Deepfake Regulation, Media Layoffs, and Guest Chris Dixon

22:48And you're going to hear from Taylor's, Ms. Swift's lawyer. And guess what? These geniuses are going to fucking figure it out. Yeah, she's the bad wrong one. You need something to pull it into attention. There's been a bill, the bipartisan bill. It's called the Bipartisan AI Bill to Empower Parents to Old Big Tech Accountable. It got blocked. It's still, they're trying to pass this bill where there's no, well, part of it is no Section 230 immunity for AI Act. There's a whole, there's a bunch of bills on this issue. And one is to block, Ted Cruz blocked Holly's bill saying it would harm innovation.

23:25He's such an imbecile. But anyway, they're trying to, they are trying to pass this this bill. And I think this could push it over the edge, right? Like it failed on a unanimous consent in December. I think it's going to come back. And I think things like this will make that happen, right? It just takes a little shove. And she's exactly the right shove. But so is George Carlin thing. So is the Biden thing. They've got to all be disturbed, right? It's not just one part of it. But if you have more and more of these high profile things, it's very clear that one, they're going to have legal liability.

23:56And two, there's going to be a federal law. But I have been wrong before about these things. You know, I had hoped, you know, there'd be a privacy bill. Of course, there will be. And there had been one privacy disaster after the next, one hacking after the next, and it doesn't happen. But in this case, I think people understand it rather easily. I mean, I don't know. They really do. Porn. Oh, okay. But this could get, talking about porn and defects, this could get so ugly so fast. I constantly, my boys are sick of me lecturing. I'm like, if an attractive, if someone reaches out to you and accidentally via text message, and starts a dialogue with you and pretends to be and portrays themselves as an attractive woman and then starts sending you pictures in exchange for pictures from you.

24:37And they're like, yeah, we know, dad. They've told us about it in school. What happens when you start getting AI-generated messages from a cute girl in the eighth grade asking you for those photos and sending her? I mean, this could just get so mendacious so fast. And the thing that really bothers me is, again, Again, big tech is pretending they don't know how to stop this. Yeah. Yeah. Shutting it down tells me all I need to know of search on her name. Like, that's their move. Like, that's their actual move. Like, because what they did is they got rid of their trust and safety. But they're going to see more and more like this.

25:13And if there's a legal liability around copyright, I mean, the Carlin thing, when I was listening to those guys, like, it's not an homage to steal your things. You know what I mean? I'm going to do an homage to Scott by living in his apartment or something. You know what I mean? Like, I think I'll just take his things, although I do do that. Where is this going? I'm just saying it's like this is the next paintbrush. You can't take other people's things and make a paintbrush, like paint something from it. There's certain ways you can do that, right? In some, you know, people call it. Well, Carlin's IP theft.

25:44Yes, theft. It is. It's like music theft when they steal, you know, stems of music or things like that. I don't know why this is that complicated, but it will require people to do many, many lawsuits because this is so easy to do at this point. It's not even, you know, it's not, it's so easy to do. And the robocalls were, did you listen to them? It was disturbing. Remarkable. Remarkable. Remarkable. You know, do you get, I don't get those, but still. Oh, no, I get, I made the mistake. I don't want to say the mistake. I met Crystal Ball, who was running for Congress like 10 or 12 years ago. And I made a political donation to her and I did it online to the DNC.

26:22And now I get five times a day a message from my good friend Charles Schumer or from Hakeem Jeffries or from some wonderful former Marine running for the 3rd District in Kansas. And it's just I get solicited so much. I just got one. Nikki Haley. I don't know how I got that. I guess I give money to Chris Christie, I guess. And they pretend like they're texting you personally, which I can't stand. Yeah, I know. Yeah. Well, we'll see. This is going to go in places and probably litigation rather quickly. But we'll see if Congress has the they really should pass that law. Blumenthal and Cruz should get out of the way.

26:58Stop innovation. He's so bought and paid for by the tech companies. Anyway, let's go on a quick break and we come back. Media layoffs are just keep coming and coming and billionaires who couldn't save the day. We'll speak with a friend of Pivot Chris Dixon about why he's advocating for crypto now more than ever.

27:17This episode is brought to you by White Claw Surge. Nice choice hitting up this podcast. No surprises. You're all about diving into tastes everyone in the room can enjoy. Just like White Claw Surge. It's for celebrating those moments when connections have been made and the night's just begun. With bold flavors and 8 % alcohol by volume, unleash the night. Unleash White Claw Surge. Please drink responsibly. Hard seltzer with flavors. 8 % alcohol by volume. White Claw Seltzer Works, Chicago, Illinois. There is a lot to talk about when we talk about Donald Trump and Jimmy Kimmel. One big question I've got is why, in 2025, are late-night TV shows, like Jimmy Kimmel's show, still on TV?

27:59Even in our diminished times, Jimmy Kimmel, Stephen Colbert, they're just some of the biggest faces of their networks. If you start taking the biggest faces off your networks, you might save some nickels and dimes. But what are you even anymore? What even is your brand anymore? I'm Peter Kafka, the host of Channels. And that was James Ponowozik, the TV critic for The New York Times. This week, we're talking about Trump and Kimmel, free speech, and a TV format that's remained surprisingly durable for now. That's This Week on Channels, wherever you get your favorite podcasts.

29:05The layoffs are also triggering conflicts between unions and management. What a shock. And many employees walking up the job. An ongoing bloodbath is decimating news outlets nationwide, is how Axios put it. The Los Angeles Times cut its newsroom by more than 20 percent last week. Time laid off dozens. And Business Insider is letting go of 8 percent of its staff, to name a few examples. More importantly, an average of five local newspapers are closing every two weeks. And more than half of American counties now are so-called news deserts, according to Northwestern. This is an ongoing thing. You know, Jeff Bezos is losing money at the Washington Post.

29:37He just hired a new CEO who I met the other day. Quite impressive. L.A. Times owner, who I've also interviewed, Patrick Soon-Shiong, is at the helm of the L.A. Times. He got into a weird fight with the editor, Kevin Merida, well regarded, who left. Private equity and hedge funds are not doing much better. Alden Capital is having trouble at the New York Daily News. Scott, you've been on board. You were on the board of the New York Times. You and I have run media companies. I think it's the new normal, more of the same, and it's either big companies or little companies. Big, big companies or little ones like ourselves.

30:15What do you think? Yeah, you're right. There's going to be a small number of big players, but even the big players are struggling. and Gannett is having a tough time. You really have to have incredible size and be incredibly well-run, and it's still not a great business. And then there's the niche guys. You know, there's the pucks, the semaphores, or that have, you know, you could argue Vox kind of owns podcasting, if you will, but they're still not very good businesses. They're okay businesses. They're profitable small businesses. When you have a monopoly called Search that is essentially a toll booth for all information online, you know 40 cents on the venture capital dollar goes uh it's for many companies trying to acquire customers goes to amazon meta or google and so when you have and these companies are going 20 a year so when you have 100 to 200 billion dollars a year coming out of the ecosystem you never the companies that have succeeded over the last 10 years that have that have provided extraordinary returns to their shareholders have been asset light hi we're NVIDIA, we just design chips.

31:15We don't build the billion-dollar chip facility. Hi, we're Uber. We don't want to actually be in the business of owning cars or maintaining them. We just create a thick layer of innovation on top of it. Hi, we're Airbnb. We don't ever want to own apartments. We'll create a thick layer of innovation on top that uses fallow assets. And to a certain extent, Google and Meta create a thick layer of innovation on top of other people's journalism reporting content creation, because that shit is hard. And where I come back to in a nod, I really like the BBC. And I think they get it wrong like every media company, but they mostly get it right and their heart's in the right place.

31:52And I think there's something about the public service of long-form investigative journalism where the reporter doesn't start with a viewpoint or think that, okay, I'm going to say, I'm going to talk about one side or have a viewpoint or I'm going to catastrophize. because it'll get more clicks so we can sell more Nissan ads. But that's cable. I don't think the Washington Post or the Los Angeles Times were doing that. And they're very excellent publications. But go ahead. Are they subject to the whims of populists and produce shit solely based on clicks? Or are they outstanding journalists? The answer is yes.

32:29There is no way you could argue these guys are immune from that. Yes, but listen, I don't mean to be rude, but I'm the person who's worked at all these places. And that is not the case at most big newspaper organizations I've worked with. It's not like, let's do this, let's do that. I think you definitely see that in television, for sure. But it's not the case. I think one of the issues is what you said. And what's happened? But that clickbait thing is just bullshit. It just is. And what's happened to those organizations? Because people have shifted their tastes. You know, that people have, look, both the business model has been knocked out from under them for lots of reasons.

33:06And it went back even further when Walmart didn't advertise, say, at the Washington Post and all the major department stores died. Then consumers got trained in a new way through search. And then people like new things. They're not making products people want. You know, that's at the very heart of it. And even the big ones, like let me get the New York Times, for example, which is considered the most successful under Merit Levy and who we've had on the show. So, look, their revenue for the quarter that ended September 2023, about$600 million. Really good. It was up 9, 10, almost 10%. Net income was 53.62, up 46%.

33:43Really well done. It might be for various reasons. The profit margin, net profit margin was 9%. It's still$50 million. It's not that much a quarter, right? It's a small business. And that's the most successful one, right? because she's added on not just crosswords, but Wordle and, you know, athletic and different and cooking and things like that. There's only a few people that can do that. And it's still not very big. And so I don't know, I think it's both tastes have changed, practices have changed, the business model has changed. And these companies have not changed for the most part. They're run the same way that when I worked there 20 years ago, or just recently at the New York Times.

34:23So the New York Times has 10 million subscribers. It's the best. It's the best and an important industry. And, or should we say it's the best? Yeah. Okay. The premier, one of the premier, they operate, they operating profit of 90 million and they have 10 million subscribers. Meta, 3 billion people on the platform. These companies, we can always highlight, We can always highlight the one that is doing the least bad, but ad-supported journalism is really, really challenging to support a big newsroom and not be subject to the whims that you have been able to. You talk about the Washington Post. Okay, I defer to your experience here that they don't go after clickbait, and they're going to go out of business.

35:11So unless they keep finding benign billionaires that are distracted taking pictures of their girlfriend and thongs, I mean. That could work. Just that could work. And that strategy might work. She wears a lot of thongs and she looks good. But here's the bottom line. Every billionaire that does this, I always say billionaire Democrats buy newspapers and billionaire Republicans buy football teams. They're all going to start buying football teams because guess what? You get to enjoy the football team and 10 years later, it's tripled in value. You sort of enjoy a newspaper. You basically have unions and journalists berate you for not be willing to spend more and more of your money to support journalism.

35:49And then you get to sell it for nothing again or to go try and find someone to buy it from you for a dollar. I want to just circle back to where I started. I believe that we should have similar to what the UK does, revenue or some sort of tax that says we're going to start an organization. I think we should have publicly funded news. Look, I just interviewed today Judy Woodruff, who has a great show about our problems as a nation, partisanship. And she, of course, was the head of the NewsHour for years. Excellent product. Talk about not clickbait. Just solid. And this, by the way, her show, I recommend it highly.

36:24It's fantastic. It's called America at a Crossroads. And it's great. It's actually really well done. And just what you expect out of something like a PBS and Judy Woodruff. And, you know, we talked about that issue of the politicization of PBS. Look, we got the right wing attacking it, what, now for 20 years? Like, let's defund it. Let's not give them any money. Now, they get most of their money not from the government, right? It's the Corporation for Public Broadcasting. Yeah, it's pharmaceutical TV or whatever it is, yeah. Yeah, exactly. But still, even the small amount they get, and I forget what the numbers are, and it's different from state to state.

36:56Like, some states fund it. They're under constant and relentless attack by the right wing, which is trying to knock the knees out of it, right? Trying to knock it down so that they have, they put them in a really bad position and then rely on the kindness of strangers, right, for to get a coat bag or whatever. So it's not like this country does not revere that public, even though, you know, what's interesting is that stuff is really popular, whether it's Sesame Street or the Antique Show or Ken Burns. That's what sort of carries it. And then you get this amazing news hour on top of it or Frontline.

37:29Let me, you know, I've told this story about Luby. He watches Frontline just on YouTube, right? He loves frontline. When I was with the frontline people recently, I was like, oh, you watch PBS? I'm so happy and proud of my son. He's like, I don't watch PBS. So it's really an interesting – so he doesn't hear any of those ads or he doesn't want a tote bag or anything else. He just gets it on YouTube. So even that's problematic. That's not going to happen in this country. It might happen in Britain. Yeah. I mean, it's a fair point. I don't know what the answer is. What would you do? Let me ask that.

38:02What's your advice to someone looking to pursue a career in journalism in 2024? Or the business part? The business. You do the business. I'll do the journalist part. Well, I've told you my very reductive analysis. Focus on the screen size that you're creating content for. Go to a company that's outstanding at making content in the native form for a phone. And if it started somewhere else with a bigger screen, be careful. Native-only phone content creation. Even as a business person, if you're going to go, you know, you want to be in publishing or whatever. The majority of NY Times employees are not in the newsroom.

38:36I mean, we always used to laugh at them when they used to come into the boardroom. They got no respect. It was like, oh, those whores that sell the ads, you know, like roll your eyes, right? I always like them. You can like them. It's kind of like a Google when anyone who doesn't have an engineering background comes into the room. They're like, oh, these are the people we have to put up with. but i would say that media and content creation and also i've always believed try to move away from something that's not ad supported that at least has at its core a subscription base but i think media and storytelling and the ability to craft stories and tell them in a compelling way and whether it's through subscriptions or sell ads against it is a is a industry that's always going to be strong.

39:18It's a rewarding industry. You just want to, one, be producing content for a small screen. And I would have a bias towards something that has a very strong subscription base. Subscription base. All right. For me, I would say, and I had a dinner, when I did a part, we discussed this because I think about it a lot. I think you have to be entrepreneurial as a reporter. You have to think about it. You have to think about doing something small because you can do very, very well. Whether it's me or Casey or Jessica Lesson, you can do very, very well, financially and professionally, if you have a small little outfit with costs that are in line with what you're making.

39:54Second thing is make stuff people want. Stop living in the same—don't assume they want what you're making at all the time. You are making a product. I hate to tell you, it's not a religion. You're not a priest. But you have to think of the consumer and the things they want. Are you talking about clickbait here, Kara? No, I'm not. No, I'm not. No, because let me get—Hether Cox Richardson writes the most like serious-minded stuff. She's making$5 million a year, you know, on her sub stack or whatever she's making. It's huge because she's making something people want. And you would not call that clickbait if you've ever read it.

40:26So there's lots of ways to get at stuff that doesn't have to be clickbait at 100%. Well, I would absolutely, though, I would encourage people to go into a career as journalism because I think going to work for a newspaper or being an investigative or a long form reporter, what I would argue is, I don't think the Marines is a good career. I think it's a great place to go for a few years. And I think journalism, I think if you have the chops to figure out a way to be thoughtful about journalism, live up to those standards, fact check, be able to write something in a narrative form that's compelling.

40:57I think those skills, you might end up writing, you might end up being one of these whores that calls me every fucking 48 hours to have lunch with some fascinating big tech executive. But guess what? But those people, they make really good living. Oh, I know. And so it's a great jumping off point. When I went to Morgan Stanley and I was in the analyst program in the fixed income department, I hated it. It was awful. But I'm sure I'm glad I did it because I picked up a lot of skills. I think the ability to communicate. And when you learn how to write well, you're not learning how to write well.

41:29You're learning how to process, reason, and think well. You are correct, sir. If I could give my kids anything, you know, my kids over the weekend, we had one nice conversation. They're like, they're 13, they're 16. They asked me a question that just cracked me up. They were both talking. I came in. I said, what's wrong? And they said, we just have a question for you. And I'm like, yeah. I'm like, they go look at me and they're very serious. I go, what do you do? What do you do? I said to them, I said, what I really do at the end of the day. You tell stories. I'm a storyteller. I'm a communicator.

42:00You are. And I'm in the media business, but my skill is I know how to communicate. And I wish I'd figured it out earlier. I really enjoy podcasting. I really enjoy writing. I like writing books. I love presenting. I love speaking. And I said, if you can figure out a way to tell stories, you're going to find a way to make a living. And they said, okay, what's the best training? I'm like, neither of you are going to like this. You need to start writing. That's where it starts. That's where it starts. It's great writing. You know, if you can, I hate to use him as an example, but Bezos in key meetings would have people write out their recommendations.

42:35He didn't want PowerPoint. He said, you need to write it because you need to think about the words. You need to think of the economy, the logic. There is something about the way the brain processes information. And also I'll say, we talk about the medium is the message. When people approach you, they approach you based on the medium through which they're introduced to you. There's nothing that moves people like the written word. That is true. Anyway, we got to get to our friend of Pivot. Let's bring him in.

43:07Chris Dixon is the founder and managing partner of A16Z Crypto, Andreessen Horowitz's VC fund for crypto and Web3 startups. He's also the author of a new book, Read, Write, Own, Building the Next Era of the Internet. that we're having a lot of Silicon Valley people on of late. We had Aileen Lee on last week. Welcome, Chris. Thanks, Karen. So it's been a rough couple of years for crypto and blockchain, but you're still making a case for it in this book. Actually, Scott has too in a lot of ways, but why don't you explain why you're still a believer? Yeah, sure. So, I mean, in the book, I try to explain what I would call the productive aspects of blockchains and why I think that blockchains can help us return the internet to its original ideals as being an open and democratic network, which is why I got involved.

43:54I've been involved in the internet for 25 years. I got excited by the early ideals of the internet. And look, if you fast forward to today, the internet's become very consolidated. The top five tech companies account for half of the NASDAQ 100 market cap, top 1 % of social networks, 95 % of traffic. Google and Apple have a duopoly on mobile operating systems. I'm sure you both have talked about this plenty. The internet, I worry the internet's at risk of becoming like 70s broadcast TV or something where you have three channels. And I think that's bad for the world. I also think it's bad for our business.

44:29You know, we're in the startup business. We want a dynamic internet. Yeah. Well, one of the things you did is, we just talked about that with AI and small companies, But you write about blockchain technology, and this is a quote from you, this is a chance to create the internet you want, not the internet you inherited. It's something we talk about a lot, like that the same companies are in charge. What do you mean by that? When you say there's lots of opportunities for innovation here that starts from ground zero, presumably, versus starts with Google in charge or Microsoft or whoever. Yeah, I mean, look, I think I'm guessing that we somewhat agree on the problem, meaning having five companies control everything is not ideal.

45:12I think there's different ways one could think about solving that. And so, for example, a lot of people talk about regulation. And I believe there is a role for regulation. I think we'll see what happens with DOJ and Apple and things like that. My proposal is to also try to do it through innovation. And through that, we want to create a new wave of Internet services that return power to the edges of the network. And so to give you an example, one of the reasons that social networks are so powerful is you're locked in, right? They have network effects. So, you know, I think you switched recently to Threads.

45:47And when you did, you had to give up your audience, right? You had to build a new audience. I'm still over there because I got there first, but go ahead. Okay, so maybe you're the exception. Most people have to. I only use it for certain things. But generally you're locked in, right, to these networks. And especially if you're like a creator, for example, and you build a business on TikTok or Instagram and you don't like the fact that they changed the algorithm or did some other thing, you're locked in. And so one of the key aspects, for example, in these new blockchain-based social networks, which is one category we're investing in, is a user owns his or her identity and they own their followers in the same way you do in the email world, right?

46:23So on email, if you have a newsletter on Substack and you don't like Substack, you can switch and you can take your followers with you. So that's just one example of how a different architecture by empowering users with ownership. This is the read, write, own. That's what I mean by ownership is a user controls their followers, not the service. That change in architecture, I believe, can have sort of profound downstream consequences on the ultimate control of these services and the economics. And, you know, look, these are, you know, these networks, I don't think we knew this 10 or 15 years ago, but today we know they control the flow of global money, business, culture, politics.

47:01They're very, very important. And I don't think that having four or five people, whoever they might be, maybe, you know, at one point you like the management and at one point you don't. I just am fundamentally against the idea that five people can control those things. I think that they should be more like the early web. You're talking to people who like to own. Chris, good to see you. Do you remember we've met before? When was that? I'm not sure, but I think about 15, 18 years ago, you came and spoke to my class at NYU. Yeah. I was going to say maybe at NYU. Wow, okay. Yeah. Well, anyways, good to see you again.

47:33Sorry. Yeah, no, it's been a long time. Sorry. Yeah. So, and this may be the wrong bucketing, but I think of blockchain in terms of front-facing applications as bucketed into three areas. There's the tokens, crypto, there's NFTs, and there's DAOs. DAOs haven't really gotten any traction. NFTs, I think, have lost 90 plus percent of their value. I think I'm being generous there. And the token market's been kind of, loosely speaking, in terms of market cap, been cut in half, even with its resurgence from its peak. Talk about those three categories, and where do you see the opportunity? Yeah, so I think with DAOs, so a couple things.

48:13There are active DAOs. A lot of them are around these DeFi protocols. So for example, Uniswap and Compound and Maker. What's interesting about them is they're networks in the same way that Facebook is a network, but the users control those networks. and those are networks that have active, Uniswap had trillions of dollars in trading volume and the users decide how to upgrade the code. Admittedly, that is early. Those are experiments. In my book, I have a section on what I call network governance where I talk about this. And my argument is essentially that it's a very powerful new way to design community-governed systems.

48:50I don't claim that we've fully figured it out. I think that it requires a lot more work to evolve. NFTs, like the NFT standard was finalized in 2020. Then we had this big rise in the market. Last year, in 2023, there were$8.6 billion in NFT sales. So I think the sort of decline has been exaggerated. But how much of that$8.6 billion do you think is false flags as people trying to pump up the volume? Well, we have a data science team and I asked them to pull these numbers and they believe that's removing wash trading, if that's what you're referring to. Got it. Thank you. That's a better term. So they do believe that.

49:27But look, admittedly, it's hard to get these exact numbers. But I think that's a pretty accurate number. And look, I think NFTs went through... The way I kind of look at these things is like the internet, we all, I think, lived through the internet bubble. I kind of began my real career post-internet when everyone thought the internet was over. And the way I view it is a lot of these new technologies go through these cycles where people get overly optimistic. And I think that probably happened with NFTs. And now I believe they're overly pessimistic. And now I think is the sort of the real building time sort of like - Let me ask you about that because you talk about the casino culture of crypto, which has become the dominant narrative.

50:03And obviously the Binance thing, Sam Bankman-Fried, et cetera. Talk about the less nefarious side. And what about the impact of those cases? The casino stuff, yeah. Yeah. And also the SEC did approve Bitcoin ETFs a few weeks ago that the price of Bitcoin has been falling. So overall, it's sort of in that moment. And I would agree with you, there was a A lot of real scammy stuff at the beginning of the internet for those who weren't there. And it went on for quite a while, for quite a while, actually. But talk about sort of that, how to shed it, because I think people think of it now with FTX. Even though they made a great investment in Anthropic, it was mostly not a good story for crypto in general.

50:41It's been, I mean, in my book, I have a long section where I talk about this, what I call the casino. And I'm, again, very against it. And I think it's destructive. I think it's destructive primarily to consumers who are victims of things like FTX. But I also think it's quite destructive to what I'm trying to work on, which is to build a productive side of these technologies. But look, the way I would describe it is a blockchain is a tool. Tokens are a tool, right? And just like any tool, you know, a hammer can build or a hammer can destroy. And there's two sides to the tool. And I think there's been a lot of attention paid to the casino aspect.

51:15There are, you know, like we have dozens of startups in our portfolio who are working on the productive side. And the reason I wrote the book partly was to tell that story, because I do think it's a bigger story than people realize. I also think that we need more proactive policy. We've been calling this for this for years, since before FTX, to put guardrails around the casino stuff to eliminate the offshore activity. I mean, look, I was involved. I mean, the reason we were not investors in FTX is I was involved with Coinbase for years. Coinbase, contrary to, I think, some popular perception. It was heavily regulated.

51:47They're Bank Secrecy Act regulated. They do full KYC and all their customers. There's a whole series of regulations. They're audited. They're a public U.S. company, Binance, FTX. There's a whole series of companies that are offshore, not audited. All these other kinds of, you know, all these running exotic products. I mean, that's the kind of stuff that I think we need to clean up and have very clear rules. Well, what about the Bitcoin ETF? It does sort of introduce consumers to it in a safer feeling way. You know, if I'm getting it from Fidelity, I certainly trust them more than even Coinbase.

52:19Yeah. And I think the Bitcoin ETF was a, I mean, my mind is a net positive in the sense of it's sort of more institutional acceptance. Oh, you say net positive. What's the negative? No, it's good. Sorry. I mean, it's good overall. Look, I'm very focused on the utility side of building applications. And so it's a new financial instrument. So for me, it's less of a focus. That's what I mean. And it's just not, you know, like I would love for some more of the news cycles to be focused on, hey, this person just came up with a cool new way to fight deep fakes. This person just came up with a cool new business model for creative people.

52:52I think specifically with the rise of AI, I see a lot of blockchain applications as the countermeasure in many ways. So, like, just to go back to maybe if I could talk about the deep fakes for a second, you know, we're now going to have an Internet awash with fake video, awash with, you know, very advanced phishing. Yeah, we have it. Yeah, we probably have it. But you can talk to Taylor Swift this week. Yeah, Taylor Swift. You can you can simulate people's voices perfectly now. They can take your voice from the podcast. Yeah, they can they can then call. I actually had a partner, Martine, who they called someone called his parents using his voice to try to get money.

53:24This is actually like a real thing happening. So in that world, we need to use, I believe, tools like cryptography to authenticate things. And I think, you know, for example, one one way to do that is you. One thing a blockchain is very good at doing is storing an immutable audit trail. And so you can have an immutable audit trail that says this video is attested to by, you know, it came from Kara Swisher. And it was attested to her by her as an example. And so it gives you this ground truth in a world in which you lose that. I think also blockchains allow for new business models for creative people in a world where like generative AI will put significant downward pressure on the ability for, let's say, an illustrator to sell things, right?

54:01If you can just go to a mid-journey or something. And so, you know, I think it becomes more important in an AI world. use uh so when i think about uh kind of the consumer facing technologies that have built so much value in tech and i think about the leadership there i think about the original gangsters i think about gates and jobs and then the new you know the new guys and they were all guys bryn page bezos these say what you will about them they were they're all visionaries and and i and i would argue at their core they were all i'll go out i think they're good people and the the two kind of iconic figures in blockchain are either in jail or going to jail.

54:45And my question is, who's the next generation of leadership that you would point to that will, quite frankly, just sort of clean this mess up? Because right now, from a public perception standpoint, it feels like a levered Ponzi scheme. I think there's just two very different worlds, Scott. So I think there's the SBF world. And then I think there's people like Vitalik, Buterin, and Vetherium. There's a very earnest, serious, thoughtful - Well, you mentioned Brian Armstrong. I think Brian got flack for years for being slow. I mean, their market share got low single digits. They were getting crushed by Binance and FTX.

55:23If you talk to any Silicon Valley VC, it was like, why is Coinbase so slow? Stocks aren't crazy. They're doing really well now. And Brian kept, I mean, I think what he did was admirable. He really kept his head down. He never changed what he does. He invests very heavily in security and compliance. And, you know, he hasn't gotten all the market share yet, but I think that approach has proven correct. I think Brian has done a great job. I think there's folks like Vitalik and there's a lot more. Like there's these conferences, like you go to DevCon, it's an Ethereum conference, and there's like tens of thousands of very earnest kind of, you know, thoughtful technologists.

55:58And it feels to me kind of like, I don't know, 2005 Web2 movement when I was, you know, I was part of that. And you go to these things and yeah, and look, they weren't, I mean, like you never know who the Larry Page is at the time. I mean, obviously Larry Page is, I'm sure, brilliant and everything else. I didn't know him then. But, you know, over time, these folks will emerge. And I do I do. I would say I think there's a very strong, productive, positive movement that I think just gets kind of crowded out by all of the, you know, the coverage of the casino stuff. But I think it very much exists.

56:31And that's what that's why I want to write the book. I wanted to go through in detail and explain this and make the case and show that this exists. Let me ask that then. I was just looking at Coinbase stock, which is up recently, but it's certainly down from to 2022, like quite a bit, like our 2021, especially when it was in the, you know, what is it? Two high was 332 and then it's now 131. It was down in the 80s and 70s and stuff like that. You know, Scott called Coinbase the AOL of crypto. Is that a good thing? No, I don't think so. It was a great thing for a while. It was great till it wasn't.

57:05Yeah. But it has been around for a while. And does it have to be mainstream? Because AI suddenly is everywhere mainstream. You know, it seems ubiquitous everywhere. Does it have to be mainstream or just where the electricity, where the, I don't know, the drywall or whatever? Yeah. In my book, I analogize blockchains to steel in the sense of like it's a building material, right? Because people sometimes say, what problem does it solve? And I really see it as a building material for building better internet services. So I think ultimately, if the movement that I'm part of succeeds, it won't be – some parts will be visible.

57:42The fact that you can – hey, there's a social network where I can exit. I can sell digital merchandise as a musician directly to my fans. You'll see parts of it, but you won't see all the plumbing. And I think most of the plumbing is behind the scenes. And by the way, it may happen with AI too. Maybe AI is just sort of baked into everything. I think it's probably a likely outcome. AI feels more like the internet, right? It feels more like a web or something like that. But if people wanted to get into crypto right now, where would you tell them to start? Yeah, I mean, I think there's a lot. So some examples of things I'm excited by.

58:16We have a few things around music. So there's a project called Sound XYZ where musicians today don't make money on the internet. They make very little money on streaming. A lot of them, if you ask them, will say they go offline and they tour and they sell merchandise to support themselves. And so there's various projects like Sound XYZ that let musicians sell backstage passes and digital merchandise to their consumers and add additional income stream. So that's one interesting area. There's a social network called Farcaster that's a lot like kind of something like Twitter or Facebook, except the user controls their name and their followers and can move around.

58:50And developers can hack on it. Kara, you remember early Twitter, how it became like a developer platform? It did. I was very excited by Twitter at that point. I was at that conference. Do you remember when they had that? I think you and I probably intersected. I used to blog about that stuff. I went back when I read the book and looked at it. Like a lot of my blog posts were about that. I was a developer. I was very excited by that. So Farcaster has a sort of active developer. Then they killed you off. They killed everybody. They killed everybody. So those are two examples. Look, there's also stable coins are quite popular in the developing world.

59:22There were something like$600 billion in stable coin transactions last month. So there are also other, you know, as I mentioned, NFTs are, I think, are bigger than most people realize. That was the original. Yeah, there's a bunch of interesting games that are launching. Like we have one, it's sort of a Zynga style game called Pirate Nation where you have NFTs as digital collectibles. EVE Online is a very popular video game. They're launching an NFT version soon, which lets kind of have more of a peer-to-peer economy where users can create spaceships and sell them to other users. So I think there's a really interesting wave of new companies that are much more accessible.

59:54Blackbird is one in New York where it's a restaurant. It's actually the founder of Resi and Eater. Ben Leventhal, you may know him. Yeah, I know. Experienced entrepreneur. Yeah, so he's doing an NFT. It's like a restaurant thing where you can use NFTs as a way to kind of reward loyal patrons. So I feel like we're having this kind of out of the downturn. It feels to me like a lot of people are kind of saying, hey, we got to really level up our game and have really great product experiences. And we're seeing an exciting wave. And I'm excited about it. I actually have two questions. There was a fear that a lot of these crypto projects were essentially VCs financing a group of intelligent guys who had found something they thought claimed was new technology.

1:00:38The VC fund would lend its brand, its capital, and create this project. They'd issue a coin. And then kind of leveraging the fact this FOMO of mainstream Americans who wanted to participate in what was hot. they then buy these coins. And because there's no SEC requirements on lockups or even disclosing when you'd sell these coins, that then these VCs would basically dump their entire stake. And that these projects were not financing any sort of growth or underlying technology. They were essentially just an elegant transfer of wealth from mainstream investors to the limited partners of VCs. Do you think there's any truth to those claims?

1:01:22I think it's possible. I think that, look, I mean, I would just say that one of our core, probably the number one thing that we have asked for and pushed for in policy for years is longer lockups. Okay. So we have 10-year, we're a venture fund, all of our funds are venture funds, including the crypto funds. They have a 10-year life cycle. We push for long lockups in the deals we do, but we don't have unlimited market power. If we go push too hard, they will do a deal with somebody else. And so I think the number one thing that the policymakers could do to improve the space would be long lockups on every project, because I believe that real technology takes years to build and you need to avoid that.

1:01:59Yes. Look, I think all sorts of things have happened. But Andreessen hasn't been subject to these lockups or self-imposed them. In all the deals we do, we have multi-year lockups. And moreover, we have... I'm sorry, I just want to clarify this. When you invest in a crypto project and there's a coin issued, you have a self-imposed lockup? Well, it's part of the lockup's in the term sheet. It's a term in the term sheet, yeah. We do and the founders do. So the crypto projects you funded in the last few years, you have not sold coins, you still own those coins? We have 94 % of the coins that we bought, we hold on all our crypto funds today.

1:02:38So wouldn't that indicate that Andreessen has taken an enormous drawdown or loss on these projects given what's happened in the crypto market? I mean, I'm not, we're RIA. I'm not allowed to talk about our returns, but I mean, we have 94 % of our tokens. Yeah, I mean, I think venture capital is a highly volatile market. Right. Yeah. And then my last case is just give us what you feel is the most compelling use case for consumers or enterprise. Say, it doesn't even have to be now, but in three years, what do you think the use cases are? Outside of speculation. Look, so... In my, sorry to keep pushing my book, but I have seven sections at the end of the book where I go through seven, like deep into seven areas of use cases.

1:03:23And I talk about social networking. I talk about finance. I talk about media businesses like NFT media businesses. I'll just give you one kind of maybe a flavor of a cool idea that I like as that's one of the sections, which is an area called collaborative storytelling. And the idea there is it's kind of Wikipedia style is internet fans get together and create narrative universes like the next Harry Potter and the next Marvel. And they get rewarded with tokens proportionate to their contribution. And then they go and the narrative universes they can create can then be licensed and made into movies and comic books and other kinds of things.

1:04:01Like that's a cool new idea that just sort of couldn't exist before you had crypto. But there's just like a bunch of there's games. I have a section on games in the metaverse. Look, I think that very clearly we're going to have the so-called metaverse. I know it's jargony, but it is a thing that's going to happen. And I'm not talking just strictly about VR headsets. I'm talking about people spending more time in 3D worlds through video games and things like this. We're going to have more and more people in 3D worlds. They're more persistent. It becomes a bigger part of our lives. And I think an important question is how is that metaverse structured?

1:04:31Is it structured with one company owning it? Does Fortnite own it? or is it structured like the web, like where there's a bunch of different, you know, like it's an open system and you can add a component to it. Like that's another important, you know, area that I'm focused on. I think, as I mentioned before, like in a world of generative AI, let's talk about your business, the media business. You know, the internet has operated on an implicit covenant between distribution, like search engines and social networks and websites, right? What happens in a world where you go to a chat GPT and you just get an answer?

1:05:03You don't have to click through anymore. Right? So we're very soon entering a world where you don't click through anymore and you don't go. I was on the board of Stack Overflow for years. Stack Overflow data was used to train a lot of these systems. And now Stack Overflow's traffic is way down. Right? So how do we train? How do we create content in the future? How do we reward content creators? So, you know, I have a section in the book on this about, like, different things people are working on and ideas for, like, new ways to use blockchains to create business models in a world of AI systems that give you the answers.

1:05:30That are protectable. They're protectable. Well, lawsuits first and then we'll do that. But one of the last things, I'm sorry, I just noticed Larry Fink, who was a big detractor of Bitcoin and stuff, of course, has done an about face and is calling himself a big believer. Of course, they have they file paperwork for an ETF, too, at BlockRock. So I think the finance stuff and the speculation, it might be a little calmer with these new, you know, it's part of that. It'll be part of that, presumably. That will still be. I know you're not in that area. You're in the tools part. But as a speculative tool of ownership, I think it's this will change it quite a bit.

1:06:02A lot of people feel like. I think that sort of institutional. And then they're limiting. Yeah, the institutional people are really piling in a lot more because it feels safer. And that makes sense. That makes sense from a lot of perspectives. Anyway, really fascinating book, actually. And we love to own. Chris, we're owners. And you know I am. I'm like tired of selling my stuff to other people. Anyway, again, Chris Dixon, he's one of my favorite venture capitalists. And that's a very short list. and the book is Read, Write, Own Building the Next Area of the Internet it's really worth your while to read it thanks Chris thanks Chris good to see you again thank you both for having yeah thanks Scott thanks Karen all right Scott I like having smart VCs on our program we've had two in a row I like them yeah it's more important they have good hair he had good hair so well done yeah you like his hair you're always liking their hair anyway anyway one more quick break we'll be back for wins and fails

1:07:01okay scott let's hear some wins and fails would you like to go first or would you like me to uh go ahead um okay i would i gotta say eugene carroll good for her keep going you know sister go ahead sister you do it it's like it's you know it's a fortitude to keep doing this amid all the attacks and his behavior was so heinous for the actual act and then he continued he's not changed his stripes. And I thought for her to do this is something else. And Robbie Kaplan, too, the lawyer, did an astonishing job. And it was in such deep contrast to Trump's lawyers who possibly, it was like she got him at Lawyers or Us, was really amazing, the stick-to-itiveness.

1:07:43And I think she's going to keep sticking to it. In my fail, if you've read, there's a great story in The Cut this week about Cecile Richards, who used to run Planned Parenthood. She has brain cancer, but she's doing all kinds of things. I've interviewed her. She was at Code in 2017, really a great leader on abortion rights. Also, she's still continuing. She's actually doing a chatbot called Charlie about good abortion rights information. She's still fighting. Brain cancer is a very serious illness she has. She seems to be doing okay, but it's still tough. What a wonderful, she's the daughter of Ann Richards, who I also revere.

1:08:25And just a really great person, one of these people that make a difference. And I really, I hope for her, it's not a fail, but I hope it's a fail that she has to suffer this. But I hope for her continued health. Yeah, 100%. I like both of those. So my fail is five elite U.S. universities, Brown, Columbia, Duke, Emory, and Yale, have agreed to pay$105 million to settle a lawsuit accusing them of weighing an applicant's ability to pay in their decision process. The plaintiffs described the schools as a price-fixing cartel. Yeah, you think? No, we all just accidentally raise our prices 4.5 % or 6 % a year in lockstep with each other.

1:09:12Highly selective U.S. universities have long benefited from exemption from federal antitrust laws when sharing formulas to measure prospective students' financial needs under the condition that their admissions processes need to be need-blind, meaning they could not factor in whether a prospective student was wealthy enough to pay. The schools did not admit any wrongdoing. You know how you get your kid into school? There's a little box in most applications that says, if you check this box, you will never ask for nor accept financial aid. We have become such fucking whores instead of public servants.

1:09:49Wow. Okay. All right.

1:10:19So this rejectionist bullshit culture, we take so much pride in rejecting 90 plus percent of our applicants. But the other way we sequester access to Americans, good kids, is by making it just unaffordable with all this ridiculous bloat and also this price fixing. Because at the end of the day, don't kid yourself, we're not nonprofits. We are in the business of money. We are in the business of money. And we need more competition. We absolutely need to hit these guys hard. We need more. They should not be subject to nonprofit status. They should not get government funding unless they grow their freshman class sizes faster than inflation.

1:11:00And there needs to absolutely be antitrust to go in and look at the price fixing here. And you want to talk about starting a kid off. We have the most anxious and depressed generation in history, kids, young adults under the age of 30. and one of the ways we put them on the path to this anxiety and depression-filled life is we say, okay, we're going to decide that you failed as a parent unless you send your kid to college. And the kid works his ass off, but maybe isn't really cut out for college. Two-thirds of kids don't end up with a traditional four-year degree. Some kids just aren't cut out for college, but you failed as a parent as a kid if you don't go.

1:11:37So the kid tries to go to college, doesn't get into one of these rejectionist elite colleges, gets arbed down to a second-tier college, but, oh, because of the cartel, you're paying a Mercedes price for a Hyundai product. After two years, it's obvious the kid wasn't cut out for college, leaves, but he or she doesn't get to leave the debt. And guess what? The school doesn't care. They got the cash to check. They're not on the hook for that bad debt. Scott is on a roll. And you end up with a 20-year-old that has nothing, has no certification, no job prospects, but they got$100 ,000 in debt. I like this effort by you.

1:12:11I like it. All right, what's your win then? Sorry, I was being very indignant there. I love your indignancy. Someone said that to me. Scott's mad about colleges, right? And I'm like, uh-huh. We're good. I don't want you to keep going. Yes, yes. I'm inside of the bowels of this place. If we gave the admissions directors and the chancellors of some of these universities an enema, we could bury them in a fucking shoebox. They're so full of shit. Okay. All right. Let's end on a positive. That was good. That was good. Okay. So my win is Ted, the series. Have you seen it? Ted Lasso? Well, you know Ted?

1:12:47No, no. Ted, there's Ted the movie. Oh, they did. I haven't seen it. It's Seth MacFarlane. Yeah. He's so great. Who is a genius. Genius. He's a family guy. Genius. That guy's a genius. He has to be a billionaire. That guy deserves to be a billionaire. I think he does okay. Oh, my gosh. Anyways, Ted, I've been watching with my 13-year-old. Hashtag inappropriate. It is so funny, so inappropriate. and in its own way, occasionally, accidentally dips into being somewhat sentimental and kind of moving. It is. He can be. Yeah. This guy and this show and the actors are wonderful. The kid is wonderful.

1:13:20And what I will say is if you have a teenage boy and a teenage girl too, it's such a fun way. It's such a fun series. It's a dirty show, but funny. It really is dirty. I want to be clear. I'm not endorsing watching it with your 13-year-old. You know what happened to me is I let Louis watch it when he was, I don't know, 10 or 12 or whatever. mistake. And then Alex would sit around the corner and watch it. And he always goes, the reason I'm the way I am is because you let me watch Ted. But I didn't know he was sneaking it. And so he's violent. There's no real sex in it. It's just rude. There's a lot of plushy penis stuff.

1:13:54And anyway, I get it. It's delightful. He's a delightful, delightful man, Seth MacFarlane, and deserves every ounce of money he gets for his wonderful creations. I mean, I get so, I'd steal other people's humor. I just, the lines just, if I go to, this guy doesn't want to go into an office, like if I go to an office, who'll let the male man in to pee? I had a vasectomy after my, after, after my testicles look like a frog holding its breath. The writers on this show are just, let's, let's take Sharpies and circle the parts on each other's bodies that need improvement. It is such a show for Scott.

1:14:36All I want is whatever they're smoking. All right. Good. These guys are so good. Anyways, it relieves me. It relieves me from mendacious fucks posing as good people that our university leadership is Ted. Be Seth. Don't be university shitheads of universities. Be Seth. The pro-fane series. All right. We want to hear from you. Send us your questions about business, tech, or whatever's on your mind. Go to nymag.com slash pivot to submit a question for the show or call 855-51-PIVOT and watch a dirty show with your teen. That's what we recommend here on our show. Scott, that's the show. We'll be back on Friday for more.

1:15:15Read us out. Today's show was produced by Lara Neiman, Zoe Marcus, and Taylor Griffin. Ernie and her Todd engineered this episode. Thanks also to Drew Burrows and Mia Silverio. Nishat Kirwa is Vox Media's executive producer of audio. Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Vox Media. You can subscribe to the magazine at nymag.com slash pod. We'll be back later this week for another breakdown of all things tech and business. Cara, I will see you later in the week.