Booking Holdings CEO Glenn Fogel on travel industry trends, M&A, leadership, and more! | E1830

0:00When you stop the larger companies from being able to buy those more nimble, agile new startups, that's going to create a bit of a problem in this whole system. And I don't think anybody in the FTC has thought this through, nor am I certain they even care. But that is something that as overall, as our society trying to create new and better things for all of us, that is something that we should all be concerned about. This Week in Startups is brought to you by Vanta. Compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a SOC to a report fast.

0:40Twist listeners can get$1 ,000 off for a limited time at vanta.com slash twist. LinkedIn Marketing. To redeem a free$100 LinkedIn ad credit and launch your first campaign, go to linkedin.com slash thisweekinstartups. And DevSquad. Most dev agencies only offer developers. Why? Because product management is hard. Get an entire product team for the cost of one US developer plus 10 % off at devsquad.com slash twist. All right, everybody. Welcome back to this week in startups. Hey, just last week, we had Kayak CEO and co-founder Steve Hafner on the program and gave us a bunch of insights into the travel industry.

1:31You may remember Kayak was acquired by Booking.com in 2013 for$1.8 billion. And so we decided to have on Steve's boss. Glenn Fogle is the CEO and president of Booking Holdings. Glenn joined Booking back in 2000 when it was known as Priceline.com. Wow. Throwback to Priceline. What was the name of the accelerator and the founder of that accelerator who created all the business patents around? You know, it's funny because, you know, Jay. Jay. Yes. But, you know, accelerator is not the right term, really. to use um he had a vision to be able to create intellectual property that he could then patent and then have somebody else actually create the actual make the thing actually become real so it was um i guess you consider it sort of an idea manufacturing idea yeah jay walker uh he had this laboratory uh and he came up with a bunch of interesting ideas uh walker digital right um And so you've been running Booking for how long now?

2:44Well, I started, as you say, in 2000. I became CEO of Booking Holdings, which is the holding of all the brands, in January 1, 2017. So it'll be seven years and a couple of months. And then I took over also the role of CEO of our largest subsidiary, Booking.com. And that was in 2019. And it's interesting, you mentioned about acquiring Kayak, because when we acquired Kayak, it was the Priceline Group that acquired Kayak, not Booking.com. Booking.com was just another one of the subsidiaries. But we, you know, booking has become so huge, we started changing it from Priceline Group to Booking Holdings.

3:28got it so what's in the collection of brands and companies now uh that you own in this would you call it a conglomerate a holding company yeah um boy i don't come up with what the term to call is it is a collection of companies that work together to achieve a common goal which is increase the value and provide great services to our customers who are part of booking holding so is booking.com by far the biggest and then you have price line known by many people in the states also kayak known by many people in the states uh you also something like goda that is outside is based in thailand and singapore so that's no more in asia open table of course known primarily in the u.s but also in uk and other parts of the world and then you go on there are many other brands too but those are the main ones and how do you operate each of those subsidiaries because this has always been the challenge um because you know these different brands might want to overlap they might compete with each other on the margins uh and when a new idea comes to pass uh you know i don't know airbnb as a new concept maybe they want to engage it so then you have um what what's the independence and command and control structure that works best?

4:47Yeah, no, that's a great question because the organizational design thing is always interesting. How do you give enough independence and incentives to make it so people feel like they're owners and drive hard? At the same time, you want to have enough cooperation in order to get the benefits of scale and making sure that we're not duplicating efforts, etc. So it's a very fine line and it's changed over time. At the beginning, the companies were extremely independent. But over time, we've come closer and closer together, making sure that each company is aware and can try and use things that other people already have done and not recreate the wheel.

5:24So it's always something that is changing. But I think as of today, we have the right balance. uh and so when you look at travel as an industry um you have restaurants you have i guess flights uh and hotel stays what what else is part of that now because i keep hearing about experiences um as a big component of this but do you have an experience you know layer i know airbnb added experiences but it seems to me a lot of young people today the big trend seems to be they want to work backwards from an experience backwards from an emotional state as opposed to maybe gen xers like we had a bucket list we wanted to see tokyo we wanted to go to barcelona whatever it was um you know certain destination is that how travels change is it experience based now well i think you have to be again language is important so i have to think what do we mean when we say an experience because as you just pointed out going to tokyo is an experience of what you do in Tokyo, though, you may want to go look at the Imperial Palace, right?

6:32Now, we would think that as an attraction, because you're going to need to get a ticket or reservation to go visit. So I think what you're more talking about is the attraction area, which we do have at Booking.com. And we also have at Agoda. And the interesting thing that you mentioned is, yes, we'll talk about that. But I have yet to see anybody really start their planning by going out and getting a reservation so they can go to see, let's say, the Anne Frank House in Amsterdam. Generally, people will start, most people will start with, they need to get flights to Amsterdam. And then they'll think about, oh, and we have to find a place to stay in Amsterdam.

7:12And then they may think at that point, oh, Anne Frank House is something that is hard to get a ticket, so I should get a reservation early. That's the type that usual order people go in. sometimes there's a little other ways we may start with a hotel first but i almost have never seen people start with let's make sure we get the tickets to the end rank house first and then we'll worry about the flights and the hotels yeah i i've had the you know i get pitched on a lot of startups and a lot of startups seem to be wanting to try to tackle this space of hey uh you know if you want to go kite surfing if you want to go e-foiling if you're bike riding etc and i know there are some smaller brands around booking experiences and packages that way but is that sort of a trend that's emerging with these younger folks or is it just something that young entrepreneurs are attracted to because it sounds on paper like it's a good thing but you're saying people generally work backwards yeah well that's it because they like to do it and that's a lot of what drives a lot of people why i like to do this and it's so hard to do it i'll come up with an easier way to get a reservation to be able to do it and plan it and that's why people are drawn to something like that but then you have to think as a business person you start thinking what's the tam of that yeah what is the addressable market here and then you start thinking about what are the types of profit margins that could be gotten and you think well how am i really going to do this distribution and that's something where you see where when you look at what travel is including things like attractions, and the numbers are all over the map pretty much, so we're going to round off, call it$3 trillion globally is a nice number to play with, right?

8:54The portion of that though is that, as we call it, the attraction part is a very small part compared to things like the accommodations business or the flight business. So it's hard to build a really big business doing something that's just doing attractions. That doesn't mean somebody can't have a nice business a business that can provide a good income and enjoy doing it okay but you're not going to create a multi-billion dollar company that way in fact there are some big ones already out there who they will get your guide you have viator which is now part of trip advise you know called big players there and these companies are not worth billions of dollars right so and those are and they've been around for a long time am i correct that accommodations is the largest opportunity in travel that's where most of the dollars are spent well i'd say that's where most of the profits are but let's go to that because flights don't make nearly as much money as accommodations do is the fragmentation difference it's just the way you work in different countries where uh there are sometimes only a few airlines um you get in so like the united states where airlines are not willing to pay any commission they don't feel a need to pay for distribution so it's the fragmentation of the hotel industry the combination business that enables there to be an opportunity for somebody to be able to get a reasonable uh return on what they're what they're doing and to give people just a comparison uh booking holdings uh is 107 billion dollar market cap right behind that airbnb at 82 and then you got the married and hiltons of the world 58 39 billion expedia way down there at 14 billion so you're i think the largest conglomerate in travel today is that correct yeah by far and i i would say that 107 to 82 to get from 82 to 107 i mean that's you know it's 25 essentially yeah it's and i guess that's an interesting i would be interested in your perspective watching the ascension of airbnb and what an amazing job they've done over there and the loyalty some people have to this market segment as a as a student of business when you first saw it what did you what was your thinking of how big it could be and then how has your assessment of that business changed over time if at all well i think look i think brian and his team have done a great job they really took what was an idea and something that was very much a niche business obviously people have been staying other people's homes for a long time and there was couch surfing and some other minor players and stuff but they really did something that really creates something that was scalable.

11:31Now, what I really admired, though, was his chutzpah is one way to put it, because in many of the places that he did business, was he legal. Now, we at the time, as a public company, we were doing things like Airbnb on a smaller scale, essentially, in terms of only doing it where it was legal, in areas where we were allowed to do it. So there's a difference. There's a, you know, that, and this goes to Shano, who had said at first this idea of you know move fast break things and don't ask for permission right yes for forgiveness exactly exactly and that's something that brian team did and that's great and they built a business out of they built an industry out of it that's great and i i admire it that being said though it's harder if you're a public company you got to be careful about doing stuff that's breaking the law and by the way you see what's going on in new york right now new york City, where it's always been illegal for the most part for many of the areas of the short-term rental business to be doing it for less than 30 days.

12:33In New York City, they finally have come out and they're actually really pushing hard on it with a new law, et cetera. And that is, unfortunately, a lot of people who wanted to rent their properties on a short-term rental platform are not able to do it anymore. What's your take on it? Should people who own properties be able to rent them and compete in this market? Or do you think it should be regulated heavily, like say New York, and that's a better model? Or are you indifferent to it? Each location can make their own decision based on what the community wants. Well, I think your last point is the good one.

13:10Look, there are a lot of stakeholders involved in this type of a business here. You have, first of all, you have someone who has a property and they want to rent it out. So that's okay. They own the property. They want to rent it. And you have, let's say, a traveler. They want to be able to stay there because maybe it's a better thing they need or a slower cost or whatever. But then let's say it's an apartment building and you have people on the floor who live there. And they don't want to have people coming in and out every night with roller suitcases, make noise and all sorts of stuff. Those people are worried about.

13:40And then you have the issue of, well, if that property is being used for short-term rentals, that means it can't be used for a long-term resident part of the community. So you have the issue of people, there's a shortage of housing, and it's driving up the prices. So you have a lot of issues. And then also, people aren't paying their taxes, where a hotel is paying a huge amount of taxes to the municipality through their taxes on hotels, but the short-term rental owner isn't paying the tax. So there are a lot of complicated issues. So the right thing to do really is you need to have all these stakeholders get together and come up with what is an optimal solution that best satisfies everybody.

14:18Now, nobody's going to get everything they want, but you call it something that actually works best for everybody. That's what you really need. And that requires negotiation, discussion, et cetera. And I think it's wrong to think there's an absolute here. If I lived on an apartment building and I'm on that floor and somebody next door is rented it out and i got a bunch of people coming at 1 a.m you know loud banging around i'd be really unhappy but if i own property and i need that rental income to help me live there well i'd be really bad if i wasn't allowed to do it so obviously conflicting needs yeah we have this controversy in tahoe where there's not enough housing to staff the people who work there during say ski season but of course uh renting the homes is highly profitable so a lot of the people who have homes put it into the airbnb or in your cases you have uh alternative uh accommodations you guys actually support the legal ones sure yeah yeah yeah and so you know it's it's a balance and uh ultimately it's just made people say we need to build more units well it's helpful too yeah i mean at the end of the day that is the issue um so what impact has it had uh these alternative accommodations uh i guess vrbo is the is the other major player in that space uh between and i think hilton do they also do like hilton alternative kind of stuff now too i think i may have seen that in my interface yeah a lot of the big international chains are coming up with different ways that they can offer a similar type property because they know people have certain needs look if you're a family and you want to have a kitchen so the kids can have breakfast there and you want to have enough bedrooms everybody's all in one space that's an understandable need that the chains realize that, hey, do we come up with a property that would fit that need?

16:04So everybody's getting into it. The question really is, what we like about our company is that we offer everything because we know there are different needs at different times. So maybe you need a hotel, maybe you need a resort, maybe you need a villa, maybe you need that ski chalet. We want to be able to offer all the properties, all the different types, so that the customer, the traveler, can actually be able to find what they need for the use case they have. Yeah, and all of that is available through your common search. You can see all those side by side. And yeah, I mean, I'm exactly that way.

16:38If we're going away for a multifamily trip, yeah, we're going to do an Airbnb, a VRBO, whatever. We want five bedrooms, six bedrooms, all the kids are going to be together, game room, all of that's awesome. But then if we're traveling just our family, yeah, maybe we just want adjoining hotel rooms, it's fine. and we actually prefer room service as a treat unless we're there for over three days, right? So we have our own like internal algorithm of how we use this stuff. Exactly. And for me, it's like, if I'm going to a resort, I really don't want to have to make the bed. I really don't want to have to clean it.

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18:21As we watch what's happening in AI, what do you think will happen to interfaces? You've spent your career for two decades on a web desktop interface, then going to mobile. Generally, it's a grid. We're all pretty good at putting search parameters in. We're all kind of like our own little travel agents. They used to have their own dedicated, you know, services that they used on a command line to do fancy searches. Now that have that beautiful interface, you know, whatever service it happens to be. But do you think you want to move to a chat interface where you talk to an interface? And have you been playing with some of the early attempts at that?

19:02Well, we have a thing at Booking.com called our Trip Planner. as an AI-driven trip planner that enables people to put in whatever they're looking for and have itineraries fit out and accommodation choices and then be able to go directly into actually booking one of them. So we have that. And we have, for our Priceline company, we have a thing called Penny, where people who are almost ready to buy, they're on the buy button, ready to buy, but maybe they have a question about the property. So they can go to a chat bot there, and we call Penny, that they can then get more information, saves the trouble go all the way back i'll try and find the content that matches up with what your question is and come back immediately with the answer and one of the most popular questions is can i bring my dog to the property that's a real popular one also is the parking free seems to be a very popular one too but that so we have lots of different ways to do it but here's the thing and this one has driven our company for over 20 years that i've been here i mean i'll be 24 years in a couple of months this is the idea that we don't know we let the customer decide for us we'll experiment we'll bring out new ideas one thing that people want to use a chatbot to do through it they want to use voice however they want we will test and see what the results are and then we'll scale once we get the signal that says this is the way people want to go what i think is going to happen is irrelevant my opinion counts for zero what matters is the data yeah what is the early data showing on that do people enjoy the chat interface and then after they use it for a little bit they go back to the original one and then do the booking there or will they actually book from a chat interface it's very early it's extremely early and i would make any i would not make any conclusions no matter what it's saying now we need to continue to develop this refine it and do it for some time before we'll have any definitive answers on any of these new ideas what's your take on uh uber uh and they're dipping their toe uh dar obviously has a big history in traveling you know him i'm sure very well um all of a sudden i think you can book some flights you might be able to get some trains on the margins when you're in europe some experiments there from like uber becoming the everything app uh like we see in asia you know you can you can do a lot of bookings directly from inside certain apps so what's your thought on the everything app and uber sort of dipping their toe there into travel yeah i think everybody uh looks at you know they look at the profitability of a business like ours and of course you'd be interested in like well maybe we should get into that area too yeah um that would not surprise me in the least um we obviously we have a ride capability we have if you don't like to use a ride uh service you could actually rent the car we have that too which i really i'm sure that And Dara's looking at that, too.

21:51Again, it's money and capabilities flow to where there is opportunity. Travel is an incredibly interesting space because, one, it's still not as good as we all want it to be. So people think they have a better way to do it. And the second thing is people already there doing it not as good as it can be are making good money. And, you know, you mentioned Airbnb and Airbnb evaluation. It's great. And they are now finally profitable, which is great. we look at our EBITDA I mean is it is a very nice number that people see and say gee maybe we should do something like they're doing oh well and yeah your uh total revenue and income has been spectacular q2 results total revenue up 27 percent year over year and your income up 51 percent so pretty amazing and you're throwing off over a billion dollars in profits uh yeah it's a pretty nice business so are you on a collision course with uber do you think uh where the two businesses will have significant overlap or do you think that's just going to be a sideshow for them i have no idea what dara is going to do what he wants to achieve i have no insights into his uh his thinking in terms of where he wants to go and his team i do know this though every day i know there are a lot of people who would like to take our business away and that's a great thing about about markets so the competition drives us to create better services better products and produce better results and i love that part and that's a great thing about business it's it's it's like sports on steroids you're always trying to come up with a better idea and win so look everybody for 20 something years people say isn't google going to take away your business right well they have to work together and you know is amazon going to take your business So the idea is that everybody who's big and has capabilities and capital is a potential competitor.

23:42And we recognize that. And that's why we have to continue to pry hard every day. well let's talk a little bit about that competition uh you guys have done very well uh in terms of m a uh but we are in an m a unfriendly environment right now to say the least we have a ftc chair lina khan who believes that she can reinterpret the law and make it so uh her um approach is to protect future competition as if she has a crystal ball and can tell what's going to happen down the road so i'm sure you've watched some of the she's put up a couple of l's recently with microsoft and activision etc what's your take on what is a healthy m &a environment here in america and her recent tenure and approach well i think we should expand that as i'm sure you read you know we were just blocked by the eu from doing our acquisition of a travel company called e-travel that does flights now we do no flights uh back we don't do the back end e-travelite does it for us and doing it for many years uh we do the front end that's how we do our flights for booking.com we wanted to buy the shares acquire the company wouldn't be that much difference really except we would then be able to have one management team driving the uh objectives the goals and all drive the same way the eu said that even though we didn't have a flight business of our own even though they said it would only increase our hotel business which is a bigger part of a big part of our business increase it one to three percent and that's their their big wider loan voice even that uh they said you can't do it because that will potentially foreclose future competition the way talking about it in a way uh miss con talks about so i i believe here's the thing is first of all we need to always have rules and regulations to make sure that everybody's playing the game fairly and it's treating all players in the right way you don't want to have sports where you know there are no rules and how would this sport how would sport work like that what but the problem is when people start trying to change what the rules are in the middle of the game without having any sort a public discussion or legislation coming up with new laws etc i think that's why you mentioned um the ftc losing some cases in court in the u.s is because there's no law that actually supports that that's just one person's idea how the world should be and that's not the way the democracy should really do things um i am okay if a democracy says we should change the law to be x well that's why we have a democracy and that's it i mean disagree with the belief that that's really going to make it better for society but at least it's done in a legal and constructive way that's the thing that i think we should all be most concerned about and when you get blocked from buying this company which was not a huge purchase i don't believe it was it was uh almost two billion yeah so i mean two percent of your total it's a two billion is a lot of money but it's two percent of your total market cap or less so it's not huge it's a two quarters of profits for you or less so it wasn't a huge one but now you're left with well you could just build it i mean that might take time and so maybe you could speak to if m a is turned off then what are the larger players left to do in the marketplace but just rebuild um the functionality of some of these other smaller entities and so is that your plan well i don't know i'm not going to discuss what our plans are but i think you make an incredibly important point is and that is how much of the innovation cycle has been people coming with ideas, getting venture capital, who are willing to invest because they expect to get a good return or hopefully to get a good return.

27:33And a lot of times that return comes from building that company and then selling it to a much larger company that has capital and doesn't want to bother building it himself. It has been a very efficient way for capital to move and help create a better society through new inventions, et cetera. when you stop the larger companies from being able to buy those smaller, more nimble, agile, new startups, that's going to create a bit of a problem in this whole system. And I don't think anybody in the FTC has thought this through, nor am I certain they even care. But that is something that as overall, as our society trying to create new and better things for all of us, that is something that we should all be concerned about.

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28:49And you can market to them through LinkedIn ads in a very respectful business mindset, right? LinkedIn means business, business means LinkedIn, and they've solved this problem. There's more than 70 million decision makers on LinkedIn, and LinkedIn ads will get you right in front of them at the right time because they're in a business mindset. They're not thinking about travel, fashion, politics, dance crazes, whatever the other social networks provide to people, no judgments. Business equals LinkedIn. LinkedIn equals business. That's where you want to do your business to business marketing. That's where you start that journey and you get in front of decision makers.

29:22So I'm going to make it super easy for you. Just go to linkedin.com slash thisweekinstartups. LinkedIn.com slash thisweekinstartups. Now, if you type in all those letters, you are going to get a real treat. You're going to get$100 in your account. So go to linkedin.com slash thisweekinstartups, claim your credit and give it a shot. Terms and conditions, of course apply because they're giving you a hundy at linkedin.com slash this week in startups the gold medal as far as venture capital goes is of course the ipo a large sustainable company hey but silver is m a and you know bronze is you know uh you know some combination of liquidation or selling of assets right uh those are the three ways or maybe dividends i guess uh not that vcs play for that but some sort of sustainability um yeah and if you take out the silver medal i mean it really does put a hamper on venture capital that limited partners don't want to be in vc funds and then vc funds don't make as many investments and we're slowing down innovation if the company does get bought it's because it can't go public and or it's gotten a great offer in in the private markets either way it's a sign of a functional market so you're if the goal is to have a functional market taking m &a off the table is just a crazy disastrous thing to do in my mind um well well stated and i would add even we should we should just point out, people may not be as aware.

30:38The number of IPOs actually is a tiny, tiny fraction of the companies that are actually bought by another company. And when you start really causing a difficult problem for companies to buy another company, not even just stopping them, but some of the new rules coming out in terms of what the requirements are, they've been put out as proposed rules. They're not out yet, but they're proposed. that would make it much more difficult to go through all the processes of buying a company. That is creating barnacles on the boat, slowing the boat down. And that is just not what we want if we want to have a thriving entrepreneurial set that's going to continue to build out new things for us.

31:20How has travel changed in the last 20 years? What are the major themes of how people travel and how often they travel? we're starting to see this nomadic lifestyle i see a lot of young founders who i invest in who will tell me i'll be in mexico city for three months and then i'm going to be camped out in san mateo near you in the bay area and then i think we're going to wind up in new york after that and i'm like wow it's great to not have kids i guess but what are your thoughts writ large on the travel industry because i see both of these like um high and low uh experiences all over the place like this amon hotel six-star experience is just extraordinary to watch that and i got to stay at the tokyo man once and was just blown away and then you have this nomadic lifestyle uh and the work from home lifestyle what's the what are the major themes right now so those are all great things i mean who doesn't love it if you are able to have the opportunity to stay at some of these incredible luxury uh places nowadays um and of course being able to work from anywhere and just pick up and say, I'm going to do my work for Mexico City next week.

32:27That's great too. But it's really important to understand we're talking about a tiny, tiny fraction of the people who do that. So we talk about it and that we live in a small bubble that is filled with people who make a lot of money and are part of jobs. They can go anywhere. That's great. But that's not what the world is. The world, the world of travel is mostly people who don't get to travel that often, can't afford a middle income because that's what that's where the whole term middle comes from because that's the middle and that's where it is and it's not being able to say i'm gonna work nobody who works on the uaw line is telling their shift supervisor i'm gonna be helping put together f-150 from whatever and when people talk about stuff like that and it gets popular that helps drive a lot of unhappiness because it's the question of why isn't my life like that yep but that's a very small part of life so really what some of the trends are though and this is a trend that's gone for a long time is that people are getting wealthier so they can travel more which is great um people are definitely looking to explore um different places that they hadn't gone to before once they've already done the things that they've done but if you can travel more then you go to a different place that's nice to see but i'll tell you i hear about some of the stuff like everybody's gonna work from everywhere and i'm saying you know you just got to take a step back and understand how the world really works yeah i described uh the top five percent of elite uh people who have flexibility because they work behind a keyboard uh and and can tell their boss their their bosses are so scared of them losing their talent that they can work from wherever they uh like but we do see in the united states you brought up auto workers i think is really interesting i'm curious your take uh since you do have strong opinions um about the fighting for the 32 hour work week in uh china they work 58 hours a week on average 56 58 hours a week on the automotive factories here um they're lobbying it looks like they're gonna get the 32 hour work week which is really interesting when you think about henry ford setting up the five-day work week the 40 hour work week to give people the weekend to go drive their cars now we're talking about maybe a three-day weekend hey that uh sounds like pretty good for you three-day weekends mean you could leave Thursday, come back Tuesday morning, and maybe have a three or four day weekend could be quite nice for a little extra incremental travel.

34:52So what are your thoughts on maybe people working these four day work weeks? Well, you're definitely right in the sense that the people who can be able to work away from their main office, we in the travel industry, we're fine with that because we do get the benefit of that. We aren't traveling for that. We're happy about that. But I think your point is a great one about Henry Ford, which really did popularized that five-day work week, which was formerly six days. And it's interesting when you think about it, because there were a lot of people who said, well, you know, this is the end of the world almost.

35:21And actually, it ended up being actually a good thing. And there have been people for a long time who have been predicting that the amount of leisure would increase substantially as because of automation and things would be easier. Yet, what we saw over the last couple of decades, actually, the average number of hours being worked in the U.S. was actually going up, not down, which was an interesting phenomenon. Other parts of the world, though, it was going down. But then as you brought in correctly, China, people do work longer hours there. Again, it's one of those things where I don't know how it's going to play out.

35:50I do know, though, I do know this, though. People who are ambitious, they want to get ahead. They don't necessarily look at how many hours they can have to work. They look at what can they accomplish and when can they get accomplished by. And those are the achievers who are really helping to move the ball forward. And I love that. but I recognize many people, they want to have a balanced life. And I get that totally because they look, I'm not, I don't need to be the top. I just want to have a good life, which includes a good job that I enjoy, that has a mission that I feel comfortable with, that pays me a reasonable, fair wage for.

36:27And then I also have time to spend with my family and friends too. That's great. And it's a balance. The issue will end up though, in terms of efficiency and productivity. And now with the ability to do work from anywhere for knowledge workers which you really can do anywhere are these wage arbitrage problems going to get even worse so we in the u.s we saw what happened when a lot of industries that were done in the u.s got transferred to other parts of the world because of way wage arbitrage so take for example textile industry or furniture maker or something Everything's gone. And what happened to those people?

37:04Now, moving ahead, now we have the issue of knowledge workers. So are we going to end up where you have a lot of knowledge workers are being done in other parts of the world? And people who were in the U.S., had good jobs, are now, unfortunately, at risk of this? And then throw on AI on top of this, Jason. And we haven't even more important than this question. Well, there's a great segue. A lot of what you do is customer support, customer happiness. People buy a flight. They buy a hotel. They buy an experience. they need support, they have questions, etc. And that seems to be the place where these language models and AI just really shine.

37:39So much of the discussions on customer support are repetitive, and can easily be done. I don't know if it's 90 % or 60 % you would know better than I and travel of what can get accomplished with a frontline language model. What are you seeing on the ground and you are a global company as well you get to place jobs wherever you want so where is work shifting to i know manila and india were places people moved a lot of business process outsourcing but it seems that anything that could be business process outsourced is going to be language a lot of language model outsourced next so your thoughts definitely definitely think that is strongly a primary use case of these large language models is exactly what you're talking about and it'll be interesting how that plays out for the people who currently are that's their subsistence that's how their their families are are living using and doing those jobs and what's going to happen to them in those places so these are very interesting societal problems that are going to happen and what's what's unfortunate is the change is going to happen much faster than other changes have happened in the past now we go back to the loonites and the looms well that was a many decade transfer of people who are doing that.

38:52If you look at agricultural workers moving to the city, the urbanization, 100 years, so that movement over time in different cultures, different areas. This thing's going to happen extremely rapidly. And it's not just and by the way, it's not just the large language models doing your outsourcing process. It's things, take for example, truck driving. How many people in the US make a living driving a truck? I don't know, 3 million? I'll make a guess about that. It's double that, I think. Yeah, I think we have close to 30 million people work in trucking or cashiers and retail. And so those two areas seem to be the ones that people were most concerned about.

39:29Yeah, trucking, I think it's like six or seven million. Okay, so take trucking. And once we get, which is not a large language model, quite so, but it's AI, and you have self-driving trucks that are actually more efficient and certainly safe for so many things. What happens to those people? If you're a 50-year-old long-haul truck driver, what are you going to do? Hi, thank you very much for playing. Well, you're 15 years from retirement. And what, we're going to retrain you to do what? And who's going to do the retraining? Who's going to pay for that? These are really important issues to be thinking about that I hear people mention the question, but I'm not even going to know what the potential answers to this are going to be.

40:09Yeah. And you are right. It's actually 3.5 million actual truckers. and then there's their support staff i think rounds it up to about double of that and this is something that's uh probably in the next 10 years going to be completely automated and certain certainly having a driver in the cab but maybe they can go a 12-hour shift or they the car could drive for 24 hours and they just get woken up and they could actually sleep in the cabin is some of the ideas i've seen batted around but yeah i guess we're relying on hope as opposed to an actual plan Yeah. Yeah. Hope is not a strategy. Hope is not a good strategy.

40:48Definitely not. Let me ask you, you've been at this for 20 plus years. You've watched a couple of generations go through. I believe you're Gen X like me. I'm a boomer. I'm 61. You're a boomer. You look great for a boomer. Are you looking to build a SaaS product? You need help on the technical side? Listen, developers, expensive. We all know this. And they're hard to find. But if you use DevSquad, they're going to help you validate your idea and bring that concept to market in three to six months. How do they do this? DevSquad is a fully managed agency that can handle product development end to end.