Google, Microsoft, and Snap earnings, plus the state of VC in the Middle East | E1834

0:00they painted this as if graycroft is like struggling or it's some kind of train wreck. i can assure you this is like a sign of actual strength what they should be saying is rakov has the chutzpah despite having 25 million dollars a year in fees on their billion dollars they have the chutzpah to let go of a couple people and refocus and add some people and you know make some trades for their team this is like trading you know a starter you know on your team and like two of your bench players rotation players to get slightly better you know a slightly better starter and a couple of better rotation players.

0:36This is far from a sign of weakness. This Week in Startups is brought to you by Embroker's Startup Insurance Program helps startups secure the most important types of insurance at a lower cost and with less hassle. Save up to 20 % off of traditional insurance today at Embroker.com slash twist. While you're there, get an extra 10 % off using offer code twist. CLA. Innovation takes balance. That's CLA's CPAs, consultants, and wealth advisors can help you get from startup to where you want to end up. Get started now at claconnect.com slash tech. And InTouchCX. Is your startup entering a new stage of growth?

1:22InTouchCX offers AI-powered automated solutions designed to help you scale smarter. Visit intouchcx.com slash twist to build your custom strategy.

1:58and I'm sure producer Nick who's going to come here and read the news with me today will have some questions but let's get started while I've been here on my trip to UAE and to Saudi. There's been a lot of news breaking huh Nick? There has yeah. Can I ask you a quick question about your trip first of all? Of course. Before we even get into anything. So did you when you went did you take Emirates? Did you fly Emirates? I did. I did. Now you're aware of Emirates. Yes, I've heard that Emirates first class, the highest level you can get a first class is actually better and more comfortable and more luxurious than chartering your own small jet in the US.

2:36I've heard that. That's a rumor. Yes, that is true. I flew business class. The first class tickets, because there were two conferences going on. There's a Saudi conference, FII. And then there was essentially what's a CES of the region going on in Dubai the week before. So all the tickets have been sold out. And so I looked at a first class ticket. There were so few left. It was$25 ,000 round trip. And so that's a no for me. yeah the uh business class ticket wasn't cheap either it was nine thousand dollars round trip usually i think it's more like six but um there's a direct flight from san francisco to dubai and it takes uh i think 15 hours so but luckily my jet lag was great i've gotten used to this flight uh and you know i'm just learning a ton here in the region it's interesting time to be here obviously with all the tragedy going on and this war um and uh i've been speaking with many people who are palestinian i've been speaking with many people who uh are from both sides and uh it's uh been enlightening but the changes that have occurred over here in the region uh have had me have caused me to really underwrite everything i know about saudi arabia um now i know uae and dubai have been incredibly progressive and changed a ton um but but that's a 20-year story what's happened here in saudi is like a four-year story um and what's happened here is nothing short of amazing the amount of freedoms the the what's happened in terms of the economy and people starting companies and the social change uh they told me if i see it three or four years ago there wouldn't have been music um dancing uh women in meetings um and uh you know just the whole society is uh really changed dramatically uh in a very short period of time so it's very encouraging and the people here are some of the most hospitable warmest people ever they are almost universally listened to all in and all the founders and and vcs listen to this week and startups obviously so i got a uh an incredible welcome here the food's been amazing and i've learned a ton we don't have any business interests here at the moment um but i'm i'll make an announcement here and this is you're going to hear it for the first time i am uh going to build a partnership to bring this week in startups to the region.

5:01I'm so excited about the startups here. And there have been a number of unicorns. You may have heard of Kareem, you know, that Uber bought for a couple billion dollars. And the ecosystem is very strong between Egypt, Jordan, Saudi, UAE, Kuwait. So it's really exciting for me. It reminds me a lot of the ecosystem I saw emerge in Stockholm and Australia over the last, say 15-20 years with Atlassian. We had Scott on recently, you remember. uh and then of course you know uh sweden with uh daniel ak who's been on the program from spotify on soon oh yeah we've been back and forth and uh great guest okay so anyway uh any other questions about the trip or the region or are you away for all in no nothing i'm good it sounds great that's interesting the big thing i've learned nick is um their commitment to venture capital is going to make them number two i'm going to make the prediction right now here on the uh what the hell is going on with your screen i i put up the number two i said i'm gonna make the prediction here i wonder what that was i did something with the ai and it made balloons go by i'm gonna make a prediction right now and i put up the number two in two um i think the region when and when you say the region you know middle east region mina um i think this is going to be the number two player in venture capital within 10 years And that's a big statement.

6:23Now, when you say number two player, do you mean in terms of LP commitments or do you mean in terms of actual firms investing in startups? Yeah, I think it's going to be both. And that's a really astute point. You kind of got right to the heart of this. I've been meeting with a lot of the family offices here. So in Saudi and UAE, what you'll have is family offices. And these families would have built some incredible business 56 years ago. And it's not just in oil and gas. It might be a money exchange. It might be, you know, in being the Pepsi bottler in the region, etc. And so you meet these family offices, and they were in these like grinded out, absurdly operational businesses, then they made money.

7:08And then these families will, they really are family businesses where generation after generation participate in the operating these businesses, then they make a little bit of money, and they maybe will open up Toyota dealerships, as but one example, McDonald's, Starbucks, whatever, they become the local partners of those, then they might do real estate. And then they the private equity people have been coming to the region to raise large amounts of capital to go buy other businesses around the world. So they learned about private equity. And then at some point, you know, if you go down the private equity rabbit hole, you eventually like wonder where these private equity come, but where are the companies coming from that private equity buys?

7:46Oh, sometimes they're public companies, sometimes they're venture capital based companies. Then you watch the venture capital companies, then they eventually will work with a partner like Stepstone, which is a consultancy that will help them get access to venture firms. It's traditionally been hard to get access to venture firms. So they invest in venture firms through a fund of funds. Right. So they'll give money to a fund of funds. That fund of funds would give money to somebody like me or another venture firm. Like Sendana is a fund of funds. Yes. Correct. A dream spring. That invests in other venture firms.

8:18Exactly. And so then they might directly invest in a manager like myself, and then they might do co invest. So they would look at something coming out of launches portfolio or, you know, I don't know, Chamath or Sachs is portfolio and they might say, Oh, we'll co invest in that. So you invested in the A and the B will confess in the C, right? So they get to make like a direct investment get on the captain with not join the board, not pick the company, the GP and a venture firm that they're in would give them that guidance. and then eventually they start their own firms. And so Sonobil, which is a venture capital firm here in the kingdom, or a fund of funds in the kingdom that invest in venture capital and Mubatala have both opened offices in San Francisco.

8:56So then you kind of see the end game coming, which is they're going to be investing directly in startups alongside us. And we'll be in board meetings in the US, in Europe, and people in the region will be represented on those boards. And overall company building, is hope, right? And I think when people build companies together, there's always that McDonald's rule. People who, you know, if you have a McDonald's in your country, they don't go to war, was I think something Thomas Friedman came up with. And there's something to, you know, companies and countries that work together, you know, being able to collaborate on a lot of different things.

9:33And that's what I'm really excited about is, I think, you know, especially at a time like this time, if people are building companies together, it's pretty fantastic. uh and i think that kind of collaboration investing in companies building companies and so that's why i want to do like a 12 episode series of this week in startups in 2024 from the region interview the vcs here interview the top companies and just educate people in the u.s as to what's going on here and share information directly over podcasts right as opposed to through cnn or al jazeera or new york times or times of london like maybe just get people direct to the founders, direct to the venture capitalists and just create that bridge of understanding because it's no different than in the United States, if I'm being totally honest.

10:15Can I ask you one more question about the region? Sure. So what is the founder ecosystem like? Great question. Because I read, and this is specifically just the other day I was reading, there was a thread on Twitter on X about how it is so hard to build and scale a startup with all of the EU regulations right now. And somebody basically took through the process. I think they were referencing like, okay, here's what it's like being a normal German founder. You get your advanced degree, then you get a grant from your school, non-dilutive, and you're like, this is amazing. And then it takes you three years of building the product to get through all of the EU licenses and everything that you have to apply for to even be able to sell a product to people.

10:57And then by the time you're done with that, you're like, okay, we can raise money. But then since you've had so little progress during that time, you raise like a really dilutive round, like a seed round and then all of a sudden you're like six years in you're 34 years old and you're like yeah it's brutal oh my god this is terrible so do you think that there's going to be a pipeline of founders from sort of the europe region that are like wow it's way easier to build a startup in maybe already happening so yeah once again you've um made a great observation and then to fill you in uh in dubai and the uae they have something called a golden visa they will give you a visa for 10 years, like if you're coming here and there's no tax.

11:35So people from Hong Kong, Singapore, Indonesia, Australia, and Europe are coming here and they're headquartering their companies here. So just think about how amazing that is no tax. Then to add to it, Saudis and Dubai and Abu Dhabi are creating programs where they'll give a founder who moves their company here, or grant might be 100k or it might be a free office space uh and i'm actually in an office space here in riad called the garage and this house is 150 startups this is like what take the take the three or four largest we works you've ever seen and put them together that's the garage it's unbelievable i mean when i say there's 150 startups here it's nuts uh and so they will give you a free office space they'll uh give you a grant perhaps uh and they'll pay for your apartment in some cases so if you're a founder imagine basically having you know whatever a quarter million dollars worth of expense and then everybody gets a golden visa and you don't have to pay tax so for startups it would be like having y combinator and launch accelerator investing your company and giving you an apartment you know like it's quite alluring for startups and so uh It may not, maybe not for US startups coming here, you know, that's a big trip to make.

12:51But for Europeans, for people in India, and for people in Asia, it's a very easy trip. You know, Dubai is two hours away from India, and Saudis, and Saudis two hours from Dubai. So everything is right. There's 4 billion people within, you know, a couple of hours flight of Dubai and Riyadh. So these are very, very close to a large number of people. The customer bases here are pretty variable. UAE is a tiny country. Saudi is$35 million. Egypt is$100 million. Egypt has a lower amount of revenue and income per person, but they do adapt technologies quite quickly. And then Saudi is like unbelievable revenue per customer.

13:34UAE is unbelievable revenue per customer. So the most profitable places in ride sharing and food delivery, UAE and Saudi. These businesses are profitable. I'm at a buy now, pay later company, profitable out of the gate here. So the companies here can get profitable very quickly because the customers are so well healed and they do have big average revenue per user. One last question about Saudi. Sure. Since you've been there, have you heard any on the ground whispers of the line? There is Neom, which is essentially a new city they're building from scratch. They just opened the first hotel there.

14:11They invited me to go. obviously I have to get back to my family and I've been here for quite a quite a trip almost two weeks um so the line is like second decade of Neom Neom is going to be a new city that they're building on the water and this is like beautiful ocean so it's essentially going to be you know Saudis Dubai or just a new city from scratch and then they build special zones within these that are culturally more like the west so as an example in dubai they have a news zone a media zone where media can go and operate freely uh and then in dubai they obviously have alcohol um you know in saudi they don't have alcohol yet but there's rumors uh and there's been a lot of talking read about in the press that maybe in neom because that's going to be a tourist destination and tourism so big maybe that would have alcohol or wine even in um uae they're going to have a wind casino outside of dubai like two hours out side of it so you know that it's becoming in terms of personal freedoms and culture you know this is more change in the last three or four years than in a hundred it's it's pretty extraordinary uh what's happening here and so i'm really excited to see the massive positive change and again you know not to be cynical or anything i have no business interest over here i just had an interest in learning right and um i think the next step for me is to maybe do a 12-episode run here of podcasts and then share with you what's going on here.

15:41And everybody's over here. Jared Kushner's here. I saw him. Every fund manager, tons of startups are here. I ran into everybody while I was in Dubai and Riyadh. And it's pretty amazing the business deals that are going down and how active everybody is. That's great. Well, while you were doing that, I grew a mustache to annoy my wife um oh yeah well and also your boss so well accomplished i don't know who looks more ridiculous me with these bono glasses or you with that mustache you know i was put us together both our wives hate us yeah i was going for brad pitt and inglorious bastards but i think i'm more like for pedro so you know no i got the brad pitt one i think i think you're pulling it off yeah i think so you're definitely not brad pitt on the uh roof and once upon a time in hollywood fixing the antenna but i need much more chiseled jaw much more blonde hair pretty gratuitous scene huh he's like you know what i'm up there on the roof i might as well take my shirt off and have a beer yeah i think tarantino was just kind of letting him fly on that one he's like let's just go be a movie star and he did a good job yeah do it yeah all right listen we work with super early stage companies at my investment firm it's called launch i'm talking pre-series a right we're talking seed stage friends and family and you know what at that stage maybe they don't have insurance yet.

16:56In fact, just recently, we had an amazing startup, they didn't have D &O insurance. If you don't know what D &O means, that basically protects your directors and officers, directors, board of directors, officers, the people who run the company, your management team. So what do we do? We send them right over to Embroker. Embroker is business insurance built specifically for startups. Embroker single application helps startups get four quotes for four lines of coverage in 15 minutes. They connect you with one of their expert brokers for unmatched service, and that goes beyond your policy, okay? We use this at all of our companies.

17:33It's easy peasy, lemon squeezy. And if you're not getting insurance, you know, at some point, you're going to have to get it. So let's make that point today. Right now, this weekend, tonight, just go to Embroker today with the code TWIST, and you'll get 10 % off their startup package. how do you get the startup package in broker.com slash twist that's e-m-b-r-o-k-e-r.com slash twist make sure you use that code twist for 10 off that also more importantly than getting the 10 off that shows them that you're listening to this week in startups so we love and broker uh they've been amazing in terms of supporting our founders for years and of course this very podcast great job and broker.

18:12Anyway, back to some tech stuff. Shout out to T. We had, yeah, we had Google, Microsoft and Snap report earnings yesterday, yesterday being Tuesday. For Microsoft and Google, both had strong overall performances, but Google's actually down 8 % on the day. And basically it was a tale of two different cloud businesses. So let's do Google first. Google beat on overall analyst estimates for both its top line and its bottom line. It had its first double digit year over year revenue increase in over a year. They were up 11 % to$76.7 billion, but they missed on cloud revenue expectations. So the stock is right now down more than 8%.

18:53Market cap is still 1.6 trillion. And if you just want to go through quickly, I'll list them off. Q3 revenue, 76.7 billion, up 11 % year over year, up 3 % quarter over quarter. Net income, 19.7 billion, up 41 % year over year, up 7 % quarter over quarter. And specifically - So that - Yeah, go ahead. Is going to be based on lowering the staff size, the layoffs, cutting costs, right? Yeah, they're down about 10 ,000 employees from the peak. Sure. YouTube ad revenue - So this is the important one too, is the YouTube ad revenue, because YouTube kind of seems to have hit a bump for a little bit there, right?

19:29It wasn't growing as fast as it was. It's been floating right around seven and a half to eight billion for the last like six quarters, it feels like, or so. Yeah. um ad revenue again eight billion dollars up twelve and a half percent year over year up four percent that's good recorder and came in above they turned it around yeah they turned it around right um and then again cloud revenue 8.4 billion up 22 and a half percent year over year but actually came in slightly below expectations i just want to point out yeah that this revenue is up 11 year over year but the number of employees is down like four percent or something 5%.

20:01So they're at 182 ,000 employees from a peak of 190. And so this is part of the overall story of getting fit in Silicon Valley, doing more with less. The number of employees goes down year over year by 4 or 5%. The revenue goes up 11%. So this is efficiency. And this is what the street has wanted from them. So I'm surprised the stock reacted negatively. Is this because Microsoft's cloud is doing better than google's is that and they think it's basically a proxy for how they're doing in ai in their ai services so i think that's really what it's all about but there is one chart that i i saw that i thought was interesting to bring up so the the chart on the top is google's total quarterly revenue by quarter and the chart on the bottom is it's year over year quarterly revenue growth so you can see in the beginning of covid for obviously for one of the i think i I guess the second time ever, Google had a actual negative, it had negative growth in a quarter.

21:01And I think that was Q2 of 2020 when COVID first hit and advertising pause and everything, the whole world felt like it stopped. And then after that, you could see the insane revenue scale up to at one point, Google had over 60 % revenue growth year over year. And obviously, that was because that was the quarter of the year before where revenue crashed down. But if you just look on it on a cumulative basis, their revenue quarter over quarter, It's pretty amazing to think that they're scaling$70 billion of revenue. Even growing that 10 % is amazing. These are big numbers. And I think that's a really good point.

21:35But you do see when a company gets to this scale, it's hard to move the needle. There's no acquisition they can make that's going to change this, right? What company is making$10 billion a quarter that could grow them 20%, right? You would have to get into something like Tesla, Uber, Airbnb. be, they would have to be able to buy one of those companies in order to like really jump this revenue up. So this is, you know, these are turning into value stocks in a way, if you think about it that way, as opposed to high growth stocks. And what they could be doing, though, is they could pull out of Apple's playbook, buying back shares.

22:12So with all this cash, if they want to see that stock go up, buying back shares or issuing dividends, which is essentially the same thing when you think about it, buying back shares just gives you a cash-free dividend for the moment. If you get the dividend, it's going to be double taxed. The company's going to pay tax on it. I think you're going to pay tax on it. I think that's how it goes. So it's really going to be... All this is going to be about, I think, at the end of the day, this is... They're not high-growth businesses. They might have moments of high growth, but you're absolutely correct.

22:43When you start making$70 billion, it's kind of hard to grow that significantly. Yeah. And then transitioning to Microsoft, Jason, you just mentioned buybacks. Microsoft announced that it bought back$9.1 billion worth of shares this quarter, which is technically it's Q1. They have an offset fiscal year. Microsoft beat on top line and bottom line. The stock's up almost 4%, or it was as of noon Eastern time. $2.55 trillion market capped. Q1 revenue,$56.5 billion, up 13 % year over year, up 1 % quarter over quarter. Net income,$22.3 billion, up 27 % year over year, up 11 % quarter over quarter. Azure was the big winner, up 20, still growing, almost 30 % year over year, up 29%.

23:25That's wild. Intelligent cloud revenue as a whole was up 19 % to$24.3 billion. Why do they put the intelligent cloud in front of that? Yeah, they group Azure in with the intelligent crowd. So they don't actually tell you their exact revenue. They just tell you the amount Azure grew on a percentage basis year over year. And Satya, in his comments, mentioned AI almost 30 times in his opening statement. Here's a quote with co-pilots. We are making the age of AI real for people and businesses everywhere. We are rapidly infusing AI across every layer of the tech stack for every role and business process to drive productivity gains for our customers.

23:59So they know. Perfect. Yeah. They know where they're going. They know what's up. Yeah. Yeah. I mean, co-pilot is the obvious proof point here. anybody who knows a developer hears from them that they're 10 30 50 faster it depends on the task and how unique your code base is so if that can happen with developers that can happen with accountants it can happen with lawyers it can happen with designers it can happen with strategy people people who make powerpoints every executive human resources are going to be using some sort of co-pilot to make themselves really fast and you know we you and i we remember we did we tried to do this this week in startups archivist and hire somebody to go through and transcribe everything and organize everything well if you go to this week in startups now uh.com we are using podcast ai they transcribe every episode of the show they know who the guests are they tagged it and now you have a full index search we were going to spend a hundred dollars two hundred dollars per episode to do this uh with two thousand episode that would have been about a five hundred thousand dollar project and i was thinking about investing in it for the legacy of the show and what three years later ai is doing the whole thing and it's just done yeah and so this is a really important point you and i were trying to figure this out i think it was two years ago yeah we had a lot of what do they call that technical debt with the old website because the old website had every single episode it had it numbered it had a small description of it but it was built on this old wordpress infrastructure that was so i mean you know and for the time it was probably in 2009 when you started it it was probably like the best Shout out Matt Mullen.

25:35Yeah. But my God, it was just impossible to move, to figure the site out. So we had to totally scrap it. And now a company we've invested in podcast. I just did the whole thing. And you guys shared a clip last week from, you know, there's about a hundred companies making, you know, make an automated clip from the podcast. And you yourself said, not bad. Like you gave it a B or something. A podcast clip recently from this. And I was talking to the founder about it. And I was like, you know, there's, there's a bit, this is a whole other side discussion, But there is a really, in terms of like podcast, TikTok clip creator tools, there are like two ways that you can go, right?

26:13You can go the route of we want to build a browser-based editor that's like really, really basic. And we're going after the sort of, I'd call it creator class, right? The individual, the indie podcaster, the solo person that wants to make a clip but doesn't want to spend money on an editor. Or you can go after more of like the enterprise class. and what that means is you know no real editor i don't think is ever going to use a browser-based like sort of mishmash together solution but what i was talking to the founder about i'm like if you want to go after like real editors what you need to do this tool is amazing and it's amazing how you could basically do a cutout of the video overlay it on stuff all automatically that used to take a lot of time in after effects now you could just do it like this right which is great but if you really want to capture like the enterprise editor market where the real money is i think you have to make it exportable to premiere and exportable to other editing software right and that's what this founder did and i was like this is there's something here now i think if it's easily exportable so they would make a tiktok video with you know moving animations putting the the um captions on top of it an interesting way but if you export it then you get all the layers and the in the that you can then edit and refine and make it perfect the polish so you could polish so say they get you 70 there that last 30 is really the part that you need a human to do right um at least that's that's what i think maybe someone will figure out the solution soon but no that i think is where the money is right now and that's what this founder is doing so that's why i thought that was really interesting i mean it it takes us two hours or four hours to make a good quality clip what does it take now probably two yeah probably so if an editor you know full-time editor or even if you were to use somebody offshore let's call a 30 bucks an hour i don't know for like a decent editor who could do it uh a freelancer might be 30 or 40 you think so it winds up being 60 80 let's round it up to 100 a clip you know if you take out 70 of cost it's basically taking out 70 of the 100 a clip in cost so you could either make three times as many clips or you can move on to the next thing on your to-do list all right everybody steven estes is a principal at cla clifton larson allen's a professional service provider that specializes in CPA, tax consulting and wealth advisory.

28:33Welcome to the program, Stephen. Thank you for having me. What are the big mistakes people make when they're architecting their accounting, their cash management? What are the company killers that you see most often? Since we're talking about startups and things that break companies, I mean, a lot of the things that I've seen out there could be around equity-based comp. One of the mistakes we'll see, and I've seen some pretty wacky stuff over the years, is founders, CEOs promising to some of the key people that they're going to get equity at a certain rate or like their last 409A, but they've just raised a series A or series B.

29:09And now the value of those shares is up 10X. And now there's a$200 ,000 tax problem. And we need to now go back to the board and try and get a bonus to this person to cover the tax. So I think that that's something that gets overlooked by a lot of startups and a lot of founders. And I think that it's important that all founders have a basic understanding of equity based comp. I mean, they don't need to be a CPA, but they should understand the difference between a non-qual and an ISO and an early exercise or a restricted stock awards would be the right thing. And if an 83B election would help out and what that is and what the implications are.

29:45Get started right now at claconnect.com slash tech. Let them know your boy, jcal sent you claconnect.com slash tech to get started right now okay you know the thing i'm really excited about with snap i saw mark pinkus tweeting about snap he's got a big position i i was thinking about putting a j trade on for snap i'm at the end of this year i'm going to clear out all my losers in my j trade portfolio so that i have all those losses to take against some wins i have in the portfolio um so there's going to be a bunch of cash coming in uh a little tlh coming in and so we're gonna we're gonna just annihilate the losers from this portfolio shout out disney shout outs uh uh warner brothers who else cost me money this year sish fix um they're all that's gonna get cleared out and then we're gonna have to put some money into something i'm looking at snap okay so take me through it yeah i just i might have to talk you off the ledge here a little bit because snap snap stock was up slightly after initially jumping initially jump almost like 20 percent and after i was i saw that beat top line beat bottom line user metrics beat expectations as well their market cap is relative to their revenue pretty low it's a pretty cheap stock it's 15.8 billion dollar market cap um q3 revenue was 1.2 billion basically up five percent year of a year up 11 % quarter over quarter.

31:09Snaps year over year quarterly revenue growth had been declining for two consecutive quarters, but now they just increased it. So they're sort of back to growth. If you go with Snaps trailing 12 months revenue, they're trading at a three and a half times price to sales. Wow. Yeah. Daily active users, 406 million up 12%. That's the thing that got me. That's a lot of people. Yeah. I'm a little dubious about that number. I'll be totally honest with you um snapchat plus which is their um paid subscription it's two bucks how's that doing uh it has five million paying subscribers they announced or they announced they surpassed five million paying subscribers so at least 10 million dollars a month in revenue from that um 200 million users have sent over 20 billion messages using snaps my ai tool uh net loss was 368 million dollars which was basically flat year over year and slightly lower slightly less of a loss why are they losing money i thought they were trying to become a profitable company.

32:03I don't understand what Evan's doing. So this is the big thing with Snap. They've lost money in every single quarter that they've been a public company, except one at the end of 2021, where they were profitable. They were on a net basis. They were profitable like$22 million or something. It was basically a break even. What is Evan's thinking here? If the entire world would give him huge credit, like they did Uber and Airbnb for being a profitable company, why is he still living in 2020 in the Zerp environment he's got to leave Zerp he's the only person who hasn't gone post Zerp yeah so you know I don't know that answer to your question but what I do know is that I think Evan and his CTO the two co-founders due to their super voting shares they control 99 % of the outstanding stock the outstanding voting shares in Snap so they can basically do whatever they want here's the thing shout out to ev and his partner for having a hootspa if you're going to have super voting shares you might as well use them and so obviously they have some thesis here that losing a billion dollars a year or a billion two makes sense i don't know what they're thinking but they i think they're content having a 15 billion dollar company if it was profitable this might be a 20 billion dollar company or 25 but i guess they don't care maybe more but maybe they don't about that maybe they got some grand vision here and they want to keep growing the user base yeah and they've been they've done a ton of work on their like you know ar lenses um developer platform which i think is is that's great but i i really don't know side quest people are using that like it's a side quest yeah and i have some of my own thoughts on snapchat as someone who's used it forever but um just let me outgrow it you get married you have a kid you that's it it's over no more snap i mean i've you're way too busy It probably was Snapchat's first real demographic.

33:57I think it came out when I was a sophomore in high school. So I was really the first group of users that were on Snapchat all the time. It was all my friends and I. And by the time I think we left college, most people were basically off Snapchat. I still have one group chat on there that I will open it for. But for the most part, yeah, everybody's kind of cycled off of it. But - They all went to Instagram? Yeah, basically everybody went. And iMessage. Like iMessage groups just got so good that there's no reason to get canceled or whatever. Yeah, iMessage got up. So their SNAPs cash position, they have$3.6 billion of cash, cash equivalents, and marketable securities.

34:38They just announced they're going to repurchase$500 million up to$500 million worth of shares using their cash and equivalents. And as of June 2023, they had about$3.75 billion worth of debt. Now, you can assume that that debt was mostly taken on during a very, very low interest rate environment. So, if it's not variable, they might be paying 3 % on it, 2 % on it or something. I don't know. Yeah. And it's corporate debt. And corporate debt always gets like a lower interest rate, right? No, I think it's opposite. I think it's higher. Yeah. Like then a mortgage because you have the house against it.