Will empathy make a comeback?

0:04Today on Great Chat, we tackle a big topic. How to lead when the world is changing at an unprecedented rate. I'm Helen, and this week I'm joined by Ashley and Angela. Great Chat is brought to you by Mercury, radically different banking loved 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. Hello. Hey, guys. Hello. I'm in your city. I know we're all on Zipers and Scope. We could have done a great job live. Well, I bet you're pretty envious of my pod setup.

0:41Like I'm in a tiny, tiny room because I'm an emerging manager on a budget. And there's no desk. So I like MacGyvered my setup. And I have an ironing board and a chair that I made them give me. And so if anyone's wondering why I look so pod ready. Honestly, I'm impressed. I would not have thought of the ironing board. I would have tried to stack like 10 tissue boxes up. Angela, you have podcasted like from sitting on the floor. I have to say. Actually, you've podcasted from a boat. I did podcast from a boat. And I'm very good at this because I spent two years on the road during the pandemic. And so I have like made like closets in my office.

1:26I have done the ironing board thing before. They're actually great because you can control how high they go. So pro tip to our listeners. It's a great makeshift desk. Guys, I'm going to manifest this because I just saw the CFO at SpaceX speak yesterday. But given that we've podcasted on the road from boats. Oh, Starlink sponsorship. The only frontier left is from space via Starlink. Oh, okay. Yes. I thought you were. I also love the idea of Starlink sponsorship. Or that. Or that. You know what? I have the perfect special guest for that, Katy Perry. she could join us katie perry who is also very pro-anthropic and that's right oh my gosh like in any other news cycle like yeah yeah i love her chaotic energy like it's it's amazing i've never been a fan of her like music or anything but now i'm just like a katie perry fan for like how will she insert herself um i'm into it well claude is back online which is great.

2:28I definitely had some, a little bit of a freak out yesterday, but I honestly, I remembered that I pay for Gemini Pro. And so I started using it and I was like, holy crap, this is pretty good. So like how sticky are these things and how not a two horse race is this whole, you know, AI consumer battle. I wonder if Claude was down because of all the Katy Perry's of the world, like showing their support by signing up. Or Pete Hegseth. Like I blamed Pete. I immediately blamed Pete. Pete pulled the plug. But like all of the timing, it was like so, you know, eerily coincidental, right? This sort of the zeitgeist of the AI war and literal war last couple of days.

3:15Maybe Quad just needed a moment to lick its wounds. Like it's been busy. Maybe. it's had a lot of a lot of actions been preparing a lot of PR statements and and it just needed a weekend a long weekend like I think everyone needs to pause usually Twitter is this great place where people come in with like very fast hot takes and just the rate of being totally wrong is it's never been higher and maybe it's just like accuracy by volume and And that's fine. But I do feel like we're entering this era where like truly nobody knows what's going to happen next, which is ironic because we have arguably more data than ever before at our fingertips, too.

3:58But truly, it's like day to day. I didn't see this coming. Yeah, that's, you know. I mean, I think this is such a good example of like how hard it is to land like a take when things are moving so quickly, because just the sequence from, I guess, late last week, Friday, when Anthropic and the Pentagon were going head to head. And then there was that moment when Sam Altman spoke out in support of Anthropic. And everyone was reacting to that. He got so many kudos for that. And that actually gave permission for a lot of other people to speak out in support of Anthropic, including a lot of OpenAI employees and OpenAI investors.

4:41And then, and so you had people who have like large Twitter followings, and I won't call anyone out, who were, you know, really like sort of joining Anthropic stand on these sort of like hard lines around domestic surveillance and like no human in the loop on autonomous weapons. And then like an hour later, or I don't know what the exact timeline is, like Sam announced that OpenAI had reached an agreement with the Pentagon and like people are having to pivot and adjust, but with very imperfect information around how close that agreement was to what Anthropic was advocating for. And so like as a comms person, a former comms person, I was just like, oh my goodness, like how do you, how do you navigate something like this?

5:26And I think the answer is unless you need to weigh in, you might be better off just taking a beat and taking a breath because a lot of people are in uncomfortable positions now having taken stands that now are awkward given their employment or given their affiliation. And then Sam Altman himself is having to try to wrap a better narrative around this moment. And I was actually even thinking about it. Like, I think he would have been in a better position had he not come out in supportive anthropic and then slid in there with the Pentagon deal. Because I think that whiplash of like people interpreting his stand as one thing and then having to recalibrate to a different reality is part of what has put OpenAI in such a challenging comm situation.

6:11I don't really feel like people are like following as much as we are though. So maybe the whiplash is sort of like, you know, smoothed over by like the people just catch the what happened before and after and not in between. I mean, one thought that I had was like, as a marketer, right, different from comms is like, who does this actually benefit in the long run? And watching Claude go to the number one position in the Apple app store, right? And, And, you know, some people attributed it to the Super Bowl commercials. And I was like, okay. Or some people attributed it to like Katy Perry and like the sort of conversation and, you know.

6:52I hope Katy Perry is equity in Anthropic. If not, someone get this moment and shares in Anthropic, please. Yeah, exactly. She's got a little referral code. Justin Trudeau, 2020. Exactly. So, you know, I think that in the end, who really wins? And one thought that I had was, I think like Anthropic or Claude's sort of brand awareness was so low before. Like just compared to, I mean, ChatGPT is basically the Kleenex of, you know, tissue paper. I think if anything, just the collective events over the past, let's say month, maybe including the Super Bowl commercials and like, you know, activism around like getting behind Anthropic.

7:35Like all of this was frankly net positive for brand awareness for Anthropic and Claude. And we'll see how long that lasts and we'll see if that matters in the long run. But I think like it's one of those, like, how do you just like zoom out and sort of see, you know, who benefits from all of this? Yeah, it's interesting because I'm curious how much Anthropic cares about like prosumer users versus enterprise users. And like, I think they must care because they did the Super Bowl commercial and they've been like leaning in on some of their more like user facing positioning. But obviously, in the worst case scenario, if they are indeed labeled a supply chain risk, this has like massive implications for their enterprise business beyond and for their business period beyond the$200 million contract with the Department of War.

8:26I can't I still can't say that.

8:31I like every time in the Anthropic post where it's like, we want to support our war fighters. I'm like, wait, when did we agree on this new lingo? This is crazy. But anyways, meanwhile, so like, you know, Anthropic, if it helps their consumer brand awareness, but hurts their like core business, which has been mostly, you know, enterprise, like that's a tough trade off. And then on the other side, OpenAI and Sam are trying to position this as like, we took on this contract at great personal cost to open AI. And we did it to repair the relationship between, you know, American AI companies and the government.

9:09And I think they've said the contract that they signed is worth like low, you know, low millions. And of course, there's been a lot of noise. I don't actually know what the volume is around sort of like delete chat GPT. I certainly know a lot of people who have deleted their paying accounts. That might just be in the tech world, Helen, to your point, versus something broader. But I think it's very interesting. OpenAI won in this enterprise contract but lost, and it's sort of like consumer love. And the opposite for Anthropic because those are each sort of their core. OpenAI cares most about consumer, and Anthropic cares most about enterprise.

9:51and so things are getting a little messy right here. But we were talking in the group chat about everyone's drawing parallels between the delete chat GPT moment and the delete Uber moment. Ellen, I know you have some hot takes there. Yeah, I think that's been picking up steam and credibly because I think it was Andrew Chen who probably got a lot of engagement on that post and he was at Uber for a long time. And he was at Uber, I think, specifically for delete Uber. I think this is just like a horrible analogy because I don't really feel like Lyft was like a real competitor to Uber for very long, maybe like for a minute, like literally a minute.

10:31And then I think they went very, very different paths. And even the delete Uber, in my opinion, again, not worked at either company. But I felt like there was like an opening where if Lyft like were so inclined, they could have gone for the jugular and been a real contender. but instead they sat on the sidelines and I was just like, okay, well that, that was their moment and they're never going to get it back. I think this is very different. I think that this is quite different. And Anthropic has, you know, a really strong business and like, you know, a ton of understatement. Yeah. A ton of traction on the fastest growing company of all time.

11:08Yes. Yes. This is not just like a winning the hearts of minds of consumers is going to be who wins at the end of the day. I think this is like much more interesting, frankly. Anyways, I don't love that analogy, but I get it. People are trying to paint, like the analogy that I, the tweet that I shared in the group chat was like the Anthropic is Alyssa Liu and Opeya is Eileen Gu. And I thought that was funny. And honestly, a better analogy than Uber left. Both are awesome. I'd be happy to be either Eileen Gu or Alyssa Liu. Like, honestly. Let's keep the Olympic week going. Yeah. I don't think it's different because I don't think it's a zero sum as ride sharing, right?

11:45Like I think the real thing with Lyft and Uber is it's very zero sum. And if you take a step back, I think maybe we're all techno optimists here, but I think we're probably just at the beginning of token usage and it's just going to be exponential. So it's not zero sum between Anthropoc taking share of ChatGPT. I think both are just going to continue to grow and more Gemini, everyone, like it's a different competitive field. Yeah, the takes are really bad. I saw another one where they did Anthropic OpenAI is Google Yahoo, and I was like, awful take. Oh, God. They're just like, you know. So anyways, it truly maybe is the accuracy by volume.

12:24People are just - I also think the Uber-Lyft rivalry was more of a narrative rivalry, and it was very superficial. Like Lyft was like the friendly brand because they had their like pink mustache. And like for a while you sat in front with the driver, whereas Uber was led by Travis, who was a total killer. And like, but it was like the actual, it didn't really impact the product very much. And so it was more just like, how do you feel about these brands? Whereas I think this particular moment and really like Anthropic being one of the first tech companies to take a stand in this era where tech has mostly like, you know, bent the knee to a certain administration.

13:10Like this is not superficial. This is like, you know, whatever you believe about Anthropic's values and how they're interacting in this moment. Like this is about as real as it gets. So I also feel like the Uber and Lyft thing was like, it was a brand thing and it was a brand thing that didn't go very deep. And then we're seeing some real ethical lines being drawn in this moment in businesses willing to, you know, I think one of the interesting things that came out of this was like, apparently as part of onboarding at Anthropic, you are alerted that the company, if it ever has to make a decision in that will be to the benefit of humanity, but take the value of the equity to zero.

13:51they will make that decision you know and i'm trying to imagine like i've never been part of any employee onboarding where like we will kill the business for you like like some of the internal like dogma and mission of anthropic is coming out in this moment and we've actually seen that they're they're willing to act on it so anyway so this feels this also feels like the opposite of that rivalry uh to me and this why this is a little bit of a pivot but speaking of like super terrible ads and companies that did or didn't buy an ad. I listened. It's the MS Morgan Stanley Tech Conference this week.

14:24And there's like 3 ,500 men in suits that have descended upon San Francisco. I don't know if you've encountered them, Ashley, but we're all congregate at the Palace Hotel. And it's a big conference. They had SpaceX yesterday. They have Dario from Anthropics speaking today. So I'm sure it'll be a full house to see what he has to say. They have Sarah from OpenAI. And then they've got Satya and like the whole tech slate. But I think the most interesting person I saw speak was Tariq from Kalshi. And he actually said that despite Kalshi not paying for a Super Bowl advertisement, they were the most searched consumer brand during the Super Bowl because everyone was trying to figure out how they could place like a view on what was happening on the game.

15:05And so they're like, yeah, like all those sucker brands that paid, you know,$7 million for a 30 second spot, we ended up being the most searched consumer brand. And so I just thought that was kind of interesting. Did he disclose whether people found Kalshi via Google? I mean, I'm assuming that's where he got the search term. I bet it was Google. It was not. Yeah, any of the AI chats. But anyway. Never discount the consumer, though. You know, they know where to search for things that they want. They won't be brainwashed by an advertisement. Angela, I thought you were going to say people were searching for how they could make money from, like, the success of the Super Bowl ads, which just shows how warped my brain is.

15:43Wow. I mean, honestly, the conference is like, it's kind of like a little like removal from reality because everyone is so focused on tech and AI in the future. And the number of times the SpaceX CFO said, multi-planetary species and preserving human consciousness, like, which really gave me like WeWork vibes of like elevating the world's consciousness, you know, but there was kind of no reference to what was happening in the broader geopolitical landscape. and honestly yesterday was just kind of weird like the markets didn't react at all they were up despite like total we were all bracing for monday morning right like through the weekend yeah but i guess it's manifesting today yeah okay i did not check that today what's happening today today is tuesday markets are down yeah markets are down okay of course everything's priced in everything's priced in but to your to what you guys just talked about about like people having like takes too quickly, like everyone over the weekend, all the banks had these emergency calls where they're basically like, no, it's always a time to buy.

16:43It's going to be fine. Like, it's not any different this time. And then it was like, oh, actually, like maybe it is different this time, given the scale of what's happening. And then, you know, everyone's adjusting their narrative accordingly. So yeah, the desire to have a hot take, like just take a beat, digest and then see what happens. Speaking of hot takes, I think one that we saw proved to be incorrect was I think people interpreted the rise of Claude and specifically Claude Code. And I think Claude Code went from like zero to 2.5 billion revenue run rate in eight months, if I'm remembering correctly, as like taking share away from Cursor.

17:18And there was kind of this like Cursor is screwed narrative. And of course, now we're seeing rumors that Cursor has doubled its revenue run rate in the past, I don't know, like three months or something. I forget what the timeframe is. Raising it, I've heard both 50 billion and 60 billion. And so it's also such a good reminder that we like, I think a lot of this is like so much of what we're going through is unprecedented right now. And we're trying to fit it into old frameworks so we can understand the world, right? Like we want to look at Anthropic and OpenAI through like an Uber and Lyft framework because that's comfortable.

17:52And we want to assume that like, oh, okay, like if Claude Code is taking off, like its competitor cursor is probably screwed. And instead we're just in completely new territory. We're still in like very early innings and there's real product market fit for agentic coding. And so we're having to like adjust our mental models of the world and the narratives lag. Yes. And I think it's also what Angela said about like, you know, people not being able to identify zero sum games and not, right? So I thought of this like Jeff Bezos quote, which is like one of my favorites, which was like when the data and the anecdotes, you know, don't align, I've found that the anecdotes are usually correct.

18:33And I love that because it was such a check and balance in this like hyper data driven, you know, world that we live in and in the Valley. And now I'm like going to revise that quote with like a little asterisk is like, unless you are just, unless all of your anecdotes are purely from Twitter, because like, Like, you know, I think it felt like a narrative violation when it was a Bloomberg that broke Cursor's AR. And I've said this about Cursor where like they're a proper noun, like Cursor for X, right? And like there's brand value in that, that I think Silicon Valley is also very poor at valuing, understanding how to value that.

19:12And so the staying power is actually quite strong. We were talking about how this moment right now feels a little bit like other moments we've had in our careers. The first one was in 2008, you know, if you work through the great financial crisis. And I think that all of our takeaways were like, we were just too young to have the right context. This was like abnormal. We're like, OK, I guess this is what like work is. Seems pretty intense. And then there was that moment, very early pandemic, where the market sort of panicked when businesses started closing and, you know, kids weren't going to school.

19:45And it really felt like everything was shut down. And there was a big sell off. You know, I remember a lot of my Facebook friends like getting margin called and like really not anticipating that moment. And now it sort of feels similar. I think the last couple of weeks we've seen a lot of SaaS stocks, you know, tumbling. And we're wondering, like, is this a start of something bigger? And, you know, I think last week with the block layoffs, you know, this block laid off 40 % of their staff. And the next day their stock really rallied. And so I think a lot of people have been saying this is the start of what is to come, a big wave.

20:18I think there are a lot of tech CEOs who looked at that and, you know, have been thinking about reductions in force and maybe this, you know, the block sort of leading the pack will encourage them to do the same. So it's a moment where, you know, nobody knows what's going to happen, but it's also like a moment where I think empathy goes a long way because we don't know, you know, how we're personally impacted and we don't know how like our neighbors and our community is impacted. But I think the other point that we made was like sort of last couple of years, there's been a little bit of a hardening in tech, you know, kind of like this backlash to empathy and, you know, definitely inclusive programs and language and all of this.

20:58And we've seen a lot of our tech leaders, you know, sort of take this hard stance, like very, very hard capitalist, lower empathy positions. And so kind of how are we even going to see our leaders navigate this moment? is a question. And then how individually in your jobs, you know, are we going to navigate this moment? And I mean, add to all this too, it's like a very dramatic and scary geopolitical background, right? So it's, and we keep seeing tech intersect with this, obviously the anthropic open AI Pentagon stuff, you know, right before the conflict with Iran. So there's just like a lot going on.

21:37Helen, as you were talking, I was like doing the math in my head and I'm like, oh no, I can see the half-life. 2008 to 2020 is 12 years, 2020 to 2026 is six years. So the next crazy moment is three years away and it'll be a year and a half. And then it's just going to be every month, every week, every day, which is kind of awesome. I mean, if the EACC people or the accelerators. Yeah, they want this. They want everything. Yeah, they want this, right? So maybe this is the new norm. Everything is happening very quickly. Yeah. I would say the other dimension and I've been thinking about as we've been discussing this topic is unlike the great financial crisis and unlike COVID, where I felt like it was very equalizing in terms of every sector was hit, everyone was in it together in a certain way.

22:23I think that the effects of this moment in time are quite divided into there's a haves and a have-nots. If you're an entrepreneur, if you're a technical person, this is an amazing time. You can find whatever job you want and this is an amazing time to build and everyone else is out there. struggling. And so it's interesting to think about how we have empathy when the events that are happening are not equalizing across the board, but creating really a divide in society across people that are benefiting very substantially and people that are trying to find their way. And also at the same time, the prior two events felt like it was like happening to us.

23:02I mean, Granted, there were architects of the financial crisis and who knows how the COVID pandemic started. But, you know, for most of us, we were reacting the best we could in real time. Whereas like tech is the architect of this moment. If we're talking about, you know, the labor disruption that AI is going to bring. And Angela, I both agree with you. And also, like tech is the first to really feel the impacts of AI, because I think as we're seeing with companies like Block, we're moving faster into this future than other companies and sort of like better positioned to see the writing on the wall.

23:41Now, I do have questions around like the convenience of the AI narrative in terms of being able to do what needs to be done. If your workforce is, you know, bloated or, you know, I read somewhere, I read two different accounts of blocks growth during the pandemic. One was that they had 4X to their company size over the course of the pandemic. The other was that they had hired 4 ,000 people. Those numbers are a little bit different, but essentially they let go the same number of people, at least, that they hired over that time. And so there's also a question of like, has this just become more palatable because AI is a useful narrative and maybe we're not quite there yet.

24:23But Jack Dorsey knows how to take advantage of this moment to be able to do what he believes is necessary to sort of like right size his company. And we saw this playbook before with Elon coming into Twitter when he slashed the workforce really early on. And it felt like it gave a lot of other CEOs in the tech industry permission to do the same. And Helen, to your point, that in many ways was like the beginning of the hardening of tech leaders who had been very empathetic during COVID. And, you know, sort of trying to help their teams adjust to all this change and trying to participate in sort of broader social conversations.

25:02And then the pendulum swung way to the other side where, you know, it became OK to just be like a like a hard charging capitalist and just do what needed to be done. And so I'm kind of fascinating to see like sort of echoes of that in the in the block layoffs. Oh, for sure. I mean, I shared with you guys, but I thought about this moment that I had in 2008 several times over the past week, which was like, you know, June 2008. everything was collapsing and I was like 24 and I worked in advertising and you know we had a couple hundred people at our agency and we let go like 75 percent of staff most of which were you know young and so all of my friends and peers and and I was left standing because I happened to work on like one of the accounts that weren't affected and so as the president was leaving that day he saw me at my desk we just came over and just like checked you know how are you doing And, you know, he made this comment, which made no sense to me at the time, but I can't stop thinking about it, which was how sometimes you have to take moments like these to right size the ship.

26:10And then I think I like literally burst into tears because I like one didn't understand what that meant. But like two, like all my friends just lost their jobs. Right. And I thought about that because I think that for a lot of tech leaders who, and leaders in general, they're thinking about how to increase margin. They're thinking about how to stay competitive and nimble in an increasingly competitive environment. And a lot of that is, well, is AI going to help me do more with less? People are the biggest line item when you look at anybody's like OpEx. And so this is sort of, you know, I wonder how many leaders are thinking about like, even if they don't, even if their margins are healthy, even if they're fine, like, are they going to use AI as this sort of like scapegoat or, you know, something where they're going to like right size the ship in this moment?

27:00And I think the answer is yes. We don't know exactly where or who or whatever, but I definitely think that that's happening. I also wouldn't be surprised. I mean, again, we like zero sum frameworks to think about things. But one thing that I've been hearing from friends who are sort of like deep in the enterprise AI transformation world is it's not just that you need less people, it's you need people with different skill sets. And so I would not be remotely surprised if like Block is hiring, you know, meaningfully on the other side of this layoff. And it's just that the types of people that it had in place are not as relevant for sort of the path forward.