AI Money Furnace, Lottery Deep Dive, Fair Work Loses the Plot and AirTree Fight Goes Public

24:32But it's pretty obvious for me to see that as beautiful and magical as AI is and as much of a long-term future as I think it has in the world and in business, lots and lots of companies are going to struggle to generate sufficient economic productivity growth to absorb the cost of that AI. When you talk about journalism, do you mean journalists using AI to write articles or journalists using AI as a better Google? In what sense are you talking about using AI? It doesn't matter what they're using. I don't think, I'm not talking about journalists using it to write their articles. I'm talking about journalists that would say openly, everyone is currently using AI to assist with research, to find sources, to assist with kind of polishing up stories that might be like, everyone is using it.

25:20But I don't see any possibility of them generating economic value from it. It's just a cost. And that is not unique to them. I was just having to be reading about that industry and thinking about it. So my bearishness on AI in the current moment, like as an economic opportunity, has deepened my bearishness. It's just becoming increasingly obvious to me that we are going to have big problems at these prices in driving sufficient economic activity to justify the high cost of AI. I've always been skeptical about the value piece, but I think we don't need, everybody doesn't need to get value from it.

25:54Like there's lots of people who don't get value from lots of things. It doesn't matter. The question is, is there enough industries to get huge value? And robotics and autonomous cars and coding appear to be the three really big use cases. And to an extent, customer service is probably another really big use case. If there's three, four, five, ten amazing use cases. If there's not a million use cases, does it matter? Like if you can – we can remove drivers. All right. Forget coding. Let's leave coding for now, but let's look at yourself driving and you've got truck drivers. So let's talk about driverless cars.

26:28Do you think the cost of making a car that can operate autonomously and then running it over five years, let's say, will be cheaper than the cost of making a non-autonomous vehicle and employing a driver over five years. Oh, like absolutely. Why do you say absolutely? It's much more expensive to make a car. The cost of a driver would be$200 ,000 over that time. A Zoox doesn't cost$200 ,000. Maybe a Waymo and a Jaguar cost that, but always other autonomous cars. Tesla's got pretty close to autonomy in their Model 3, and it's a$60 ,000 car. So, like, it's way cheaper. But I hear you, but lots of Uber is driving$20 ,000 cars, UberX.

27:21So you're now saying maybe there's a$60 ,000 car that has... There aren't many$20 ,000. $25 ,000. There are. $25 ,000. A Corolla costs you$35 ,000 now. Oh,$35 ,000. You're usually hanging out at the Ferrari factory, so you don't see too many of these everyday cars. But they cost a lot more than$25 ,000. Yeah. Let's say 35. That's fine. So we'll do 35. So here's 35K for a Corolla. By the way, you know, you have sold me heavily on autonomous vehicles and Zoox did the rest of the work for you. Yeah. But I just want to talk about the economics of this because it's not so obvious to me. I do think people will pay extra for autonomous, but I'll come back to that.

27:59But I just want to compare 35K Corolla and a driver, 60K Tesla, no driver. And I agree with you. Over five years, let's say that driver is probably more than 200K. Let's call it 250K. And so we can round it out to pretty close to 300 grand. And so is the cost of the autonomous vehicle operating likely to be the same, you know, $240 ,000-odd over five years? Probably not, but the cost is not zero. Like they are chewing tokens and a whole lot of other things to drive autonomously. Like it's not – it is a sophisticated activity. And so there might be a cost differential, but I don't think that cost differential for the first five years is going to be dramatic.

28:47And so I think largely – and so my question to you is this. Self-driving is a better experience than a driver. Do you expect because there's no driver in the car that you should pay less money for that better experience than an experience with a driver? Yeah, totally. And there's a couple of things you're neglecting to talk about. So one is, I'm going to talk about this in a second, because I was on the run sheet anyway, but one thing is autonomous cars are around 90 % safer than driver-driven cars. So there's significantly less risk of dying or getting injured. So who's going to pay? So who do you think will pay for that?

29:26That's a negative externality or it's a positive externality, you could say? So the government might be very enthusiastic about subsidising that because of the cost of road trauma, right? So should insurance companies. So government, which is a big insurance company. Yeah, I agree with you. So that's a big factor. The other thing is the time savings. It allows us to allocate resources more effectively as a society. And you may have seen the article in TechCrunch last week. My favourite business, Waymo, obviously, is allowing teenagers young as 13 to use its robo-taxi service around Nashville now as it looks to scale the business by reaching a new group of riders.

29:59This is what I've been saying for years is going to be a huge value unlock. Think of how many parents, you being one and me being another. Some parents spend an hour driving their school or two hours driving their kids to school every day. That's a significant time unlock for these parents to be able to pop them in a Waymo, which is obviously very safe, probably safer than the parents because it's generally just safer to have an autonomous car. I agree. There's less drink drivers. Drink driving should really go to zero. It's obviously been reduced a lot in recent years, but it still happens. Drug driving should go to zero because there's really – you can just jump into way more autonomy.

30:32And there's the other great point how way more is amazing for disabled people. Disabled people cannot get taxis. Taxis don't want to pick them up. So they can actually get an autonomous vehicle and have mobility. This is not just – this is disabled and elderly people. It gives them a new sense of life. There are so many great things that come from this technology, not only cost-effectiveness, that improves all sorts of – all parts of society. But why can't drunk drivers just get an Uber now? Why do they need a driverless car? whatever they don't it's more expensive they don't want to get in the uber ubers might not want to take them etc etc the whole bunch of reasons why they might not and obviously drunk driving has reduced between enforcement and ubers it has helped it i think this helps it further and why do people still own cars when there's already ubers what do you think the answer to that is there's a there's an inefficiency with ubers and obviously there's a cost but it's probably less cost than a there's not enough of them is that part of the problem yeah Yeah, exactly.

31:26They're not ubiquitous enough in most cities? Yeah, they're not ubiquitous. There's issues with them. They're not reliable. And I'll get to this story in a second. They're often not unsafe. Now, I'd say Uber's a – a driver of Uber is far – if you're looking at a sort of safety ladder, the safest is autonomous. Then probably you driving your own car. And then an Uber is the least safe. Like getting some random car for some random guy is the least safe. And we'll talk more about why in a second. But I think it's a huge unlock across all sorts of parts of society. But safety being a big one, cost being another big one, the ability to have a lot more efficiency.

32:03So I agree on safety, but I do want to make this point that a city like Melbourne or Sydney, these are very big cities on a square kilometre basis in order to have the experience that you and I both want, which is it's very available all the time. So basically, I don't have to own a car. That would be the ideal. I think that's where the world is going to end up, but that would be the ideal. Totally. There needs to be tons of them because the city is so big. And additionally, people want to pay less money for a better service, which is what technology delivers. So it's not unprecedented by any means.

32:43And the build-out costs of all of this are enormous. I just think it is possible in my view that unless you're one of these hyperscalers, if you're involved in any of this world today, you are going to go broke in the meantime and whoever buys the really incredible carcass of what you've built at a much lower price from the liquidators is the one that's going to be able to extract economic value because I just am struggling to see a near-term payoff in all of this that's fast enough for investors to continue piling money into this thing for as long as it's going to take. And I agree with you, autonomous vehicles is the exception because all of the major players are either hyperscalers or enormous automotive businesses.

33:29But I am very worried about, well, not very, I'm increasingly very worried. I was already worried about how enough economic return is going to be generated fast enough to justify all of this AI build-out. Are you talking about generally, you've moved off autonomous cars, this is just general AI cost. I think autonomous cars is probably one of the best cases for being able to generate a return and you've got the right companies also building this stuff. But, and maybe I'd go further and say, I actually think ultimately that this technology applied to hardware has a clearer road to profitability and economic value creation than the software alone.

34:12I think that's the place that I've reached. Robots is also a really big one. Like obviously the idea of robots making food and folding and washing is still pretty far away, but that's pretty interesting. And the one that we're already at is robots doing a lot of industrial uses. We talked about this a few weeks ago, robots on mine sites, laying dynamite, like stuff that we're going, all the robots going underground a kilometre in really, what would be a really dangerous job for human, but obviously it's a robot. So I think there's a lot of stuff that's happening already in the robotics field. We talked about coding.

34:41I think you were going to talk about coding more in deeply, whether AI is helpful or not with coding. I'm curious to get your take on that. Well, what's the economic value? Like what do you think is the dollars of increased productivity that offsets the massive cost? Because I think we're not firing massive. The cost isn't that massive. The cost is massive. No, I disagree. I know what our cost is. I can tell you what our cost is for team versus AI, and the team would cost – I'll just make up a number, but I'll give you a ratio. So the team costs us a million bucks. Our AI cost is like$50 ,000 or$100 ,000.

35:22Our token cost is way less than our people cost at this point. Yeah, I get it. But like your argument in the past, I remember, has been we don't fire people, but we hire more slowly or not at all, and we pay AI instead. That slows our hiring process. That was your pitch, correct? What we're talking about is that's the in-customer service, which is another area where AI has been pretty helpful. is we've been able to really double our transaction number and our obviously customer service tickets scales almost linearly with transaction numbers. We've doubled our transaction numbers and haven't really increased our team size.

35:54That's because we're able to add a whole layer of efficiency, really, which is basically half our tickets, comms being handled by AI in a much better way for the customer. So our team can focus on the really hard stuff. I had a bad experience at a hotel and need a resolution. The stuff that's just really hard to AI versus the can I change my date, can I change my transfer, what does my deal include, all this stuff that like is perfect for AI and can actually do better. I think customer service is a great use case for productivity improvements will justify price. I totally agree with you. Like that is one of the best examples.

36:31But general coding of software, the thing is you can only generate increased productivity one of two ways. Reduce cost, increase price. Output. Increased revenue. And so we're going to do increased output as we're going to use price as an example, how much you're getting from customers as the measure of that. And so increasingly it seems obvious that these wholesale wiping out of tech teams is not going to be happening from AI as it shouldn't and as we didn't think it would, you know. And so that's not going to be happening. So it's not going to be on the cost side. And so the question of whether you can – so let's say I've got developers now and they're producing stuff three times more quickly, like they're coding and producing output three times more quickly because of all this money that's being spent on AI, which might not be as much as the team, but it's millions and tens of millions of dollars and hundreds of millions for some businesses.

37:18And so what am I going to get for that? So far, nobody has proved, if we really look through the numbers that are presented, nobody has proven that you can charge lots more money for the extra output that you're generating. Well, is it? I'm not sure. So this is something that I think about a lot in the context of our business is does the, are we seeing a higher cadence of product releases? I think probably we are. And then the next question then logically is, are those, is the higher cadence of product releases leading to more revenue? And you'd think that if you've got more, and even it could be something like, oh, I'm trying to think of a, look at our trip planner, for example, which is actually an AI tool.

38:00I mean, we obviously use AI to help code it. So if you want to, we now have, I've had 300 ,000 people use this trip planning tool that allows you to build a trip effectively with the help of AI. So you're chatting to the trip and using LM to build a trip. But in our environment, so you could be doing it in Clawed or in GPT, but instead you're doing it in our environment. And we see significantly higher basket sizes and a lot of people using it. So, yes, there's some causation correlation there, but I don't think it'll be completely correlated. I think there's some cause there as well. So I think there is definitely some benefit.

38:34But you're right, it's really hard to quantify. And for a consumer business, it might be easier because you pump out more stuff, you can get more customers. And so I understand how it would work for a consumer business. I understand how it works for a data business. Like I get how Catapult can extract more money out of its customers over time by providing more analysis and guidance. But like let's talk about like we're using software called Riverside. We know Zoom. We know Teams. They are pumping through the token cost with their dev teams, no doubt about it and I can say the likelihood of us paying one cent extra for their increased cadence of releases the chances of that is zero and so how do they ever if they can't cut costs how do they ever recoup the money they're spent on tokens by driving economic value I don't see how they can I think if that was the case the only justification is having less developers and you have less developers but they use AI so they're more efficient and you the amount you're paying for AI is less than the amount you were paying for developers.

39:36That would be the only justification, really, of this sort of business. And I'm sure, which I don't believe in as a use case, like that is not within my likelihood of probabilities. I'm sure Zoom, when they – is Zoom a public company? They probably are. Yes, of course. Yeah, when – when public public during COVID and went to the moon and – Are they doing well or did they tank? Oh, they tanked, of course, but they were flying at one point. Yeah, yeah. Well, I'm sure on their SEO slide deck, there are many slides that explain exactly how they're going to do value creation, value capture using AI.

40:08But ultimately, I think that we may look back on this moment and say that was completely naive at best. And I think that businesses like that, what they are going to find is that these token – I'm not talking about deploying AI as a product, but we can put that in that basket as well. But like I'm talking about token costs being used by businesses, which predominantly is what is churning through all of these data centres. I think we'll look back and say, actually, all that AI did for businesses like Zoom is it increased their cost base because they can't not use it because their competitors are using it.

40:44Yeah, totally. There's definitely a good argument that that's the case for a lot of businesses. Obviously not every business, but there's – and remember, You go back a year and every CEO and every earnings call and your report was gloating how much AI they were using when it was even more sceptical back then, but people were gloating about it. Now you very rarely hear people talking about it. It's completely gone 180 from what it was a year ago when it was just the hot new thing. And let me just say this as a final point. The problem for these AI businesses is that when you are a company that sells products to customers that just increase their costs, all they want to do is spend less and ideally zero.

41:30And that is a really bad way to be able to extract increasing margins from your customers over time. In between you made the point about Uber before, we were talking about Uber before, but another win for criminals and a blow for public safety. The appalling Fair Work Commission has ordered Uber to reinstate another driver with lost pay after finding he had been unfairly deactivated for speeding and erratic driving while watching YouTube and scrolling Instagram, in part because the complaining riders didn't take the width of the stand. This came despite three dangerous driving complaints over four months, including seeing the speed limit by almost 50 kilometres.

42:04Uber Head of Safety Nicole Ashcroft said the Commonwealth managed to urgently reform the deactivation regime, including giving weight to patterns of behaviour to ensure the system properly balances fairness and the need to keep the public safe. Of course, the government spoke and backed the unfair deactivation laws as an important safeguard, but said it was considering independent recommendations following a review. The Fair Work Commission is, of course, being swamped by Uber unfair deactivation claims since the government's gig policy, gig legislation came into effect last year, reporting more than 500 applications lodged in the first year.

42:35In the latest case, the commission heard that the Uber driver, who had done 6 ,000 trips, had allegedly been driving a customer while texting, watching YouTube and giving likes on the video website. The passenger leds the driver also took three phone calls and was texting, engaging in frightening behaviour, including swerving and hitting holes in the road. Mate, he was doing 100 Ks in a 60 zone swerving, he told Uber. Just two weeks later, another rider alleged the same driver was speeding and swerving around corners while scrolling Instagram and picking songs. He was also spraying cologne on himself while I was in the car.

43:08Uber also submitted driving data that showed this driver was driving 93 Ks in a 60 zone during the first complaint, 89 in a 40 zone during the second, which is crazy, and 90 to an 80 zone in the third. but that didn't sway Commissioner Stephen Crawford who favoured the driver's evidence saying it was cross-examined, it was tested on cross-examination and the riders did not give evidence during the hearing. Crawford said it is conceivable that three riders may have taken a dislike to the driver which is pretty bizarre argument as three completely separate people for a range of reasons this could have prompted them to complain about his driving.

43:39Of course the AFR did bury the lead in this article forgetting to note the commissioner who made this shocking decision was, of course, a former unionist at the Australian Workers' Union appointed by the far-left Labor government. So we have another instance of far-left unionists putting the health and safety of everyday Australians, young women and children at severe risk to pursue their ideological goals. Dear, what do you make of this mess? It's terrible. I mean, obviously, the riders are not going to testify. Who the hell would want a driver that is clearly, at the least, the riders think the driver is a maniac?

44:13Absolutely. I mean, no one wants to be in the courtroom or wherever it was with that person or the commission with that person because what are the repercussions? Why waste your time? And you've got the time. Who is this guy and who does he know and who's he going to send after you? You know, like, I mean, of course they're not. And I think, you know, we just play a little game of probabilities called is it possible that three people had the same complaints and they're all independent? Yeah, it's possible. It's not zero odds of being chance. but it's much more likely, given that they're all made the same complaints at separate times and they're separate people, that they're telling the truth.

44:49And so, like, I think that... And not to mention, there'd be probably hundreds of people who didn't complain who probably have the same experience. This is just usually you get one complaint of every 50 bad instances. So God knows how many times this guy's actually done it. And the riders are not going to the commission to ask the commission to fire the driver. Uber's fired the driver. Uber, to their credit, has absolutely done the right thing here because Uber doesn't like firing drivers because two sides of the marketplace are important for them to work. But they've done it. They've done it.

45:19They've taken it seriously. And this commission has reversed that decision. And what does Uber do now? I don't know where you appeal to from here. I don't know if they're going to. They're probably going to a Supreme Court somewhere. We'll go to a federal court. We'll go to a full bench. You should take the full bench. of the, usually they go to the full bench of the Fair Work Commission and usually you get some more sensible people. But that said, Labor has absolutely stacked this bench with unionists. Like if you look at Tony Burke, who was the workplace relations minister, has stacked it with unionists.

45:48I looked at when this guy, the Stephen Crawford fellow was appointed and there was eight people appointed, all from unions. So Tony Burke has just gone, we're going to put as many far left people on here as we can. And this is what happens. People are actually going to die as a result of this ideological war from Labor and the unions. There's no question someone will die as a result of this at some point. And so I wonder what it would take. I say this very seriously. Like what would it take for that commissioner to uphold a dismissal of an Uber driver? It might take someone that would be deemed worthy of protecting in the world that that commissioner lives in to have been affected.

46:30And so this is the problem with ideological wars, that some people's rights are worth more than others. And so I suspect unluckily for Uber, the three people that complained were not clearly the right people to be protected, and therefore they were just ignored. I mean, this is absolutely preposterous. And you're right, it's much worse than, you know, bad for companies. It's unsafe. They also had data showing he was going 89 in a 40 zone. So all this is – like Uber, this is these ridiculous gig laws that the far-left Labor government brought in, this appalling government that's just disgraced itself over the last two years.

47:09But the whole point of the gig economy is it's hugely flexible. So you can come in and come out. It's really easy to get a job. It's ultimate flexibility. And there was only a tiny number of people who were complaining about it. Most people love this situation. And now I've got a situation where Uber can't get rid of a driver who really is in all intents and purposes a contractor. There's no real direct relationship with Uber and the driver. People come on and off the platform. They can use Diddy, they can use Uber, they can come in, they can come off. There's no, it's not like you're rocking up, clocking into work every day on any kind of regular basis.

47:39In all sensibilities, had Parliament not legislated for this, they wouldn't have been, had anything like these kind of rights. So you've got a combination of Labor bringing these ridiculous laws, then Labor appointing these far left unionists to enforce even a more extreme version of these laws. and the result is we've got these unsafe Ubers now because people can drive at 90K in a 40 zone and get away with it scot-free. The thing I slightly don't understand is that we basically live in a surveillance state to a large degree. Like there are cameras everywhere now. I don't know if you've noticed that, but like everywhere you look, just look for the little domes sitting on traffic lights that are just videoing everything that goes on.

48:17How is there no video available of this? It's a good point. It's probably hard to track down specific videos six months later though. I don't know how long they save it for. there's probably some logistical issues there. But, like, how much data does – how much do you need? These people gave witness statements. Yeah, they weren't cross-examined, but, like, surely we can't make people cross-examine for something like this. What's in it for them? Like, ultimately, I don't blame these three victims. But, ultimately, somebody will die on the back of Tony Burke and commissioners like this guy. And when we have a – heaven forbid it's a young kid who dies in an Uber from a guy who should have been terminated but they brought back, and that will be just the ultimate in appalling legislation and appalling judicial interpretation of that.

48:59It's also just a total lack of empathy. I mean, we'll finish talking about this, but what I find so frustrating is, like, this commissioner, I am certain if it was someone in his family that experienced this, he would be very supportive of getting rid of that driver. is just a complete lack of empathy for the riders that have been affected here. Yeah. And then I'll go to a super quick break, back with some more stories just in a moment.

49:32Today's episode is brought to you by Visa. If you run a small business, here's a question. Are you still using your personal card for business? With a Visa business card, you get improved cash flow management, rewards and greater spend control. and your business spend stays separate for your personal spend. So if you're still using your personal card for business, go to visa.com.au to apply for a Visa business card today. Today's episode is brought to you by Seneca. You may remember friend of the pod, Luke Larative, came on a couple of weeks ago and our listeners absolutely loved him. Of course, we're not the agreeables podcast, we're the contrarians and Luke is a contrarian himself.

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51:24And we're back. Artie, you've got a story for us. Okay. So I was looking at some companies that I was trying to find companies that were maybe overlooked and not very cool. Okay. And so one of the companies, you know, the cost of living is going up. And so everyone would like to win the lotto. So I started thinking about what about a lotto business? And so you know our story that we talk about Mr. Size Horse, the Chinese story of like good things can be bad things and vice versa. Lotteries are like, well, it is. And lotteries are one, two, and three on that list, right? Like everyone who wins a lottery pretty much, it ends in catastrophe down the line.

51:58But every one of the three of us, presumably, you tell me if you disagree, but Mark, you'll be happy to win the lottery even knowing how much it ruins your life. after, weren't you? Me and my partner always joke about how when we win the lottery, we're going to be super rich and it's going to be awesome. Yeah, and you'll be the couple that somehow, well, that would be the first terrible decision, right? Quitting your job. That's the beginning of the end, to be honest. But basically, you'll be the couple that somehow defies the odds. I also think that if you said to me, you want to win$100 million Powerball, I'm like, yeah, I know, I'll take it.

52:30But you know what's going to happen? You're going to do this and this. I'll be, I'm happy to take the risk. Oh, I'll beat the odds. So everyone thinks they can beat the odds. And so I thought maybe if we can't win the lottery, we can own the lottery company. So I had a bit of a look at that. But I've got a fun quiz for you to begin with, which is, so the company I'm going to talk about is called The Lottery Corporation. Have you heard of that business? Of course, yeah. It's the old, when Tabcorp spun off its lotteries business, this is what was created, this business here. and it pretty much owns every lotto and lottery you can play anywhere in Australia except Western Australia where the government owns the lottery there.

53:12They run it themselves. And so this is every single – and they own scratchies and all sorts of stuff. What do you think is the number one lottery in Australia by turnover? Which game is the number one game? Is it like Powerball or something? Yes, that's correct. Powerball is number one. How much of the turnover roughly do you think that represents? 60%. So, Mike, what do you think? 75%. Yeah, he anchored you terribly with that 60%. So the answer is it's about a third. It's 36%. So about one in every three dollars spent on lotteries in Australia is spent on Powerball. I wonder if you know the name of number two or number three.

53:58I'm not sure you'd even know the names of these games. Number four, Powerball. Some of my listeners remember this. This is when you had to watch TV, like in the 80s and even 90s. On Saturday and Wednesday nights, like 8.28, they would actually show the lottery being drawn with the balls going in the thing. And I remember during the footy broadcast at halftime. Yeah, they paid for it. But it was like every week in prime time twice. It was remarkable. That's right. This was like normal lottery, not even Powerball. But it was actually remarkable that people would watch TV and record the numbers. What a difference.

54:29And now you buy it online and whatever. it's done in a minute. So do you know what that normal lotto is? It used to be called in Victoria Tats Lotto because it was Tats Lotto. Yeah, absolutely. But it's not called Tats Lotto now. It's called, I think, there's national, it's called Oz Lotto. Oz Lotto. So that's 14%. So that's the third biggest. But there's one at 27%. Doesn't Lottery Corp still own Oz Lotto as well? I thought it was owned by the same. Yes, it owns all of these. It owns everything. Okay. It owns everything except WA. Okay. And so tell me, so the number two one is something, I'm going to tell you what it's called, and you can tell me if you've ever heard of this.

55:05You play with Lotto Mike or you don't buy Lotto tickets? No, I don't. I don't buy them. I'm going to start buying them. It's a scratchy man. I'm going to start buying Lotto tickets. Are you doing scratchies, Mike, or no scratchies? I'm joking. I'm making that up. I don't participate in any of it really. If someone gave me a scratchy, I would very happily take it. But, you know, that creates this issue that has arisen, which is if I win, how much should I be giving to you as the giver, right? We also need a coin and who has coins these days? So how do you scratch it physically? That's true. So the number two lotto is something called Saturday Lotto.

55:36I'd never even heard of it, but apparently that's the name of that game. Is that the old Tats Lotto on a Saturday? I think it might be. And so this is my last question on composition. Scratches, instant scratch-its they're called, what percentage of total lottery turnover do you think they represent? 5%. So 7%. So I felt like it's about right, to be honest. Yeah. So that's what this business sells. And now I want to talk about what they actually look like as a business. So they have revenue of around about$3.5 billion. It's a big number. What do you think that revenue means? So you're in the travel industry, Adam.

56:22You sell lots of tickets. What do you think that revenue means? What's the problem with that GTV? So that's all tickets sold, isn't it? So it's not the value of all of the tickets sold. What is it? There's one thing taken out between GMV, which is the total value of all tickets sold, and this revenue. One thing is taken out. What do you think that one thing is? The winnings? I don't know. Yes, exactly. How much do they give away as prizes? So, Mike, you can answer this question. out of every$20 lotto ticket that's purchased, how much of that$20 do you think is given back in prizes? Oh. That's a good question, right?

57:03Yeah. Can I have a go at this as well after? Five. Five. Five dollars. Five out of every 20. What do you think, Adam? So Mike's gone for 25%. I reckon it's probably not far off actually. I would have said something really similar. So it's actually half. Yeah, it's actually half. So you should think about the value of lotto tickets as being about double the revenue of TLC, we'll call this the Lottery Corporation. Yeah. And so they've got$3.5 billion. What do you think the single biggest expense is in that$3.5 billion? Do you mean government tax or licensing or something like that? This is why I love doing the podcast with you because you know nothing about this business.

57:49I didn't even tell you we were going to be talking about it. And immediately, and so let's see how amazing you are. What percentage of their revenue do you think goes to, I'm going to say government licensing plus the money they need to pay retailers to sell their tickets? Oh, 50%. Well, I think 50 % is absolutely directionally right. You know, you didn't say 5%. and 50 % is pretty close to the number that goes in to government costs. It's a bit higher. But when you go into a retailer to buy a lottery ticket versus buying online, the reason that all these news agents still exist to sell lottery tickets is because they're taking 12 % of the ticket as a commission for selling you that ticket.

58:31And so these guys wake up in the morning at TLC and they go and sell a$20 lottery ticket. $10 of that, they don't even bother booking as revenue because that's gone as a prize. So they've got$10 left. And then$7.50 of it goes to government and to the people selling it generally if they're not themselves online. And so they're left with like$2.50 out of that or thereabouts. And so that does not make this an easy business. So when you think about what this business is, essentially it's a government-regulated monopoly because you can't just start – remember in the old days this was the only form of gambling that was allowed in the 80s when we were growing up.

59:10It was legal. So it's effectively a government-regulated monopoly on lotteries. So all they really do is run this ball machine, essentially, and there's really not much to it. There's not exactly the huge costs in running. They've got no real cogs. All it is is just maintain this monopoly. So it kind of makes sense that the revenue they keep is quite small because there's just not much cost coming from that. So that is a good point. and let's come back to that. But first, let's talk about your power that you've just mentioned, which is, yes, cornered resource. So they have a cornered resource in every state and territory in Australia except WA, as I said, and all of their contracts extend from between 2050 until sometime in the 2070s.

1:00:00Which one was the most recently extended contract? Well, I think I know this. That would be the disgraceful Victorian government extending it for 40 years to try and desperately pay the bills. That's right. And so I don't know if you know about this, Mike, but what you might think would happen when... So they get these contracts that say you can run this lottery exclusively for some number of decades, generally speaking, maybe 20 years. And so in Victoria, TLC, their contract with Victoria was going to expire in 2028. And the government, instead of saying, now we're going to let companies from all over the world bid for this contract and see how much they're going to pay.

1:00:40They just went to TLC without telling taxpayers. They did a deal behind closed doors to extend it for 40 years. Do you know what they charged for that, Adam? It must have been well in the billions. It wasn't in the billions. Oh, I thought it was. I thought it was$5 billion plus. No, it was$1.2 billion. Oh, okay. Yeah, okay. In addition to the 37 % of every ticket that they're paying on top of that. Yeah. So it's expensive. And do you know when that cash for that$1.2 billion, it's going to extend for 40 years, but do you know when the cash has to be paid? No idea. When is it? It will all be paid by October 1st this year.

1:01:29Ah, okay. $1.2 billion of cash right before an election. Well, that's a coincidence. And so one suspects that$1.2 billion was a massive, massive undercharging of a 40-year contract. Look at the P &L summary. They've got revenue of$3.6 billion and variable costs. The variable costs, what you're talking about, the government, essentially government costs basically. So there's 3.6 in revenue, 2.6 in that government, the government slash distribution costs. All that other OPERX is only$315 million. So like it's such a cheap business to run. Almost all of it's going to government. It is. That is absolutely correct.

1:02:13And so they've got these deals that go for long periods of time and they've got them exclusively. And you're right, that's the core of this business. But there is an operating overhead to this business as well. And, you know, like they have to maintain all of these relationships with all of these sellers, et cetera. There's multiple games. It's not like it's not zero dollars of overhead. It's 300 mil, as you said. And this is actually a business. They recently swapped CEOs. It's actually a business that's been pretty good at managing the fixed costs of its company. And so what do you think about – well, I just want to tell you a little bit of a fact about this business that is one of the more interesting things.

1:02:53And there's a lot interesting about this actually. Because when I looked at this, I'm like, I bet you this is an overlooked business and there's a huge opportunity with it. That was a terrible assumption. People know about this thing. It's not exactly new. Well, you can tell me what you think about this shortly. So the 12 % they pay when someone in the store sells the ticket, when they sell that ticket themselves online, they keep that 12%. That's pretty good. But there's a cost to acquire the customer though. So like any... Well, they're doing that marketing anyway though to drive the customer into the store probably.

1:03:34Well, yes and no. If you're walking past a store, you see it. I think a lot of people will go, I'll buy a Taz Lotto. Yeah, there's some people who buy it every week. But I think there's definitely people who see the store. Like there's one in the supermarket, which I often shop at. There's a tiny little Taz Lotto place next to it. All I do is sell lottery tickets. and I reckon people just walk past this place and buy it because it's there. I think there definitely would be a – and these guys aren't stupid. I'm sure they know that they're getting value for these third-party distribution outlets.

1:04:00But they sell – and so what – I mean, this is a weird question, but like – so if I said to you they sold in 2018, they sold 15 % of their tickets online through their own offering, what percentage do you think they sell today through their own offering? 30 %? Over six years – or eight years. 40 yeah okay so so they've increased to 40 yeah that is you know that should give them a massive margin improvement yeah um interestingly as a little aside there's a business it's called jumbo corporation i don't know what it's called today jumbo interactive wasn't it yeah yeah jumbo interactive i don't know what it's called today we've talked about on the pod before if you want yeah isn't it the one you almost bought when it was super cheap and then you didn't buy it and went up 10x or something.

1:04:46I told – I was begging a big fund manager, not that big actually, but a successful one to just please – I got this great deal. Please give me the money. It was a couple of million dollars. Anyway, that was a 100 bag. We missed out. I know it's a fucking disappointment. I couldn't persuade them. I didn't have$2 million. Yeah. But basically, there's a funny relationship between that company and the Lottery Corporation. so actually the lottery corporation does not pay them 12 percent they pay the lottery corporation four to five percent for selling their ticket and they go and do all of the marketing and that is the relationship they have and it's a contract that expires in 2030 and accounts for maybe you know six or seven percent of total revenue that's coming in so that is an unusual relationship How does Jumbo make money?

1:05:35Obviously, they do. But what's their motivation? They charge money on top of the price of the ticket. Oh, so the punter pays. It's the old Webjet model. Oh, okay. Remember Webjet used to charge money for a domestic ticket? It's still the Webjet model. I was sure that that model would not work. That was a totally terrible call. Well, yes and no. If you look at that business, in certainly the last few years, it's really struggled. and it's now worth, see, our friend Katrina, who was a great CEO, moved on, a new CEO came in, and it's down to, I think it's$120 billion now. It's got like 60 mil cash, net cash.

1:06:10So it's a business on it. Effectively, a two times EBITDA multiple. So the market is really bitter on this business. It's certainly not viewed positively. Well, definitely consumer paid more. Consumers paid that premium for a lot longer than I thought they would. Totally. They pay a premium if they buy through this Auslom. I didn't realise that. I had no idea that they charged a premium. I guess in the days before you had online direct sort of lottery corporation selling, it kind of made sense. But now you can go direct. It actually doesn't make sense anybody would pay a premium, other than the fact that that's where they think they can be the only person to get the tickets from.

1:06:44So it's just a jumbo. Well, they say that they sell all these extra services, you know. Ah, okay. Well, jumbo almost exists purely as an information asymmetry business. The people who go to them don't have the understanding they can actually get it cheaper elsewhere. It's definitely possible. And so that's the nature of this business. What do you think about the growth of this business? Like how do you think this business is? I mean you can see on your numbers like how it did over the – you know, it's down 3.5 % in revenue year on year. Do you know why it was down? There's a reason that's very peculiar to this industry that has an incredible correlation with revenue.

1:07:23Well, inflation should be increasing it, I would have thought. So inflation does increase it. And also there is pricing power in this business that I'll come to, surprisingly. But there's an unbelievable, I would say it's more than correlation, it's causation of volume that goes on. What would motivate you to buy a ticket? Unemployment rate, I'm sorry. What motivates you to buy a ticket? Mike, when are you most likely to buy a lottery ticket, Mike? Maybe like if I've seen someone else who's really rich and I'm envious. to do with you, this decision. You walk past a lottery store and something that is on the sign makes you buy a ticket.

1:08:08What could be on that sign? The amount of the prize. Yes, that's right. The size of the jackpot is extremely correlated with the ticket revenue. And basically what TLC says is that 2026 had a very unusually small number of big jackpots. Ah, okay. People kept winning. And so revenue was down. Yeah. Yeah, people kept winning it. But by the way, it was down in 2025 as well. It peaked in 2024. But if we look at their revenue growth over, and one of the challenges with this business because of the leverage of this business, they have very low fixed costs, as you said. But like a drop in revenue really, really affects the profitability of the business because their fixed costs are so low.

1:08:56It's very leveraged both on the upside and the downside to revenue changes. So from 2018 to 2026, let's just work out their average growth of their revenue during that period. So compound average growth rate of their revenue. what do you think that number was? How fast was their revenue growing each year on average? Do you remember this business was part of Tabcorp until 2022 and it famously demerged, Tabcorp demerged. This was eventually Goodbank and Tabcorp was in many senses the bad bank, weirdly. Obviously, Bill McLaughlin now runs Tabcorp. This has obviously been a larger business now. I would have thought it's grown at, I don't know, 3%, 4 % over that time.

1:09:40I think they're pretty close. it's grown at about 4 % to 5 % over that period of time. So it's revenue growth. And by the way, I did mention this was the old Dab Corp Lotteries business. Oh, did you? Sorry, I didn't hear that. No, no, it's good that you've caught up to that. That's good. I always wonder which part of this podcast you're up to when we're talking. So now I know you're up to about 10 minutes. That's good. That's fine. You'll actually really enjoy the next 10 minutes of this podcast, by the way.

1:10:10Looking forward to it. So basically that 4 % to 5 % revenue CAGR, that drove like about an 8 % earnings before interest, tax depreciation and amortisation, EBITDA CAGR. And so it really flowed through well. And one of the key reasons it flowed through really well was not just how leveraged earnings are to revenue growth, but also all this online movement, 15 % to 40 % online, saving$12 per ticket, 12 % per ticket, that really helped the earnings growth. But you'll be disappointed to know that from 2023 to 2026, the earnings CAGA growth was only 1%. So it was not growing much at all. It really, really slowed.

1:10:56Now, I don't know if you looked at, and so this share price has gone nowhere in five years. I don't know if you've looked at the valuation of this business or the dividend yield that it pays. But do you know what earnings multiple this business is on? It's like a 35 times multiple or something. Yes, it's on 35 times earnings. For a 1 % earnings growing per year, revenue going backwards each year for the last two years. I know I'm being cynical. I'll tell you why some people justify the price. But it pays a dividend yield that's grossed up. So it pays 3 point something percent dividend, but when you gross it up, that is you put the tax back into it, like for people or superannuation people or whatever, or to try and make it to work out what the equivalent to a bank interest rate is or a bond, it goes up to 4.8%.

1:11:444.8 % is exactly the same grossed up yield as a big infrastructure player in Australia. Do you know which infrastructure player that is? Oh, big infrastructure player. Transurban? Yes. So they have the same yield as Transurban and their share price has gone the same nowhere in five years as Transurban. And the pitch that the CEO makes, which I think is a bit clumsily made, but I'll rephrase the pitch a little bit, which is we've basically got exclusive toll roads in every state and territory of Australia except WA, and we've got an ability to increase the prices on the tolls, which is true. They just increased Powerball by 17%.

1:12:25Now, the government has to approve it. Like, there's lots of approvals that need to happen and the minister can veto, but it happens. And basically, they increased the price 17 % and the revenue for that went up 11%. So they kept most of the price increase. Like, there is some price elasticity, but not that much, right? People kept buying tickets generally. So they own this toll road. They own one in every state and territory except WA. It goes for a very long time. Like, they've got this toll road. They've got the ability to increase prices. Every year, more cars are joining the toll road. because there's population growth and inflation as well.

1:13:00And you could even say maybe they can, my analogy would be they can add more lanes to the toll road because they do introduce new games as well. That's part of what they're allowed to do. And so the way they pitch themselves is basically as an infrastructure play. That's how they pitch. That's how the CEO pitches his letter. Infrastructure with digital migration because the 40 % can go to like 50 % or 60 % probably, right? And so how do you feel about that pitch for this business? Well, I think the pitch is a smart pitch. I think it's a pitch of five years ago when you had interest rates of 2%, 1%, when these businesses like Transurban and Lotto Corp were very much called defensive business in vogue.

1:13:43To me, in this environment, I don't know. I think this shows sort of the power of index funds now. I think because they're big, they stay big to an extent because of index funds and the sort of rise of index, the fall of active. but this makes no sense. I would absolutely not be buying this business at this price with this kind of growth when there's no real market expansion here. They're just sort of eking away inflation, inflation revenue gains and what is government controlled. Government could always go for more money as soon as they need it. So there's nothing at all I like about this business.

1:14:11The same as nothing I really like about Transurban. I think Transurban is a bit better in terms of coming up with new stuff and sort of being a bit more acquisitive. Whereas these guys, it's like buying a bond essentially, but a really low yielding bond. Well, it's like buying a crappy bond because an Australian 10-year bond now is paying like 5.4 % or something like that. It's a high yield and you can say, well, you don't have the return potential of like equities but you also don't have the risk. And I'm not sure there's a lot of return potential in this. I mean there is pricing power but ultimately there is price elasticity in lottoes.

1:14:48I think there might be a recession coming so that is a tailwind but it is a weirdly expensively priced stock for what it's offering. I think the bigger issue is if you make more money, government just taxes them more. So the government's not going to allow this business to get more and more valuable. It's going to hold the business roughly, which is kind of what it's done. That's right. Every time they make more money, government just taxes them more. It's a literal tax. That's right. Not a metaphorical tax. Do you think this can halve in price? Because one thing I didn't tell you is this year's dividend, yield was paid with 109 % or something of like profits.

1:15:26Yeah. So they're actually paying a dividend above their profit. Yeah, they're borrowing, particularly borrowing to pay the dividends. I'm not sure it dropped 50%, but I can see it dropping 25, 30 easily, like without a heartbeat could drop that much. Because it has dropped. August was not a good month for it after its results because of the drop in volume. Let me say this last thing about it that I think, you know, is going to be most interesting to you. So their favourite number is called NPAT-A, which is quite perverse is what it means. It means net profit after tax and amortisation, but it actually doesn't mean after amortisation.

1:15:59It means before amortisation. Yeah. And so this is – and so what amortisation do you think they're referring to? It's purely the government contracts, right? Yes, the money they have to pay the government. And so their pitch is – let me tell you how they paid the Victorian government. So it's a 1.2 bill. 400 mil or so comes straight out of the cash that they had. And then the 800 mil, they issued two lots of$400 million worth of bonds that they're paying 6 % or 6.5%, 7 % on. And they pay that interest. And their argument is the cost of those government contracts. And so they'll recognize the debt on the bonds as an expense.

1:16:39but basically the whole cost of all of that 1.2 billion dollars they think it should never make it into the profit and loss you should never see it and their net profit completely this n pet r whatever you want to call it like that completely excludes these costs i think that is the most ridiculous use of an adjusted accounting metric that i've ever heard of outside of the ai buy businesses. Like, it is absolutely unbelievable. So I think at this, why would this not halve? Because the yield is too high, you mean? Yeah, I think eventually start getting to a yield of 7%, 8 % becomes effectively slightly.

1:17:18It's kind of like a bond in many ways. It's got a government monopoly. It's got a government guaranteed revenue stream. The government's going to tax them a certain amount. We kind of know what their expenses are. The expenses aren't going to change that much. It's basically as good as a bond. So it's kind of a proxy for a government bond. Yeah, it's as good as a bond, except the amount that you get paid as a dividend does have the potential to go up or down unlike, I mean, I guess a bond, the amount you get paid doesn't change but the price of the bond does change. You know, what would be interesting is this.

1:17:49These businesses, as it gets, I mean, it's 20 years away, more than 20 years away from its first real contract renewal, 25 years away. But if you look at another business that I think is very boring called Atlas Arteria, which is a toll roads business, it's paying a dividend yield of 10 % because there's some questions about like whether its asset is going to be renewed, et cetera, et cetera. So when questions arise about renewal of these contracts, you definitely see yields potentially rise. But it's so far into the future, I don't think it's relevant here. I don't know. You know, the truth is this.

1:18:24If you think it's a bond and if interest rates keep rising, then this stock price should fall the same way a bond falls. Yeah, totally right. And that's a non-zero. There's certainly some risks around this business, you're right, that can impact the price going forward. That said, I would treat it like a bond, but I think it's an overpriced bond as we speak, which is my biggest issue with it. I'm not sure why it's priced so high other than the fact that maybe there's some people who get, I presume it's a fully frank dividend, so maybe you're getting, if you're a pensioner or in super, you get the dividend paid in cash.

1:18:58So maybe there's some benefits there that make it more attractive. than a bond potentially. Do you – I want to ask you another question about this. Oh, my last question is going to be about what to do about this. So the CEO in this business earns$2 to$2.5 million a year. What do you think about that as payment for a business like this? That's a non-leave question, by the way. For a$10 billion business or whatever, I think it's roughly$10 billion market cap, that feels about right. I kind of don't know this extortionate by any stretch. I think it's underpayment for a business of this size. size.

1:19:29Well, so Kinders and Cassidy gets 25 million to run a business the same size with some pretty strong powers. So she's the high watermark for executive room in this country, but 2.5 definitely has the same overs to me. Yeah, I think it's underpaid for this business. And it's my last question. So should I short this business or not? I'm more short than long. Obviously not investment advice. I'm definitely more short than long here. I can't see myself really going either because it's not a business that really excites me either way, but it feels like there's a lot more downside than upside in this business at that price.

1:19:59But making money excites you. And, like, I think if you believe interest rates are going up... It's making money because it's a government monopoly. Yeah, no, I don't mean making... I don't mean the business making money excites you. Oh, you mean shorting? You making money excites you. Yeah, like, you making money excites you. And so I think this could easily drop 20 % if interest rates keep rising. But it probably won't drop 50%. Yeah. You're assuming streets will keep rising. But, again, it's not a late atmosphere. They might not. The RBA doesn't like increasing rates. So whilst we think and have been saying for years they should be increasing them and should have kept increasing them, they didn't.

1:20:32And that bumped them up sort of a couple of raises. But still, compared to what inflation levels are, it's a pretty permissive level of interest rates in the economy at the moment. Well, that's nice. That was a different kind of business than we usually talk about. It was. I just want to finish with a story I found pretty interesting. This now is sort of a week or so old, but worth talking about. This is a really bizarre situation at Airtree. And the AFR, which has been running quite a few stories on Airtree, which had been just obviously a very successful venture capital business, but kind of under the radar.

1:21:01It's now less so. I think we can speculate as to why, but the article actually talked about Airtree missing out on the big gains from the sale of e-commerce business Eucalyptus, of course, run by your good friend, Tim Doyle. The AFR noted that Eucalyptus' earliest backup was Blackbird. Famously, Blackbird did incredibly well out of Eucalyptus, giving investors eye-popping returns of 34X or 34 times what was paid out or$206 million proceeds on a$6 million investment. So great result, assuming this all gets paid out. The AFR then went on to say that Airtree, whilst it did back Eucalyptus, which is a pretty big point, according to people briefed on the investment who spoke on the condition of anonymity because they're not permitted to comment, Airtree decided to not invest in Eucalyptus' first major fundraising in 2019 and was subsequently edged out by rival capital firms as the company continued to raise funds.

1:21:51The AFR continued that while Airtree still locked in strong returns when Eucalyptus sold, the upside paled in comparison to Blackbird. The experience proved transformational as it shifted its strategy to go harder earlier. Airtree did invest in Eucalyptus Series B and did generate a strong return. Tim Doyle then told the AFR that Airtree underbid at Series A and added that Airtree partner Jackie Vling's pushed the firm to lead the round at 30 mil was blocked by the partnership. This is pretty unusual sort of stuff being aired here. So you've got a founder teeing off on one of its backers. You've got one of the partners in Jackie teeing off on another partner.

1:22:30I'm not sure who. You've got AFR getting leaked to by everyone. And bear in mind, they actually did invest in this business, and they had plenty of other winners that Blackbird didn't have. So it seemed incredibly harsh on entry, this article, for a start. But what's more bizarre is just all these leaks coming from everywhere. Well, we can say a few things about this. We can start with the following. I think Tim Doyle was maybe one of the easiest people to back. Like you could have just said to me, Tim is doing something, and I'm like, no, I'll back that. Just tell me the price of back. Like I think it was like the easiest guy to back.

1:22:59For the record, I certainly made sure he had a Tonsu suitcase. Like he's got one of those babies. So like he's just like knowledge of life. I think he can afford to – pretty sure Tim can afford to pay for that suitcase. I didn't say he didn't pay. I didn't comment about that. But like basically not everyone gets freebies. You're in like a very – you're in a very – Elite club. Let's say that. But I will say that, like, Tim almost, you know, Tim knows as much about how to sell consumer products to people as almost anyone I've ever met on the marketing side. And so, like, I think he was just, you'd have to be crazy not to back him.

1:23:38Having said that, the fact that they didn't lead this early round, et cetera, is a non-story. I just want to say that to begin with. That in itself is a non-story. There's nothing interesting about that beyond gossip. And so then you say, the heck is going on with these articles? And there are some peculiar things about this article. Number one, a partner inside Airtree was identified by name as having wanted to support this deal and being overridden by people higher up the chain. Presumably she's talking about, or she might not be doing it. Presumably the article is implying that Craig is the person that overwrote it.

1:24:27And it was not like a random rumour. Tim Doyle himself made this comment. And the question is whether Jackie was a part of this comment wanting to be made or she was just referenced. But it would be unusual for someone to be referenced like this if they were uncomfortable about being referenced. and so certainly I don't think and so I'll tell you some like high level views on this gossip this is a gossip okay this article so it's not gossip I'll say my high level views on gossip I don't think it's driven by Blackbird like I don't think they you know these it is it is an industry where people pretend to be friends but they're really frenemies but this would be unusual I don't think Tim has it in for anyone in with regards to this like I think that um that there seems to be a campaign to try to make Airtree look a bit hopeless and bad and like we can speculate where that comes from but we won't but like I don't think it's from those sources and I just think if I'm a newspaper and people are prepared to give me these leaks and even better go on the record saying things that are going to make readers want to read I'll publish that all day long and so I think this is just a gift for the financial review and it's this is like Like, this is gossip news, not real news.

1:25:41Well, I think if you were speculating, and this is a speculation, you've got obviously Daniel Petrie and Craig Blair who started the Airtree, so Blair and Petrie. Daniel's not there anymore. They obviously had a famous falling out and Craig has stayed and Daniel hasn't. Like, you may, and this may be wrong, but you could assume that maybe Daniel was talking to the AFR about this story. I'm not saying that's exactly what happened, but I think it wouldn't be a huge leap to assume this. Well, I tell you why I'm sceptical about that, knowing the guy. Like, he's very successful. He's very rich. He's got access to everything and everyone that he wants.

1:26:18And in my understanding, like, I've only had positive experiences with him but, like, not everyone has. Like, we're all in business. We've all had negative experiences with some people and he is not a person that goes and does things behind the scenes, behind you. But, like, I think he would just come out with guns blazing personally And so I don't know what's going on in there, but we can definitely say one thing. Like there is something going on inside Airtree, in and around Airtree, that is a bit messy. We don't even know how messy it is. It might not be very messy, but it's a bit messy and it's creating very interesting gossip news articles that people in the industry salivate over and once you're two people removed from the industry, you couldn't care less.

1:26:58That's my take on this. I think where you could be critical of the AFR here is they've certainly taken a very negative slant on Airtree here that how well did Blackbird do, how badly did Airtree do when, A, the nature of entry is you obviously don't strike it, you hit it 400, you miss stuff, you don't get stuff. They actually did make an investment a little bit later and obviously their returns weren't as good as Blackbird. This is one of Blackbird's most successful after Canberra, one of Blackbird's best bets. So I'm not sure you can be too critical of Airtree at all here. They got in, they could have missed it completely, which a lot of other people did.

1:27:32So it seems like a really strangely critical article for a fund that actually did invest in this business. I'm no percent critical of Airtree about this thing. Like the summary, the one-line summary of this is there was a startup founded by someone that had been good in someone else's business and Airtree thought it was too expensive so they passed on that round and then invested in a later round. I mean, that is the whole story in one line. But I tell you why I'm less critical about the Fin Review. Like they're a business. And this is a story that if they turn it and twist it the right way, without being dishonest, it sounds a hell of a lot better.

1:28:11And you are the number one person that criticizes everyone, including me, for burying the lead in stories. And so they've done the opposite to burying the lead. Well, they've made a fake lead. They've made a fake lead, which is worse. It's not fake. It's not fake. I don't think it's a great story. I don't think it was well written. I think it was unfair on Airtree. So in many respects, and AFR does a great job with this tech, and I think Paul's great, and they are the leading tech rag in the country without question. I just don't think this is a great article. So I think it was unfair, and ultimately they have a responsibility to get it right, and it's not right, it's not right.

1:28:47My guess is that this article got a hell of a lot of views, clicks, views, like this is the kind of article that really drives reads and engagement in a publication like the Fin Review. So I think basically this is a rear window story that was turned into a longer form article around tech. But this is basically a rear window story, if you ask me. And as a rear window story, I can kind of understand it. I wouldn't have agreed. And we don't agree with a lot of rear window stuff. We love some of it. We don't agree with that. That's the nature of the column. But this wasn't a rear window. Rear window is an opinion piece, essentially.

1:29:27It's an opinion column. This was written not as an opinion. This was written as a news story, which is where I think it's – I think it was just really unfair. And we don't always get it right, but I think HRE's had its share of wins. Well, they had us talking about it for eight minutes, so that's another box they've ticked. We're only talking about it in a negative way. We've talked about it, and I think they got it wrong, and I think they got the story wrong, and I think they owe HRE an apology, to be fair, not that they're asking for one. I think we'll wrap it up there. That was another great episode.

1:29:55look forward to chatting again on Saturday of course with our fantastic business quick bite episode thank you Adir thank you Mike for sitting in and we'll see everybody soon

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