Supreme Court and Social Media, Cybertruck Troubles, and Guest Matt Mullenweg

24:53I've seen him show it off. I've seen him drive it around town. But I'm like, everyone else has got the truck out. Let's go, dude. There's still, though, this unique, and it's fairly new, peanut butter and chocolate to drive valuation of someone who's an iconic figure who's a great storyteller slash visionary. and then using social media to massively increase your stock price, then getting access to cheaper capital, investing that cheaper capital, and then pulling away from the competition. One in three companies 20 years ago that went public were not profitable. Now two in three are not profitable.

25:30So the narrative is now important in the numbers. And to his credit, his narrative and his leveraging of social media, it's just unparalleled as evidenced by the fact that just, I think 30 or 60 days ago, they put out this big press release. We're announcing the Dojo supercomputer, leveraging AI, which helps, gives us an advantage around modeling and creating scenarios around autonomous driving. The market goes, oh, wow, Elon Musk, AI, plus his ability to promote this on his social media channels. The core competence of CEOs now in the growth economy, it's storytelling. It's the ability to leverage these new mediums.

26:10They're there. We'll see if people buy this truck. I just think - I'm not saying it's warranted. Right. I'm not saying it'll last. There's got to be actual sales here. No one gives a shit what Mary Barra says. Right, but they've got to be - Have her announce a supercomputer. I get it. No one cares. He's got to sell the cars and he's got to make them profitable. You know what I mean? That's it. I don't think his narrative is as flexible as it was, but we'll see. Yeah, I'll tell you what he should do. He should buy Jon Hamm and have Jon Hamm play him. That's what he should do. And then he'll be fine.

26:38I'm watching Mad Men with my 16-year-old, and all I keep doing is pausing it and going, just so you know, at work, that is not appropriate behavior. You're not supposed to do that. This is a show about what you're not supposed to do as a boss. Anyway, let's get to our first big story.

26:57The Supreme Court is temporarily allowing the Biden administration to continue efforts to get social media companies to remove misleading posts. Late last week, the Supreme Court announced it It was pausing an appeals court ruling that limited the government's ability to communicate with these companies. The court has agreed to hear the case this term, in addition to several other social media First Amendment cases already on the docket. It's a win for the Biden administration, but I don't know in combating misinformation, at least for now. The original lawsuit claims that government officials censored productive speech by urging tech companies to modify posts involving COVID and the election.

27:32The case has already seen lots of back and forth with various appeals and injunction. Missouri's attorney general, one of the parties who brought the suit, called the government's actions the worst First Amendment violation in our nation's history. I don't know. It's interesting. What's the best argument for the government to make? Well, the best argument is that we have First Amendment rights. And if we pass a law that says that social media firms, I mean, this is so ironic because Congress passed a law that said that they're not subject to the same scrutiny of the content they put out as every other media company called T30.

28:06But I would imagine the defense for the White House or the legal claim of the White House is if we pass a law saying you can't say this stuff, then, yeah, that's a violation of the First Amendment, which is governmental passing a law that limits free speech. But I think that they have some rights to free speech and can say to these companies, when you are saying these things and they get algorithmically elevated and both of us, including the executives of your firm, acknowledge that there's no evidence that mRNA vaccines alter your DNA. Can we work together to stop the spread of this obviously false information that is creating greater levels of death, disease and disability?

28:48When there is a deep fake of Nancy Speaker Pelosi that makes her appear inebriated, can we all agree that this is fake, this is bad for voters, this is bad for America, and we'd appreciate, we'd like to know what you're doing to stop this. Isn't that their First Amendment right? It is not, Scott. You are a terrible lawyer. No. The government, it's the government. They're speaking as the government, not as themselves. The government's not supposed to do. It looks like it's quashing free speech. I think that's their argument. I think where the argument is, even if it's not a law, you're violating First Amendment.

29:22You could be. You could be. I think I think this report is exactly who has to weigh in here. But, you know, the conservatives are also attacking besides trying to silence academics, as we've talked about before, the agency CISA, Cybersecurity and Infrastructure Security Agency. Thereafter, I interviewed Jen Easterly, who's running it. This is the group that's, you know, trying to protect elections. The guy that Trump fired for saying the election wasn't stolen. If you remember that, they're trying to attack it and it's funding the hard right Republicans. They think they're gone too far and are looking for ways to rein it in.

29:57This is very typical Rand Paul. But this is what he says. SISA has blatantly violated the First Amendment and colluded with big tech to censor the speech of ordinary Americans. You know, they're going to do some damage here. Can I just ask you a question? And I'm generally asking for illumination not to make a statement. Everybody talks about the power of the presidency. the most powerful thing about the presidency is the bully pulpit. And that is his, and it's always a him, it has been always his to date, their ability to say something that endorses, conjols, shames, sets a vision, you know, tries to influence people and organizations' behavior.

30:34So is the basic argument here that the bully pulpit is fine, but if you're not doing it in public, you're doing it directly to a company, it's no longer the bully pulpit, it's a violation of First Amendment? Yeah. Yes, it could be. If it's the government speaking, I don't know. I think that's why it's got to go to the Supreme Court. Other cases on the court dockets involve social media and First Amendment. They may call for sweeping changes. Other cases involve whether public officials can block people on social media and whether state laws can regulate how social media companies moderate content.

31:06We do have an inkling of how some of the justices might approach the White House case based on this latest ruling. But Justices Alito, Thomas, and Gorsuch publicly dissented on the court's decision with Alito calling out government censorship of private speech. They are on this case. They're not giving up. It has the same vibe as when they went after abortion and everything else. But I think it's— I think it's the same group of people constantly bitching and moaning that their speech is being censored. Yes, but I think it's a coordinated effort by a lot of these groups to hit academics, to hit government, to hit anybody who questions anything.

31:45Because they do not want a government agency declaring an election free and clear, even though that's the job of the government and things like that. We have electoral boards. Isn't that what they're supposed to do? I know, but Seitz has done invaluable work. And Trump fired him anyway. And they still do invaluable work. But all these Republicans are bowing out of their help around election security to their discredit. And now they're sort of crawling back a little bit. But, you know, they have to make these things about free speech. We'll see. It's an important case at the moment. It is. All of these are.

32:20And our Supreme Court should be the one to weigh in. And I'm scared that they're going to weigh in in the wrong way, but we'll see. All right, Scott, let's go on a quick break. When we come back, CEOs and companies feel the pressure to weigh in on the Israel-Hamas war. We'll speak with a friend of Pivot, Automatic CEO Matt Mullenweg, who has some news to share about his company.

33:02No hold music, no generic answers, no frustration. Visit sierra.ai to learn more. Not all journalism is the same. Take The Guardian. Our coverage has something unique. Fierce independence. Nobody owns us or tells us what we can and can't say. So we're free to report the whole picture. We connect what's happening in Washington to the rest of the globe. Expose corruption wherever we find it. and give first perspective on everything from wellness and soccer to culture, the climate, and more. Read, watch, and listen to The Guardian for free at theguardian.com.

33:46Scott, we're back with a continuing debate over whether companies should speak out about the Israel-Hamas war. We're seeing the consequences of doing so with a number of companies, CEOs, and entertainers this week. Let's start with an update to Web Summit story we discussed last week. Like CEO Patty Cosgrave announced over the weekend he's stepping down. This is after the backlash of his comments accusing Israel of committing war crimes. Scott, did the news of his resignation change your decision to pull out of Web Summit? Are you going now or what? I was called by a couple of media outlets and I said, I'm not, I have no comment.

34:19My actions speak for themselves. And they said, well, off the record, are you going? I'm like, absolutely not. And I said, why? And I'm like, because this is meaningless. And I think it's an interesting lesson in corporate governments that the media has gone for this head fake of, oh, he's stepping down. Let me be clear. When you own 82 % of a small company, stepping down a CEO is absolutely meaningless. All it means is he can go next week. He can get 82 % of the profits. He's still in charge. He's still in control of the company. His card will say founder or chairman and not CEO. An analog would be, remember all the shit that Chamath Palapattaya and the owner of CrossFit, the CEO, got a lot of grief for making what people perceived as insensitive comments.

35:05Yeah, yeah. They didn't ask Chamath to change his title from owner to shareholder. They said, you need to sell your stake. I think the NBA said, you got to sell your stake. They didn't tell the CEO of CrossFit, change your title to chairman and all is forgiven. They made him sell his stake. And I just find it when you're, so I've managed small companies about the same size. I would immediately, as soon as someone was great and I was worried about them leaving, who was a senior person, I'd say, you be CEO, because titles matter to people. But I was always in charge. You know why? I was the largest shareholder.

35:38And I controlled the board. I controlled all decisions. And be clear, Patty Cosgrave, and you may decide that's enough, the public embarrassment. You might decide to forgive them. Fine. But be clear. nothing has changed here. Yeah, he's still in charge. He's still in charge. He will still get 82 % of the profits. He will still make all the decisions. My bet is that whoever was actually doing all the work, they just give him or her the CEO title now. But I just find it hilarious that the media is acting as if this is some sort of change in anything. It's not. It's laughable. I agree. It's laughable.

36:14It's just when you own 82 % of the company, If Bob Iger stepped down as CEO, he loses his compensation. He loses his authority. He's out. That's a big deal. When you're the 82 % owner of a private company, the only title that matters is largest shareholder. You can call yourself general consulate of Australia. It doesn't mean a damn thing. No one doubts who's in charge at News Corp. The guy who controls all the voting shares. Yeah, it's the Rupert Murdoch test. Is he gone? No, he's not gone after all the shit. The Dominion, the sexual harassment lawsuits. Oh, my God. You're right. You're 100 % right.

36:52It's risible. It's risible. Look up that word. It's a good word. Laughable is what it means. McDonald's is finding itself also in a difficult situation with franchises taking sides in the war. Early this month, McDonald's franchise in Israel said it would provide free meals to Israeli soldiers. Some McDonald's franchises in the Middle East have made statements distancing themselves from the Israeli franchise. Others made donations to Gaza in solidarity with Palestinians. McDonald's Corporation has set the company's top priorities ensuring the safety of its people and teams on the ground. Employees at Google, Meta, and Amazon are pushing management to speak out against the war, according to a report in The Washington Post.

37:28There was just today, there was a story about a woman at CAA who had a post criticizing Israel. She has big clients. Her name's Mahat Dahil. I'm not sure I'm pronouncing that right. Whose clients include Tom Cruise, Natalie Portman, Reese Witherspoon, Anne Hathaway. She came under scrutiny, according to The Hollywood Reporter, for an Instagram post that had been highly critical of Israel and referenced genocide. The post was later deleted and the agent apologized for the remarks, but she's resigning from her leadership role in a division. Around 20 % of the largest companies in the S &P have issued formal statements on the Israel-Hamas war as of last week, according to Bloomberg.

38:08Nearly all of those 100 companies released public statements on Russia-Ukraine, so they're very wary here. We'll get to Dave Chappelle in a second, but first talk about companies very briefly. Like it's situational. And the reason why you have a kitchen cabinet and you have a board of directors and you have thoughtful people hopefully you surround yourself with is one situation is not like the other. I don't think a small company hosting a web event in Lisbon has any obligation or, quite frankly, any rationale to weigh in here, especially when your comments are going to be seen in terms of the timing as being an apologist for terrorism.

38:45And on a shareholder basis, my advice to companies on political issues from when I'm on the board is unless we have operations directly impacted by this, unless we have people on the ground being impacted by this, you know, unless it's a no brainer. I think when Russia invades Ukraine and starts bombing maternity wards, I think that's a no-brainer. But the problem is when you take a political stand as the CEO, you're implicitly or explicitly putting pressure on your employees to agree with you. And if they don't agree with you, to be silenced. So my advice as someone on the board who's thinking on a risk-adjusted basis about shareholders, if you're McDonald's, I'm not sure you can avoid not making a statement about this because you have a big business in Israel.

39:36I feel for them. I don't want to pretend that I understand exactly what they should do. My advice to them would be, to the extent you can, stay out of this shit. You know who did a great job, I have to say? Who's that? Ziggy Marley said, free Gaza from Hamas. I was like, that's a very clear statement. And he condemned anti-Semitism and the attacks. You know, Biden's coming under increasing pressure from Arab Americans, too, as Israel prepares to invade. So this has lots of chapters, you know, for these companies. And then you have another person who's, of course, when I saw it, I was like, of course, he had to say something.

40:13Comedian Dave Chappelle had a show in Boston where he condemned Hamas, but also reportedly criticized what he called the war crimes in Gaza. This led to both tears and walkouts. You know, I just, I don't think any, there's a particularly good answer in this situation, unfortunately. Especially as things unfold. If all of a sudden Israel starts to get really aggressive in this, what is a information war, and they have been aggressive, starts to get aggressive. I see I'm correcting myself because I'm like, I'm not thinking it. Yeah. Yeah, but I want to channel my Jeffrey Sonnenfeld here or my Sam Harris.

40:51And that is when a comedian or anyone else says this, but also this, I just don't think the moral equivalence exists here. They accused Israel of war crimes. And here's the thing. That is a damaging accusation because in Israel, there are war crimes. If you take hostages, that is a war crime. If you kill noncombatants, that is a war crime. If you take video of you killing a son and then you send the video to all of the son's contacts on his phone, including his parents, that is a war crime. If you murder and mutilate children in front of their parents and then kill the parents, they force them to witness this before you murder them, that is a war crime.

41:41Hamas, there is no such thing as a war crime. That is their approach to combat. And so when people say Israel is guilty of war crimes, they are acknowledging that Israel, and assuming that damages them and that's an insult, they're acknowledging that Israel lives in a superior society than jihadist fundamentalists who don't understand their approach to combat is war crime. And so to pretend that these two have any sort of moral equivalence is, quite frankly, is outrageous and ignorant. Well, we'll see where it goes. We've been talking a lot about misinformation on social media with the war. I assembled a panel this week to talk about it.

42:24And I want to play a clip from this BBC verified journalist because you have to remember there are people out there trying very hard to get it right, to get people good information, even if good information makes it really hard to decide what to say. Let's listen. What we want to know, first of all, you know, when was this piece of video filmed? Where does it come from? Who's the original source? Can we actually source the video to the person who filmed it? The platform that way was first shared, because obviously you put something on Telegram or on WhatsApp, then it travels across platforms. So just because you see it on TikTok or on Instagram doesn't mean that's where it came from.

42:58You have to source it. You have to find out who filmed this video, this piece of footage, who first posted it online. And then you have to contact them and talk to them because they probably have more context. Then the second thing is, is this actually the entire footage? Is there a longer version? Have other people been at the scene where this video was filmed? Meaning trying to manipulate it to look. Well, exactly. Has it been edited? I appreciate journalists trying to do that. I still think even correcting the misinformation is still you then get what do you think, right? Even if you know exactly what's right.

43:31As you were noting, there's lots of reports about what happened on the attack on the Israeli citizens. A majority of viral misinformation about the Hamas war on X is being pushed by verified users, by the way, according to a recent study. When you say verified, you mean people with a troll check, a blue check? Yeah, troll check. Researchers have analyzed 250 most engaged posts in the first week of the war and found that verified accounts were responsible for 75 % of that. So let's just be clear. Verified account means you've paid$9 in some cases to spread misinformation or elevate your content to have some veracity which you have not earned on your own.

44:05Yeah, I agree. I agree. So it's a big information mess, which I think that's the whole point. Let me just ask you lastly, we have to bring in our guests in a minute. You pause, don't you, before you say things? Or maybe you don't because you have to be – it's not for fear. You don't want to upset. I pause because I don't want to upset people. I'm like, I got to be thoughtful here rather than knee jerk, right? Like, say something off the top of your head in life. I think that's the problem I have more than anything. I don't know. You don't want to. Look, I'm conflicted here. I think if you have economic security and people who love you unconditionally, you have a moral obligation to speak your mind and speak the truth.

44:54Because I do find that over the last 10 or 20 years in academia and in media, there is a certain narrative that has emerged. It's like, this is the narrative you're supposed to adopt. Yeah. If you veer outside of that narrative, you risk your economic livelihood or being shamed. And as a result, when we all start barking up the same tree, we get stupid. So I do think you have an obligation to speak your mind. I think on issues like this, to take a breath and try and understand both sides. Fareed Zakaria, similar to what you said about Ziggy Marley. Yeah. When I interviewed Fareed Zakaria, he kind of summed it up perfectly in one very simple statement.

45:24He said, I have a lot of empathy and sympathy for the people of Gaza. I have no empathy or less empathy and sympathy for Hamas. That to me sort of summarized it. You know, it's like, you know, I get it. That makes sense. And to just be able to articulate and to be able to, you know, see, if you will, the nuance of the situation here. But I don't buy this. The fact that NYU students, the fact that young people have conflated the struggles of people in Gaza with civil rights, I think they are incorrect. Yeah. I don't, you can call them strident, but I think this is a situation here where there is a wrong and a right.

46:04And let me be clear, there are different forms of evil. There are different forms of wrong. I have said that far right policies in Israel have done them no favor. You could argue that they're inhuman. I think that Netanyahu is a criminal, but you have to call out, you have to, there are shades of moral ambiguity, but there is a right and a wrong here. And I try to be, you don't want to diminish people. You don't want to make people feel bad. But what I see here is just a disturbing virus that is airborne that you can't see, that is rooted in anti-Semitism. And I'm not trying to sound holier than thou here.

46:42On a risk-adjusted basis, it's not a smart idea. If I had a big company and I was the CEO, I don't think I would say these things publicly because I would be assuming that everybody feels the same way as I do and I would be taking unnecessary risks with other people's economic livelihood. But I'm a 58-year-old that has a small company who has been blessed by America, who has been blessed by people who have risked life and limb to push back on anti-Semitism. So we have an obligation to, like, in my view, we have an obligation to speak up. Yeah, I think that's well said. Well said. Anyway, let's bring in our friend of Pivot.

47:26Matt Mullenweg is the CEO of Automatic and co-founder of WordPress. In addition to WordPress, the Automatic portfolio includes Tumblr, long reads, Pocket Casts, and more. Matt, it's good to see you. How you doing? Likewise. This is a little earlier than I'm used to getting up, but for y 'all, I'm happy to. Yeah, I'm in San Francisco, so it's early for me too. So for people that don't know, we started all things at Neat Recode on WordPress. And I know Matt very well. He was a tremendous partner. And it was early. We were an early partner of yours. There were a lot of different platforms. And we just thought you had the highest quality platform.

48:01And you were always an excellent partner trying to figure out how to expand our little blog experiment. Thank you. And Scott, I think you used WordPress as well. No mercy, no malice. Oh, dude, you owe me lunch and drinks. We have been using WordPress across everything. You are, I mean, you've done what few people have done, and that is you've taken on the big guys and you're winning. Well, that's what we're going to talk about. We're going to talk about. So this is our first Pivot exclusive. Talk about this acquisition of what you're buying and why, because it's in that vein of what Scott absolutely just said.

48:36Yeah, and it's a new area for us. So Automatic typically, which is the holding company behind like WordPress.com, WordPress, Enterprise, VIP, et cetera, has worked in publishing for a while. We moved into commerce in 2016 with WooCommerce, which is like open source Shopify. And now we're going into messaging, which is a much more competitive area in a lot of ways. So we're doing this with the acquisition. It's a company called Text, T-E-X-T-S.com. and it is a desktop app, which has sort of reverse engineered all the protocols for all the different messaging apps. So it brings in iMessage, WhatsApp, Signal, Telegram, LinkedIn DM, Instagram DM, Messenger, all these different things into one interface, one program as a power user tool, kind of like a superhuman for messaging.

49:24And yeah, we are announcing it on this pod. So thank you so much. So why did you buy this? From your perspective, why? Why does that help you? You've talked in the past about making Automatic, the quote, Berkshire Hathaway of the internet. What do you mean by that? And what's the importance of doing this and sort of providing a smaller company rather than the bigs, I assume? Some of it was born out of personal frustration. So I don't know if you have like these multiple messaging apps. It's hard to track who you messaged on which one and everything like that. I found myself sort of getting very behind.

50:00And so went out in the market and actually automatic ended up making some investments in this space over the last few years, including an element, which is a mixture company, Beeper, which is another app which has some similar things, but differently. And came across text and was really just taken with the product. I also I'd say finally that I really enjoy working in areas that I feel like we can spend the rest of our lives on. And that are important kind of human rights for freedom. Because as you know, everything we do is very user-centric and open source. So publishing, commerce, messaging, between those three, you cover a lot of the human condition.

50:36And they're complementary. Because, of course, when you publish, you want a distribution for it. And so being able to work with all the different networks seems great. So the final reason is the regulatory framework. So products like this, I think, have a big risk of being shut down or blocked by the different networks. The bigger ones. Meaning the bigger ones have outsized control over people, correct? Yeah, they can do subtle things. Like just sort of like block your clients or make it so your messages don't send. And I think right now with the regulatory frameworks, the antitrust frameworks, particularly the UKCMA, what's going on with the EU regulation, it would be a bad look for the Apple, Google, Meta to block this because it's completely user-centric and it maintains 100 % encryption.

51:23So it runs 100 % client-side. So it's just as secure as their desktop apps. Right. But you're fighting against bigger players, right? That can do what they want. I would say we're fighting per se in that they might not love this, but it's supporting all the networks. So it's not like an alternative network. So if anything, it'll make it maybe easier for people to stay connected or keep up with their WhatsApps or their LinkedIn DMs. Particularly, I think channels you might not check as much, or they don't have a great interface, like a LinkedIn DM, which kind of gets a bad rep, but actually it can be really, really interesting.

51:56And sometimes I'll have like a gym in there and I just miss it because I don't log into LinkedIn very much. Whenever I'm in a VC meeting and someone's pitching the company, if it looks like it's directly competing against anyone in big tech, the VC's like, we're out. You can't compete against these guys. And you are. You're competing against players of much deeper pockets of capital who can bundle this with software that's everywhere. Like when you're in a strategy meeting thinking, okay, every day we compete against Microsoft. Every day we compete against Adobe. What is it that you think entrepreneurs and companies like yours can bring to compete against the big players and actually not only survive, but thrive?

52:42First is speed, and that's probably the most important. So big companies, with rare exceptions, typically have trouble moving as fast. Second is focus. So focus, I would say, you know, messaging is very, very important, but look how much trouble like Google's had getting it right with like infinite money, infinite resources. I think some have related to focus is also the incentives of the managers or the people kind of running different divisions in these companies. And then finally, like how can you use their weight or their size or their business model against them? So for example, with Tumblr, which is one of our products, all the other social networks are really dependent on advertising.

53:29So what we tried to do in the beginning after we bought it was create like a non-advertising upgrade. So with messaging, all the big networks are really incentivized to get you to use their thing, and they don't want you using anyone else. So they do various things that try to lock you in. most notoriously, I would say iMessage, which of course is kind of Mac and iOS only. And they don't allow interop. In fact, in the US, there's a whole thing where like teenagers get excluded from chat groups because they don't want to be the green bubble in the group. But we can say, hey, let's support all of this, which I would say is actually the far more like user and customer centric version, because, you know, as users, we use all these things.

54:09And so the companies want to pretend you don't, but we all do. So that's also something we've taken a big approach for. So we just try to integrate with everything. Open source also makes that easy because people can write plugins for anything. So I think if you keep those three things in mind, you can compete with the big guys and in fact thrive. Because they're all trying to keep people in there. You used to call it a walled garden, essentially, trying to keep people using their products over. They're not trying to advantage the consumer. They're trying to advantage themselves. I'm curious, how are people using Tumblr?

54:39Why do you think they're still using it and what are they using it for? For better and worse, it has a little bit of a niche thing going for it, which is it's primarily kids under 25, which I actually wouldn't have expected before we bought it. And they like a few things there. One, it can be anonymous by default. So especially as you're growing up, you can kind of try on different identities. It's not attached to your name forever and ever. People love that they can follow like fandoms or fan fiction is really big on their art and artists. It tends to be a much more creative network. And then finally, the other thing about it being mostly young people is their parents aren't on it and their teachers aren't on it.

55:22So that's obviously that doesn't work forever. If we like 10x Tumblr, you have a lot more parents and teachers on it. But today where it is in sort of like the 15, 20 million MAU range, it tends to be like. What did you pay for it? What did you pay for it? I love that question. What did you pay for it? Like three million dollars? Yeah, we paid a de minimis amount. I think it's been reported$3 billion, but it was free like a puppy. So, but the more interesting thing was a few years before that, Marissa and Aaron Yahoo paid$1.1 billion for it. So you bought it for 0.3 % of the purchase price. I would argue that it's arguably the best and the worst acquisition in history across one company.

56:04And you're on the right side of that trade. Yeah. Yeah. Although he said it's like having a puppy, like they chew the shoes, right? It was kind of a, usually in acquisitions, you have something where there's like intimifications or guarantees. We took on all the liabilities, all the lawsuits, all the everything that we're pending with Tumblr. And we've invested a lot in it over the years. So internally, we actually budgeted a pretty big amount for what we need to invest or turn it around. Right, right. So one of the things that's involved in this one and others, you're a big proponent of open source, whether it's on your platforms or AI.

56:37Explain why you think it's so important. Automatic launched an AI writing assistant for WordPress in June that can generate and edit text, for example. Explain where you are right now on open sourcing, because it does feel like the bigger players continue to grab all the good bits, essentially. Although it's interesting in AI that Meta has taken a more open source approach. So I believe it's not hard to see how more and more of our lives are influenced or actually kind of run by the software that we use, you know, from everything, what defaults are in operating systems, what websites work or not on the web.

57:16Software open source, particularly the GPL, which is the license we use for pretty much everything, comes with like a bill of rights. So where most software you click through, and when you click on it, it's like, here's all the things you can't do, and here's how the company is protected, not you. The GPL gives four freedoms that sort of are user-centric, that protect you. It's the freedom to use it for any purpose, the freedom to see how it works, freedom to modify it, and the freedom to redistribute those modifications. So this kind of bill of rights for software, I think gives us agency autonomy, allows us to be sovereign in our digital choices.

57:48And so as more and more of our lives become dictated by that, we're gonna become less and less free if we're using proprietary for the majority of our software. So now most people don't care about what I just said. So that's why like with WordPress, we're like, well, I was radicalized to this young, open source is like my religion. And I was like, but no one cares. So we just need to make the best software. So that's what we, so the approach we create is we just try to use these principles to create software that is, again, super user-centric. And if we create a better user experience, people choose it.

58:21And so they might not know they're getting this thing that makes the world more free or the web more open, but they will. And if enough people do it, it actually even influences the competition, will make the proprietary folks open up a bit more. So, for example, WordPress has a really open import and export format. We've tried to make it easy to leave. As Sting says, if you love someone, set them free, right? So this format is actually supported by all of our proprietary competitors, like Wix and Squarespace and et cetera, because it became the industry standard. And I think that's a very powerful way that even if you're not a majority market player, you can influence the proprietary competitors to be more open.

58:58And who do you see in terms of the big players? Who kind of keeps you up at night? If there was a big player, you thought, is it Adobe? Is it Microsoft? Who do you look up to and admire and thinks has just the kind of power to come for you, if you will? Hmm. That's a good question. One thing I do think about is we try to not to go head to head with a place where we don't have some competitive advantage. A good example of this is actually advertising. We do very little advertising. We try to allow like word of mouth and community to spread our products. And partially because like when we did do a lot of advertising, all of our competitors had so much more money than us.

59:39And that kind of head to head fight, they could just outspend us typically by like hundreds of millions of dollars. That's tough. You know, with the big tech, you know, the Microsoft, the Googles, Metas, we both compete in some areas, but we also partner in so many others. So I do think that particularly with messaging, although they might not be able to do this themselves, this kind of like multi-client thing, I think they're actually going to be happy that someone is doing it, someone independent. Because like I said, it's something that they probably will need to do anyway. They're going to need to open up with like coming regulation over the next year or two.

1:00:20And this will actually be something they can point to and say, hey, we're glad this exists. I guess the final, you know, one person who's intimated, they might be working on the same thing. Although it's just a tweet and you never know what to do with these is Elon Musk. Yeah. Oh, yay. Yeah. Someone, you know, he's a complicated Shakespearean character, but yeah, a head-to-head competition. It's not like a, you know, I don't think I would ever go into like the solar or the space rocket space because he is, you know, fiercely competitive. and executed well in those areas over many years. So he would have a, this is this everything app or that everything gets joined at Twitter?

1:01:05It's hard to tell. And I will say that in the software side of things, I don't think he's been as impressive so far as the hardware side. So, you know. You're so kind. He's so nice. He hasn't been as successful in the software side. Yeah, that's an understatement. But you did buy, you became a Blue Check subscriber. Not one of the trolls because you're not like that, but you wanted to see how the subscriptions work is what you tweeted, actually, which was interesting. And to be honest, you know, a lot of what he's been doing with Twitter are things we had already tried with Tumblr. So I was very curious to see like what the user flow was like.

1:01:45And honestly, like I'm still a Twitter user. So I think I do want to normalize, like we should be paying more for the services we use versus just expecting to get for free. And then our data or our usage being sold to advertisers or something else. So I think I want to normalize that we pay for more of these things because I think it's a better business model in the long term. Most people do. Most people don't disagree with that. It's a question of who you want to give your data to or who you want to have affiliated with. You didn't ever think of doing a social network when this sort of the Twitter started to go off the rails a little bit here.

1:02:20Did you think about doing that rather than a texting platform? Well, we bought Tumblr in 2019. So we were already... It's not the same. It's not, it's sort of the same. It's not used the same. The user base is very different. But if you look at the fundamental primitives of the capabilities, you could use Tumblr just like Twitter. And it just, it was in kind of a rough spot. So since the acquisition, you know, when it was bought for a billion dollars, it was kind of on a similar trajectory as Instagram. and was actually purchased for a similar amount. It just, you know, I think when Yahoo got distracted with activist investors and Alibaba and all this other stuff, they didn't focus on it.

1:02:59So that's when it kind of withered on the vine. And then they got sold twice, you know, the merge with AOL, the sell to Verizon. So it just ended up without the focus. And so, you know, it was definitely a turnaround when we brought it in, but I want to see, could we do upgrades? Could we fix the algorithm, give people choice in the algorithm? So a lot of the same ideas, and also very humbling. So most of that stuff we did did not work. If people say they want to pay, almost no one does. Yeah, that's true. So Matt, you're 39, really a young man. You're financially secure. You've built a great company.

1:03:36What, for you personally, do you have, what box do you still want to check here? Other than the success of Automatic, what would you like to accomplish over the next 10 or 20 years? Well, first and foremost, is I want to work on open source the rest of my life. To the extent I have a creative window, when I have energy and the ability to work really hard on things, I want all the energy to go into things that are open source. I understand you're passionate about open source, but what does success look like for Matt as a citizen? Oh, I do think about, I mean, when you use the word citizen, it does sort of remind me of like how I could contribute particularly to where I live, which is America.

1:04:20So when I think there, I think philanthropy. Starting to do more in Houston, my hometown. I've done a lot in San Francisco, but actually not as much in Houston. And actually just someplace I've been personally trying to learn more is about cybersecurity, which was kind of when I was young, I was kind of in the hacker world and stuff like that. I just joined a board of a company called Field Effect, actually, in Canada to learn more about both the defense and the offensive side of cybersecurity. Because I do feel like if you think over the next 10 or 15 years, that's going to be one of the major areas of sort of great power conflict.

1:04:55It's actually already happening today, just kind of behind the scenes. There's a digital Hiroshima once a week across major governments and companies. And so, yeah, if there ever were like a call to serve the country, I'm not good at most things. They don't need me on most things, but perhaps I could contribute on a cyber side. How do you look at the current moment? Because here you're working with a young entrepreneur. I find young entrepreneurs a little more global, a little more tolerant, et cetera. How do you look at where everything has ended up? Hmm. And, you know, I think why, I think, Scott, you might've said this, like, we should be slow the judge, quick to forgive.

1:05:39I've totally messed up. There's actually examples like, I think when I had coronavirus or a fever and I got spicy on Twitter. I've only deleted a few tweets in my life, but like, I've definitely made those mistakes where I said something I regretted later or so, yeah, just remembering that that happens. and what do I try to do? I try to blog more. I find that the process of like writing to my site, ma.ttu, which is my WordPress blog, like sort of slows you down a little bit and it doesn't have the feedback loops of like a Twitter or a mailing list. Leading by example. You know, we try to, we've been a big advocate of distributed work.

1:06:16We've been fully remote since 2005. You have. You know, both pre and post COVID leading for that. And that leading by example, it opened up the market for a lot of other companies to be distributed as well. Now it's kind of like a standard thing. Most startups are actually, but prior, when we were early, like it was almost impossible to get funding. VCs didn't believe you could build a big company like it. And so just having something where people could point to and say, Hey, like, you know, automatic's not 2000 people get lab, which I was on the border for a little while. Like it's a public company, $7 billion.

1:06:49Like those examples, um, makes it a lot easier for future generations, future companies to, uh, to follow that. And then I know it's overstated, but I think first principles thinking, particularly with moral sides of things, leads you to interesting areas. So one example where we were totally wrong is we used to pay people in different countries or different cities in America, different pay scales. And kind of like 2011, 2012, my colleagues, the employees of started coming to me and saying, hey, I'm doing the same work as this other person. Why am I getting paid less, you know, by currency or cost of living or whatever?

1:07:30And at the beginning, I just had all the standard explanations, cost of living, the best prices, whatever. But it really haunted me. And I started thinking, well, wait, like, you know, past 50 years of America, we've been saying same pay for same work. I'm not going to pay a man and woman differently or people of a different skin color. Why am I paying someone waking up or going to sleep in Pakistan or India differently than someone doing the exact same work in California. So yeah, we shifted that. And it took like a year or two because you can't do it all at once just with finances and everything.

1:08:02But then we got to a place where we're same pay for same work globally. Some variation in the short term with like currency swings, but then we always bring that, we catch that up. And that helped our hiring so much, right? Because all of a sudden, if you're making way more in Brazil, what are you gonna do? You're gonna tell the smartest people you know, the best engineers in Brazil, hey, go work for this company. They'll pay you way more than local competitors or even what, like Google or Facebook will in that same country. You're a baller, Matt. I never would use that word for Matt. Anyway, Matt, thank you so much.

1:08:35And again, it's text.com and it'll be rolling out a mobile thing. I'm excited to try it. It'll be interesting. You make great products and thank you for all the stuff you did for us that I never thanked you, I guess, but thank you. Keep being you, my brother. You're doing great work. Thank you both. All right, Scott. One more quick break. We'll be back for Wins and Fails.

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1:10:57Okay, Scott, let's hear some wins and fails. Would you like to go first? You go first, Kara. I have to say, the morning show is really good. It's funny. I've been watching that, too. Oh, together. We should watch it together and talk on the phone. I really think it's very spicy this season and really fun to watch with a really high-level group of people. Jennifer Aniston's great. Reese Witherspoon's great. The whole cast is great, some of which are not well-known actors like Jon Hamm, etc. Who plays the chairwoman? I ask that because she's a lesbian, and I assume that all lesbians know each other.

1:11:29She's outstanding. I do. It's Holland Taylor. Holland Taylor? Yeah. When she comes on that screen, I mean, she's a tiny woman in her 70s, and she just owns the screen. She does. She is very good. Yeah, she's been with Sarah Paulson for a long, long time. And she's on a bunch of stuff. She's been in The Morning Show. She's on The Chair on Netflix. She's amazing. I love Dolly Taylor. That's another win. You know what I think of when I watch that show? And I am fascinated that Apple did it. It literally drips money. It does. The production value is there. Oh, yeah. Yeah, the Hamptons houses. They clearly said to them, we want an amazing show.

1:12:08This is going to be a tentpole for Apple. And by the way, money's no problem. And not only that, it all shows up on the screen. It all shows up on the screen. They do a really great job. It really does. I'll go to my fail in a minute. What is your win besides my win? Oh, I just wanted to bring some attention to some young podcasters. A guy named Stephen Bartlett, Diary of a CEO, this 31-year-old kid out of the UK. just such an impressive young man he interviews CEOs and the thing I love about his podcast is he's putting on a master class on innovation around podcasts I've done his podcast and he has these cameras rotating and he'll travel to LA to interview people in person and then he does an amazing job with editing and post-production he's just this kid is such an innovator really young doing an amazing job and from a standing start is now like one of the biggest podcasts in the world and is kind of a celebrity in London.

1:13:04Anyway, Stephen Bartlett, Diary of a CEO, a guy named Chris Williamson, another young man. He hosts something called Modern Wisdom and he's really courageous. He's been talking, before it was kind of cool, he was talking about some of the challenges struggling young men face. And he's also this kid who was sort of a party boy and he'll acknowledge that. And then he went very kind of deep inside himself, a lot of meditation, a lot of work on himself as he describes it. And he kind of came out as someone who was really interested in ideas and thought leadership. And he started this podcast called Modern Wisdom.

1:13:36And it's doing really well. And he focuses on the struggles that young men are facing in what I think is a very courageous and sometimes controversial way. And finally, this podcast, Young and Profiting, another young woman named Hala Taha. Hala's made some comments about the conflict in the Middle East, which I vehemently disagree with. But she does it in a way that I think she has personal connection to. And I think she's very raw and authentic about it. And her podcast talks about young people in business. And she's doing really well. And it's a very well-done podcast. Anyways, my wins are these young podcasters doing interesting things, being very innovative, very courageous.

1:14:15And then my fail is just the media's head fake around that there's been any change, that they think that someone gives up a title when they own and control the whole company, that they think that that has any sort of— It just struck me as just so hilarious that the business media and the media is taking Patty's quote-unquote resignation as CEO as anything kind of meaningful. It just struck me as do these people not understand power and shareholder rights and governance? So I don't know. I think the media just like totally missed this one. Anyways, those are my wins and my fails. I have a lot of fails actually this week.

1:14:53But I think probably, you know, I was thinking of these deals they made with Sidney Powell and Ken, is it Cheeseborough? I call them Cheeseborough. I don't care. Chesborough. They better have, they better testify to something pretty significant. I think every one of these January 6th people should go into jail. You think they're getting off too easy? I do. I feel like maybe. I don't know. I would, I just want more insight into what's happening because, look, I think those people who went into the, they deserve the jail sentences. but it should be equal on some level. And these two are the ringleaders, as far as I can tell, are crazy.

1:15:29One's particularly crazy, Sidney Powell. So I just feel like, okay, you better start talking and not be a waste of our, you know, the largesse of the government on this thing. I worry it could create even more cynicism about this whole thing. And obviously, the big cheese is Trump. I assume that's why they're doing what they're doing. It's definitely worrisome to me, as is all politics right now with the rest. You know, Congress continues not to be able to meet. I was heartened by Mitch McConnell boosting the Biden administration's attempts to pass these bills, these foreign aid bills. That showed some bipartisanship, which I was surprised and happy that he did that.

1:16:15He did the right thing in that regard. But we'll see if the House can get together. So I just I want people not to hate on government. And sometimes I'm like, oh, can you let's hope that it matters what the deal they've done, the deals that are being done right now. I have faith that they wouldn't. I mean, to your point, it feels to me that they're getting off easy. They're pleading to crimes that I don't believe will involve the prospect of jail time. But I would imagine the prosecutors there are smart and don't hand these things out cheaply. So I'm hopeful, actually. I would have liked to see Sidney Powell in jail, given how she behaved.

1:16:54And also Ken, who is the quieter one, but the brains of the operation. Anyway, 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. Okay, Scott, that's the show. We'll be back on Friday for more. Please read us out. Today's show was produced by Lara Neiman, Zoe Marcus, and Travis Larchuk. Ernie Andretot engineered this episode. Thanks also to Drew Burrows, Mille Severo, and Gaddy McFain. Make sure you subscribe to the show wherever you listen to podcasts. Thank you for listening to Pivot from New York Magazine and Vox Media.

1:17:26We'll be back later this week for another breakdown of all things tech and business. Cara, have a great rest of the week. All right.

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