Big Tech earnings breakdown w/TechCrunch's Alex Wilhelm | E1731

0:28This Week in Startups is brought to you by Sign up for free at miro.com slash startups. That's M-I-R-O dot com slash startups. And Crowdbotics. Great ideas can change the world. And Crowdbotics is the fastest way to turn those ideas into code. Get a free scoping session for your next big app idea at crowdbotics.com slash twist. All right, everybody. It's Friday. It's This Week in Startups. And Alex Wilhelm is with us. He's the editor-in-chief of TechCrunch. plus go sign up and subscribe for that and uh alex has been on the show dozens of times and yes sir he knows tech and you're like like a classic journalist you don't get involved in uh too many uh you know superfluous social whatever you know cultural issues uh you like to talk about the business and the tech yeah to a degree i i do think i'm i'm recently castigated because i I popped off a little bit during Silicon Valley Bank.

1:30And do you ever just hit the zeitgeist at the wrong time with the wrong people in the wrong way? I took rhetorical for both of us, but I got more flack in like 30 minutes about my SVB take than I got in two years. And I was like, oh, this is why I mostly talk to my friends. Right. Yeah. What was your take on the SVB situation? Okay. Don't. I've already been. I paid penance for this. So don't shout at me. but i was like no bail out the rich before the fdic announced that they were going to make the deposit but what i didn't realize was how downstream the effects were going to go etc etc so i learned but people took it as like oh the media hates us you know they're all communists and i was like i'm sorry i i apologize for my seven word tweet well i mean this was a subtle um issue because i agree with the sentiment of don't bail out the rich people who are placing bets i don't feel like united airlines management should get bailed out or i should get bailed out as a venture capitalist i i'm generally anti-bailout um but yeah when you look past and i didn't know the extent that silicon valley bank was used by my kids school the public school in my district is a silicon valley bank customer and they were not going to be able to pay the teachers right this was not you know the name of the bank played big into this and then the good news is the yeah the management the equity shareholders not the good news the fair news yes equitable news was that they did not get bailed out and all we did was enforce fdic but i too you know i took the opposite side of it which was like holy cow what i'm seeing from the inside as a venture capitalist now who does random acts of journalism as opposed to a journalist who covered venture capital yeah i watched the bank run for silicon valley bank occur in my feed email phone calls and at the same time people were moving it to silicon silicon valley bank to go to um first republic i was about to say yeah first republic people were moving out of first republic and putting it into bank of america or jb morgan and i'm like wait a second bank runs can cause other bank runs and then i was like wait i think there's a word for this i i think there's a word It might start with a C.

3:45Oh, contagion. Yeah. Contagion. Yeah. Well, okay, look, if we're going to bring up First Republic, before we get into this earnings stuff, did you see what happened to their stock today? First Republic. You got demolished another 30 % or something? I mean, it's over. 30 or 40, yeah. Yeah, it's over. Okay, good. That was my question. Because my view is that this goose is cooked. But I wanted to make sure I wasn't being too pessimistic or negative. You know, it's down 40%. It's got a market cap now of$685 million. 52-week high was$171. and it's trading at$3.67. So, you know, like Silicon Valley Bank, an incredible brand with incredible people who work there.

4:21Yeah. And this like really custom banking where you can get somebody on the phone as opposed to cookie cutter banking at the big four or five, it really does serve a place in the world. And not just for rich people. This mom and pop stores, main street stores, they get to have a banker and they get to get a line of credit, all this stuff. So we've got a serious problem and i hope somebody buys this asset and maintains it i mean imagine if i don't know what's a big tech company that wants to be in banking oh apple yeah i was about to say google wallet apple number one yeah yeah you know microsoft not so much now that i think about it but google for sure for sure yeah amazon probably would take a swing so if we're spitballing here and amazon first republic takeover it would cost like 12 minutes of revenue look i mean first republic is now worth like two buzz feeds that's bad your bank should never be worth a low multiple of buzzfeed stock right like i mean it's been a while since you and i have caught up but i mean the buzzfeed situation is bonkers uh they were making two to three hundred million dollars a year and i think their stock was trading at less than their revenue oh yeah their revenue multiple went below one if i recall correctly and uh by the way did you know that lyft's revenue multiple is also below one now i did not know that i just saw that i think 0.9 last time i checked or something like that i think uber is 1.8 but like those businesses have also been repriced pretty extensively yeah it's you if you refuse to show profits uh and then you know you just go for the growth number which was rewarded in the serp in the zero interest rate market it was rewarded um i can tell you dar is having a hell of a time turning around a battleship and saying oh we're supposed to go in the other direction it's like battleship aircraft carriers do not turn they're not like speedboats it takes a little time to turn them around i'm just in awe that uber isn't more profitable and i and i know it's a complex business with a lot of tech that goes into it there's insurance questions and markets and support there's lots of things but like when i use uber eats i am paying markup fees delivery fee and tipping i am paying like 3x what the food costs and you think it would just rain money down from the sky right well it turns out human beings in america doing service jobs went from a seven eight dollar minimum wage to a comp you know to a 15 minimum wage in some cities and then in order to compete for them you kind of got to hit 25 to 35 bucks um or americans are just not going to do those jobs you you close the borders we have no immigration got 9 million job opening so as weird as this whole economy is uh but you know the good news is i think if you look at facebook doing the layoffs getting rid of management redundancies there is a path to have your stock recover and my understanding um is that uber is taking all that very seriously and i think you're going to see the free cash flow i think they are reporting in the first week of may like so that maybe that feels right yeah they're they're gonna i think they're gonna surprise some people people are because what i always knew having been an early investor unless i don't have inside information now yeah was nobody would change their behavior maybe like the bottom one or two percent if you raise the price of a ride by a dollar right and nobody changes their behavior so i think now that they're i don't want to say a monopoly but a duopoly with doordash and a you know almost a monopoly with lyft suffering uh i think they can they're going to start printing money that's my hope i'm still a large shareholder talking about yeah no i mean look as someone who has depended on uber and lyft for it's been so long now i was in college when uber rolled out in chicago and i actually got to go to their like chicago launch party when they were just black cars like that's my my history with the company uh i have given them so much money over the years.

8:17Yeah. I would like them to persist because I still depend on them. So I'm here for that. Listen, we work with super early stage companies that my investment firm launch pre-series A, maybe you got a couple of thousand dollars a month in revenue. You've raised a couple of hundred thousand dollars, maybe a million dollars, right? That's the early days, year one or two of a startup. And I'll be honest, a lot of times startups, they don't have their insurance. They haven't set that up yet. They haven't set up their accounting properly. They're getting things cleaned up. In fact, I was recently had a great startup, but they didn't have D &O insurance.

8:53That basically protects your directors and officers. That's the D, directors, people on the board, officers, the people who work at the company, right? Directors and officers insurance is super important. So what do we do? We send them right to Enbroker. Our friends over at Enbroker are a business insurance company that's built specifically for startups. You just fill out a simple application, right? And then startups get four quotes for four lines of coverage in 15 minutes, four quotes, four lines of coverage, 15 minutes, easy, breezy, lemon, squeezy. That's right. They connect you with one of their expert brokers for unmatched service that goes beyond your policy.

9:29And listen, you might think, oh, it's too early to have insurance. It's not that expensive. It's not that complicated, because in broker makes it easy. So here's what I want you to do try and broker today with the code twist and you'll get 10 off their startup package at imbroker.com slash twist that's imbroker.com slash twist we love imbroker i use imbroker they're an amazing team they do a great job for startups whether you're in year one or year five go use imbroker.com slash twist on the cost front though that's going to kind of bring us into earnings because i feel like everyone's trying to show off operating leverage these days which is such a weird thing to discuss because two years ago you and i were talking about literally anything else right what are your new initiatives tell me about your self-driving unit what about vtols what what can you add to this party in this mix and now it's like what can we take away how focused can we get and you know people were hiring and buying office space two years ahead of plan and that's what i think their best practice was so if you're facebook microsoft uber whoever twitter you're like okay what am i going to need imagine saying today what how many people and how much office space do i need in 2025 let's buy it now and we'll just incur we'll just grow into it it's hilarious i feel like you you can't have more of a flip on that i mean when i was at crunch base we were expanding and we were in like one floor of our building then two floors of our building and then it was like two and a half floors of our building and we were counting down till someone else left the other half of our floors we can move that company is now in fully remote and that office space is either empty or occupied i think by someone else it's pretty wild i was in uh san francisco on monday i had our accelerator come back in person for the first and the last weeks hey it's a really great feeling and then this founder university program which kind of comes before an accelerator where we put 25k into companies that are just like haven't even incorporated yet i had a hundred of them and i was at fenwick's office for one and wilson since he needs for the other they're nice enough to host us and put out a nice spread and walking between the two if i die to embarkadero i mean alex compared to what we saw just three years ago it was like being in a dystopian sci-fi film where you're like oh i am the last person it was like a twilight zone episode like remember the twilight owns my favorite twilight zone episode is the one where uh uh time i think it's called where the guy is in the library and he wants to read books he's got really thick coke bottle glasses and uh he goes into the a vault uh with like all the great old books and the vault closes and he gets locked in for 24 hours when he comes out this is a this sounds great keep going this is amazing i'm not gonna tell you anything after this okay because that happens in the first 30 seconds when he gets out of the locker because it's a time 24 hour locker he has been reading books all night his his dream is to just not have to talk to people in the library but just actually read the books he comes out and the world's changed i'll just leave it at that oh okay i can guess but yeah don't threaten me with a good time put me in a vault 24 hours with just books dude that sounds amazing it's that's what's just so great about this episode i cannot wait to talk to you about this uh episode and yeah for folks asking about uber may 2nd but it's um your that office is not being counted in the 30 % of offices in San Francisco that are vacant.

12:49Yeah. So now you sort of put in the shadow vacancies. It's probably 40. It might be 50%. I mean, I don't know how they ever recover. A rebuttal to this because I have a big soft spot in my heart for San Francisco. I lived there for eight, nine years. Amazing city. Amazing city. I'm a West Coast boy. Originally, this is in my DNA. And because both my sisters went to Stanford, I've been bopping around the Bay Area since i was like eight and i just love it people i think forget that sf is and always has been a boom town and it will boom again and then it will bust again and we are currently in the trough of of pain and i fully respect that there's work to be done let's not get into politics on that but like yeah i i think sf will once again have its moment it wasn't cool 10 years ago or 15 now 15 i am and i'm sure it's a boom bust cycle i did see it.com web 2 now it does go through these things it's not the first time that it got hollowed out but you know it got built up too and so it got built up and then hollowed out and then the work the remote work thing combined with the safety issues and again not to get political putting it all aside you used to be able to sell somebody who was you know had a family who's a cfo let's say uh you want to be the cfo of uber airbnb oh you want to be the senior cto you got a family oh great bring your family to san francisco let me show you dolores park let me show you uh the let me show you pack heights let me take you to presidio i mean it's gorgeous let me take you to tahoe we'll go to wine country and you could sell it yeah and it's a hard sell now and you had to sell it against hey it's expensive but it's it's delightful i mean when san francisco is on it's on it's oh it's just stunning and beautiful yes to be able to go to tahoe for the weekend and ski or to go to napa for the weekend and drink wine and and or to go south to santa cruz and surf i mean it is extraordinary yeah which is what makes it heartbreaking um i'm really rooting for it to turn around yeah buzzfeed 55 cents yeah what's market cap i mean i i'm i'm almost shocked to say it out loud 76 million dollars i'm i'm so sorry uh first rule book is 8x the buzzfeed market cap my mistake i mean it's it literally reminds me of the dot-com era where cash on cash on the books became greater than yeah the the valuation so you could basically fire everybody turn the website off and make a profit yes now there are control issues because my understanding is uh jonah peretti controls i think some amount of buzzfeed and but well how is the news in the media business with the buzzfeed news shutting down because that was a pretty elite group was it not super elite in fact i actually used to pay buzzfeed news they had some sort of like give us five dollars a month you don't get anything for it but you can give us money and i always said sure i'll support the team um to me it had already been sufficiently desiccated by layoffs and exits that when they finally stomped on the last bit of it um it wasn't the biggest shock i think it was kind of sad to see the end of an era because the hope was there's a company does all the silly stuff it makes money and you spend it on news huzzah what a cool model isn't that great and it turns out it wasn't um buzzfeed though i i don't have a lot of emotional uh connection to the the non-news side of it but i i will say that it feels like a relic from a different era.

16:19It does. It feels like Yahoo. Suddenly it feels like not even Huffington Post or, you know, AOL or something. It's kind of driven. Given that I currently work for some combination of the AOL fused into Yahoo, I take that personally, but. Well, I mean, the thing I will say, you know, I'm friends with Jim Lanzone. It is incredible Yahoo staying power. So Yahoo Finance, Yahoo Sports, like some of these services and they actually redid mail are pretty fantastic. So I would actually take the Yahoo back but I'd leave the AOL and the, uh, you know some of those other assets that just feel like they're they're just on cruise control whatever well we're on the podcast and we both have to behave um tell me about jim lenzone because i've i've slacked with him once that's all i got you know jim ran cnet um and he is a great steward of brands and he can manage the two um you know when you run a publishing brand a house of brands if you will like condé nest or like yahoo today with tech crunch and other assets um i think they still own engadget my old brand yeah um you know you have to be able to balance what the advertising and corporate folks want to do to destroy brands and compromise them and what the editorial group wants to do to make them excellent and you know there are some people who can take that tension extracting value from a brand you know making it hum and then you know not destroying it and and what most people what happens to most people who are in those positions is they're they're just like shutting things down they don't appreciate the fact that you know the gadget reader is different than the tech crunch reader is different than the yahoo tech reader and the yahoo you know finance folks even though finance overlaps with this is a different audience and the brands mean something to those audiences yes he understands that the brands mean something to audience and it's okay if they overlap you know like what the overlap between engadget and tech crunch is always going to be 20 and what somebody running the huffington post might do some mid-level manager wonk might be like oh and they did this they took joystick this incredible video game site that we had created and they're like we'll make it huffington post gaming and it'll just be huffpost slash gaming and it's like oh my god that's death to the serious gamers who have been with this brand for two decades and i think jimland's own understands brands and how to be a good steward of brands for the people who love them and the advertisers who love them but it's consolidation is how typical mba's minds work and they think efficiency and consolidation and who can we fire and what can we cut and it would be like saying you know what you're directing this marvel movie you might as well throw grogu in there because he's popular and you're like i'm sorry what yeah yeah yeah grogu you know from mandalorania he'd be great why don't we make him one of the x-men i knew that was a star wars reference i wasn't sure what it was referring It's like, I'm going to make Yoda part of the X-Men.

19:24And you're like, what? Okay, but there's some great crossovers in comic book history. So like, you know. Great. That's great for a one-off gimmick thing over the summer when we're kids. It's not good for the long-term health of the brand. So you just got to be careful. Yeah. There is nothing like a good whiteboarding session. Don't I know it? Man, when you're there brainstorming ideas, collaborating, and you get those vibes that everybody's dialed in and you get your best ideas. as you're putting your best foot forward. Well, it's hard to do, right? You got people spread all over the planet. We all work remote now.

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20:32And here's the best part. Miro has a community of power users who are addicted to the product. And you know what they do? They make world-class templates all day long. Go to Miro.com slash Miroverse. And one that founders might love is the Complete Naming Mega workshop so many startups they have trouble picking a great name in the early days this workshop is going to really help you and your team brainstorm a great name that's iconic faster inputs equals faster outcomes and velocity is how startup wins you all know that so go to sign up for miro right now for free miro.com slash startups miro.com slash startups to sign up for free uh earnings great to catch up yeah i've missed you let's talk earnings so uh we're gonna start with google and i just want to say that google cloud after many years of losing money demonstrated operating profit in the last quarter ring the buzzer give them 10 points that's fantastic i'm sure that ruth porat the cfo over there has been uh looking through the numbers to make that all work out i presume there is probably some trimming here and there uh but what really took my my mind here when i read this earnings report was that revenue was actually up just three percent year over year yeah and that's a really small number and it's very close to zero it's which is stunning um if you think about this collection of stocks could we really call them like high growth stocks anymore you know when you when you get to single digits they're not high growth stocks but what is great is that in an advertising recession down market there's some profits right because facebook hit some down quarters uh and meta facebook i'm gonna call everyone knows what you mean yeah and so i do think the fact that they cut those 12 000 employees and they told everybody hey a little bit back to the office a little more focus it's not enough they haven't gone full zuckerberg but sundar doesn't have that ability because he's not the founder and he's got a he's a consensus builder and so i think the the act of them getting their act together and cutting costs and getting earnings up you know a non-founder has a harder time with that because they just can't come in and say here's what we're doing they have to build consensus amongst leaders of groups you saw susan wojeki left youtube you got the deep mind people um you know it's all these different fiefdoms little kingdoms and so it's just going to be hard for them to make change i don't think they're going to fall as far behind on the ai stuff as people think i think they're just more thoughtful about releasing stuff because they're google because they have antitrust issues because they have a monopoly so they just got to be careful you know scaring people that's my understanding it's like they just don't want to scare people at how good this stuff is but now that cat's out of the bag and microsoft's going for it you'll see more coming out and it is important for them if they're going to be third to azure and aws um to make it a sustainable business i think that's we talked about this early on the top of the show just everybody's trying to make these businesses sustainable yeah and they got too many employees at these companies so i would expect them to cut more people to hit their numbers and get this to be a growth story and get the stock to move so 190 000 employees i think that number was inclusive of employees they've cut right so you're coming up on on 200 000 employees and you want to streamline operations and make things move faster.

23:57Is that a thing you can do? Is there a corporate story where a company that's this rich and then that large and human kind of capital has managed to actually become more agile? Because poor companies can just cut tons of stuff because they're out of money. Google is still incredibly wealthy. So I wonder if there's like a natural inertia to just being that rich and that makes it harder to actually make the hard choices to get faster. when you're sitting on ungodly amounts of billions of dollars, tens of billions, or in Apple's case, is hundreds of billions of dollars, it's kind of hard. And when Sundar's taken down whatever, tens of millions of dollars in stock, hundreds of millions of dollars, yeah, it's a hard message to say, we need to get rid of this entire group.

24:41We need to lay these people off. And did you see the TikTok reaction when Google made these? I mean, just every person who six months ago was making, here's my day at the Google office in New York, and i'm getting a matcha latte with soy and then i went and i got a back rub and then i did yoga and then i did some email and then i went home and you're like i i think you're doing more non-work than work yes but okay sure maybe i'm just an old gen xer who like to grind um so yeah there is communication issues i'll be honest they did none of these companies because of their cash positions it's a really interesting point you kind of alluded to there none of them had to make any these cuts so you say hey why are they making the cuts these are sacrificial cuts these are motivational cuts these are entitlement cuts great irony of irony google created entitlement culture they were like let us do your laundry there's a coffee bar on your floor and guess what there's going to be a coffee bar on the other side of the floor so you can walk half as far and yeah we upgraded the beans to blue bottle because facebook has fills i mean entitlement culture was bonkers at the peak you we lived adherence in the bay area you lived it you saw it it was nuts it was great it was awesome until all the dill went away until well and i think people and i don't blame employees for when somebody says we'll do your dry cleaning for saying okay i mean just to say okay when somebody offers you something is nothing wrong with that um but i think they want to scare employees into performance perhaps back to the office eventually and it is a power play um i think it is as much about getting people to perform as it is about getting the bottom line so removing m &ms or whatever sacrificial you know services go away massages whatever that's good uh getting some costs out is good but i think it's really just to motivate people to work harder and to maybe take back power because the power dynamic was flipped power dynamic was flipped but i don't think it actually ended up landing in the hands of like the individual googler i think it ended up just so diffuse through the middle management setup that the company didn't realize how sticky it became to make decisions and do things and that it's reasonable if you have a ton of money and you have a big problem space and your competitors are rich, you do a lot of stuff.

27:03You know? I mean, Microsoft makes hardware still, you know? And Google tried Stadia. And Amazon, they had a Halo brand they just shut down that was like wearables. Microsoft tried a wearable too. So these companies are always going to kind of, I think, expand outwards. And there might be periods when they just rapidly contract to fix that. But I don't think it stems the long-term problem, which is, how do you run a business that's this big, this rich, and this, essentially, almost its own nation state, without there just being inherent bloat? i'm curious yeah there's always going to be bloat um i think it really is when the founders say hey we're going to ship this cadence i'm building smaller groups who are building these elite projects and you'll see it once in a while where they take a couple people out of the building they're like this is the war room this is the group that's going to do bard and you know they they've made some uh combinations of google brain and deep mind you start seeing people move to different buildings uh and being on like swat teams and hey we're going to release this product in 30 days it can be done yeah um but you know there was a lot of distraction that i was and i'm i don't know if you were on the episode where we talked about it but i was like people are doing uh petitions at apple and i'm like can you imagine steve jobs coming to work one day and people are like oh uh mr jobs there's a petition on your desk from 800 employees he'd be like oh okay great um can i see that list and then he's like yeah um hold on a second and he just looks down the list he takes three names off of it i'll bring these three people to my office and then the other 997 i just take this to hr and um yeah just fire them all and turn off their badges but that's not just the founder dynamic that's also the fact that if you have a very firm perspective on where you think things are going you don't have to listen as much to other people but if you are as you noted a consensus person with founders over their shoulder and you don't have anything like a controlling stake at the company like i'm sure i'm sure sundaro is very wealthy and shout out to him well done but like i don't think he owns more than what a point to the company oh much less yeah yeah yeah and he doesn't have founder authority like you're saying he's got the founders in the border of his shoulder and then he's got to try to keep really talented people in the game uh but it's a profitable company.

29:20It's an ad-based company still largely. So cloud's de minimis when compared to the ad business. It's moving up. Yeah, moving up. I mean,$7.5 billion in the first quarter, up 28 % year over year. It's now bigger than YouTube's ad business. And the only thing bigger than it is search. Now, you're right. Compared to the aggregate revenue portion, it's 12%, whatever. But it's the only growth thing there. And as we're going to see from Microsoft in just a second, that remains the story that the cloud is really pulling these majors forward like you know three percent growth at google seven percent at microsoft but what was the biggest and fastest growing thing it was azure their public cloud so it's the same story with microsoft although it does feel like there's a little bit more operational discipline i would say in redmond than mountain view just because they've been already through the founders are gone new ceos come in and then they've already gone through the next stage of that which is okay that didn't go as we planned so now we need to find the next essentially tech person to lead the thing satya in that case and there is a vibe going through silicon valley um after twitter reduced their headcount by 80 or so um that was extreme but that sort of got zuckerberg on board with okay i could go with 10 percent less i could go with 20 percent less and so now between elon's 80 percent you know and google six and zuckerberg's 15 there there is some consensus of we can do more with less and how much less with ai is going to be a big question because meeting developers who now uh are going faster i was on a website and i i've been playing with the plugins i don't know how much you're doing chat gpt4 but i've been playing with the plugins and i'm like hmm this does feel like the bottom 30 of what i do 30 of what i do could be automated in the next six months now that doesn't mean i lose my job it means i get back 30 of my time and i can deploy it somewhere else so either way there's a massive efficiency coming to america to the world and i think that is going to change the percentages the single digit percentages we see here those things could double through the combination of attrition of cost and efficiency of who remains this is a double win that i think is on the horizon and i think this is what works us out of this recession So I like nearly all of that, but I want to clarify a point on the use of ChatGPT, because one thing I think a lot about is GitHub Copilot, which is the thing that helps you write code.

31:51And what I'm trying to figure out is, are we getting to the point where self-driving cars are today in terms of Copilot? Because my Subaru can stay in the lane. It can tell me when to slow it. It can't do intracity stuff. Okay, fair enough. But it's still really great. So is co-pilot for GitHub going to be like my car or is it going to be like self-driving autonomous vehicles pretty soon and actually be able to do whole things for me or just assist? And if it's the whole thing, then, I mean, fire half the staff. But if it's just the help, then you're right. 30 % back, everyone's more efficient.

32:21But it's not like a sea change. It's more of an acceleration. Yeah. So I think your analogy is correct. We're at level two self-driving where you kind of take two functions away. So I have adaptive cruise control at seven car lengths, three car lengths, like even my backup, uh, ice engine suburban that I have in case my Teslas are, you know, uh, something gets the fan and I need to get out of Dodge with gas because of zombie apocalypse. Um, sure. Uh, that has, uh, it doesn't have lane control, but it does have adaptive cruise control. Right. And then you have on your Subaru, both. So highway you're good, you know, like the chance of chance of getting an accident on a highway.

32:57if everybody had that is pretty low um and does give you back it's just less arduous to drive right that's what i find is i'm less exhausted after a two or three hour drive to tahoe i do think your analogy is correct except on the low end tasks it does 100 so i'm trying to think of the right analogy highway driving versus city driving sure um but there's a lot of like um items of research that we do as journalists or you know i was doing a um a research of lps because i'm having my angel summon up in napa and i want to say you know i'm gonna invite some of the big endowments or whatever see if anybody wants to come and you know i asked it for the large endowments then i put it in a table then i said sort it and i was like this is something i'd pay somebody 35 bucks an hour to do i might use cross space for so i'm paying a subscription and it's just kind of doing it and then i i'm playing with the playground on open api and i'm like okay give me the people at the ford foundation i want the twitter handles and then i'm like you know what i really want to do is i want to follow them on twitter and then i want to follow them on linkedin i want to like a post or i want to dm them or in mail them now i can't do those last two or three things and that would be the left hand turn into an intersection right but i had 17 developers show me they did it in an hour when i said this is the next piece i need to do they're like i wrote the code for you already it's like it took me an hour so i this weekend i'm going to start playing with some of the dev you know sandboxes and i haven't done development since basic and pascal and you know the 90s and so i you know i i do think it's gonna go faster than self-driving is my long answer to your short question i really hope you're right But here's the problem that I see.

34:39When I look at all the stuff Microsoft is doing, they are doing co-pilot for X. They're building AI into Exchange or into Dynamics CRM or whatever. I don't... Cool. Fine. That's great. Thank you. But what I want is a new separate program that is at the OS level that can interact with everything for me and that I can give increasingly complex commands to. I wanted to say, go to my email, pull 10 names, drop those into a Google sheet, send that to Bob, and then I want you to grab me 10 stock prices, print them out or whatever. I want Siri, but amazing. And I wanted to have these functions that are now possible thanks to LLMs.

35:17And my vibe is if LLMs can write code, as they pretty much can, and if they can take complex spoken assignments and figure out what to say next, why can't they write code and figure out what to do and say next in a way that we couldn't before? and then let them just do a lot and so if this is a it's everyone it's friday i'm very tired so like that wasn't the best explanation what i'm trying to say no i think it's a great one actually you're describing a workflow and then you're describing you don't want to have to stitch the workflow together and make sure it works you want to tell an ai what the workflow is and have it done and uh i am using plugins right now i was able to get on plugins this week somebody at uh at open ai was nice enough to push me up the list and i started using expedia and kayaks and i have a trip next week where i'm going down to laguna and i'm speaking about uh ai in the hospitality space of all things and it turns out like a lot of the first things are hospitality things open table kayak expedia and i'm like okay so i start asking them can you please um tell me what are the closest airports to laguna right because i know i could go to long beach etc and then give me a list of flights sort them by um length of flight and then distance to laguna and it couldn't get that second piece but i got the first piece and i was like okay it's almost there and then the next piece i would normally do if i was going to be there for a week was tell me the top rest rated restaurants on yelp and then search the web and look for eater listings of the hot new restaurants give me a list of those um and tell me what the top three dishes that each place are and put them on a map yeah it's going to be able to do that by the end of the year and then when i can do that voice that's going to be that's that that's the thing because then i can be typing and also talking and i can get two things done at once um but back to what about the hospitality section and the sector in ai my first thought was that's ridiculous my second thought was where are labor costs the highest percentage of cogs probably hospitality yeah so of course i'm going to go ai first yeah so i mean that makes a lot of sense here she just yeah a lot of a lot of that stuff is going to we're going to see what we saw during covet i think um with you i don't know if you had this experience where a restaurant that had you know couldn't get waiters and you're like uh yeah two for lunch we don't have a reservation and they're like yeah it's gonna be half an hour you're like but there's a third of the tables are open and they go um yeah we don't have enough servers or back back of house staff to cook the food so if we seat you we're still not going to be able to serve you and you're like can i sit at the table and in an hour okay and you're just like this is a very weird moment and then they put toast or one of those systems in yeah where they get rid of waiters you order it yourself you pay for it yourself and they took two thirds of the they just have runners now right and yeah pretty much yeah that's all san mateo right now all right probably the most challenging thing i hear from founders is related to building either they aren't technical and they're searching for a technical co-founder or they can code, but they're just spread way too thin.

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Schedule a free scoping session and get your detailed build plan at crowdbotics.com slash twist that's crowd b-o-t-i-c-s.com slash twist i'm gonna i'm gonna drag myself by the scruff of the neck back to the earnings thing and just say a couple quick things um azure growth 26 in the uh next quarter so pretty good looking ahead and microsoft is already attributing one percent of azure's growth which is their public cloud to ai in uh the next quarter and jamin ball uh who used to be at red point and is now at altimeter i think anyways he does a lot of really great analysis on on uh tech stocks and he said i think that that one percent works out to like 450 million in revenue for azure ai already as a run tracks yeah yeah so that that's that's actual real you know nine figure dollars that that uh i think matters a lot and then elsewhere microsoft i'm not going to go through this all like linkedin and so forth but windows not so good everything else medium good company made uh it's q3 net income fiscal q3 calendar q1 jason uh 18.3 billion dollars that's cash in the bank we got it we secured the bag i mean they could buy you know it's a billion and a half a week it's 200 million dollars a day it's amazing i'm so poor and i'm not it's a money printing machine it's a funny printing machine yeah and and they did layoffs too and they're um get you know uh getting people back to the office and i i do think that cloud is going to see significant gains because of ai because every company i'm working with to spend um a thousand dollars extra say you have a hundred fifty thousand dollar developer sure and you spend a thousand dollars on ai credits for that developer to be faster so you spend eight percent of their salary or something but you make them twice as fast or 50 as fast like this is a pretty good bargain it's like paying for grammarly for a writer you know you're like okay grammarly is 10 bucks a month and you're gonna not make as many spelling errors i don't need to get a proofer for you great um so it's i think we're oh yeah i just had an idea jason so you're describing essentially the ability for software to increase human productivity and then you're looking at the cost of humans and then kind of working that back to the efficiency of software and how it's a good deal yeah this actually means that we could essentially tie the price of software to the cost of human labor and as humans get more expensive it becomes effectively more valuable ergo you can charge more for it so what we should do is raise the minimum wage to a hundred dollars an hour and then every tech company will be worth 40 trillion dollars i figured it out it is uh this is going to be the natural tension that occurs uh we're going to see the concept of a 10x developer is changing that developer who you know was supergirl or superman and they could fly and the other superheroes were like batman or the flash they can't exactly fly but they can do some cool stuff yeah it's like okay guess what everybody in the justice league cannot fly and you're like hmm okay that changes the dynamic well people who were you know a 2x developer not a 10x developer they're going to become 7x developers and the 7x is going to become a 10 you're just going to have a lot more really fast developers which means software is going to move at a faster pace and it's all going to be deflationary so software will get cheaper um and talent will get cheaper you could already see on the websites like fiverr and stuff like that that people who scrape things like crunchbase or pitch book or linkedin those jobs of like hey i can find you leads for a dollar or now i can find you 10 leads for a dollar i can find you a lead for a penny i can i can do a scraping job i can do and that's all because of ai and scripting so it's just going to be continued deflationary impact until uh i think there'll be a choice of either redeploying that those people's times yeah uh or uh you know reducing headcount and reducing costs and so you'll see a bit of both uh looking at meta i think that's a so anyway microsoft crushed it again uh incredible job um can i do my meta segue because i was thinking what i was gonna do something like uh you know what else is not driving efficiency the metaverse hey oh hey oh sorry well you gotta give him credit it he's like i don't want to get disrupted so i'm going to do a crypto project and then he's like the world really doesn't want me to control crypto after i screwed up elections in dozens countries and created you know uh uh you know um all kinds of psychological issues in young children and eating disorders so he he pivots off of crypto remember that crypto project we're gonna do libra whatever it was going to be uh then he he hasn't pivoted off of oculus and metaverse but he certainly has not talked about it and he talked about ai a lot more in these earnings calls so he wants to win i bought the stock at 94 the monday after he said he was going to cut 10 000 people it's the best trade i've made in a while um and his stock continues to go higher because they had negative revenue growth for three quarters this made people believe that this was okay you're aol right this is the start of the slide down you hit a peak and now we're going on the other side of the hill uh but he cut headcount significantly i know there were 4 000 more layoffs recently 11 000 were in 2022 but now the other part of the financial playbook alphabet google said they're going to buy back 70 billion he says he's going to buy back 9 billion uh and so all of that put together i think has led people to believe that he wants to win and he is nimble so you look at google not nimble microsoft super nimble zuckerberg most nimble and so if you're going to place a bet you're going to place a bet on microsoft and zuckerberg right now and you're going to move your money out of google into those two companies and if you don't agree with that you can send an email to jason's email address and not mine um but to kind of carry on your point uh they did post revenue growth three percent in the first quarter obviously to your point not a growth stock but if you go from negative growth to positive growth it's literally day sorry night to day like it's like the sun comes out there's a future in front of you cash flows might expand especially if you're laying off people my my beef though with the company's results is is all that's great and the company had net income of 5.7 billion that's a lot of money congratulations uh their their spending on the metaverse stuff is still incredibly high i forget the exact number but i think the operating loss on reality labs was just around four billion in the quarter and unbelievable that's huge you're they're not being nimble of getting away from that i think it's going to be hard to slow it down and i think he still believes apple is going to release their headset the end of the year which we keep hearing and that he needs to be part of that And so while AI is clearly going to change everything, he still believes and Apple still believes that AR is going to change everything.

46:35So is it possible for us to have two platform shifts at the same time? Of course it is. We had cloud computing and mobile happen at the same time. So it's not like awesome. Yeah. Because you combine the two. your your photos were suddenly on went from being on micro sd cards and offloading and external hard drives to all of a sudden mobile me becomes iCloud and it works and google photos works right they bought Picasso whatever and now we had something on our mobile phones that was a huge problem and arduous and everybody's going to Best Buy to get memory cards and memory card readers and now all of those are collecting dust because it's all abstracted to the cloud via mobile well now you put ai and ar together well who knows what the how those two come together but the mind does start to think about really interesting applications yeah and i'll just say this i'm a i'm a long-term vr bull i'm a short-term vr bear because i just bought a new gaming pc the other month um and i did not buy fancy nerd goggles for it and i'm just i'm waiting for the reason to do it and i'm going to do it i have a i have a sim racing setup like you know i i didn't have a child until recently so i had a lot more free money yeah uh but i you know i i'm going to do it and i just i just don't know yet so to me like they're there it almost feels like they're like the ipad it's like the pre-ipad smartphone when they're taking an old os idea putting it in the wrong form factor it's not quite there yet but something's gonna break the logjam and maybe this is the right long-term bet but at four billion a quarter that's a hard thing it's a hard call option to keep paying the the rate on you know every single thanksgiving and christmas somebody's going to bring the new oculus i'm going to try it i'm going to do the try oh my and goodbye i'm going to put it on go wow they made great progress and then i'm going to hand it back to whoever brought it and be like thanks and i did it again this thanksgiving i played a game that was like like a breakout game i played a star wars game i got about 30 minutes of time twice and i was like that's enough for me i want to play age of empires or like a real-time strategy game like starcraft two those are more appealing to me uh than these you know vr games as impressive as the technology is but i do you think there's a a material difference between vr and ar in this regard because i am a vr i am vr not interested and i'm ar fascinated so i remember the first time i put on maybe actually the only time i wore microsoft's hololens product this was years and years and years ago probably oh gosh forever ago and they were still in like the development form they're like you know big wires coming out of them and i got to play with an ar kind of like roblox type game or sorry a minecraft type game in the in the real world it mind-blowing and so going back to our ai idea about combining workflows together and having more speech built into these products and so forth you're still going to want to have the ability to have written text appear to you and so there may be some sort of ability to take ar and ai and make them into something that's quite interesting in a unified sense but i don't actually think that's a gaming context i think that's a that's a work slash life context not an entertainment context i agree and that's exciting to me so yeah i can see that it's like a guide you know you're like hey siri and then all of a sudden this person pops up and you're like can you get me the legal assistant and the legal assistant pops up and now you have like princess leia being projected from r2d2 in your field division and you're like hey i need to do a non-disclosure agreement for with this person i want it to last uh you know a year and then in what jurisdiction do you reside you're like california what jurisdiction do they reside i'm like london they're like oh okay well you're gonna need to file one in london uh because you know it doesn't apply the california law to there and uh you know you need to answer these six questions would you like to answer them now and boom and the ad is like oh i actually have four of those answers for you boom like that this is a compelling future um and you the the minority report or blade runner where he's like move five to the left zoom in here go there and he's talking to the computer like analyzing a picture that's the stuff that's going to get super interesting i think and the workflow you described being super frustrating for you yeah make you get me these uh earnings reports send it in an email put it into a google sheet you combine that with ar and it's happening on a desktop over here and you mentioned i'm working over here so hey i'm doing a podcast i'm talking to jacal and i'm like i asked you a question hey what was blackberry's earning decline you're like hold on a second can i get blackberry's earning decline in a chart uh from the peak to the trowel and it's like it comes up on the screen coming right up this stuff is going to be incredible uh congratulations to zuckerberg um he's staying remote too that's another interesting sort of rub to it um and it seems like he will keep cutting people uh until morale morale and performance continues so the beatings will continue until morale improves i i use that in a headline but i flipped it i said um the layoffs will continue until investor morale improves.

51:46And it seems to have finally worked out because Facebook, of all these companies we're talking about today, had the best post-earnings share price appreciation. People were very excited about what they were doing because they returned to growth, they cut a lot of people, and they said the magic word, which was AI, a million times on the earnings call. And investors lost their shit, and they were so happy. This is where AI would come in helpful. Hey, AI, can you tell me for each of these earnings calls how many times AI was mentioned? And we could just chart that and we just tried it over time for the last four quarters and say uh i loved a friend of the pod brad gerstner's tweet i think i guess he went to uh mid-journey uh and i heard there's a discord my my kids were uh my wife were on the at dinner in a discord doing mid-journey making jedi bulldogs and uh here's what brad made he made zuckerberg looking like he was on the juice on steroids taking peds uh peds he looks like westbrook or he looks like westbrook's taking peds either but no he looks like superman not wearing a blue a blue uh speedo um it's a bit much it's a bit much but what i like about that that particular thing is it captured the the core elements of zuckerberg's face but it actually aged him a bit and he looked yes he looked there more like he was like 45 um i don't know how old he is today but he looked older there uh and i don't think it didn't look bad on them no maybe that's maybe that's predictive ai via mid-journey this is what i'm witnessing with all my friends i i hit 52 years ago all of my friends who are in their 50s now are like you know what i'll be dead soon i might as well have the best body of my entire life in my 50s and they're like you can do it jay cal all you have to do is work out four times a week and eat chicken without the skin on it and uh you too can have the best body and look like uh you know jeff bezos or uh ai zuckerberg so you just have to sacrifice food and lift things yeah sure so i'll lift heavy things i'll do cardio but like since i gave up drinking i'm going to eat candy like like the non-negotiable like like you're you i will die with a kick what do you gotta go to are you a chocolate sour candy uh your equal opportunity what do you what do you what's your there's three main candies of sub verticals there's chocolate there's fruit and then they're sour yes and to me each has such a high peak to it that you must visit all three mountains on a regular basis very cool wow look at that so you you like to climb multiple summits sometimes on the same night while consuming some uh california-based vaping products and uh perfect you can just absolutely uh herbs will uh enhance the flavor i can confirm uh from a friend yeah anyways uh amazon yes hey speaking about green things amazon makes a lot of money um aws doing well but actually had lower i think it was operating income than last year did that worry you jason huh you know i'm a shareholder uh in amazon i believe in amazon i believe they're not fit i think they need to keep laying people off um amazon web services growth is slowing and i i know what's happening here i am not concerned about the slowdown in um cloud computing we talked earlier about people who were signing leases for two years from now hiring people from two years now the same thing happened in cloud people were provisioning and they were basically like somebody who didn't have to keep track of what's in their pantry just filling the pantry so they were you know developers were putting up instances never turning them off and they just were not um you know managing the pantry uh as tightly as they should now when you saw the layoffs happen last year and you saw the contraction the contraction in the economy everybody said what is our spend now i was i'm not going to space say specific names but we had like a couple of different email products we were using they were costing thousands of a month and we had a bunch of mailing lists and we were getting charged based on the size of the mailing list and i'm like we haven't emailed this list in a year and i said um to me can you put that list for founder university uh for our angel uh summit or our angel uh university can you just put those on a sub stack because sub stack's free actually i put them on review before twitter got rid of review uh rip review rip review and so but i was like wait a second sub stack is free i i i sent this list once a year maybe twice i don't need to pay a monthly fee for this and so boom all of a sudden forty thousand dollars less in email fees across two companies i'll get you talking about hundreds of thousands of emails now yeah no i'm just saying so that's that's a material savings material savings car yeah it's half of a salary of somebody right there you go and so i think that's what's happening is everybody looked at their amazon on uh bills and when your revenue is going up top line's going up you're like whatever who cares this is like not that much money but when you have to get rid of two people in your department you're like you know what uh do we have stuff we can move from the live storage to the glacial storage that right does it need to be as fast oh we have these instances running oh we have this many cdns we don't need that much or let's renegotiate and so the great renegotiation has occurred that's what i think the slowdown is it's not usage or utilization people are using in the cloud more than ever.

57:09It's just people are negotiating harder with their cloud providers and they're tidying up and that's why you're seeing this belt tightening, which means people aren't being wasteful, which means I actually think these businesses are stronger than the percentage growth decline is showing. Hard to agree with all of that. Also, we're lapping some pretty impressive results from a year ago, which were predicated on not the same belt tightening. The fact that we're still seeing double-digit growth across all three major cloud providers is very impressive the only caveat to what you said okay is that in amazon's earnings call i was going back through it uh today writing about this exact issue actually and they said that they were running growth in april for aws was running 500 bips below q1 which means five percentage points if you don't do bips out there uh 16 minus 5 is 11 11 is very close to 9 and 9 is a single digit growth rate um and that that doesn't change our thesis about cloud but for amazon in particular given that their e-commerce business is unprofitable internationally and occasionally unprofitable in north america they can't really afford to have their main growth engine and profit source slip of gear and so i agree with you i i think that growth return is a couple quarters out it could get a little rough for some of these companies too we just mentioned that azure has the open ai chat gpt the the the sexy new product uh the new cars on the lot they got the new prius they got the tesla model y whatever the hottest car of the moment is and so yeah you could see people saying you know i'll use azure for this uh and then google cloud is uh just a third but you know you do have competition in the space i do like their advertising business i think that's like pure drop to the bottom line that's growing double digit percentages and then uber added that doordash has an advertising business you're starting to see these advertising businesses in places where you didn't expect them and when you've got a marketplace like uber does or amazon does with third-party sellers and then you or doordash does with restaurants and then you say to the folks who are in your marketplace would you like to come up ahead of your competitors would you like to what pages would you like to be shown as a you know what are the double dash on doordash you get to do a second thing it's like hey can we show your ad after somebody orders from this restaurant do you want to show your boba or your you know liquor you know restaurant and it's like yeah i think i would pay for that sure i need more business these businesses i was in a an uber and i was just thinking they know i'm ordering an uber black okay great there's a signal they know my zip code they know my address what are the chances they know the value of my home what are the chances yeah and what are the chances they know the cost of my hotel okay uh the hotel i was staying at uh you know in japan uh is you know i was staying at the park hyatt it's not cheap it's like a thousand dollars a night that's the uh one from uh what do you call it um uh not white lotus the other one lost in translation there you go yeah so i'm at the that hotel uh there was 800 a night it was during the marathon but they know in japan i'm staying at this you know five-star hotel four-star hotel i mean what's that worth to an advertiser uh to know hey would you like the people who stay at the top hotels in the world this person's been to japan austin miami and la in the last year and their hotels cost 800 or 600 on average they're four or five stars this person is staying at holiday end so it was jcal during the weblogs era me and brian alvey were splitting a room at 150 a night hotel i'm not kidding we would get no bed i've been there we would be we'd sit there and we'd work until 2 a.m and then sleep a couple hours and have breakfast together um and uh you know that advertising information is extraordinary do you want the person who bought i just bought a 300 not 300 200 and some odd dollar waffle machine for my daughters got this incredible my own heart that's yeah what's it called uh it is the what's the name uh god um i'll tell you in one second um okay because i'm a big waffle machine just to flex a little bit yeah please uh tyler florence the chef uh from the food network just sent me the one to get so i get it and so it's that brand i love anyway i'll send it you have to show but it's like a four you can make four four five waffles at a time because i got three daughters and i had the single one and i'm literally like making one waffle at a time And like these three, like baby tigers are going to rip each other to shreds over one waffle every seven minutes is what makes four, every four minutes.

1:01:51And so pretty different, different ball game. Um, I love that, but the advertising points very good. And I'll tell you why, because when you think about, um, Instacart, people think about a delivery business, kind of, but they also make software for grocers. That's another thing. They also have a simply amazing amount of inventory for advertising, because when I'm going to buy a thing, most of the time i don't care if i'm buying oreos or chips ahoy to pick up the first example that came to mind but they have a lot of advertising space there and they're using it and another company swiftly i've known the founder of that forever um also working in the grocery space explain to me how much cpg brands are this was uh henry kim um how much cpg cpg brands are willing to pay for like last touch advertising if they can change a sale on the ground and so there's a ton of space here i just think it's interesting that we're talking about these major tech companies these ad incomes like who would have thought that like the apex point of a tech company when they reach real scale is they can finally sell ads but that does seem to be the case i mean apple and and then we bottom one by the way it's the breville smart waffle maker pro this is the only waffle maker that had an le you know lcd screen and like settings at this level of granularity of christmas it's absurd how good this thing is uh and it's yeah it is for the brand for me oh i found it yeah oh my gosh b-r-e-v-i-l-l-e now they got a kid the smart waffle pro four slice yeah it's no joke i mean you could save 50 bucks if you want to get the two one maybe a family of three could get by with that i had to go industrial these kids are killing me uh i needed four waffles at a time one for me one for each of the kids people who are watching this are not watching this on on video you can't see this but like it's literally has a feature called waffle iq intelligent automation dials in your cooking time perfectly to suit the waffle style including belgium classic chocolate and buttermilk like oh my god i love that i'm that idiot and i probably saw it on an ad uh where it was trying to upsell me on the 39 one that i saw on wire cutter that i was like that's good enough and it was good enough for two years now that you got the twins it's no longer good enough they're not once you're over 28 good enough is no longer yeah an okay thing is my vibe um let's talk about snap before we go just really quick yeah uh so snap uh had if you notice how snap only has two responses to earnings which is up 20 percent or down 20 like why is the stock so swingy it's just i want to give them a hug almost because they just get wrecked so much advertising the advertising business is finicky um advertisers uh you know during a down market will pull back they will pause ad campaigns they'll push them back and i think you know performance-based advertising like google search or like we just talked about amazon's uh you know marketplace stuff these things are very close to the purchase decision the closer you can get to the purchase decision the more scientific it is right so okay the waffle maker cost 279 dollars i can pay eight dollars every time somebody clicks on it now if that waffle thing is on the new york times it's like okay yeah you this person looks at recipes maybe i can pay 80 cents per person and i gotta hope that one out of 10 actually you know clicks and that's how i get to my eight you know clicks past you know they're not looking loose and so this is why google has always you know with intent and being closer to the sale and amazon obviously even closer to the cell uh uber might be very close to the cell hey i'm going to the warriors game where are you going to go out for drinks after right right so this is um i think the the core issue that snap twitter um instagram you know certain ad networks are gonna youtube are not close to a transaction so they're getting brand advertising brand advertising uh half the time it works half it doesn't nobody knows which half works that's the classic statement and so So it's just a little less predictable and, dare I say, essential as performance-based advertising.

1:05:56Essential is the right word. I mean, essential is the right way to frame it because when you have a reduction in spend across the economy and things slow down, you cut the non-essential things first and brand advertising is the first thing to go. I don't think it's a shock or a surprise that we've seen so many media layoffs in the middle of a slowdown in advertising spending and generally, especially on the brand side. I mean, a lot of this money just evaporated out of the economy. um snaps revenue dropped under a billion down seven percent year over year and then the numbers just get brutal it had a worse operating loss a worse net loss uh it did have more operating cash flow but man just yeah it's hard to find a lot that was exciting about this and they got some really tough questions on the um on the earnings call and okay one of them was particularly rude i saw it trending and i didn't actually listen to it i don't know if we have we do have it queued up here.

1:06:46Did you hear this? I did. I haven't heard it. So I'll hear it live for the first time here. Let's play. Our next question is from Rich Greenfield with Lightshed Partners. Hi, thanks for taking the question. I got a couple. I guess given the infrastructure and creator investments that feel pretty vital to reversing the pressure you've seen on engagement and advertising, I guess the question is sort of why aren't you scaling back your AR investments? You know, you talked about offsite partnerships and I saw last week things like AR Coke machines or vending machines. Like why not scale back AR investments until you're in a better financial position?

1:07:26You know, obviously, it feels like Meta has got the luxury of sort of walking and chewing gum when I look at like their metaverse investment. I'm not sure you have that luxury. So how do you think about how do you balance sort of what you need to reaccelerate your core business versus sort of investing in the future? And then two, I guess just a big picture question, Evan, of just obviously you've got what now is going to be another quarter of revenue declines, at least based on your internal forecast in Q2. What gives you confidence that you can return to robust growth? Because I think obviously the big challenge here is investor confidence in you and the team.

1:08:08Yeah, that's a little rough. Walk and chew gum at the same time, but fair, do you think? Oh, absolutely fair. I mean, the reason why Meta can have its stock go up 15 % after its earnings and the fact it lost$4 billion on Metaverse at the same time is because its core business is gold. Tons and tons of gold. It's just, it prints bricks of money. And I just pulled up Snap's earnings. I had all the numbers. I mean, their net loss in Q123 was$329 million, and their revenue was$989 million. When you're running like a negative 30 % net margin on a gap basis, you have fewer options. You have a less robust amount of maneuverability room.

1:08:50Yeah, that question came from Greenfield. I know him. Yes, he's a particularly sharp elbowed. He's a bit of a provocateur, yeah? Well, okay. So here's the thing. I don't think that question was actually rude. No. I think it's the venue that made it seem so rude because most people get on the call and they go, J. Cal, amazing quarter. You guys are the best. Thank you for taking the question. Just a small point. Can I clarify? Of course. Are you seeing channel flow with the sales? Thank you so much. What an intelligent question. Oh, thank you so much for the question. And then you give me a bull**** answer and then nothing happens.

1:09:26Ah, yes. Ah, yes. I just passed gas and it smells like roses. Yes, exactly. Yeah. So he asked the question. i mean basically he said out loud what everybody's thinking which is come on your business is uh struggling here get focused you got to get focused um and he said he's going back to the he was the one who said hey we're going back to the office um four days a week or whatever we we don't have the luxury of that so i he's an enigma to me he's an enigma to me too i've never i've never spoken to him i don't know him at all i do like stuff about snap i do like that they stayed independent that they had a very different take on social that they managed to capture new demographics that they've done uh investments into original content and creator uh stuff earlier on um i wore snap spectacles i thought they were awesome they're killer at brand uh but ultimately they're a small social network in a world of of much bigger companies that have better ad um yeah i don't leave rich like this is the twitter problem all over again so yeah i mean you are you essential or not and in a down market people are going to just cut you know and simplify maybe we'll just focus on the two or three things that are working and we won't be as experimental with our ad budgets and so if you were experimental on snap or twitter or tiktok you might cut that and just focus on your amazon you know ads and your and your google ads and your facebook ads right so you can only focus on so many things back to the you know walking and chewing gum i think that's part of the issue here uh they do have an impressive number of people using the service i mean it's 350 million people or something like that people are addicted to the service uh and it's an audience that is valuable it's young people so it's valuable to brand uh advertisers but in a down market advertising gets walloped and they are going to keep uh they're going to need to to keep cutting costs and to show some uh profits here and and show growth so yeah i know we have to go for we're over time but just before before i bounce um and go back into babyland uh this is a question about social media but what's your what's your vibe on people that want to ban or not ban tiktok from the united states uh so it is crazy that the united states would not demand uh reciprocity uh with china yeah it is also crazy to think that the chinese government would treat americans differently than they treat their own citizens their own citizens are tracked uh in apps they're tracked with facial recognition uh and they have a social score and if people don't pay their debts um they are scarlet lettered inside these apps if people don't uh if people smoke on a train or eat food on it they will can have their social scores a la black mirror uh that famous episode where you're waiting each other so uh we would have to be completely naive to think that the chinese government the ccp would not use this as a weapon against americans the obvious answer and this is has nothing to do with your politics you just need to look at what Huawei or any country would do or swap out China for Russia or Iran or North Korea if they owned this app and they had this amount of access to Americans you'd be like well I'm not giving Putin access to this many Americans period full stop so it has to be divested and the investors who are in that company want to return this is the greatest IPO of the next couple of years um so if the board wants a return the investors want to return and it's not going public why well i know why it's not being divested well one i i agree with all that by the way okay we're on the exact same page i was just curious if we were in alignment here but the reason why it won't go it won't be divested is that the last thing that i read about this was that the chinese government doesn't want to appear to be forced to do that so i want to save face yes but also it kind of makes a point that this thing is not controlled by china but yet it can't be divested didn't go public because chinese government says no so we're on the same page here i mean it basically proves the point as you described it yeah yeah investors want to go public investors want there to be a float and free trading of the shares which would then if it was a freely traded company it would not be owned by ccp anymore and there's a person from the ccp on the board and they have said no why would they say no it's an asset it's an asset obvious now if you wanted to if you want to be tell a lorenz and you want to be like well tiktok the creators need to make money and we're not thinking about that when we have no proof that's just complete naivete i like i like taylor but i do disagree with her on this yeah yeah i mean it's just it's literal complete naivete um you all i mean it'd be like for people be like oh well no i met this russian spy and they didn't spy on me and they didn't compromise me and it's like how do you know that they could have like swapped out your sim card when you were at the bathroom like you're dating a russian kgb agent like yeah the the thing that i would say is that i don't like there's a certain vibe amongst certain people in tech and this is actually across every possible group in in the in the industry and even the media covers tech in which there's this like uh almost like a point of pride that we're all like outside in the dark smoking cigarettes saying well we're always being tracked by american apps too who cares that's weird and and to me the answer is no we can fight surveillance capitalism at home and we can also point out that there's a greater national security risk when it involves a a hostile foreign power that is trying to exterminate um a part of this population so yeah we're on the same page but we should probably stop talking so i think yes i mean your your analogy is exactly right yeah um i think we could be absolutely um we could be absolutely um against what's happening to the uyghurs in china while also looking at the american prison system saying hey we got too many people in prison and the death penalty is not i deployed fairly here but these are two different things yes genocide and you know our incarceration system being flawed these are both can be solved and addressed and they could be different magnitudes of risk and or uh wrong in the world all right alex wilhelm uh you can follow him on the twitter and uh go subscribe to tech crunch uh plus you know get that in there support great independent editorial and on Twitter.

1:15:54He is part of the First Name Club, Pat Alex. Yes. Thank you, my brother. Jason, thanks for having me on as always and a real treat and I'll just say this, may summer come quickly, may we all go surfing and let's all get a nap because we need to. Yeah, exactly. Everybody get a good nap and see you next time, everybody. Bye-bye.