was like October. I remember. To me, in the like challenger brand discussion, it felt like Anthropic just had more space to try on different things. And in the same way, they were trying to figure out what business model worked for them.

21:49And then, you know, it kind of aligned and they had that space to experiment and do things like a coffee shop and go after consumer and then. Or their Super Bowl ad. Yeah. Today, it would be like, like a scare ad about mythos. We're keeping it caged. It's too powerful. You're welcome. We're saving humanity. We thought it'd be fun to just talk about hills that we would die on things that we consistently believe backstreet boys are greater than NSYNC you know just important life debate yeah I saw that they were going to be at Bottle Rock day three and I was like should I stick around for Backstreet Boys closing but I feel like the Las Vegas experience is probably better and they're extending the residency until the end of the summer I heard well that's important important news yeah I feel like we're in an era of like hot takes loosely held.

22:41You know, it's just like whatever is going to get the most engagement is the opinion people put forward. So what are the takes you will take to the grave? Like what are the hills you will die on? I feel like a good segue from what we were just talking about is actually open AI and when they were experimenting with ads. And there's a lot of discourse around like ads. Yeah. So nobody likes ads and a hill that I will die on. This is your hill that I will die on is ads are the perfect business model. I cannot think of a single thing that has truly democratized technology for the masses than ads. And so to your point about holding back models, like, well, a win-win for everyone, actually a win-win-win, like users, the company, and then also, you know, advertisers is like having great ads on the platform.

23:24Like ads can be net positive to the user experience. They can be useful. They can be entertainment. And then they also, you know, help create a revenue stream that enables the company to be able to like, you know, provide better, better technology to the masses. And so I will the hill I will die on is that ads are the perfect business model. And we need to stop calling them creepy. Because I see what, you know, Instagram ad engagement rates are. And if we thought they were creepy, we wouldn't be just like laying in bed buying shit every night. Our generation being like, so anti ads gave way to the subscription models and like the explosion of like prosumer sass.

24:04And now all of us are left with like 37 sub stack, you know, subscriptions and sort of like, you know, reminiscing of a time where, oh, was it so bad that we had to watch that pre-roll before we like read, read a couple of really incredible pieces of journalism? Like, yeah, so that's, that's the hill that I will always die on. I love it. Helen, who was leading the charge against ads? Was it media? Like these, like, but like Facebook, because like, I feel like media has suffered more than anyone. Yes. I honestly, like my, maybe this is more of my personal arc, but I feel like something around 2016, Cambridge Analytica, the Trump election, like European governments, European governments, but I think that like, we sort of like, we wrapped it all up together and threw it out.

24:54And it was going to be a lot more nuance than that. But there was also like the privacy mongers, right? Like it was sort of like this anti-ads thing that like we started to look at the revenues that ads were bringing in and we're like, oh no, like Zuck is too powerful. Like he can't have, you know, hundreds of billions of dollars of ad revenue to go do whatever he's up to. And I think people were so upset about the election. It was just like so many things getting wrapped into one. I feel like post-2016 election, people were just like we've had it with ads. Like that's to me, like the time where I think things really, really flipped.

25:28I agree. My husband has turned all of that stuff off and like doesn't track his Instagram feed. It's terrible. It's like terrible. It's like a fishing post. Like, you know, like it's like you're a male. You must like fishing. Yeah. I mean, I love my feed, but then in the same breath, it's, you know, how much would you pay to go on Instagram every day in a subscription model? Probably not that much. And it reminds me of in the, in the old media world, like they talk about like the bundle, like the, the life cycle of any industry is like, things are bundled and it's better. And advertising is my proxy for that.

26:01And then people are like, we only want this or that. And then they unbundle. And then you, as you said, you end up with 37 different sub stacks and it's too expensive. And then you re-bundle again. And so we're just like, a Netflix subscription, an HBO subscription. My other thought, um, this is not fully formed yet. So, so bear with me is I think it's interesting to think about relative positioning because Facebook was the challenger in the ad industry to old media, what Ashley was saying. But in the AI age, I think an AI ad is just going to be the return is going to be worse than a traditional ad, right?

26:33The cost of compute, the cost to create that ad is way more than like UGC content or, you know, the default today. And so in the same way of, you know, what it took to get reels off the ground where it was cannibalizing revenue, In this AI world, Meta has to face the question of do they want to cannibalize their existing super high margin advertising business for AI ads versus for open AI? Anything better than zero, which is like free, is like a win for them, right? So they're coming from different positioning. So even within ads, I wonder how that incumbent versus challenger positioning will play out for market share in the future.

27:12I didn't mean to turn this into like a whole ads discussion. But Angela, you are you are so brilliant. And you made this, you know, joke in the group chat about how like the alphabet structure enables Google to take themselves private. And because the biggest the biggest question around like SEO, the move to AEO or GEO is like, how does Google catch up when when all advertisers are now asking how they can be surfaced in search results in in AI chats? right? And I think the answer is like, they're going to have to go through a painful shift. But if they do that successfully, like, I think that they'll win.