Journos WFH Fail, Catapult Goes Large, Atlassian’s Horrendous Buy, Biggest Rocketships, Delta’s Upmarket Win and Adir’s Celebrity Encounter

25:00I say bubble, I don't mean like the pricing bubble. I mean they live in a bubble, you know what I mean? Yep, yep, yep. And do you know what doesn't penetrate that bubble? Some things don't penetrate that bubble. One of the things that can't penetrate the tech bubble in Silicon Valley is self-awareness. It bounces off the outside, okay? And so this is what Reid Hoffman decided to do with AI. First, he created a young version of himself. That's what he used AI for. Reid at 20, okay? Now, already I would be embarrassed by this. I certainly wouldn't be publicizing it. Yeah. So that's number one. How do you look?

25:37Like Reid at 20. Okay. Do you think he looks good now? Not really. We can't comment. I was going to say we can't comment on people's appearances because we'll get cancelled. But I think older white males, you can say whatever you want. Yeah, yeah, absolutely. Anyway, I wasn't very focused on his appearance, but he just looked like another kind of guy that grew up in, I don't know, the 80s, I guess, or 90s at uni. And so, but if that's not bad enough to create a digital twin of yourself at 20, he then went on to post and publicise the conversation he had with his digital twin, learning all this stuff, providing advice.

26:15He wrote this whole post about the advice he provided to his digital twin and how incredible it was to have all this insight in his 50s that he could provide to his 20-year-old self. And all I was thinking was, you realize it's not your 20-year-old self, don't you? It's AI. It's not real. Why are you giving advice? And it was like this whole epiphany of how he helped his 20-year-old self. He's actually a pretty good-looking guy when he was young. As in that, I'm looking at that. You're very fixated on this guy's appearance.

26:47We can do another podcast which would be like Vogue for men in their 50s. What were they like in their 20s and how badly have they deteriorated in the following 30 years? But do you not find that totally bizarre that he went to all the trouble to give advice to himself at 20 when he's giving advice to AI that he's got nothing to – I just found the whole thing completely – I've been too long with Sam Altman, who, you know, I think of Sam. I think he's just, all these guys have just jumped the shark, I reckon. You know what the word solipsism means? No. It's like, you know what it is, Mike? You always know this stuff, Mike.

27:23Yeah. Well, I would pronounce it solipsism, but I think we're on the same track. I haven't even corrected him. After a long run, it goes crash. Yeah. You've probably only read it in books. That's what I was going to say. Yeah. Yes. Correct. I've only read it. I guess it's like a philosophical idea that the only thing you can really be sure of is that you are conscious. You can't ever know for certain that anyone else is conscious. Is that kind of it? Yeah, and then what evolves from that is a level of self-centricity that is beyond anything else imaginable. And I would say, like Trump has got that, right?

28:02In Trump's world, there's only Trump. That's all there is in Trump's world. How does this differ from narcissism? Well, because narcissism is this idea that you're like fixated on yourself. You know, it's from like the Greek dude that looked in the water and fell in love with himself. Narcissus, right? But this is more philosophical belief that like the only thing that kind of has any relevance to you in the world is you. And so like I think that that is the good summary of the bubble that goes on in Silicon Valley with these people. Like this idea that you think people are going to be deeply interested in what you told as advice to your 20-year-old self, it's just – I don't know.

28:40Maybe I found it more cringy than you did, but my God. No, I tend to agree. I find it – it's a bit cringy. I wouldn't bring it up, but I find it – I think it is not ideal. But he's allowed to post it on LinkedIn because he invented LinkedIn. But all those Silicon Valley AI guys, I question whether how much this whole AI boom is just people – A, people who think they're really smart sort of pontificating on this whole AI thing and B, everybody else thinking these guys are really smart must be right. I'm still yet to see any great evidence that AI is going to change the world. Maybe it will, but I haven't seen any evidence of this.

29:13We're just basing this on this belief that it will change stuff, but nothing seems to have changed. Well, aren't you going to ask me whether I used perplexity this week after promising to use it last week? Did you use perplexity this week? I did. I think it's great. Like I'm surprised by how good it is. It's really good. Listen, to be fair, I use like ChatGPT for different kind of stuff. But just to get information, perplexity is so fast. I can't believe how fast it is. Yeah. Yeah. And so good. And just the answer it gives is so good. So yeah, this is a better Google in my view. Whereas I actually don't find GPT a better Google.

29:52I find GPT is good at certain niche things, but actually generally as a utility, I very rarely use GPT. I use almost everything else around it, interestingly enough. I'm obviously in the minority because 75 % of people use GPT, but I don't know much about this brand. But almost all of my searches are not commercial searches. And so I can't really comment about how perplexity has helped me in finding a product. Would you use perplexity as an agent to help you make a buying decision? No. you know my view on it I don't like using AI to help me shop I just find it I don't that's not it's the reason why people still someone was I heard this on a podcast I think yesterday or the day before the reason why supermarkets think of the the value customers transfer back to supermarkets versus getting a delivery when you go to a supermarket you you pick and pack yourself you pay yourself you take it through the trolley you look at what you want versus when you go online and somebody else has to do all that for you for virtually nothing like if you're a Woolworths member of It's zero.

30:51But we do it. We go to the supermarket. We take our time. We spend our time. We spend our effort. We pull stuff off the shelf. We put in the troll, all that kind of stuff. We do it because we want to do it. Like you and I both love supermarkets. I love making the conscious choice of buying A over B or X over Y, which you don't have that same ability to online. And if you go to an agentic mode, you've got even less ability to do that. I'm not going to place my complete faith in someone else to choose what I want to buy. That's a good point. Okay. So my last topic before I let you quiz me. Did you see – I'm confident you would have seen this – the very interesting news that came out of Delta, the airline, in the last couple of weeks.

31:31Is this with the Amex stuff or something different? Revenue – with the breakdown of revenue between premium seating and economy seating? Oh, I did see – and also something about Southwest, who are going to make a billion dollars next year just from seat selection. So similar sort of concept. Finally, they caught on to that, right? Yeah, and 350 from luggage. So Delta passed this milestone, which is – it's a milestone, although I tell my issue with it after I tell you it. So the milestone is the revenue that they got from selling premium seats exceeded the revenue from economy seats. Wow. Well, I'll tell you what my issue is with this.

32:09Like it is a milestone, no doubt about it. Everything that is not the base economy seat is included in premium. So they've got like this thing, Comfort Plus, which is like an economy – like it's a domestic premium economy. Like a Virgin X type thing. Yeah, yeah, all the way up, right? So like it's a big basket that catches a ton of stuff. But regardless, there is no – and they said that it's going to keep increasing. There is no doubt post-COVID there has been a boom in non-economy ticket purchasing, and the airlines are feeling the benefit of it. And one of the primary drivers of this profitability in airlines, I'm going to tell you stuff that you know better than I do, but premium economy is the most profitable cabin for an airline.

32:56They charge twice as much as economy for a bit more cost, not much more. It's almost business cost in many instances. It's not that much difference. And so that's very profitable. And then business is – like I think the order of profitability per like, I don't know, passenger mile or something, yeah, is like premium economy, business, first economy. But economy and first might be switched. First is not very profitable for airlines. Yeah, I'm not sure first is more profitable. Oh, maybe it is now because they're really jacking up the cost of first. But it wasn't pre-COVID. First is the halo that you put on the plane.

33:32So people say, oh, my God, this airline's amazing. Also, what they've done is most carriers who have first have made business worse. So first is kind of how business used to be. And business is almost how premium economy used to be in a slightly better seat, really. So I think that that news from Delta is good news for you at Luxury Escapes because it shows the trend towards people wanting to indulge more with travel. And it means I think your higher ticket packages will become more and more popular because people are indulging more in travel. Well, there's a couple of points. You're making a couple of assumptions there.

34:12I'm not saying it's wrong. It's just that could be right, could be wrong. One thing I'd note is what that largely shows is just the massive disparity of wealth between rich and poor now. And the rich have gotten so much richer since COVID, and the poor have gotten poorer, and the middle class have probably gotten slightly poorer. And you know what I'm going to say, the reason for this is? Well, it's your inflation argument for everything, right, which I agree with. Because the government printed money, and where does the money go to? It goes to rich people. So the reason why I say inflation is such an insidious beast is because it increases the gap between rich and poor until your point, which eventually comes to revolution.

34:47And what is it? Madani in New York is probably the first step of that. So this sort of wealth-poor divide is not good for anyone. It's certainly not good for rich people who get stuck at the end of a pitchfork, as you say. Oh, well, that's it. If you draw a line of accumulation of wealth and eventually you get to private jets, like in the book of like how life went. when you turn the page after you get to the private jet, you see the pitchfork. Like the pitchfork comes immediately after the private jet and the torch that burns down your house. So yeah, like I think it is a genuine risk. So this is – what Delta's data shows, it doesn't surprise me at the slightest, is that the rich people have got so much money now and call it the upper middle class have a lot more money now as well that what are you going to spend your money on?

35:31Well, the most obvious way to spend money is flying better because there's such a big difference between business and economy and first and business, et cetera. In terms of how it impacts luxury escapes, our most – well, actually changes every month, but we sell a lot of Singapore and Qatar and Qantas, but probably our most common volume is Jetstar and then Virgin because look at Bali and Fiji, the routes we sell a lot of. But I mean more the package than just the airline, right? You sell packages that cost$2 ,000 and$100 ,000, let's say$80 ,000, whatever it is. and so i would have thought you're going to start you're seeing more of a skew not a skew but like the more the stuff over 25k sells much better today than it did pre-covert oh we didn't sell that much pre-covert we don't know we'll have a benchmark but i think where you're right is there's general inflation in accommodation so people are paying and there was an article in the in the wall street journal saying how the luxury the cost of luxury hotel rooms has doubled since covert to like three thousand dollars on average or something this is sort of that really high-end luxury, the Hotel the Caps and the Ritz-Carlton's and the Amman's, et cetera.

36:38So everything's gotten more expensive. That said, what we're seeing, what we've certainly seen in the last six to 12 months, and this is benefit of Luxury Escapes, is customers look to value and we are the best value option. We're not the cheapest, we're not the most expensive, we're the best value. So if you want to save 30%, 40 % going to Grand Hype, which is a great hotel in Bali, you can go through us and get all-inclusive for$19.99 for five nights instead of$4 ,000. So that's the reason people – I think people are – some people are happy to spend more, but a lot of people want to see that value.

37:07Are you paying CPM for that last 15 seconds for the ad or not? Or you got that for free? Well, I tell you this is the last thing. That's the take for my preparing the actual newspaper ads is I get my usual – my weekly plug of luxury escapes in. Well, I tell you this is the last bit of this discussion. So I just flew back from Sydney a couple of days ago. And, you know, I think Qantas now has these new A320s that they're flying domestically. A320 or 321? 321. But isn't that the same thing? It's just the next version of a 320. Yeah. I think there's more business seats. Well, that's what I was going to tell you.

37:41So I got on this plane and there were five rows of four seats in business compared to three on most Qantas planes and two on Virgin planes. I think Virgin made a huge mistake on their refits. I've said this before, like they should not have put two rows of four. They could have sold four rows of four. Absolutely. And how many free seats do you think there were amongst the 20 Qantas businesses? Zero. And so I asked someone. But they'll upgrade. They'll upgrade. Yeah. So I asked someone, do you think they're all paid? And they said, no, you'll notice when – I asked someone who works for Qantas. And they said, no, you'll notice whenever you book an economy, it tries to get an upgrade with points into those business seats.

38:22Absolutely. Whatever it is, you and I both know whether you're paying points or dollars, they're getting the economic benefit of it. It doesn't matter, right? Totally. And so I think to me that was very eye-opening. By the way, they were very nice seats. Like they actually are pretty good like what they've put into that plane. Those new planes are great. I went on one to Brisbane, the 320, I think. The other one has the three and the two. We were in economy because we had the kids. And I thought it was a really comfortable flight. I loved it. The overheads are better. Like everything about it was better.

38:53Yeah. Well, they have the overheads are where you put your bags on the side, not flat, which is much better, right? They make the overheads a bit higher so you can put your bag on the side and you can put way more luggage into that overhead. Did you see the article Brent Grandwater wrote in The Age this week, probably in the City Morning Herald as well, in Traveller, talking about how – How the hell would I read that paper? Maybe you saw it online. I don't know. Anyway, he talked about how he went on a Virgin flight. I think it was Virgin flight, and there was like heaps of space in the overhead compartment because they are only allowing one over, unless you're obviously high status or business class, one overhead bag, one purse essentially.

39:29Whereas previously it was two, which was just being abused massively. People take these huge bags in and taking up all the space. So that's a great transition from Virgin there. And I think hopefully Qantas follows suit. I hate people taking two massive bags in. I find that I can take a carry-on on Qantas that I would call, it's an international size carry-on. So I can take that on Qantas and put it in the overhead. They give me no problems. Virgin, if I take it, sometimes they'll want to weigh it before I get on the plane. And it's never going to pass the weight test. And their overhead is smaller as well.

40:02It gets in there, no problems. But they are smaller. And so now when I travel mostly, I just take like a small bag, like a weekender, I guess you'd call it, that I can put in the overhead and like a small bag I can put under my seat. That's what I take now. The whole weight thing is ridiculous. Because obviously - Well, they changed it at Virgin. They changed the weight thing as well. The weight thing makes no sense because it goes in the hole anyway. So the weight doesn't get like removed. It should be purely a size thing. All that matters is size. Originally, they were worried that it would fall on your head and kill you because that is a risk, right, because it can move.

40:37But they always say it might be careful it might have moved in flight. But I've flown 1 ,000 flights, let's say, and it's never moved in flight. And so what Virgin has done, in my understanding, for economy is that they've reduced it from two bags to one bag, but they've made it that you can make the bag a bit heavier than you could previously. Is it 10 kilos now from seven? I don't know. I didn't look, but like whatever it is. Which 100 % makes sense. You're much better having one heavier bag than two lighter bags of the same size. Like that was just a ridiculous rule. So I could say that fixed up what was complete insanity.

41:12All right. Come on. Get to your quiz. Anyway, that's very – I always say we talk about airline stuff, let's say once every two weeks travel stuff. And I always get nice feedback whenever we talk about travel stuff because first I tried to shut you down on it for quite a while, but then I capitulated and I'm like, yeah, I think people like this stuff. Well, you've got so much inside knowledge and like I travel frequently. So I think it's an interesting – by the way, you know how you mentioned the Amman Hotel? Yeah, absolutely. Even that hotel is so expensive that even I think it's ridiculous. Yeah, I've certainly never stayed there.

41:46like who the hell stays in those hotels? I actually don't get the difference. There can't be that much of a difference. It's people with too much money is who stays in those. Like you could stay at a JW Marriott, a really nice or call it Intercontinental. These are great hotels for call it$500,$600 a night. Maybe you get 20 % benefit, but you're paying 6x for an Amman. The only reason you stay there is you've got so much money and you want to say you stayed in Amman. There's no other justification for it. it's not people with the most money that stay there. I think it's people who are rich and they want to communicate.

42:22Either they think it's the best, I'm just going to splurge on it, or they want to try and insta it up to say they stayed at the Amman. It's like first class. The richest people don't fly first class. They fly private, right? And so I think like Amman is kind of the same thing, I think. I think people are probably Amman actually getting into that private charter thing that Four Seasons do. But I think there's also – I don't think there's one arch type or rich person. There's some rich people who are incredibly frugal and there's some rich people who just spend money like it's going out of fashion.

42:51I think there's multiple different types of rich people. I think you're talking about the ultra, ultra rich, but I think there's multiple types of ultra rich as well. There's the one who lives in the same house. That's true. 1958. And there's the people who spend$100 ,000 on their daughter's 13th birthday. So I'm not sure – I heard one of my friends was telling me about – I won't mention any specific. but there was a birthday party of a 12 or 13-year-old girl and they went to Nobu. They hired out Nobu, which would have cost, I don't know, 10 or 20 grand or whatever it cost. And they went to Crown in Sydney after the party.

43:23Like to be able to afford that sort of for a 13th or 14th, whatever it was, it's just ridiculous. Mike, I've got this question for you, which you might find slightly confronting. You're trying to just delay the quiz as much as you can? No, because this is what I think, all right? So we're quite a bit older than you. Adam would find that a very painful admission. Yes, I knew you were going to - Mike and Mike are at the same age. Yeah. Adam and Mike, you know, like you and I are the distance of like Mars and Earth, Adam. But Mike is like the sun away from us. So like - We don't know how old Mike - I thought Mike was like 25.

43:59Turns out he's old. How old are you? No, I don't want to disclose that publicly. I like the air of mystery around it. You know what, Mike? Mike, whether you're 25 or 30 or 35, it doesn't matter for the purposes of me saying Adam and I are a similar age and you're much younger. It does matter because you're getting to a similar gap between me and Mike. Definitely not. Do you think I'm 70? Well, you were in year 12 when I was in year 7, so we know the gap. Is that – oh, I didn't know that. How do you know all this stuff? Because you and Adam Goodback are good friends. I remember Adam Goodback was my house captain when I was in year 7.

44:34Was he? Yeah. Adam Goodback took – he's like my closest friend, right? And so he took school very seriously. He was on the school council, whatever. I was like, he was like captain of everything and charismatic. I was totally rebellious, totally rebellious. Well, getting 9.9. Because, no, because like the thing is this, you know, I'd say this only because you know it already or else I wouldn't make this comment, but you know, like how I was on this sports scholarship as you also on a sports scholarship too. I was on a general. 50-50, right? I wasn't. I wasn't. Oh, this was like a 50-50 sports academic.

45:10And so what I thought about that is, this is how I thought about it, that makes me untouchable. And so I can – because them throwing me out of the school or punishing me severely, I didn't do anything – I wouldn't set the school on fire. I wasn't bad. You didn't burn it down. I don't like rules, okay? Rules are not for me. Getting to a podcast on time, rule one. If they punish me severely, it's got to look worse for them than for me because if they made the choice to give me the scholarship, No, they can remove a scholarship though. I was always, not that I ever did much wrong, but there was always that latent fear that we'll take the scholarship away, which I'm sure has happened to some people.

45:46I knew they wouldn't do that. That looks too bad for them. But people don't, you having scholarships is not public knowledge. They can quietly remove it. No, I don't. Well, maybe you're right, but that was not my attitude. My attitude was I'm basically untouchable. And so like I would leave this. Elliot, your buddy Al Capone. Well, I thought the school was so boring that at lunchtime I just left. I just went to like – I just went to – you know how it was near Glen Huntley Road shopping? I just went to Glen Huntley Road and then I got caught one time and I came back in with, you know, the authoritarian guy, Jock.

46:18Jock, I love Jock. Who was like punished. Yeah. And so I was in his office and I just – he was like saying you were seen on – you were seen on Glen Huntley Road. You're not allowed to leave the school grounds. I'm going to suspend you. And my two thoughts were, one, I don't think you're going to suspend me because I think that the headmaster is – like I'm in his protection program because he doesn't want me suspended. And two, you know what defense I ran? You know what defense I ran? The Shaggy defense. It wasn't me. I just said it wasn't me. You mean Shaggy? I think you mean Shaggy. Shaggy is Shaggy.

46:51Because that's how he says his own name, right? Yeah, that's how he says his name. I say it like he says it. Can I add just a quick bit of trivia? Recently we found out all three of us are left-handed. Well, it turns out all three of us also had scholarships to our high school. Oh, you're a scholarship. I guess to get in with that. You go to school. What was your scholarship? I had a music scholarship to St. Kevin's. That's pretty impressive. That's good on you. Thank you. Thank you. What did you play? It was actually for singing. Oh, wow. Well, we're going to do something about that on this podcast.

47:24Yeah, exactly. Anyway, Mike, this is a long-winded way of saying this. Basically, we're at a different life stage to you as much as Adam doesn't like to admit it. And so we've had more time to accumulate wealth and build businesses than you have. But when you hear this podcast and we're saying about flying business class or whatever and staying there, and you're a different kind of, no, different generation to Adam. I don't want to make him feel bad, but you kind of are. Like when you listen to all of this and you think about your friends and you, like how do you feel about the fact, like do you agree with what Adam is saying that this COVID period and the mega inflation that's happened has meant people that had some money before that have now just become richer and richer and other people have been left behind?

48:10Like do your friends fall into that second basket or not? Like to be perfectly honest, like I don't think any of my friends fly business class. That's what I'm saying. Do they feel like they fall into the all these older people got richer and we're still struggling to buy a house or things are more expensive for us? I think there's a bit of that. Yeah. I think the consensus is that, you know, I guess the rich have become richer and there's a bigger divide between wealthy and middle class or rich and poor. I do think there's that. I think the general consensus is that, yeah, everything's more expensive.

48:47You know, even going out to get a cup of coffee is so much more expensive than it was three, four years ago. So I definitely think there's that. I think I would say a lot of my friends, you know, I feel a lot of my friends are educated, university educated like me and have decent jobs with decent salaries, but I don't necessarily think they're able to be super liberal with their money. I think everyone's quite tight with spending. People would prefer to stay in at home and have things at home rather than go out to a big dinner or something like that. But do they want to kill us? Like, are they angry?

49:27I don't. What are you saying? Us. I think they're more you. No, no. I think it kind of just is part of what it is. Like, I think it's just it is what it is. They're accepting of us. I kind of am. I'm just like, it is what it is. I think it is too or isn't. I think it gets to the point where you get sick of ideas of private jets and first class flies and you get the pitchfork out. I just want to go once on a private jet. No one's taken me on a private jet. I've never been on it. Well, the only person who's been on a private jet on this podcast is John Stenshaw. That's true. I think spends more time on private jets than any billionaire in the world.

50:00So, Mike, just to finish this question, like, do you feel like – that's what I'm asking about your friends rather than you. Do you feel like it's changed, like, their political disposition, that there's this widening gap? Like, do you think they're more likely to vote for the Labor Party or the Greens or something like that than they would otherwise have been? I definitely think that. I think there's a huge political schism in my age group. And I think people are, certain people are going further and further, I guess, left. I definitely think there's a huge, I'm not really sure what word I'm searching for, but almost like a disdain around any kind of even moderate right wing politics.

50:46because I think people just see it as like you're just trying to make rich people richer whereas the left side of politics will help us succeed, I suppose. The left side of politics will make sure that everybody is poor. Yeah, exactly. So that's basically. It's a great – you're talking about branding. The left has done – continues to do an amazing job of – like look at Dan Andrews and he was effectively an authoritarian much like Trump in many ways yet the left and the people love him despite his policies being horrendous for young people. Like who benefited from lockdowns? That was old rich people who, inverted commas, stayed safe and healthy at the expense of younger poor people who had to live in their rivers.

51:25But it didn't feel like that at the time because I remember what if – because, yes, what it felt like is you work in a cafe, let's say. I'm just picking that as an example. You can stay home, not have to go to work, and this job keeper is going to pay you tons of money. because remember it was like not really – $600 a week. It wasn't totally correlated to your earnings, right? And so like I think that he sold the dream to younger people that they could just like stay home, be safe. He put a friendly face on authoritarianism. Totally. I mean I think we're living in dangerous times. Like people talk about the military risks that exist in the world today.

52:06I think those are real. But I think we live – like I think the war – when you think about Western liberal democracies, I think the war within is much more dangerous than the war without, like outside the borders. I'm much more worried about what's going on inside Western democracies and also that obviously weakens them to be attacked from the outside, which is what happened in Israel. It was very – like Israel got weakened on the inside with all the civil discord and protests and then was attacked from the outside. Like it's a very worrying time. All right, you can lighten the mood with your quiz.

52:37I've got – you couldn't have got a better segue to this quiz, the mini quiz. I got the big quiz. First, the mini quiz. How many of Mike's friends want to kill us? Is that the quiz? And listing them by name order. The quiz is university – you could not get a more perfect segue. Universities who produce the most billionaires. This is American – oh, no, this is global universities. Oh, that's an interesting quiz. Most are American. Can you get – how many of the top 10 can you get? Well, there's no – let's just put some ground rules. There's no Chinese university on that list, correct? The Chinese one's number nine.

53:08It's really hard to read this. I've printed it. I made it too small, but I can definitely see the first few. You know, the first sign of ageing is eyesight going, Adam. This is almost unreadable, but I can see some of them. Actually, I can see enough of them. Do you think that we've reached a high point of a quiz where Adam's literally brought a quiz that even he can't read? This is quality. The listeners can't see. He is shining his phone torch into the paper on camera. You claim to be 35, but at this moment you look at the 70-year-old. Don't wait. Just to be sure. I'm trying to read a menu. Could I ever guess at number one?

53:44Absolutely. Is number one Harvard? Absolutely is. And it is number one by a long way. So 104 billionaires, Harvard. Oh, wow. Two is pretty obvious as well. Obviously Zuckerberg was Harvard. I just want to say, can I just say this as a, let me say this about Harvard and this quiz in general. I think the cause and effect is not in the direction that this quiz implies. What I mean by that is I don't think Harvard is creating The engineers go to Harvard. I think, this is my theory, more and more wealth is becoming hereditary in this world. And you can get into Harvard if your parent was an alum or if you're rich, basically.

54:24And so I think that is what's going on here. I don't think Harvard's creating the billionaires. I'm not sure. No, I'm not. Well, it says universities producing the most billionaires. I'm assuming there's not counting people who already are billionaires. But what it does show is the huge advantages. Basically, it's a list of the most advantaged unis. And that could be because people are very successful going in. Because even if you're not a billionaire alum at Harvard, you're still very hard to get into Harvard. And you need to be pretty – I don't mean you start off as a billionaire, but I mean like if you start off with like$100 million in your family, it's a lot easier to make a billion dollars with a$100 million head start.

55:04Mike, you go for number two. You're good at these quizzes. Number two is pretty easy as well. I don't even think I know many others. I mean, is it Yale or Oxford? Stanford will be somewhere on that list. Yale is number six. So is the whole top six just Ivy League American universities? No. So is Oxford in the top five? I can't see Oxford in here at all. The problem with Oxford is not many billionaires in the UK and they're all rich people inherited money. People go to Oxford to get an education. That's their disadvantage, right? I want to get an arts degree, yeah. Okay, let's get into that. Stanford?

55:40Number two, obviously. And when I say Stanford, of course, is an Ivy League. Number three is Ivy League? Columbia? Columbia is... Where's Columbia? Can't see Columbia on here, actually. Well, that's shocking. What about Princeton? Princeton is on here somewhere. It's about number 13, which is where I think Trump went, actually. So there's one, two – there's three Chinese ones, I think, or I should say Asian ones. I can't read the writing. I think it's Chinese, though. I'm just going to say like Penn, Dartmouth, Brown, aren't they? They're the Ivy Leagues, aren't they? Penn's number three. Yes.

56:16All right. Number – I can't remember number four. You have to think also where the billionaires are. So the billionaires are basically in the US. That's where the billionaires are. And some in China. And so China is number nine. You can't read it. Is that because you can't see the words or it's in Chinese characters? I reduced the font of this image and I printed it out. I just can't read it. It's just impossible to read. So I just want to talk about the professionalism. This podcast reaching a pinnacle of professionalism at episode 144. Adam can't get his camera to work. His ability to talk into microphone is actually going in reverse, and he's got a quiz that he can't read.

56:54I can read most of them. This is my small quiz. Big list coming. What do you want to – are there any universities on there that are in Europe, not the UK? I can't see. France? I can't see in Seattle. Okay. I'll just go through the ones I can read. So Yale, of course, number five. MIT. So MIT, number five. Yale, number six. Cornell, number seven. I'm surprised MIT is on there, to be honest with you, because MIT is not usually a launch pad for entrepreneurs. It's tech. It's churning out tech. I know, but it's mostly people that go to work for founders and build the businesses with them. It is not historically well known for being a launch pad for founders.

57:36So USC is about number 10. Berkeley number 11. USC is a private college in LA. So Berkeley number 11, which is not private. UCLA, about number 15. Chicago, number 16. That's all I can read. So basically American universities that have a lot of students skewed towards the Ivy League with a few Chinese ones that you can't read either because the writing is small or they're because they're written in Chinese. We've lost all our CCP listeners as a result of this quiz. By the way, I'm sure that's not true, to be honest. Not the many that we've lost them. I'm sure we haven't lost them. This is my wife's quiz.

58:17So she was watching a doco, I think on the plane, and it was about the world's biggest rocket businesses. This is another quiz? This is the main quiz. This is the big dance of quizzes for today. Legible? This quiz is legible. Legible. I printed this one. I actually got perplexity to give me the answer to this stuff. I looked around. I tried to find out. It was a really hard subject to research because there isn't hard data because most of them aren't listed. So I had to sort of poke around. But perplexity came up with a pretty good answer. actually. So leading rocket companies by, effectively by estimated valuation, bearing in mind a lot of these aren't public.

58:53In fact, most of these aren't public. Some of them are, some of them part of bigger businesses. So can we agree SpaceX is at the top, right? We can agree SpaceX number one. That's the obvious one. Call it 400 billion. Are there other rocket companies? What about the Amazon one? Is that number two, Blue Freedom or whatever it's called? Well, you mean the Bezos one, Jeff's Blue Origin, number two and that had an estimated value of 50 to 100 billion which i was surprised by but oh i finally worked out why it's called blue origin when i said blue freedom it's because the earth is blue right that's why it's blue origin right i presume so yeah it took me a while well the other rocket companies what about that australian one is that on the list uh gilmore is not on the list i mean like what about the north koreans are they on the list they got some i mean this is mike do you have you ever heard of a rocket company nasa they on the list like what about Raytheon?

59:44They make everything that you shoot. Raytheon aren't, but there are other ones that are very similar to Raytheon. Like? Like Lockheed Martin Space. Oh, that's what I was about to say, Lockheed Martin, yeah. And this is a subset of Lockheed Martin. They've estimated, perfectly estimated at$10 billion. There's Northrop Grumman, which is estimated at$72 billion. Obviously, that's part of another a big military business. But there's a couple of really interesting ones. So there's ULA, which is a JV between Boeing and Lockheed. So Boeing obviously had an absolute disaster with the space station. I don't think they make rockets, though.

1:00:23What's that defense tech startup that's shooting the lights out? They don't make rockets, though. Oh, you're thinking of Palmer Luckey's one? Yes, exactly. I don't think they make rockets. They're more drones and things. Nah, other stuff. What's interesting? Tell us the interesting ones. Would you think that there's a US$25 billion rocket business started by a New Zealander? I would never have given. No. New Zealand founded. Have you heard of a business called Rocket Lab? No. I mean, that feels like the most generic name for a business. Well, it's a New Zealand founded business. And then they've moved to the US.

1:00:59It's really a US business now. It's publicly listed. $25 billion market cap started by a New Zealander who I don't think went to uni. I think he was basically self-taught. He was obviously a very smart guy and he always loved rockets and just taught himself how to become a rocket engineer. Well, they won't be doing space tourism on his rocket. I'll give you that as a tip. Well, they do plenty of other stuff. Space tourism is not a good way to make money. Space tourism is terrible. The way to make money is by shipping cargo into space, which is what SpaceX does. So I've never heard of that business.

1:01:30Is it listed on NASDAQ, is it? I think it's NASDAQ listed 25 billion. And it's gone up sort of 10x in the last few years. It's been an incredible story. but amazingly a New Zealand guy founded it. Well done. Never heard of it. The other one is Relativity Space, which I brought up before. Do you remember there was a close association to Ideal Shiffman? Do you know what the Idealink is here? I have no idea about it. Who do you think funded it from Seed's? Mage? Not you. I think you'd know. That's disappointing. A bloke called Mark Cuban. It's a tenuous link to me. Not at all. It's a rock solid link.

1:02:04So Mark Cuban found this. I'm not involved in most of his businesses. I didn't say you were involved in it. I said you were linked to it. Okay. One degree of separation. Is that what it's called? Or is one degree yourself? I can never work out these degrees of separation. No, one degree is Cuban for you. And for me, Mark Cuban is two degrees of separation because I know you and you know him. So I'll do a Series F now. So Mark led a Series F in January for$4.5 billion US. And then you may have heard this in March, so two months later, Eric Schmidt launched a$3 billion down round and he basically took over the business.

1:02:38He basically did a$1.2 billion raise,$3 billion, which was really weird given they just raised two months earlier. It was a bit of news around this at the time. So Eric Schmidt basically came in as exec chairman essentially. And this is number five. I never heard of that. Old Schmidt has been pretty quiet since his Google days. How much should he? Not in terms of this. How much did he pocket off Google, you reckon? Oh, he's worth tens of billions. I think he's 30 or 40 or 50 billion. He's done pretty well. Maybe not 50, but he's definitely up there. And he plowed some cash into this. So I thought the Rocket Lab story was the most interesting one here.

1:03:16$25 billion business coming out of New Zealand is remarkable. This is getting to Canva's a bit more, but it's Canva-esque levels for a New Zealand business. Remarkable story. and I'm just Mike I'll give you a quiz which quiz did you like better I liked the first one because I was I knew more of the info the first one me too you can answer my wife on that one oh no I definitely liked the second one better in fairness I didn't really do a great job on the second quiz because it's so hard to find no I liked it the minute you say it was her I definitely liked that one better I've now got if I can support her over you I'll do that every day of the week before we go to a quick break I've got another final question for this, not so much a quiz, but a question.

1:03:59One of the worst acquisitions of all time potentially closed this week. What do you reckon it was? And what happened on that day? Well, this is the time for terrible acquisitions, to be fair. Like you're going to see a lot of bad acquisitions in the next 12 months. Yeah. It was a sub-billion dollar acquisition by a company we talk a lot about on the pod. You could say it's a favorite of mine. Is it an Atlassian acquisition? It may very well be an Atlassian acquisition. Because I remember you. So what did Atlassian buy? So the last thing they bought before that was a browser business. It might be called The Browser Company.

1:04:33The Browser Company closed this week. What happened the day that Atlassian closed a$610 million browser acquisition? Is it something that happened to Atlassian? What happened that day? It didn't happen to Atlassian specifically, but - The browser company. Oh, was that the Trump? No. It was the day that OpenAI announced it was launching a browser. the day Atlassian closed an AI browser acquisition. Oh my God, that is unfortunate. Well, so you might say that's unfortunate timing, but I'm sure the investor relations pitch is, you see, we got there with a head start in an area that everybody is piling into.

1:05:10I'm sure that was the investor relations. I think it's more like we just burned$600 million of shareholder capital on this ridiculous acquisition. I see a lot of people talking on LinkedIn about swapping across to the open AI browser. I'm not doing it. Like I looked at it like it's – I mean I'm not doing it at the moment. But I still maintain after my initial pessimism on Google, on Alphabet, I think they are very well placed and it is much more likely – Yeah, I'm very bullish on Google. They'll run perplexity into like their Google search. You can have already got the AI-assisted search tab on Google, which I accidentally click when I try to go home and quickly get off it.

1:05:50But yeah, anyway, I think the browser wars with AI, it doesn't feel like a new war with new winners. It feels like a continuation of the existing war with a dominant player that might get a bit less dominant, but it definitely is Google's to lose. I think there's a lot to be said about Atlassian's core product in Jira being a super sticky product that will just churn out cash for many years. But as an acquirer, it's up there with one of the worst of all time. Like almost everything it buys. It's like the Yahoo of the 2020s, really. It keeps buying ridiculous stuff. And remember, from Trello to now here, it's never born anything good.

1:06:29It burns cash. So I think what is happening at the moment is a lot of fear masquerading as greed. People are misunderstanding fear as greed. I think that these deals, NVIDIA, AMD, they all look greedy, these deals. but these are not greedy deals. These are fearful deals that these companies are scared. AMD, very scared they're going to be left behind. Atlassian, I think, is scared. They're definitely scared. I don't think this is greed. This is fear. They're not total idiots but they're just making stupid – they're lashing out in fear. Well, they're not idiots. Like we don't think they're idiots.

1:07:06We think – I don't. You can think whatever you want. I don't. I think they're very smart but I think that they are scared about how they're going to maintain this valuation and they have a different view on their approach than we do. They might know something we don't know. They possibly don't. They might just be too close to it. But I think a lot of these crazy deals that are going on at the moment are less about companies trying to take advantage of the moment and more about companies being terrified that something might destroy their core revenue stream, which I largely think is not going to happen.

1:07:42But if Grammarly is not being destroyed by AI, of all the businesses to be destroyed by AI. If Grammarly is not being destroyed, I think everyone can take a breath and take a moment and say, we're not all going to end up being controlled by a robot army and losing our jobs and, you know, mining for the silicon or whatever it is, you know, collecting sand. Like, I think we should calm down about this whole AI thing and stop panicking. On that note, we'll go to a super quick break, be back with a couple of big stories after that.

1:08:23and we're back and i do you guys did a cap raise recently we did it was i think that's an interesting topic right because i mean most people presumably listen to the podcast are not going to do a public company capital raise at any point in time and this is a great insight into how the big dogs the asx work behind the scenes the big the big great danes the asx the rottweilers so i'm going to tell you how it works because everything is just formulaic basically when it comes to or look pretty much most things that look um very complicated and arcane from the outside are relatively simple and formulaic it's just you don't know what the formula is so they look sophisticated from the outside but my in my experience not much is sophisticated i remember when I was growing up and they called like they said Ethiopia is in the horn of Africa and I'm like oh I wonder why they call it the horn and I had all these sophisticated reasons and then I looked at the map and I realized it looks like a horn and so I think that's a lot of life is like that right where things seem complicated but they're not because everything's just made by people and so yeah so this is what happens it's what happened to us but I'll say it more generally so you go and find something to buy it takes a long time you have to keep it secret that's not easy.

1:09:37People love leaking deals. And so this deal probably took us three to six months to get done. A lot of travel to Cologne. Can you explain what the deal was? Yeah. Basically, there are, like we think about Catapult as having, this is how I think about business. There are pillars for growth and then you can put, you can bolt things onto those pillars. And so Catapult has a pillar that's all about athlete performance and wellbeing. And it's called performance and health, which is where the traditional wearables business fits. And it also has a pillar that is all about tactics and helping teams make tactical decisions.

1:10:13And that's where our video business fits. And we felt like there's another area that would be very interesting for us to go into, which is a scouting and recruitment part of the business. And so, the previous acquisition we made, which was a business called Perch, which operates in the gym environment, That was a piece of the performance and health pillar. It wasn't its own pillar. But we found an opportunity to buy what we consider to be the best business run by the best founders that's in and around making scouting type decisions. And so we made that acquisition. And we can call it acquisition circa 100 million AUD.

1:10:49It's not exactly, but we can call it circa 100 mil. And so then the thing is, how are you going to pay for that, right? So you go and do this deal, you keep it secret, and then you say, okay, you sign the deal, but then you can't pay them because no one just has$100,$120 million lying around. Was this Target profitable? Like is it a criteria for you guys? Yes, it's profitable. It's like, I mean, God, like our rule of 40 is 30 plus. These guys are substantially higher than us. Like this is a, this is like, you know, rapidly growing special business. And why do they sell to you guys, given they obviously have a good trajectory themselves?

1:11:26They mostly took stock. I think the view they came to is they can build a lot of talk about startups revolves around making money. And it's definitely important to make money when you build a startup. But in my experience, the best founders, they really want to nail the mission they're on. These founders want to be the globally most successful provider in the space in which they operate. and realistically their best chance of achieving that together with us. And so I think that was a big part of their motivation. And we had long conversations about that because I didn't want them to leave, right?

1:12:05Because you're such a great platform there. Yeah, and that's right. We've got great distribution. We've got more than 4 ,000 teams. And so Catapult is different to most businesses in the space because when people sell their businesses to us, they're really rolling them in and the founders stay. we've got a great track record of founders staying and remaining an important part of the business. And so we go and say, we're going to buy this business. And then we say, okay, we better get some money to pay them because some of it is cash. Yes. Like a hopeless version of Warren Buffett. Correct. And so how do you get the money?

1:12:42So if you have to get money, it's a bit of a tricky process because people might want to give you money and invest in your business, but it's private. And so you've got existing shareholders and then it's harder to get people to invest in a private business because there's no liquidity if they want to sell. And then you have to argue about what the company's worth for a bit. And so in a public company, you don't have those problems. It basically works like this. There's a share price. Everybody wants a discount to that share price. So first people have to like the deal and like the company. Catapult has no problems today being liked as a company.

1:13:19People get what we're doing. And this deal is the dream deal of every investor. Like they knew what we wanted to do. And so we don't have an issue with that. And so then the question is, what can you get them to pay? Now, everybody wants a discount. And one of the challenges is, to put this slightly subtly, I don't often do a deal to raise money on the sell side, but the people on the buy side, they're always buying. So the party in the middle, the investment banker, who's their relationship often going to be stronger with? Not me. I don't come along very often. And so what you're always trying to fight against is investment bankers giving too good a deal to the buy side versus you selling shares.

1:14:04We're able to deal with that because we had Goldman Sachs and Canaccord. We have a long... Were you underwritten? Yes. So, we'll get to that. So, that's the other reason why investment banks want to keep a check. Well, so, we went with two banks that we have long relationships with and I basically make clear to every service provider that I deal with, I'm a non-transactional person. I believe in relationships. I'm not going to fight you on everything but if you make me feel like I'm just got a target on me, then this is the last time we're going to be doing stuff together because I'll feel like the relationship is no longer important.

1:14:38And like, to be honest, I played that card a few times during this deal. I'm like, I'm not going to haggle you on fees, but you need to decide, is this a relationship or is this you trying to satisfy your short-term hunger for fees? And like, I find people are very responsive to that because I uphold my end of the bargain. So then you say, is the quantum of fees public? Do you have to disclose that? You don't, I don't know. That's a good question. Probably it's somewhere in the documentation. And IPOs, they certainly do, but what about capital raises? Listen, everyone is charging 2 % to 4 % of fees, depending on what the size of these things are, right?

1:15:13That's the ballpark. And so we're at the lower fee end, generally speaking, but also, really, I say this honestly, I have a very close relationship with these bankers, and I don't know why people do not understand that the best way to succeed is to find these service providers that you're going to need for your journey and to pick some and stick with them and develop deep relationships with them, whether it's advertising agencies or investment banks, whatever it is, just form relationships. That is, relationships are the key to success. And so then you say, yeah, is it underwritten? So underwritten means that the investment bank, as you know, it means the investment bank says, we're going to go and try and raise this money from investors.

1:16:05But even if we don't and there's a shortfall, we will put in the difference. You're going to get the money one way or another. We guarantee it. And so what they like doing is charging you an extra fee for underwriting because it's like you're buying an insurance policy from them. but what most investment banks do, not in this case, but what they generally do is they say they're going to underwrite it but then they don't want to do it unless it's already fully subscribed by investors so they're not really taking risk, right? It's just free money. Every IPO is like that essentially. When the book's covered, they'll underwrite it for an hour.

1:16:41Exactly. It's like saying we're going to sell you an insurance policy in case you have a car accident but we're only going to sell you that policy when your car is in a glass case inside a safe and there's no possibility of damage. Well, Ferris Bueller's dad did that and didn't work out well. It didn't go well, right? That's true. Don't put the case on a cliff. So, and so then you go through that. And then the question is, how do you price the IPO? Now, usually you have to price at a discount. Why? Sorry, the IPO or the cap raise. So, So this is called ECM, equity capital markets. What does that mean?

1:17:19It means you're raising equity, not debt. That means you're selling shares. Capital, that means money. And markets, it's a market because you're publicly listed. So you're on the market. So that's what, this is called ECM. It's very lucrative for the people that are involved in it. And so then they go to mostly your existing investors, sometimes a new investor that you really want. and they secretly tell them, we're going to wall cross you. That means like we're going to take you across the Chinese wall. You know, that's what it's called. We're going to wall cross you and we're going to tell you what's going on.

1:17:53But you're not allowed to trade because if you trade, like it's inside information. So you wall cross the funds that you think are going to cornerstone the raise. And then you give them a price. And the way the price generally works is the company says it shouldn't be a discount. The investment bank says, I think the investors are going to want a discount. The investors say, give us a big discount. And you argue. Now, I'm pretty good at resisting discounts. But unfortunately, when we raised this money on the Saturday, so you often do this on a weekend because the shares get suspended from trading.

1:18:25The Friday was when Trump went a bit bananas again with the tariffs and tanked NASDAQ. And so the shares were like trading at$7.14 when we suspended. And to be honest, I can say openly, I thought we would have to provide almost no discount. but in the end, we had to discount down to$6.68. Now, it doesn't mean much of a dilution because we only diluted the company equity 6 % or 7%. We're very cautious on diluting. And this would have made like a half a percent difference on 6 % or 7%. So it's not much of a difference, but I kind of have a principle that I don't want to dilute existing shareholders.

1:19:02I want to protect them. And so I'm not allowed to talk about how many times oversubscribed it was because investment banks will shoot me for reasons only they understand. And they said a lot of words that didn't make sense to me. And that number of oversubscribed is also a bit of a furphy because a lot of people overbid. So here, people, it was many times legitimately oversubscribed. One reason is because people really believe in Catapult. It took us a long time, but we got back there. The other reason is because we sold it at$6.68. It was a discount from the$7.14. Everybody kind of knew it's bouncing back and they're going to make an easy 5 % to 10 % on the stuff pretty quickly.

1:19:42And so then we go through a process. So then you get cornerstoned by these wall-crossed investors who all of them want tons of stock. And then you go and make it public in the market. And then in this case, everybody comes piling in and wants all this stock. And so then you sit down with the investment bank and you say, who should we give the stock to? Now, in previous times when we were a micro cap and not worth very much, a few hundred mil, like we might get slapped around a bit by the investment bankers. You got to give to this one. You got to give to that one. But when you're in the ASX 200, it's amazing how everything changes and you're so in control of your own destiny.

1:20:23And so we said the following. We said we want to make sure all of the existing investors that believed in us get stock. like no one's going to get as much as they asked for but we're going to make sure they get a good chunk of stock we're only going to give it to long only funds what that means is if you can short if you can bet against us we are not giving it to you because i do not want to use this for people who would shorted catapult bet against us to close those shorts so i do not want that to happen And also, I just want really high-quality, tier one, long-term investors to buy this stock and to go on the journey.

1:21:05Yeah, totally. And so we were able to do that because there was so much demand and we're in the ASX 200 and also because of our relationships with the investment banks who really felt like they were working for us. And so you allocate it, then you're open to trading, and immediately the shares actually went up from the$7.14. and so that's how that played out, right? It's a very interesting process. It's a very unscientific process, un-mathematical really. It's just basically saying we need this money. Who wants to buy shares? Who should we give it to? Okay, now we've got the money and then you put it behind you and life goes on.

1:21:44It's a very interesting process. Just looking, your shares are now trading at 738, so well above it was before this whole thing. Yeah. The market cap is almost$2.3 billion. So I think it was – we were talking about when we started the pod, it was about, what,$200 million? So you've 10X'd since you started the pod. So you get another reason why hopefully the early listeners jumped on the Catapult bandwagon and 10X'd. So you could have been retired. Well, I know a few who did actually. A few people came up to me and said, oh, I bought them when I heard you talking about it on the pod. By the way, I do want to say because like not much of this credit should be going to me.

1:22:20Like Will, the CEO and his team, did an incredible investor relations job of preparing investors for this pillar of growth. And so when it came, they all understood it. They all loved it. You know, there were no surprises. Like I've learned a lot of lessons on this journey. And one of them is like the only surprise is an unmistakably good surprise, like an upgrade in results. like this this should be a no surprises activity basically yeah obviously it's been a great partnership between you and obviously sean eagor the founders and will more recently so or five years ago when you i think six years ago when you brought him on so uh what a an amazing story and if you go back a year or more the directors like the board were involved in setting strategy, understood the strategy.

1:23:13And so everybody inside the business was aligned about what the next step was. We were just waiting for like the right company to find, which Will found. And so I think like, like no, you know, it's like, I think running a business like of this kind of size public company is like being in a cage with a lion or a bear. It's like Basically, no sudden moves. That is the way to think about it. So from a really happy story, we've got a much less happy story. And during the week, me and Mike got a furious message from you. I think it was on Tuesday night or Wednesday night saying, I cannot believe this Westpac finding.

1:23:53I said, what the hell are you talking about? Anyway, I later realized that you were talking about the Fair Work Commission ruling in the Westpac work from home cases as it's become known. I think I was much more emotional in my message. I think I might have said the leash is off and you can go bananas on this Westpac finding. I think I would have either way. So the Fair Work Commission, and what's almost more frustrating is how badly it was reported, which we'll get into this in a second, but the Fair Work Commission ordered on Monday that Westpac accede to an employee's work from home request so she could make school drop-offs and pick-ups for her two six-year-old children at a private school she moved a house to be closer to.

1:24:32Deputy President Tom Roberts, and we'll get back to him in a second, ruled in the employee's favour despite acknowledging the need to work from home arose, at least partially from her personal preferences. The mother had moved her family to Wilton, south of Sydney in 2011 to be closer to a private school, but ended up further from the Westpac office. As a result, it took her two hours to travel from school to the office each day. In January, Westpac terminated her work from home arrangement as it was inconsistent with its hybrid work policy introduced last year and warned that her request would undermine its ability to insist staff return to work.

1:25:07Tom Roberts, the commissioner, said, I expect that the present circumstances arise at least in part and within the usual economic constraints that apply to the choices that every person makes because the applicant decided to move her present location and send her children to a school of her choosing. However, Westpac has submitted the remote working arrangements to the employee over an extended period. Unions have, of course, gone to town on the ruling, and the Australian Services Union National Secretary, Emmeline Gaskey, said, Flexibility is not a favour that can be arbitrarily withdrawn. This ruling isn't just a win for one Westpac employee.

1:25:43It's a win for workers nationwide. It confirms that the employee's legal right to request flexibility isn't a mere suggestion. it's an enforceable right that employers simply can't veto. I can't believe how angry I am about this ruling. Like, I'm angry on two levels. One is, let's just talk about the absurdity of the concept. Imagine we said to Mike, you can work from home, no problems, to produce this podcast. It's fine. This works well. I mean, you don't talk into the microphone, but like it works well. And then Mike says, no problem, I'll do it from home. And then Mike moves to us somewhere.

1:26:19that has no electricity. And he says, but I can still work from home because you let me work from home. And so this is not Westpac saying we're okay with where she's living. It's them saying, we let her work from home from where she was working under certain arrangements. And she chose to move for reasons totally unrelated to us. And now the way of working is no longer feasible for us as an employer anymore. And the judge basically says, well, you let her work from home. So you've lost all power to decide where that home is. And if she was working 100 % from home, then maybe there would be the nuance in that.

1:27:00But she wasn't, right? She was coming into the office for part of it and now says, I can't do the coming into the office part because it's too far away. Well, I wonder why it's too far away. Could it be it's because you move too far away. Like this ruling is completely bananas. I cannot understand how this could be sensible to anyone, to anyone that this would be okay. And you just have to think about the concept and take it slightly more extreme. Like, you know, with Mike, for example, like it was pretty extreme, no electricity, but we didn't have to even be that extreme. Like what about someone that has to come and work from the office four days a week and can work at home one day a week and says, you know, I just sold my car and there's no public transport where I work and I'm far, it's going to cost me$250 each way to get to the office.

1:27:55I don't think I should have to work in the office for those four days a week anymore because I sold my car. Why is that not consistent with this ruling, right? Like it is, so that's my number one problem. I'm going to say my two problems and you can comment on both. That's number one. Number two is a much shorter speech. The more you have rulings that disempower businesses to set reasonable terms for their workers to be in the office, the more you're encouraging businesses to say, oh, we're going to have to let people work from home. How about we let them work from home in the Philippines or Vietnam or the Ukraine?

1:28:32You know, Ukraine's still big on tech. like you are just sending jobs offshore with rulings like this i think your second point's spot on that's the broader work from home problem uh and that's called the second and third order effects i think you're falling into the trap that every that all these journos are falling into what do you think the trap is that you've fallen into oh i'm surprised that you say that i have no idea and i think that and i'm yeah i'm certainly critical in general but you know the reason why every journo has got this completely wrong because they didn't do the most basic research.

1:29:05It took me about 10 seconds. What do you think that research was? You're going to make some comment about who made the ruling, right? I'm going to make some comment on who made the ruling. So just to understand, this is the fair work commission. Well, I left that to you. I knew that this was going to be coming up, so I didn't want to steal your thunder, in fairness. Well, this is the most relevant piece. This is what a sham, this fair work commission. I was at Freehills, which is the ultimate employer law firm for six months through my articles and I was in employee relations or industrial relations I think was called employee relations back then and you learn a bit of stuff so the Fair Work Commission isn't like a real court the Fair Work Commission is is you could probably call it a kangaroo court because there's there's essentially two types of Fair Work Commissioners there's Fair Work Commissioners appointed by the Liberal Party and there's Fair Work Commissioners appointed by the Labor Party who do you reckon appointed well my guess would be that um they didn't come from a corporate background.

1:30:01So it would be unlikely to be the Liberal Party. So Tom Roberts, the member here, he's not a judge. Let's be clear, this guy isn't a judge. This guy has, I think he's a lawyer, but he's certainly not a highly competent lawyer. He's not a Q, didn't come from the Q becoming Q. So good old Tom Roberts was - Well, you mean he's not a senior. We don't say he's not competent. He wasn't a very senior lawyer. No, I argue he's not competent either. But this guy was a career unionist. He's only ever worked for a union. So, of course, he's going to decide this way because he was appointed by Tony Burke, the far left member of Western Sydney.

1:30:35Oh, I hate Tony Burke. Yeah. So, it was appointed by Tony Burke who's obviously far left himself. And actually, when he came into power, he said of the last 27 appointments, last 29 appointments, the Liberal Party's appointed 27 or 28 employer reps. So, the Labor's done the exact opposite, which is kind of understandable. and they've appointed a bunch of unionists to the Fair Work Commission. Well, you say it's understandable, but like – I'm not saying I agree with it, but it's what you expect. So I think it's bad that the Liberals appointed 27 people from that and I think this whole system is deeply flawed where you stack whoever you want and then only one of them makes the decision.

1:31:16Like that is what's crazy. So what may happen is you can appeal to the full bench and then you can appeal to like the Supreme Court after that or to the federal court. I think it's the federal court actually. So hopefully this abhorrent decision gets appealed. But what every journo who's written about it, and this is the state of business journalism in this country, nobody bothered to say this guy was a lifelong unionist. Of course this decision was made. This isn't a ruling on work from home. You actually felt the same trap. This isn't a ruling on work from home. This is a ruling on some far left woke unionist who's, of course, allowed work from home because that's what he is.

1:31:48He's a unionist. And all the unions have jumped on saying this is a victory for work from home. No, it's not. It's a victory for the far left who appointed one of their own to the commission. This wasn't a Supreme Court judgment. This wasn't a High Court judgment. This was a sham judgment by a sham member of a sham commission. So let's get that straight first, what it actually was. I agree with you on that. Although I just want to say what amuses me. Once you're like, you know what, like a minigun or a chain gun as you play those video games? Like you press the trigger, it takes a second, but then they just fire everywhere.

1:32:20And so I love it. When you get worked up, you're one of those. Because business journalism, you just tried to put 14 rounds into that. This is the state of business journalism. But actually, you think business journalism is pretty good, like the Australian Financial Review. They're good. They're globally good quality business journalism. They lose the plot sometimes, and this is one of those cases. I think it would be very interesting to know why they didn't report on the background of this commissioner. They're lazy, and they don't understand. No, it's not – well, I totally disagree. It's not lazy.

1:32:50Like it's a very important – like I think the fact that you raised it is very important. I wonder – I'm going to ask. I wonder if they didn't think of it or they were short of time or they think that that is not the way they want to report to have this like reporting of implicit bias. Now, I agree with you. There's no doubt in my mind that the background of this individual – It's not implicit. Heavily – yeah, heavily shaped. Well, explicit bias would be this person saying, I think unions are much better than employers, therefore I'm going to find in favour of this worker. It wasn't a union case.

1:33:23It was an employee versus employer case. Of course the union's going to have the employee side because that's what they do, and that's why you have a full... So how would you fix... So this is what I want you to answer. How would you, if you were the... Who oversees Fair Work? Is that the Minister, the Employment Minister? Well, maybe the Attorney General. It's one of the... Possibly a combination. So if you were either of those things, like in a way that would be amazing and in a way God help us all, then – and if you were both and you could – what would you – how would you change this? Because there needs to be some arbitration body to make decisions.

1:33:58You can't just pump everything into the courts, right? I don't know. If you look at the great example – You can't because the courts are full. The problem is – The courts are full. The takeovers panel, which is a very successful body, and that's made up of investment bankers and lawyers. but that's investment makers and lawyers judging their own. So there's no real dog in the fight. They're not hiring unionists to be able to. Maybe they are actually. So what would you do with this? I think you almost have neither. You've almost got to have – like a bit like VCAT or NCAT or QCAT where you have essentially retired lawyers potentially.

1:34:29You have non-partisan people. But every retired lawyer – Well, non-employment lawyers. Sorry, non-employment lawyers I should say. Yeah. All right. But I want to be the devil's advocate on your ideas, okay? So lawyers, almost any lawyer that is successful has predominantly worked with corporations because that's who can afford to pay. So the left will argue that's skewing to corporations. Like if you look at the Supreme Court of the US, often they hire people, they employ, like Donald Trump might bring on people who think he's in the far right who then give decisions he doesn't like. So it doesn't always – often when people get to – when really good lawyers get to positions of high authority in the legal profession, they actually forget their past.

1:35:11But the Fair Work Commission is just really biased. And everybody knows – and you've seen – there's been a few cases of Fair Work, the reverse, where it's been an employer-background member who's found against Fair Work from Home. So you see it go both ways. But what my criticism here isn't so much of this guy, this Tom Roberts guy is a unionist. years, but the fact that the media failed to report that, which is more my issue, that it was so relevant. It was so relevant here, and nobody mentioned it. So that's my first point. My second point - Do you think this is going to get appealed up to the - where does it go, did you say?

1:35:46The Supreme Court? Federal Court. I think it goes to the full bench, which is three members. Before we talk about that, I don't know why Westpac ran this case. This is a really stupid case for Westpac to run, because they didn't have clean hands here, for a couple of reasons that you didn't mention. Firstly, or one you did, this person's a mum. And I think if you are going to allow work from home, if someone's got young – and yes, she did move away from the office, but she has young kids and I'm the biggest work from office acolyte in Australia probably. And even I'm allowing people with young kids to work from home.

1:36:20So I thought this was a stupid case for – like whoever the morons running this case at Westpac are should be fired immediately. They're idiots and they've done everybody a disservice. But hang on. You say this, but when you say she's a mum, if you have 14-year-old kids, you're also a mum. Of young kids, no. Of young kids. She's six-year-old kids. But if she took on this work and then moved to go to a better school,

1:36:47it's a tricky situation because I'm sure this is – There's one extra element you're forgetting, and you may have noticed, is she offered to work at a nearby branch that was close to her and Westpac said no. So she said, I'll work two days. And maybe Westpac's only – she's something in mortgages, some sort of mortgage exec of some sort. Maybe they should have just taken that option. But they might have said, nah, if we're going to have this collaboration, she needs to be in the head office. This is one of my questions. What about if this conversation would have happened before she moved, I would feel – I don't know when it first happened.

1:37:24If she had this conversation with Westpac before she moved, I might feel slightly differently about it and about your criticism of Westpac. If she only told them after she moved, I feel differently about that, right? I don't think that's honest. I'm actually not critical of the employee here at all. I'm highly critical of Westpac, and I'm critical of journos for not reporting the bias, the likely bias of the member. Well, you're not critical of the decision. I'm less critical of the decision than you are. Every decision is nuanced. I'm shocked by that. And Westpac should not have brought this case.

1:37:55There's plenty of examples of the 21-year-old tech bro living around the corner who doesn't want to come to the office. Bring that case, or a person who's got two or three or four jobs. Bring that case. Don't bring the case to the mum with the two six-year-olds. That's a stupid case to bring. The line is, if someone's caring for their mum or their kids, they've got to take them to school. They've actually got a legitimate reason to work for them. She's also offered to work at a nearby branch. This is a dumb case to bring by some moron lawyer at Westpac who doesn't know what the hell they're talking about.

1:38:23has ruined it for everyone. Westpac, you're a bunch of dickheads. Stop ruining it for people. Well, you say they've ruined it for everyone, which I agree with. They have to appeal this, right? This has to go to appeal. They should run this all the way up. But the problem is, because they picked such a dud person to take the fight on, that they've duffed it. They should have settled this out of court quietly, let her work for the nearby branch and everybody's happy, and run the case for the tech bro who's 30 who doesn't want to come into work. Not the mum with the two six-year-olds. I really disagree with you on this.

1:38:52Like, shouldn't the measure of this be, if she was here in these circumstances when she applied for the job, is it reasonable to assume that Westpac would have still given her the job? Isn't that the measure? I think the other point is Westpac also allowed this for four years. So they came to the nuisance, so to speak. Oh, I didn't know that part of the story. They allowed it for years. They suddenly changed their policy. She said, let me work from nearby. They said, no, you can't work from nearby. You've got two hours a day. Well, why are you running this case? Don't run the case. There's so many stronger work from home cases.

1:39:25Did she come into work for four years or she – what do you mean this was happening for – I thought she was working from home for the four years. Westpac then said, no, no, no, no more working from home, guys. You've got to come in a couple of weeks. She said, let me work nearby. They've said, no, you've got to come in all the way because you chose to move. So if that's true, then I suddenly feel very differently about this. I feel like you know how they like you know this myth of possession is nine tenths of the law kind of thing I mean it's not true right but like but I do feel a bit like that with this like if you let if she was allowed to do this for four years and they suddenly changed their mind then on day one that it changed that to me is her demanding new terms but four years later that's them changing the role and I'm much more sympathetic to her if they're trying to change the role on her but I thought the ruling was not a good ruling was my main issue with it it was a terrible ruling and it was a terrible case like everything about this is terrible the reporting the ruling the judgment like everything about it but like the point is there's and like we have instances where we have great team members who have chosen to move further away and we obviously want people in the office but if they've got a really good reason not to come in we'll do everything we can to keep them um but what what happens here but i think your other point or point number two is probably the better point anyway is this person like she may have won this she may have won the battle but she's going to lose the war so what will happen is she won't get promoted she won't get a pay rise they'll gradually just squeeze which is what they should have done without running the case is she'll just get squeezed out because she's not in front of her boss and she's not going to get promoted so or her job gets outsourced to bangalore as you said so ultimately it's the classic pyrrhic victory that it's there's pyrrhic victories and pyrrhic losses all over the place on this stupid case but But ultimately, her job will eventually just get killed somehow and she won't get pay rises and she'll probably just have to self-select out because it's just not going to be a great environment.

1:41:23Westpac have ruined it for everyone meanwhile. And when people Google her, unfortunately, unless she's paying for reputational management now, which is expensive to push down the SEO result, this is what's going to come up if people Google her name, right? That she put Westpac through this, which might have been legitimate from her point of view. I feel bad for her actually. I actually don't think she's in the wrong. Yeah. Listen, if they had accepted this arrangement for four years, if that's true, then I take back everything that I said, other than I think the nature of the ruling was very poor.

1:41:53But yes, I think that if that's true, they flipped it on her. But listen to this. Someone sent me this. I don't know if this is new or not. Someone sent me, look at this Westpac ad from yesterday. Someone sent it to me. It's a job at the Westpac Group, Sydney, New South Wales, and in brackets it says on site and then underneath it says in the description of the ad why on site this role thrives on in-person collaboration workshops team huddles and shared problem solving are most impactful when we're together is it possible i don't know if this predates this ruling but like is it possible that westpac is now running in their ads why stuff needs to be on site to try to prevent this type of thing from happening the other problem i have with this whole case and why I didn't like Westpac running it is this isn't a case to set a precedent.

1:42:44It's just like you want to set a precedent. I can understand why the union wanted to use this case. Oh, yes, you're right. This was a mum with two young kids who offered to work nearby. It was a great case for the unions to run. It made sense because this is a really sympathetic plaintiff. It's a stupid case for Westpac to defend because it's a sympathetic plaintiff. So I think this is something like the old Qantas legal team running this case, like just idiots. Well, my overarching advice for people that are listening to this is, if you're running a business, try to do everything to stay out of the courts against your employees.

1:43:18If you're an employee, like this isn't good for you either. Like try to figure out ways to settle this problem. Because if you go to an employment lawyer, like often they're going to say, yeah, you've got a good case. So you can like try not to fight this stuff. Like being, going through having a public war, like, you know, there better be a very, very good reason for it. That couldn't be resolved some other way. I know, you know, there's another kind of footnote. Just before you go on that, just on what we, what we've done as a business is similar to your Westpac ad is that we have told probably for the last two and a half, three years, we're an in, in, in, we're an in office workplace.

1:43:58If you like that, amazing. If you don't, we're probably not for you. Go work. at the ATO or whatever, go work at CBA or whoever, a business that embraces work from home. And that means that everybody who's worked for us in the last three years, and maybe staff churns at sort of 10 to 15 % a year. Within seven years, six, seven years, you've pretty much got a workplace that suits your preferences. So there's actually no need to go to court and do all this stuff. Eventually, people who want to work from home go to places that allow work from home. People who want to work from the office go to places that want to work from the office.

1:44:28And we end up this nice equilibrium that we shouldn't have to fight over. I don't know if you know what's going on at the moment more broadly in the world of fair work. How many, like what, one in how many people do you think brings a claim each year to fair work against the employees? Like one in a hundred, one in a thousand, one in 10 ,000, one in a hundred thousand, one in what number of employees do you think brings a claim? I saw there was an article on the Fair Work Commission being bombarded with claims. Remember there's multiple types of claims. there's unfair dismissal and there's always these now what's ridiculous general protections claims as well which people can make for anything which are terrible we actually maybe should talk about that on a different episode or even ask us anything if someone wants to ask about that I think that's probably too long a topic for this but in terms of your specific question I would have thought it's 50 ,000 one in one in is it one in 2 ,000 one in 200 one in 2 ,000 maybe Yeah, I think it's one in 300.

1:45:27Like if you assume there's about 17 million workers and there's like 50 ,000 claims being made every year. I mean, I'll give a snippet and then we'll talk about it more in another episode. But it's quite hard to bring an unfair dismissal claim. Firstly, you have to have worked for more than six months for the employer. Secondly, unless you're on an award, you have to be earning less than$183 ,000 a year. And thirdly, it has to be unfair. That's probably the biggest hurdle. But maybe on another episode, because you're shutting me down, we'll talk about why there are much better ways for employees now to create problems for employers, even when things were not unfair or didn't fulfill those two other criteria.

1:46:18And that is predominantly what's happening in Australia now. Yeah, that's a big problem. We've got big workplace problems in this country. I don't say this is some right-wing maniac. Obviously, I'm not that. I'm very sympathetic to worker rights. But we have got big problems in this country. And what is going to end up happening is it's like unemployment is already 4.5%. It's going up. We're going to drive up unemployment and we're going to drive jobs offshore. And by the time we do something about it, it will be too late. Yeah, it's the ultimate in short-term greedy from an employee perspective.

1:46:50Like if you sit down, if you work hard and do what you need to do, you'll progress and go really far. If you try and take a shortcut and sue your employer, especially if it's illegitimate, more than what I'm talking about, maybe you get a short-term win. but it means you probably won't get another job somewhere else or it'll be really hard to get another job or you remain at your employer. If you get this work from home thing up like this employee has, then you don't get promoted, you don't get pay rises. It's just so counterproductive to the relationship that you want to build with your employer and employee, which is one of let's work together to create lots of value for our customers and we'll share that value between us, hopefully fairly.

1:47:29And that's what you want to do with your employees. And you don't have a win-loss adversarial relationship. Well, most employers won't admit it, but they're allergic to employees that have taken action against a previous employer. That's the honest truth, right? And I'll tell you the nicest thing to end this part of the discussion on, because you've shut me down, is I saw a post online from Evan Thornley, great guy, one of the original winners of the dot-com boom. and I saw him post something about an employee that had been with him for seven years and was moving on. It was the most supportive, encouraging, positive post about that employee from like, this person is a superstar, a lovely human being from a lovely family.

1:48:18Like if I said to, like I replied to him and I said, this, this, the quality of this post is a better recruitment tool than 1 ,000 LinkedIn job ads for people to see this is how he feels about the success of his employees. Yeah, totally. And there's nothing better than like I don't love group people. I hate when great people leave the business, but you get a massive satisfaction when a Dan Gattaya or Blake Hutchinson leaves and creates hundreds of millions of dollars of value for themselves or other people. That's a huge pat on the back for us. Well, you do. I love seeing, yeah. You feel that way and Evan feels that way.

1:48:55and Leonard Hammersfeld who runs Buzz feels that way probably more than all of you. But I struggle to feel that way. I'll be honest. Like I struggle to feel that way. I often feel like, you know, you're with me or you're against me kind of thing. And I feel a bit betrayed when people leave even. Like I'd be supportive. Even start their own business. I'm always very supportive of that. I know. But I still feel like, yes, you know what? We're all a work in progress and I've still got work to do on that topic. Going to competitive is different. If I go to competitive, then I'm in your boat. But if you go and get a role you couldn't otherwise got or you start your own business, that's a huge result.

1:49:30Oh, going to a competitor, I'm litigating if that competitor is named in their employment agreement, right? But I'm being very honest about this. Like I find it very emotionally hard to accept people leaving the mission that I thought we were all on together. and over time I've understood that being the founder or CEO or chairman isn't exactly the same as being an employee who's being paid to be there but it is still a journey for me to get there you know. The reason why I think you're actually wrong in that view and clearly you're changing your view is we've had I don't know percentage but it's it's not insignificant and that always very good people leave and come back and I'll often say to someone who's who I think is really great and they're leaving for a non-competitor I'll say my you know my number when you want to come back ping me and it happens happened multiple times this year it happened multiple it happened probably probably two to three to four times a year that we get really great people back and they come back a better team member uh happened with with someone i can think of just just really recently and he's he went to get a he wanted to broaden his experience and that was that was great and he's come back and he's amazing well you've just undercut your own argument like you said it like such a good guy until you kept talking because um basically your pitch is i'm happy for people to even very supportive because I reckon they're going to be boomerangs and come back anyway.

1:50:50That's not really. No, I'm talking about different categories of people. I'm talking about first there's the Dan and the Blake category who's creating their own business or effectively in Blake's case, refounding. Or there's the other people who just go to a different business, like don't go to a competitor, but go to a different business. In which case we say, well, when you want to come back, we're here for you. Oh, for sure. I agree with that. A hundred percent. I'm never, I never feel anything but positivity towards someone that has left and come back. I think on that positive note, big episode, we will see everybody on Saturday for our Ask Us Anything episode, of course.

1:51:24And thank you for listening in.