Mythical computers and super apps

24:44All right, we got to take a break and then we're going to come back and talk about a very different, maybe completely opposite way of thinking about interacting with technology. We're going to talk about super apps. We'll be right back.

25:05Support for this show comes from LinkedIn. When you're a small business owner, your business is on your mind 24-7. So when you're hiring, you need a partner that works just as hard as you do. That hiring partner is LinkedIn Jobs. When you clock out, LinkedIn clocks in. LinkedIn makes it easy to post your job for free, share it with your network, and get qualified candidates that you can manage all in one place. LinkedIn's new features can help you write job descriptions and then quickly get your job in front of the right people with deep candidate insights. Either post your job for free or pay to promote.

25:40Promoted jobs get three times more qualified applicants. At the end of the day, the most important thing to your small business is the quality of candidates. And with LinkedIn, you can feel confident that you're getting the best. Based on LinkedIn data, 72 % of SMBs using LinkedIn say that it helps them find high-quality candidates. Find out why more than 2.5 million small businesses use LinkedIn for hiring today. Find your next great hire on LinkedIn. Post your job for free at linkedin.com slash track. That's linkedin.com slash track to post your job for free. Terms and conditions apply. Support for this show comes from LinkedIn.

26:18When you're a small business owner, your business is on your mind 24-7. So when you're hiring, you need a partner that works just as hard as you do. That hiring partner is LinkedIn Jobs. When you clock out, LinkedIn clocks in. LinkedIn makes it easy to post your job for free, share it with your network, and get qualified candidates that you can manage all in one place. LinkedIn's new features can help you write job descriptions and then quickly get your job in front of the right people with deep candidate insights. either post your job for free or pay to promote. Promoted jobs get three times more qualified applicants.

26:54At the end of the day, the most important thing to your small business is the quality of candidates. And with LinkedIn, you can feel confident that you're getting the best. Based on LinkedIn data, 72 % of SMBs using LinkedIn say that it helps them find high quality candidates. Find out why more than two and a half million small businesses use LinkedIn for hiring today. Find your next great hire on LinkedIn. Post your job for free at linkedin.com slash track. That's linkedin.com slash track to post your job for free. Terms and conditions apply.

27:30Welcome back. The idea of a super app has been around in tech for a really long time because it's really not that complicated a concept, right? Basically, what if you could do everything you needed in one place instead of needing a million apps for a million different things? And really, there are two flavors of super app. There's the kind that tries to bundle a bunch of similar stuff into one app, like Uber trying to do ride sharing and food delivery and public transit tickets all in one place. That's all, you know, moving things from one place to another. So they sort of make sense to put in one place.

28:05That's a semi super app, I guess. But imagine if Uber also tried to get you to video chat with your friends in the Uber app or book doctor's appointments in the Uber app or watch your favorite shows in the Uber app and look for an apartment in the Uber app. Now that would be a true super app. Lots of companies have tried to build a super app like that and only one has actually succeeded. We'll get to that one in a minute. But more recently, Elon Musk has been talking about how he wants to turn X, the platform and company formerly known as Twitter, into a super app in its own right. Personally, I think that is just straight up impossible for a bunch of different reasons.

28:44But I figured I should check that theory with a couple of people who know this space and Elon Musk really well. So I brought in The Verges, Liz Lopato and Alex Heath to talk through it all. Alex Heath, hello. Hi. Liz Lopato, hello. Hello. That's a lot of energy for The Verge cast. Yeah, Liz really won the hello there. Listen, man, I'm hype. Whenever you tell Liz she gets to talk about PayPal, it all just falls apart. Which is actually, okay, So I've been trying to figure out where I want to start with this, because as we talk about super apps and Elon Musk and X and all this stuff, there are a lot of places we could go.

29:20But Liz, you have a very old book that you were just telling us about that makes me think we should actually start about 25 years ago with the first time Elon Musk tried to make X happen. You are like deep in the history of this man and PayPal. And if you go back to the 90s, all the stuff Elon is trying to do now, he was kind of trying to do or at least thinking about trying to do back then. Right. Like build the sort of one app that runs the universe. Yeah. So I guess one of the things that I just want to like, you know, if you can think back into like the mists of time, if you will, back to 1999, it was a very, very different time on the Internet.

30:02As all of us who are online recall, and those of you who are not online due to not yet being born, I'm sorry. Musk is one of the sort of original internet entrepreneurs, and he founded this business called X.com in 1999, which was when he thought it would be like a really cool idea to do electronic payments, checking accounts, stock trading, mutual funds. And like, I want to be real, a lot of these ideas seem pretty ahead of their time. At that point, nobody had really figured out how to use an email address for payments, which is something that like we all do now. Right. And so part of what what went on there was there was this unbelievable cash burn.

30:46Customers got like a twenty dollar bonus on a cash card when they signed up and like ten dollars for everybody they referred. And then there were also all of these problems around verification where they would give credit cards to just anybody who wanted them. up to like a$10 ,000 credit limit. And, you know, Musk's sort of idea was just to onboard as many people as possible because he wanted to have like a million people using the new credit card by the end of the year. And like, this is like, by the way, Peter Thiel's retelling of this, the million people. And so there were a lot of bad checks.

31:17There were, you know, banks that wouldn't allow people to have checking accounts. Who were you signing up for this card? They had something like a 50 % chargeback rate, which is completely wild. There was just like a lot going on. And there was a second startup called Confinity that was Peter Thiel's that ended up merging with X.com because they were both burning money really fast. And the VCs involved were like, these are similar businesses. Let's like see if we put them together if something good happens. Let's burn money together. Let's burn money together. And Confinity had this very popular product called PayPal.

31:50Part of what went on there is there was a conflict around PayPal. Musk wanted to rename it to X and use a different kind of software to run it or a different kind of code, rather. And nobody else wanted that. And so Elon Musk went on his honeymoon and there was a palace coup and he was thrown out of X.com, which became known as PayPal and is still successful today, sort of despite these sort of rocky beginnings. Right. And if I remember right, even then they had this thesis that like, we want to do all this money stuff. And we think that if we can be sort of the conduit through which money flows on the Internet, we can solve everything.

32:33It's like there's a little bit of like what people talked about with crypto that they're like, if we can fix Internet money, we can we can change everything about how everybody does everything just through the money. Like, were they talking about that in the 90s or is everybody just like retconning that back into Elon Musk's history of X.com? I mean, I think that that was that was sort of the primary goal, because if you think about how the Internet works, it does seem to be missing a protocol. And that protocol is money. And so, you know, there have been a lot of attempts to create a money protocol online and crypto is one of them.

33:06But I think that was part of what these guys were thinking about. And when I say these guys, I mean both Musk and Teal when it came to PayPal. And like if you were listening to sort of my description of X.com, it does sound a lot like what is called the quote unquote super app that seems to be Musk's ambition now with Twitter. And I do think that there is something pretty powerful about the idea of having sort of a unified money protocol. But the other thing that maybe is worth mentioning is that here in the U.S., banks got involved. And so, you know, I have my banking app on my phone. I can upload paper checks to my checking account if I so choose by taking photos and things.

33:46And so there are I already have that particular offering. And then on top of that, you know, there's PayPal, there's Venmo. There's all of this competition around ways that you can send money and ways that you can transmit money online. And then, you know, you think another layer, you think about crypto. If you're involved in the crypto world, there's, you know, wallets, all sorts of other ways to send money. So it's it's a highly competitive space, much more so than it was in 1999. Right. Which I think is why, Alex, I'm curious how you have seen this space over the years, because I think you and I have both been covering the consumer internet for a long time.

34:17And I think it was like the mid-20-teens, I think, where somewhere along the way, everybody who made any kind of successful messaging or social networking app started talking to me about wanting to be a super app in which you could do everything. And I think it's for the reason Liz just described, which is basically like money on the internet got like pretty easy and there were lots of ways to do it. And so everybody was like, okay, what is our lock in? And it was like, okay, this is where people hang out with each other. What else can we build on top of that? And I feel like 2015, everyone I know was telling me that they were building a super app.

34:53Was that your experience too? Yeah. Were you in the audience when Facebook had its annual conference in 2016? Do you remember the Messenger chatbot craze? Oh, yeah. I do remember that. So that was actually David Marcus at the time, who was the former president of PayPal, was trying to bring this very super ad vision that we'll get more into that Elon wants to do to Messenger. And Messenger had 900 million monthly actives already at this point. It was huge. And they made this big concerted effort to get developers to build these chatbots inside Messenger. And the thinking was that you would do all kinds of things besides talking to your friends.

35:33You would talk to businesses. You would do customer support that way. And it bombed. I mean, it totally bombed. And, you know, we can go many directions here. But many years later, WhatsApp, Meta's other app, is actually probably the closest thing to what is a true global super app. But that's been a much longer road and it's become that in countries that are not the US or Western Europe for very important reasons as well. yeah no i think that's right well and i think we should before we get to whatsapp i think we should talk about wechat just yeah briefly and i'm curious as from both of your perspectives how you think about wechat because wechat as we talk about super apps the like one piece of software in which you live your entire life wechat is the absolute smashing success story it is like every app you can think of all shoved into one app called wechat that is also where you talk to your friends.

36:27And I feel like everybody I've talked to for the last 10 years is just trying to do what WeChat is doing. And that is like everybody's end goal. It's every whatever VC wants to fund. It's what everybody wants to build. Like, this is the future of everything. Liz, do you see a line between those things? Like is the thing that PayPal was trying to do what WeChat managed to pull off? Obviously, in China, it's a very different country with a very different evolution of the internet. Like, did they kind of get it right? Did WeChat finish the job there? So I think it's worth lingering on the differences between China and the United States for a moment.

37:02For sure. Because WeChat is actually bigger than what the sort of vision originally for X.com was because X.com didn't have the sort of social media component where you can like post statuses. There was no idea of finance as being a kind of social media, even though I think as everyone who's used Venmo knows, it is. And in fact, you know, if you think about the dollar bill, that is actually media. Right. You know, it's there's literally a photo on it or not a photo, I guess, but a print. Well, and in the same way that all these other apps have started with something else and sort of worked their way down to buying stuff, I think realistically, like if if this had worked the way they wanted it to, you get to the point where all of your money is moving around and then they start to look.

37:41And it's pretty easy to like pull lines out of that into let's let people send each other money and talk about it and let's let them buy stuff. Why don't we bring the store in here? Like you can see how you would arrive at the same place, even from the exact opposite direction. That's exactly right. And so one of the things that I think is worth mentioning about WeChat is specifically the Chinese Communist Party, which engages in a great deal of surveillance. So WeChat is a very good way for Chinese authorities to keep an eye on what people are doing, where they're sending money, who they're talking to and what they're reading.

38:14OK, and this is, by the way, the downside of every super app is that it is a one stop shop for surveillance. And I don't mean to suggest that the U.S. government isn't surveilling us because, as we all know from Edward Snowden, it is. But it's a little bit of a pain to put together all of our various social media streams and, like, the stuff that they're getting from wherever else. And, like, this is like a one-stop shop for the Chinese surveillance state. So that's one way of thinking about these super apps, and it's one way of thinking about WeChat. Like, it's very, very powerful both for the users and in terms of social control.

38:46And so one of the things that I think is maybe interesting here is that in a lot of places where these super apps have traction, there are conditions that are very different than the conditions in the United States. Either the banking industry isn't as developed there and didn't get online as quickly, or there is a level of social control from the government that there isn't here in the U.S. And so I can see why Silicon Valley VCs would love to have something like WeChat because that would be very powerful. You know, it would make you a lot of money and there's all sorts of things you can do with all that data.

39:19But I don't know from a user perspective why that's necessarily something you would want, especially knowing that it really could ramp up surveillance. It really could do things that are maybe not in your interests. And again, like this is just a basic difference between China and the U.S. Besides the fact that there is a lot more competition here because the U.S. government allows a lot more competition around financial services. And to put a finer point on what Liz is saying about WeChat in China, I mean, WeChat literally is an extension of the government in China. You can have your government ID managed and accessible inside WeChat.

39:59It is a sensor apparatus for the government. And the reason WeChat became so successful inside China when it did is because not only does the government there censor from within, it also censors out things from other countries. And so there was a vacuum where there were not any other social networks, the most of which were getting created in the Western world, allowed to even exist in China officially. So WeChat became the blessed service by the CCP. It continues to be to this day. And to Liz's other point about money and about it being incredibly lucrative, it is. But historically, and you can look at WeChat as a perfect example, it's owned by Tencent, which is a mega cap tech conglomerate, kind of similar to an Apple or an Amazon in China.

40:46WeChat as a business actually doesn't make Tencent the majority of its money. The majority of Tencent's money comes from its gaming business. They have a cloud division. They're starting to do a bunch of AI stuff. These super apps by themselves are not wildly profitable. It's when you attach them to these conglomerates that also have, you know, historically the blessing of the government that they operate in, the country they operate in. So it's a very unique situation for WeChat. Right. And so given that, all of what you both just said, which is basically there are like these giant systemic differences between these two countries that would allow an app like that to work in China, that would almost certainly not allow an app like that to work somewhere like the United States.

41:29And yet every tech company of a given size has this exact ambition. Alex, you wrote a story a couple of years ago looking particularly at Snap, which you thought was kind of headed down this road and had a real shot at pulling off some if definitely not all, but some of that. Like, why did everyone get so obsessed with this if it's not a particularly good business and there are a million really good reasons it's never going to work anyway? Well, Facebook meta has basically cornered the ads market for these social apps. It's incredibly hard, and Snap is living proof of this with where their stock price still is today, to compete with a scaled digital ads business like that.

42:08It's really meta and Google, and that's it. No one's been able to take a meaningful share out of that. And so if you're a Snap or you're a Discord or you're one of these kind of up-and-coming, growing social networks, you're looking at other ways to build a business. And the Super App thing is it's a sexy idea, right? It's also about time spent. If you're a social media site, you want as much time spent in your app as possible. And a Super App is something that people use all day, every day. And so the thinking is, can we bring more activity? So like, for example, Snap tried a whole gaming platform, Snap Minis inside the app, and they shut it down because they couldn't make money from it.

42:43And you know why they couldn't make money from it? Apple. This is a thing that we don't talk about really as it relates to these digital apps. The power that Apple, as the distributor of these apps to the App Store and the way the App Store rules work, is extremely powerful. And guess what Apple doesn't like? They don't like app stores that compete with their own. And so eventually you get down this road if you're building a super app where you're a store within a store kind of idea. And the only app really at scale that is allowed to get away with this is WeChat. And there's been some reporting on this over the years that basically, and I believe this to be true, Apple knows that it will not sell iPhones in China without WeChat.

43:24And so it's let WeChat do things that it will not let any other app of that scale do. And that's why Snap's kind of mini stuff failed. It's why Facebook has never been able to build its own kind of store within Facebook. They've tried many times. This is starting to loosen with some of the EU regulations specifically that will allow competing app stores soon. But Apple is the main hindrance, I would say, actually, to building a super app outside of China right now. And is that just because a huge part of the business case there is just payment fees? Like if we can get shopping in our app, if we can get people sending each other money in the app, and we can take even a relatively small percentage of it, that there's a whole lot of money to be made doing that.

44:06And if you can't get any ad money, which you can't, that's one way to potentially make a lot of money here. I don't know. I would be curious to hear Liz talk about this because my understanding is that payments businesses are not wildly profitable businesses. They're actually pretty commoditized. The tech is fairly standardized at this point. There's many competitors. There's Stripe. There's ADN in Europe. The banks all have their own competing rails at this point. The big ones. I'm not actually sure payments is in and of itself a big business. Like, Liz, I would actually we could just get into actually right now kind of what Elon wants to do with X.

44:39I was just going to say this is a perfect segue into this is a bad idea. No one will ever do it. There's no reason to do it. And so Elon Musk is trying. Actually, guys, I want to I want to pause here because everything Alex is saying is true. Payments is like not the most lucrative thing on Earth. But there is a brand new competitor that I do want to talk about that went live on July 20th of this year called FedNow. And it lets you as an individual or businesses, if they so choose, send instant payments through your depository institution account, which is like usually a bank. Liz, I straight up thought you were just lying to me.

45:13Like, I thought this was like an elaborate bit you were doing. I just Googled this. This is real. Sorry, keep going. Yeah, it's from the Federal Reserve. They've been working on it for several years now, and it's potentially very, very powerful. It's a brand new set of payment rails that we just we haven't seen how it's going to be used used yet. You know, there's we have the first release of it. There's like fraud prevention tools. There's a number of support capabilities. And I think that if you're thinking about payments in a very serious way, the U.S. federal government has just given you some competition.

45:48So that's that's maybe also worth keeping in mind. Liz, I would love for you to react to this. So Elon held his first meeting when he took over Twitter in November. I got an audio recording of the entire conversation and put the full transcript on The Verge at the time. And there's a section kind of in the middle of the meeting where he gets into the payments ideas that he wants to implement at Twitter before it was X. And there's this one line that I think really gets to the heart of what he thinks the reason people will want to transact through Twitter will be. And he says, if you can simply have one balance on Twitter that can simply go positive or negative, and when it goes positive, the interest rate is better than you could receive elsewhere.

46:29And when it goes negative, the interest rate is lower than you see elsewhere. Now you have a much simpler system. Is that actually a compelling reason to do any of this? And is this something that is going to get people to transact in Twitter? I don't think so, but he seems to think it is. It doesn't sound simpler, does it? Is that even anything? Well, he's saying like they're going to come and you write about this on the site all the time, Liz, like he's saying they're going to compete like so much goes back to interest rates. And he's saying we're going to focus on better interest rates on the positive and negative end so that we're the compelling place to store your money.

47:04Can he actually do that? I don't think so. Well, you know, there have been a number of people who have been trying, most notably Goldman, which has been offering a product both with Apple and also on its own. It's just a savings account. You can't like there's no debit. you can't withdraw. It's all electronic. So you have to withdraw to another bank account in order to get cash out. But the idea of like high interest savings accounts, like those are not especially new either. And it's something that we've seen a lot of banking institutions move into with mixed results. So, you know, I understand wanting to compete on interest rates.

47:37But the other thing that I'm going to say is that like, I think about this stuff on a pretty regular basis, and I don't pretend to be an expert. You know, I certainly don't have an econ degree or anything like that. But I do. I am interested. And I talk about interest rates with, you know, friends and family and they don't understand them. They don't think about them. And so, like, if you are offering a consumer product, as many institutions, by the way, do, it needs to be simple enough to be understood by most consumers, because I do remember during the era of low interest rates, I had people who were telling me to get certificates of deposit, which didn't make any sense, given, you know, that the interest rate was almost nothing.

48:15And I would have been earning less on a CD than I was losing in inflation. So there just seems to be a basic lack of, I would say, financial literacy that would preclude something like that making intuitive sense to a consumer. So that's problem one. Problem two is that it sounds pretty complex. So if he's saying, you know, if your balance is positive, you get a better interest rate. And if your balance is negative, you get a worse interest rate. That's a lot more complexity than just having one fixed interest rate that you can sort of rely on and do math around. So it sounds like he has some ideas that don't translate easily to a consumer audience.

48:57And if you're thinking about a super app, if you're thinking about some of these kinds of payment apps like Venmo or PayPal, which mostly make money on the float, what you're thinking about is a consumer audience. What you're thinking about is people need to transact without thinking too hard. They need to, you know, they go out to dinner, one person pays the bill, and everybody else sends them, you know, some amount of money for the bill. That's what they're thinking about. And so, you know, in that sense, like, maybe social media can be useful because, you know, you have your connections with friends.

49:25But I also think about the people who I talk to online most often. And they are not the same people I see in everyday life. You know, with all love to my internet friends like David and Alex, because we don't live in the same cities, You know, the people who I'm going to be sending payments to because we split dinner are not the same people as the people who I'm talking to on Twitter all day. You're saying your friends at dinner, they're not all on X all the time? No, it turns out that I have a bunch of friends who like have jobs that mean that they're not on the Internet all day. I genuinely don't even know what that means.

49:57That doesn't that does not that doesn't track to me at all. But I just want to say one more thing about the consumer business side of this. Like this is also not been a good business. It turns out that like, like to your point about the Apple Goldman Sachs thing, like Goldman Sachs is by all accounts trying desperately to get out of that business because providing simple, understandable ways for people to make sure they pay their credit card bills actually turns out to be a really crappy business. And when you're Apple, that's all fine and good. And I get a notification every month telling me to pay my Apple card.

50:28Turns out that's not making Goldman Sachs any money, which is a real bummer for Goldman Sachs. So yet again, this is the kind of thing that seems like it ought to be a good business because you get to be in the middle of people moving their money around between each other. And it just might not be. I'll play devil's advocate just for one second from us. You know how many apps people download per month on average? Take a wild guess. Zero. Zero. Yeah. So this is the case for the super app. That's the whole thing. So, you know, if you're in the US, though, the apps on your phone already do all the things he's trying to build.

51:00So that's obviously the thing that wouldn't support his vision here. But he's got one of the last scaled social media platforms with hundreds of millions of monthly users. At least some portion of those are real users. We're not sure how many, but it's got a sizable user base of real people, we think. There is something to be said for make it a stickier product for the people who are using it. You can see him putting the pieces together with the creator payments that they've started doing. right? So if you're verified, you're starting to get like, I think it's actually now bi-monthly just payments to your Stripe account.

51:37I think it's deeply funny by the way that he's using Stripe for all this right now. Like he, they're building it all on the fly. They have none of this like in-house yet. So he's using Stripe, but you know, say you're a creator, you're getting these payments, which are basically some undescribed rev share of the ads that run against your tweet after certain million plus impressions, that balance. What if that just starts earning interest for you in your X account. And that's, that feeds into the money that you can send through the system. And he's talked in, in internal all hands about, you know, we have to be backwards compatible with the existing financial system.

52:11So they're going to have credit cards and debit cards for X as well, you know, as wild as that says, as wild as that sounds, that's going to happen. He's going to offer lending. So it's going to become this full kind of bank thing. and he's been wanting to do it forever. And it's just kind of, it's remarkable that it's like so similar to the early vision, like the late nineties vision that Liz started this conversation talking about. And he seems to just not care that the world has changed and think that I've got a big enough user base that I can make something interesting here and TBD if that will work, but that's, that's what he's doing.

52:47You also just perfectly described why I think the super app discussion is so fascinating because it just makes logical sense every single time, right? No matter which company you are, whether you make WhatsApp or Snap or Uber, which is kind of trying to do this, or any number of other companies. It's like, okay, well, we have this one core competency. People are spending their time inside of our app doing a thing. What if we do this like slightly adjacent thing? And then if that starts to work, what if we do this other slightly adjacent thing? And over and over and over, you can talk yourself into, every company has to be some kind of like financial juggernaut because that's what powers a lot of the rest of this.

53:25And then you talk yourself into not only do we want to be a social media app, we also want to be a chat app, and then we have to do some entertainment stuff. But then people are going to want to get around, so we should probably be a rideshare company. And it's like you can talk yourself into trying to be all things to all people, which is a terrible idea in perfectly rational ways one step at a time. And I feel like we've watched these companies do this for like 15 years, and it's so funny and so bizarre every single time. And now we're just watching Elon Musk do the same thing, but at like record speed.

53:54You know, David, I also want to just point out something because we've been dancing around interest rates for a minute. I understand I sound like a broken record, but post 2008, there was a very long period of very low interest rates. And that was part of the reason why we wound up with people trying to do blitz scaling. It was part of the reason why we found people, you know, moving into related businesses that didn't totally always make sense. We work opening a preschool will forever be my favorite example of that. That's right. And so, you know, if you think about it in a way, it was easier to experiment with this kind of thing because there weren't a lot of places to park money that would earn you interest.

54:35And so that meant that there was a lot more money available for investing. And if you think about what's been going on over the last two years, the Fed has been raising interest rates. And so that is no longer true. Separately from the fact that, you know, the yields on bonds are pretty high right now, relatively high. There's also just a variety of financial instruments that have suddenly become much more attractive than they've been for about a decade. And that's a problem for VCs generally because all of that VC scaling, like blitz scaling stuff, you know, typified, for instance, by Uber, that relied on there being a lot of cash available so that you could pour it all into the market, corner the market and then, you know, jack up the prices, which is essentially what Uber has done.

55:20Again, we may not be in conditions for that to continue to occur anymore. And one of the things that has been a real question for me when it comes to Elon Musk, and it's an open question, is that a lot of his success happened in this low interest rate era. A lot of what we think of as being Tesla's success, for instance, happened when it was easy to get a hold of money. And even then, Tesla almost went out of business a couple of times. You think about SpaceX. It's still private. It's very much venture backed. And it's a valuable company. It does a lot of important things for the U.S. government.

55:54I don't mean to suggest that it's smoke and mirrors or anything like that. But again, conditions have changed. You think about some of the other projects that Musk has been working on, the sort of more far-fetched stuff like The Boring Company and Neuralink, and you wonder how far they're going to go in this new environment. And you think about Twitter, which, you know, Twitter has never been an especially successful business, even though it's been a particularly influential one. And you think about all of the debt that Musk loaded it up with in order to buy it. And you think about the new environment we're in, which we haven't seen, you know, in quite some time.

56:34And you just wonder if Elon Musk is prepared for this era of normal interest rates. Like there just seems like a lot of the things that he has done has been to spend as much money as possible and worry about the risk later. And I'm kind of wondering if it's if we've reached the moment where it's later and you should be worrying. Yeah. Alex, what have you heard from folks over the last couple of years? Because I think, Liz, I agree with you almost 100%. But also the other thing that is happening is that all these companies tried this when there was unlimited money to throw at it. And it kept not working still, right?

57:05Like, Facebook couldn't make dating happen. And all these companies have tried to expand into this, like, do more things with your life outside of just the sort of core competency of our app. But Alex, I'm curious what you've seen. Like, have folks pulled back on this ambition because of sort of the larger economic changes here that we're talking about? From a product perspective, no. I actually wrote a piece in The Verge in 2021 predicting that there were going to be more of these super apps attempts around the world. I wasn't specifically talking about the US, but just broadly for a number of reasons, but because a lot of the kind of scaled, big independent apps that do one or two things like they worked as a business in a model where you could track people across the Internet.

57:52And that increasingly is not happening anymore, thanks to Apple and regulation. And so you have this incentive for all of these companies that make money by how much time people spend in their services to bring more of that activity inside their walled garden, so to speak. So you have like TikTok doing shopping, right, where you can like buy a thing you see in a video without ever leaving TikTok. that wouldn't have happened five years ago because you didn't need to because you could still track who made the purchase where if they went somewhere else it just wasn't worth the effort so i do think there's a natural kind of business incentive at play here for all of these kind of time spent based companies to become more like super apps and the tiktok shopping thing is actually a great kind of very very fresh example they're testing like a storefront that looks like Amazon right next to the video feed and TikTok.

58:47So to Liz's point about, you know, the broader kind of macroeconomic climate here and the fact that it is, you know, capital is more expensive. You can't just like, you know, Tesla's not going to become a trillion dollar company on pure mania anymore, right? Like that era has passed. Sure. But like, I mean, from everything Musk has been saying since he bought Twitter, he seems to be painfully aware that things are changing. Like every time he talks to people internally, it's like, we have got to prepare for a recession. You know, I reported on meetings, like when he first bought the company where he was talking about the fact that he thinks a very bad recession is coming.

59:25It looks like that may not be the case now, but he's definitely been thinking, you know, things are shifting. I don't think he's totally oblivious to it. I mean, he is, he is the richest person in the world. Like I think he probably has pretty good data. He's very focused on cutting costs on, you know, I think SpaceX SpaceX just had its first profitable quarter. I just saw in a media story in like Q1. So he is actually kind of like leading the charge, so to speak, in Silicon Valley of like cutting companies down to the bone to try to make them profitable and get away from this kind of hyper growth era.

59:56So I don't know. I don't know if the things are, I don't know if that's, that means that he's going to succeed here, but I do think he seems to be at least aware that things are changing. Yeah, I do think to go back to WeChat for a second, one of the things WeChat was able to do that worked so well was essentially just pour money and energy and effort into getting people into the app. Like Liz, what you're talking about with the early days of PayPal, where they're essentially just heaving money at people to use PayPal or X.com or whatever the heck it was. WeChat was able to do that kind of thing for a long time and just work so hard and grow so much that it kind of had won the market before anybody really noticed.

1:00:36And then you get into that sort of escape velocity and it becomes very hard to lose because people decide it's smarter to just build inside of WeChat than build their own thing because they don't have the money to compute with it and like on and on. And that's how you win. And that in this era becomes much harder to do, right? Because there's no free money to just throw it growing. Dave, it becomes easier to win when you have the full backing of the CCP. I mean, like to get to our early point, like and this can maybe kind of bring it full circle a little bit like to what Liz was talking about earlier.

1:01:06Do we really want Elon Musk, who already has a ton of power, especially through Starlink and how that relates to how physical wars are playing out in Ukraine? Do we really want someone with all these different businesses and power to have something like a WeChat? And he has a business in China that is very important strategically to Tesla. He's got a lot of pressure points that can be pushed around the world by different governments. And do we want something like a super app where we transact and do all these things to be managed by one person who, let's be clear, controls his companies completely?

1:01:47Right. So it's like this isn't like a normal governance situation. So there's there's a lot to be concerned about there. Liz, I have a strange feeling I know your answer to Alex's question. There are a lot of reasons I don't want Elon Musk's super app managing my money. And all of the things that you guys have have mentioned are part of it. Part of it is also, you know, I'm a reporter who reports on Elon Musk. And like, do I necessarily want him to be able to, like, look into my bank account from God view? Do I? I feel like it is, though. Like you like you a little bit just like root for chaos at all times.

1:02:27And like that is chaos. It's true. And like, honestly, I he's going to find out that I spend far too much money on my cat. But, you know, like as you think about these things, the other thing to think about is Elon Musk's history of implementation. And it's sloppy. And, you know, some of that is like the panel problems that we saw with Tesla, you know, and various other sort of implementation problems. But even if you just narrow your focus to Twitter slash X, there's just been a lot of sloppiness there from the X sign to not getting the X handle until after the name had already been changed to the various sort of problems that we've had around the service where we were being rate limited abruptly for a while.

1:03:13And like this kind of like slap dash mentality is an old Silicon Valley mentality. It's, you know, usually thought of as like move fast and break things. And that does make sense in certain contexts. You know, like the Twitter fail fail whale was a thing because because sometimes the service went out because there are too many people on it. But, you know, if you think about the things that you don't want from banks, I'm just going to list some of them. abrupt frequent service changes, regular service outages, new fees added at random, white supremacists, difficulty with verification, spam and fraud.

1:03:50You know, like these are all things I don't want anywhere near my money. Yeah. And if you just look at how Twitter is operating right now and you think about it, it's like, do I trust Elon Musk to actually handle my money in a way that makes sense? Right. It's like all these crypto scam ads that I see in my feed every day. It's like, oh, all I want is to be able to actually send money to those ads. Right. With one click, they just have your bank account now. That's what everybody's looking for, right? Yeah. So, okay. Last thing. And then we should go is I think if you imagine somebody, Elon Musk or Mark Zuckerberg or somebody from a product perspective manages to build this thing, they accrue all of the value, all of the user data, all the everything to like be the WeChat of America.

1:04:36could anyone pull that off from a regulatory standpoint like would would lena khan and the ftc just throw their bodies in front of one company having this much this is an argument i've heard and i genuinely don't know where i land on like could you even in theory pull this off under the u.s government's nose no there's no chance i mean facebook are we old enough now to where we don't remember in just 2019, Facebook tried to create a global currency. Libra! I remember Libra. I love Libra. Yeah. And honestly, Libra was a pretty smart idea for a global currency that had a lot of benefits and was going to be managed by a trust, et cetera.

1:05:19They thought through a lot of the potential blowback. Guess what? It still got shut down. I would say there's next to zero chance that anything like this happens in the U.S. for all the reasons you just said, David. I mean, if Facebook can't buy Giphy, do you really think like the Congress, especially all the members of Congress who have strong feelings about Musk already are going to let him build a financial superpower that potentially has more power than the U.S. government? No. Like, no, absolutely not. I want to pile on to this because it isn't just an antitrust issue, although it is a very sexy antitrust issue.

1:05:55what you're talking about is essentially somebody who's managing the digital dollar. And I feel like the Fed and the Treasury both want to be involved with that. And so not only are you looking at an antitrust issue, you're looking at dealing with other major government agencies. And, you know, there are people out there, Circle is one of them, that are interested in being the purveyor of the digital dollar, that are interested in doing that kind of work, that have talked publicly about wanting to work with the Fed, with the Treasury to have a digital dollar. And that's a very, very different proposition than what we're hearing about with these super apps.

1:06:30And like, again, if you go back to something like FedNow, there is like a reality where it turns out like maybe your competition is the United States, because it turns out the dollar is a really, really important part of why the U.S. is so powerful. The dollar is something that a lot of people transact in around the world. It's a really, really important part of the U.S.'s soft power. And wherever the dollar goes, U.S. law goes as well. So whenever you're talking about this kind of like super app, when you're talking about these kinds of big payment companies, you are inevitably also talking about something much more powerful.

1:07:07And Elon Musk already has a lot of sway in the federal government because, you know, Starlink is very important because he sends a lot of satellites up for various U.S. military missions. And so there is like this question of how much more power we as, you know, the United States want to hand over to him. Like he's already like doing all of these things for the military. Do you want him handling the U.S. dollar as well? And I feel like the answer is probably not. It's a real like no one man should have all that power kind of situation. It's just where I land. yeah i i don't know i kind of hope somebody gets further down this road and we can actually have this fight in a real way because i think meta never had a chance because of all the other stuff going on with meta the ftc was just like the whole u.s government would have stopped libra if it came to it i don't think elon musk is gonna even get close but it's it's gonna be fascinating to see if someone can get well enough down the road that we actually have to have this fight for real but i'm not convinced we're ever gonna see it alex who would you bet on do you still think it's could Snap do it?

1:08:10No, I don't think this is happening. Not in the US. I do think it will happen in other parts of the world where countries are kind of more willing to embrace something like this. But I think the US is so against big tech right now. And there's so many established players doing things really well at scale, like banking, that I just don't see how this happens. But, you know, could be my famous last words. No, I tend to agree. I think instead of a super app, we got like the whole internet and I think that's probably a better trade. And like, that's okay. Like it's actually, I love it's capitalism.

1:08:42Like I free market, whatever. Like I love having apps competing for my, my services and my attention and to have options is a good thing. Like we shouldn't be like necessarily wanting one company doing everything. Totally. All right. Well, we got to take a break, but thank you both for, for doing this. I appreciate it. And I will, I will X both of you some money for being here. Thank you. No, you won't. All right. See you guys. Bye.

1:09:09Support for this show comes from Zapier. When people talk about AI, they often talk about the future. How will AI affect the economy? What will AI's potential be in the future? Will AI be able to make popular art? But the more important question is, what can AI actually do for your business today? If you're looking for concrete implementation of AI for your business, you can try Zapier. Zapier says they can help you and your team actually reap the benefits of AI, not just talk about it. With Zapier's AI orchestration platform, you can bring the power of AI to your work. Connect top AI models like ChatGPT and Cloud to the apps your team already uses, so you can add AI exactly where you need it.

1:09:50Whether that's automatically enriching leads, coaching your sales rep, resolving IT tickets, or more, you can do it all with Zapier. Zapier is for everyone, tech expert or not. No IT bottlenecks, no complexity, no AI hype, just results. Teams have already automated over 300 million AI tasks using Zapier. Join the 3.4 million companies already automating with Zapier and transform how you work with Zapier in AI. Get started for free by visiting zapier.com slash verge. That's Z-A-P-I-E-R dot com slash verge.

1:10:31Support for the show comes from Udacity. AI seems to be everywhere these days. And if you want to prepare yourself to be able to use it, Udacity says they can help no matter what field you're in. Udacity is an online learning platform with courses in AI and tech, including generative AI, Gentic AI, Python, data science, and much more. When you learn with Udacity, you're not just passively watching videos or reading articles. You're doing practical exercises and projects that prepare you for the job you want. That's why 90 % of Udacity graduates surveyed say that they achieved their enrollment goal.

1:11:07Udacity just launched a master's degree in AI. You heard that right. And when you have a certification from Udacity, recruiters and employers take notice. So for a better job, better salary, and better skills, you can check out Udacity today. The tech field is always evolving, and you should too. You could try Udacity risk-free for seven days. You can head to udacity.com slash verge and use code verge for 40 % off your order. Once again, that's udacity.com backslash verge for 40 % off and make sure you use the promo code verge so they know we sent you.

1:11:51All right, we're back. Let's get to the VergeCast hotline. As a reminder, the hotline number is 866-VERGE-11. You can call and ask us absolutely anything about tech, anything on your mind. We want to hear it all. You can also email us, vergecast at theverge.com, if you don't want to call. This week's voicemail comes from Daniel. Hey, VergeCast. This is Daniel. I always have this question of why social media doesn't recognize the fact that, like, people are more than just one thing. like why can't I have a whole collection of subreddits for each of my like quote unquote modes like sometimes I'm in productivity mode where I just want to see you know how to be optimally product productive I guess and do spreadsheets and that kind of stuff and then sometimes I'm into my hobby interest mode and I just want to see stuff about like video games or whatever the only way I've ever found to do this is to actually have totally separate social media profiles, which is just super annoying to maintain.

1:12:50But why doesn't any social media recognize that that's a thing that pretty much every person has? Anyway, tell me your thoughts. Bye. Okay, I have answers to this question. For once, I have a I have a small thought and a big thought. The small thought is that for Reddit, this is actually a thing you can do. Reddit sort of buries this, but it does actually exist. It used to be called multi reddits. And now it's called custom feeds. And basically the idea is you can pull a bunch of different subreddits into one thing that you see all as a single Reddit timeline. So like I have one, ironically, for productivity.

1:13:25That's all of my like productivity nerd subreddits. And then I have one for all the sports teams I care about. So like I have the Arsenal subreddit and the New York Giants subreddit and the Yankees subreddit all in one place. This is a great thing that Reddit does. I don't know why they don't share it more. It's kind of awkward to find. I'll put a link in the show notes on how to set up a custom feed on the web and in the apps. But it is possible and you should do it. And it's great. The bigger picture thing here is I think this is a good idea. And I think we're going to get towards it. I think one of the things we've talked about a lot with the social web and activity pub is this idea that there are going to be lots of new ways to sort and filter and display the same kinds of content.

1:14:05So you've heard Elon Musk and others talk about this idea of like open sourcing the algorithm so that you can get different versions of the same experience depending on what you want. So you could show up and say, I'm in the mood to just go on TikTok and watch bloopers from TV shows that I like. And that's actually an instruction you might be able to give an app like that over time or to say, I'm in work mode or I'm in school mode or whatever, and actually have these things work separately. It's hard work and it means having different algorithms and systems. And it also means making users do more, which most of these apps don't like to do.

1:14:41But I do think that's actually a place that we're headed with some of these tools. The other thing is that I wouldn't underrate how useful it is to have multiple accounts. Because the other thing is, when you're interacting on these, when you're liking stuff, and you're commenting, and you're posting, having all of that stuff kind of live together in a separate account works really well. So even if we get to the point where you can customize your algorithms or like I have custom feeds on Reddit, I'm still posting as me. And so kind of my interactions in my life all live in the same place. And a lot of these companies, Instagram, I think does this better than almost anybody make it really easy to switch from account to account.

1:15:19But I'm a big fan of having multiple accounts. I have lots of accounts on lots of different services. And it occasionally gets like awkwardly cross pollinated because you forget what you're into but having a reddit that i go to when i'm just looking for sports stuff and want to like yell about sports that is separate from where i comment as like a person who people know on the internet is really useful and if you want to shit post you should have an account just for shit posting is my personal and professional opinion so the point daniel is i think we're headed somewhat towards the world that you described but also custom feeds on reddit will instantly make your life better.

1:15:53I hope that helps. All right, that is it for the Vergecast today. Thank you to everyone who's on the show. And thank you so much for listening. As always, there's lots more from everything we talked about, including mythic computer at theverge.com. We also made a cool video. We have some really fun stuff on the website. Go check it all out. It's good stuff. If you have thoughts, questions, feelings, or sick custom computers that you made and want to tell me about, you can always email us at vergecast to theverge.com or call the hotline 866 verge one one we love hearing from you and speaking of the hotline one thing we're going to do at some point in the very near future is an entire verge cast episode all about the verge we're calling it the meta verge cast episode so if you have questions about how we make the verge how we make the verge cast what nila's favorite food is why alex kranz has so much weird stuff on her walls send us all of your questions call in with all of your questions we're going to do a whole episode about it it's going to be awesome this show is produced by andrew Marino and Liam James.

1:16:47Brooke Minters is our editorial director of audio. The Vergecast is a Verge production and part of the Vox Media Podcast Network. Nilay, Alex, and I will be back on Friday to talk about the Kinect, the drama about OpenAI's web crawler, all of your computer rooms, which has been so fun to see, and lots more. We'll see you then. Rock and roll.

1:17:13Support for this show comes from Snapdragon. Take charge of your day with a PC that can keep up with you. With PCs powered by Snapdragon X Elite processors, you get up to 22 hours of battery life so you can be productive on your terms. Whether that's during coffee shop marathons, airport layovers, or wherever life takes you, it's the performance you deserve for your busy life. Break free from power outlets with a PC powered by Snapdragon X Elite. Learn more at snapdragon.com slash laptops. battery life varies significantly based on device settings usage and other factors