The MEI vs DEI debate, tech press, Chime buys Salt Labs, and more! | E1974

0:00All right, everybody. Welcome back to this week and startups. I'm Jason Calacanus x.com. Jason. He's Alex Wilhelm. And we do news about three times a week. We're still doing the liquidity pod. We're doing another episode of AI with Sandeep who's been very busy. you know summer traveling all that good stuff but we're dialed in now and uh you're gonna get the news from us three times a week this week maybe twice because we have uh the holiday but uh how was your weekend alex i don't know that anything eventful occurred in the last couple of days as we start july in the slow summer scene no i mean i i feel like the world is calm trade is flowing politics is normal everyone's relaxed no one is uh up in arms at all everything's chill.

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1:36For just$39 plus state fees, Northwest will handle your complete business identity. Visit northwestregisteredagent.com slash twist today. I saw Elon this weekend and he said record traffic on Twitter. So there's your, on x.com, had a record number of minutes the last couple of days because we had a debate on Thursday. you and i i think i could speak for both of us maybe trump's not our ideal candidate uh but i have had concerns about biden's age for a while as i think 70 of americans have so uh the debate was i don't know i'm curious your take alex my takes been pretty well known because i've been talking about the hot swap theory for months yeah i actually i wrote about this a little bit and i had to say in that piece that i was like well you know jason has been talking about the hot And I thought there was just enough institutional momentum that that was not going to happen.

2:30Then the debate happens. People, I would say there was a broad consensus that Biden's performance wasn't so good. And in the wake of that, I was like, okay, there does seem to be a lot of pressure now from various editorial boards, from politicians, et cetera, to swap out the Democratic candidate for someone a little bit younger and more spry. and then since then seems to have kind of gently gone back the other way towards keeping them on the ticket i'll just be totally honest i i that was incredibly diplomatic of you i like how you uh framed it very diplomatic well well look we have a nice wide audience here and i want to make sure that i'm hitting everyone's objectives and viewpoints as fairly as possible i will say that when you say trump is not my preferred candidate given how important to me a separation of state and church is church and state and his recent uh viewpoints on the louisiana rule and so forth uh means that he's pretty much off my list entirely for good so i'm still going to support biden over him because biden is boring and does believe in a separation of church and state uh but my opinion is one vote so it's not super important what matters is what's going to happen at the national level and so forth and so i'm just curious jason just to give us your current confidence interval in the chance that Biden gets removed, voluntarily or not, and replaced.

3:53I'm 100 % certain he's not running. 100 % certain. And I've been saying this for a pretty long time now. I've been very vocal about the fact that I believe he's in significant cognitive decline. And I take zero, zero pleasure in describing, you know, what we saw on Thursday. But he basically, you know, he lost his train of thought multiple times was trailing off and you could just tell that you know there are some significant cognitive decline that's occurred and this is not the person we voted for in 2020 and um you know i know people want to do weekend at bernie's and make fun of it make light of it we're all sadly going to go through a decline in health unless like we get some miracle ai super intelligence that cures alzheimer's dementia and and you know just physical decline so you know i i have such great compassion for people who families who are going through this and it's just perplexing to me that they would pursue this uh as opposed to something like saying hey you know what he did a great job vice president vice senator president once like it's time for somebody else to take the mantle i think this is like some crazy weird strategic decision but if we get to just raw strategy right putting aside what we saw and i think there's consensus in what we saw so i think there's two ways for us to go through this one is strategy going forward and then one is you and i me as a former journalist from you know you know whatever web 1.0 the 90s and into the early 2000s but then kind of not being a full-time journalist and then you coming out of being a full-time journalist and starting your own enterprise with your newsletter um for a long time i don't think we should talk about the media angle like what's going on here in the media that you know in terms of the flip-flopping of the new york times and and that was like a very strange thing that occurred so let's start with strategy um and i hate to be tinfoil hat conspiracy theorist i do think that they pushed up the debate i'm talking about like the democratic machine i think they pushed up this debate in order to get a heat check on where you know this race stood in order to have the optionality of swapping out the team that they're going to put on the field this seems like a crazy conspiracy theorist but there's a lot at stake these parties are very sophisticated so i think they pushed for june in order to just see how he did in the debates and i said before the debate occurred if he doesn't do well then i think they're going to do the hot swap and this was beyond not doing well this was just disastrous i mean 72 or 74 percent of americans think he's in he's not fit to serve according to a cbs poll this isn't according to some weird what's that one ramsan or something like some weird yeah like you know republicism yeah rasmussen right that's like some edgy poll on the side you know that's got some inherent bias into it's a cbs ball you know like yeah i think we can we can trust it directionally so i think strategically the trump administration the republicans made perhaps the worst tactical error they could ever make which is instead of saying no we want to do a september debates like always they sped up the june debate i think that was a trap that was laid for them i know i'm sounding like a little bit tinfoil hat here they've now given the only reason i i push back gently against your conspiracy theory and i say that with with joviality is that it implies a lot of confidence in the dnc you know when people are like well the government has a secret plan they they hid the aliens and i'm like do you really think that the government could build a conspiracy of that size so like i i but i hear what you're saying giving it the disclaimer i know i sound tinfoil hat i'm like i know this sounds a little crazy but if i was a strategist and i said you know what we have this you know there are political machines on each side we kind of know that so if you're part of the political machine you say hey let's do this early and then if it's as bad as we think it could be and it turned out to be you know as cataclysmic as possible with the new york times editorial board saying he needs to bow out i mean the new york times and msnbc and joy reed and we'll get to the media thing in a second are knives out saying hey you're done that's as bad as it gets so now they have a free option how often does that happen that you get to say what is trump's positions right now he's revealed all his cards are on the table what two democrats can we totally refresh here and put as the countermeasures to that based on where the country is with a hundred day window and then that just roils the entire race it's like okay who's going to be in the nba finals this year okay it's going to be boston okay how do you counter boston what's the super team that needs boston okay you need wings right you need two or three really good defensive 3nd wings to counter them essentially you know what you're up against right and so i think that the series of events and listen i know i sound crazy but if you look at my clips from the all-in pod when i predicted all this um i think he resigns before the end of the term crazy right kamala becomes president she's the first female president ever then she says you know what i was the first female president i'm not going to be the vice president or the president good luck i'll support anybody she gets either a supreme court nomination who knows what some you know victory lap kind of situation um and she served her country and then they field two new candidates who are young dynamic and who don't have a 30 chance or 20 chance of winning anyway that's as best as i can figure out what's going on there you know i had a moment of clarity over the weekend in that there's so little that you ever feel like just kind of like you're flowing in the ebbs and flows of history and you're kind of looking around going like this is some wild stuff but then you realize that your paddle is the size of a matchstick and no matter how much you paddle like you back to my point of having one vote, what's my thought process worth?

10:14I will see. I mean, at a minimum, you feel very confident in this and I talk to you a lot and I think you're smart. So I appreciate the overall perspective. I don't have as firm of a view because I feel like we're so far outside of the bounds of like historical normalcy that I struggled to kind of chart a path forward. One thing that I keep stuck on, I keep getting stuck on is Biden's 81, Trump's 78. If Trump's selected again, he's going to end up being older in office than Biden is going to be, or roughly the same age when he exits if he loses. So we're kind of like saying that's too old. And your other option is a guy who's going to be that old if he's president again, which to me isn't much of a solution to the issue of age and so forth.

10:54So the thing I wanted to ask is term limits, age caps, what do you think is the right way to approach? Cognitive test? I think a physical and a cognitive test is because you know listen 81 is not the same for all people like i know people who are skiing in their 70s and then i know people who are in wheelchairs in their 70s like and who can't walk a half a block without you know oxygen uh etc and then there you know there are other people who are vibrant so it doesn't you know hit us all equally and i think you know there's that expression how did you go bankrupt and it was like slowly then all at once this is what happens with cognitive decline it's like a very slow thing and and you know i don't like the piling on with the videos on twitter and you know instagram or whatever here's biden four years ago here he is today but i do think you have to look at them and be like wow this is like a really serious decline because he was so i was watching some of those 2016 and 2020 videos he was so crisp he was so there so present and then just a small number of years later boom so i i think you could either do an age limit on the back end of 80 years old 75 years old or you could just say there should be a cognitive test as part of the physical and you have to do that and you have to disclose your finances whatever the basic set of disclosures as a cognitive test could be one of them at the back end of reagan's second term it's been disclosed that he had alzheimer's um and so who knows who was running the country for that last year right it's pretty scary to think about but there probably needs to be some sort of cognitive test every two years.

12:32So even if you're in office, we need to check because, hey, you got the nuclear codes. What if you have a senior moment? I'm just being gentle here with terminology. What if you have a senior moment during all this? What he's clearly suffering from, I think, is, and I'm not a doctor, but there's something called sundowning, where like at the end of the day, people who are in this decline, and I tweeted about it, they start to just become either agitated out of it, slurring words, weaker. and they've kind of come out and said, listen, he's sharp as a tack from 10 to 4 p.m. So let me ask you, what do you think of the media right now in terms of this crazy flip from like being all in on Biden and then being all out on Biden?

13:16Well, the editorial, you're talking about the editorial boards because the Times article that really stirred up the pot over the weekend was the New York Times editorial board coming out and saying, all right, Biden, your time's up. And there's for people who don't know, there's the editorial part of newspapers, and then there's the news side. This is why the reporters at the Wall Street Journal are not responsible for editorial page any more than the folks of the Times are responsible for their own edit board. But they are seen as pools of powerful opinions and people who are kind of in the know.

13:46And that's why it's great that we have different political views at our newspapers, because we get different elite perspectives, if you will, and not elite in quality terms, I mean, elite in terms of access. So the Times coming out and saying, hey, come on, this is not looking good, I think is a big statement. There has been a lot of hand wringing, I think, amongst people who are very concerned about a second Trump administration. And I know we're going to get to Supreme Court cases later. But to me, it seems to be a relatively reasonable perspective to take that. All right. As you said, well, this will happen.

14:19We'll see. We saw they took a stance. It doesn't seem to be too shocking given where you and I think the median opinion is on the overall performance in the debate. So I wasn't that shocked by it. I was a little shocked by how fast they got their act together and published it. Because that means they had to sit down and write it. They had to agree on it. It had to get edited, blah, blah, blah, blah, blah. That takes some time. And it came out not that far after the debate, which means they probably thought this relatively quickly. Right now, startups have to do more with less. We all know that.

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16:00And twist listeners get 15 % off their first four weeks. Stop burning money. Hire developers smarter. Visit Lemon.io slash twist. What else is on the docket today, Alex? Let's get to it. Let's just jump into the first story. Okay, so skipping the rundown, we're going to jump in. this is a Jason edition. There was a weekend conversation about DEI, MEI, and a TechCrunch article. And you wanted to put this on the show. I witnessed it, but I know you were at TechCrunch previously. You might know some of the principles here. And I do think this is perhaps the end game of the DEI merit discussion in Silicon Valley in terms of how CEOs and the media are doing their you know, a little dance over this issue.

16:42So yeah. Okay. So over the weekend, a tech crunch newsletter that was also published on the website, we have a image of it up on the video. And if you're watching that got a lot of attention and a lot of pushback and we've excerpted the segment that got the most attention. It was a two paragraph clip. Jason, why don't I just read this? And with your permission, I'll read it verbatim. Okay. So scale AI's Alexander Wang has decided that diversity equity and inclusion d e i are posse and replace them with his shiny new acronym m e i merit excellence and intelligence i cringed so hard that i'm going to need a chiropractor very high a line he likes to put some pizzazz on things and then this is the the bit that people got peevish about i would invite him and those supporting him to all the way off you misunderstand me you thought i wanted you to partially the way off please read my lips i was perfectly clear off you all the way remove head from ignorant ass then all the way off that is the segment and then there was a blow up and then the piece got edited and then connie lords us okay connie is formerly of strictly vc which was purchased by yahoo your alma mater tech crunch and she's the editor-in-chief now yes my former boss my friend yeah hi all an opinion piece that ran on our site yesterday did not go through our standard review process and was unfair to both our readers and our staff.

18:02That post has since been updated to reflect our standards and will ensure that this doesn't happen again in the future. That brings us to today, I believe. Yeah. Alright. So, this is interesting. For people who don't know a long history of TechCrunch, it has always been spicy, has always been unfiltered, and has always had room for publish first and, you know, deal with the ramifications later, like all blogs. And, you know, listen, I was part of the start of the blog movement with Engadget. worked with mike on the conferences of the early days of tech wrench and they had a concept of process journalism which is kind of like shoot aim and then you know deal with the ramifications in other words it's more like a conversation and this by the way blogging as a conversation predates twitter um and it would be like i'm just going to give you my raw opinion here on filtered and then we can all react to it um but here you know we just talked about how there's an editorial page at the new york times without bylines with a lot of thoughtfulness behind it and a group of people who sit in a room and say hey okay we're gonna we're gonna put this opinion out here it might be spicy and blogs and twitter and this feels like a tweet you know to this gentleman who wrote you know told everybody to f off it feels like on his twitter handle nobody would care but in tech crunch in 2024 owned by you know yahoo and a private equity firm trying to co-exist with the technology industry which buys tickets to events sponsors the site and might you know connie's view of this i'm taking a guess you know based on her uh previous uh startup that was purchased strictly vc is i think she's a little bit more buttoned up and wants a little bit more thoughtfulness and less of the hey i'm just gonna start spouting off here my personal opinion and And I think maybe, I thought it was very telling, it didn't go through our typical vetting process.

19:57I think actually the TechCrunch vetting process exactly is, yeah, go for it. Let the chips fall where they may. And maybe she's reinstituting something new here. But I do think this signals something for me about the standoff between the tech press and the tech industry that's covered. And so I'm just curious your take because, you know, you might know the individuals. you obviously know khani involved but what's your take on what we saw here so haya who wrote this is a human that is amongst one of the nicest that i know um and so to me when all this popped off it was very humorous to see people talk about him as if he was some sort of evil person uh haya also by the way has been a founder and a vc so he's not someone who only has been a scribbler and he's someone who has experience on i think every side of the table possible in this conversation he also That's helpful context, by the way.

20:51Yeah. Yeah. He also is very much his own person and rolls his own style. And there was, to act your point about blogging, more space in the old days to go about writing on the internet. In fact, we have an article from Old TechCrunch here from the Mike Arrington days that John's going to pull up for us entitled, So a blogger walks into a bar, which I believe is Michael Arrington showing up to a private meeting of angel investors back in 2010 and accusing them of fraud. price fixing people have been saying on twitter in the last couple days oh we need to bring back the mike arrington days and i don't think you want to do that because if you think that this higher thing was spicy don't forget that michael arrington was a lawyer and he acted like it and yeah you know what that was an era of tech crunch i was going to tech crunch events when you and him were hosting them back when i was in like high school so i've been a fan of the blog forever That said, Connie is definitely changing up the way I would say TechCrunch approaches the market.

21:52And I think the whole internet has moved away. And this has been going on before she took over. This is not a 180 about face with Connie. I think she's continuing a process of professionalizing TechCrunch, making it less of a freewheeling blogging space and much more of a standard media company, which is why I think in this case, she didn't say, well, we have a lot of voices on TC. Some of them you're going to agree with. Some of them you're not. instead she responded as she did by editing the story publicly apologizing and I think trying to circle the wagons around her team which to be clear as a leader is a great thing to do but I do think this is illustrative I think the era in which you could go hog wild on the internet is pretty far behind us the thing that I I'm a little bit annoyed by in all of this apart from the fact that I think people were unnecessarily focused on one paragraph of one story but whatever it's the people that have been telling me that cancel culture has run amok and that people's employment shouldn't be impacted by their views were the very people who were standing on their soapbox and screaming to cancel this person to cancel this person because they didn't agree with his culture i think he has been canceled i think it says formally contributor to or people were kind of dunking on him so maybe he's a former i think that's public via his linkedin i'm not gonna i talked to haya about this after it all went down but um because he and i've talked for years and years and years and i think he's great he's a colleague yeah well former but like still someone that i just adore like if he was in town i would run across town to get lunch with him because he's so pleasant the point is though like you know the andreason horowitz folks are are like you know oh you gotta fire this person fire them shame shame shame right and they're the same ones who are don't cancel people yeah wait a minute so i think that this showed that media has changed and that the current tech run under connie is going to be a more of a buttoned up operation maybe that's how it needs to be to survive hell yeah i i i like connie i love tc i like i love them both i don't mean to get me to grade them differently there but i do think that the era in which you can pop off on the internet has gone away and everyone everyone is being censorious towards views they don't agree with and i just think that we need to understand that everyone's doing this and that it's not one particular group or the other also there's a huge power imbalance when the billionaires jump on you and they have staff and you don't well and then here's you know when having been the tech press myself and then being on the other side of the table as an investor in these companies i you know have the unique perspective here and still doing random action journalism in this podcast there used to be a tech press that was very tightly connected to uh the technology creators in the bill gates steve jobs era people who wrote about tech in that era were fans of technology like walt mossberg and yeah sometimes walt would say this isn't a good product but it was kind of jovial and and walt mossberg would go for walks with steve jobs steve jobs would play the press and it was um collegial maybe to use a word then it became adversarial and then we you know there was a little bit of access journalism so some people who hosted conferences where these folks spoke who were getting paid a million dollars or two million dollars a year as the most elite commenter journalists in the world would kind of use kid gloves a little bit because they needed to make sure that those people showed up now those people don't host conferences anymore and they go super ham and like you have this like you know group of journalists were like i hate tech people but i'm spending my career covering tech people it's like okay that's super interesting you hate tech people and you cover them okay fine fair enough you're disappointed in them whatever and then you had the two collegial era and i think what we're kind of weaving towards is a more balanced objective moment which is going to be hey i cover this stuff if this had been an editorial page you know article it would be totally fine if you said hey we have editorial it's marked editorial and if you're on the other side of it in jesus and horowitz and you want to have this person fire you don't want to have the person canceled write a counter piece and we will publish it next to it that's actually how all this should work which is why i wanted to bring it up with you today here we should be able to have a vibrant debate about dei versus mei that's what's interesting and here we are you and i are talking about this for close to 10 minutes without even getting to the subject material so before we cancel people like this kid who's uh you know wrote the spicy thing that you don't agree with why don't you just write a counter piece and ask tech crunch to publish an email comment and say here's my counter or put it on your blog or put it on your sub stack that's actually a healthier debate it i agree there is an interesting discussion here between mei and dei which we'll get to next in just one second the thing i'll throw in is the blogging era was a greater focus i think on individual voices versus publications so by design and that was part of its charm in its early days and eventually it was very disruptive oh it was massively disruptive because suddenly people had personality a little zip they had their own style their own cadence and they could go micro down on topics they cared a lot about and no editor so you know So Peter Rojas, you know, and Engadget just going direct and not having an editor.

27:09Oh, Malik going direct, not having an editor. What that meant to the audience was, whoa, I'm getting something unfiltered here and spicy, right? And edgy. And that's why it, you know, Engadget and then the other collection of tech blogs, TechCrunch after Engadget and all these other ones beat the New York Times, beat the Wall Street Journal. in fact beat walt mossberg in terms of influence uh was because it was more spicy and felt more unfiltered to the audience so you're correct but the the era though of that has there used to be room it seemed for another option and now it seems that the blogs are getting much more professionalized sounds like i'm saying it's a net positive or an unvarnished good they're changing and i think that's also why we've seen a lot of subsects out there eight sleep has released the pod for ultra besides heating and cooling you know all about that now it elevates automatically, which is so nice for reading.

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You know, for me, it's all about getting that extra hour of sleep every night, because if you've got to make decisions the next day you want to be sharp if you're going to be on camera you're going to be a leader of a company or a podcaster you need great sleep so here is an awesome offer for our audience eightsleep.com slash twist use the code twist to get 350 bucks off the pod for ultra what a generous discount there at eightsleep.com slash twist currently they're shipping united states canada uk europe and australia so you can get it down under now okay well done to my friends at eight sleep you want to get to the dei in the eye part of this so let's put the media aside and talk about that yes so you know if you look at the original uh tweet you know the person saying listen i'm running my organization here we are in america we hope is a free country where people can pursue you know their visions i'm running my organization i think the person happens to be asian based on merit i'm just merit i think it's merit excellence and i don't know what his eye is in his thing but i remember the first word merit and excellence you know there's an anti-dei movement you know uh hysterical and ridiculous that sometimes being like the reason planes from boeing are falling out of the sky is because of dei and they're not the case which is not the case i mean there's other screwed up things they're doing they're like trying to save money and cut corners by not training pilots and how to use the map system because they're a capitalist and they don't want to spend money and they want to hit earnings it has nothing to do with trying to have a female african-american pilot like that's not what's going on here it's more you have people who are deranged and think well you know what let's build a really complex system and train pilots to save a couple of shekels over here that's what's at work here's the uh here's the alexander wing tweet and uh if we scroll down just a little bit we can see the actual note which is that mei for them stands for merit excellence and intelligence perfect and do those seem like overlapping points to you slightly slightly you know listen um if you're running a i don't know what his company is but um if you're right okay so they're running an ai company you probably need some pretty smart people okay check um everybody wants excellence i picked you to be co-hosts because of your excellence and because of your intelligence and merit okay by the way i also picked you based on merit because you have a track record you did you know crunch base you did that crunch you have your own newsletter and you did podcasts okay great and i saw that merit i saw that excellence in my own eyes i saw that intelligence and i picked you uh and pursued you for years for that reason and the same reason i pursued molly she also had that cohort did not pick molly for diversity i did not say you know i need to have a female male whatever so uh or you know whatever uh co-host i have thought actually though about co-host and thinking about generations and have generational perspective so i don't know if that makes me racist or not to think you know what you're you know younger than me that adds a perspective uh and somebody younger than me but i think you can hold both of these ideas in your head when i came into the venture industry less than like two or three percent maybe less than two percent or three percent of investors were non-white males or let's just say non-male were female and then maybe less than 20 percent would be described as a classic minority now in silicon valley indians and asians have been taken out of the minorities even though they are true minorities because they're so successful so it's like as sam harris once told me like this identity politics becomes like a cul-de-sac because it's like the oppression olympics and who is more you know uh who has the least amount of power in all this and you just start talking yourself into circles so i appreciate that he wants to run his company based on merit excellence who doesn't and intelligence the thing that's missing from this though is that people always love to say you know let's just do merit and as a capitalist that tickles me in all the right places the problem is it's not i've never actually seen a meritocratic system that's stuck to it i've never seen a system in which favoritism legacy status friends hiring friends which is how most people get jobs in the world today yes you're is how it goes about right hiring within your network it's a technique and you know what sometimes it works great sometimes i've seen a very effective technique yeah can go both ways so if this had said we're going to uphold meritocracy and we're not going to let people hire their friends and we're going to then it would have more heft to it but to me it's it's declaring where they're going without telling me how they're going to get there and so to me it just it seemed a little bit tin ear and clearly when they wrote this and shared it publicly they knew what kind of reaction they were hoping to get back to your people know what they're doing and they got it they got plotted from the people they wanted to get plaudits from and honestly here's me being cynical i think they got criticism from the people they expected to be because oh yes this current moment if you want to virtue signal as a venture capitalist the best thing to do is to one, be a Trump supporter, and then two, crap on the media.

33:59And if you can do those two things, then you are part of the cool kid in crowd right now. So here we are, people are teeing up softballs for themselves, to pat themselves on the back, and you know who ends up getting fired? One dude from TechCrunch. Congratulations. And, by the way, going after those two things would mean you would get cancelled just six, seven years ago. God forbid you went after DEI or a journalist, you would be piled on the opposite ways. Journalists have been unpopular since yeah the invention of print i think i mean but you you certainly didn't want it certainly was an unwise technique but five to ten years ago they would literally tell you do not fight with people who have ink by the barrel like buy their ink by the barrel yeah and that was not untrue yeah that has changed which is good i think there's more of a balance you know when it comes to dei it's in fact illegal to hire based on it and now we're getting all these lawsuits so you do have to be thoughtful about you know if you do have a dei program or you do care about that which by the way i did when i came in you know to my point earlier i was like wow these like the number of people getting funded the number of people um who get to write checks it isn't really a diverse group and i said to myself it'd be great if it was more diverse and we started something called founder university and we would do one of these two-day programs we call it startup tune-up now um we would do these two-day programs and we would say this one is for underrepresented founders now we did originally for female founders but then we said you know let's do underrepresented founders you know how we let people determine that they just self-selected so if they felt they were underrepresented so we had a little brouhaha back to that like identity politics cul-de-sac like somebody's like why are asians and i was like i don't know uh we have a form you fill it out if you feel you're underrepresented you can pick that like i you know a little finger waving that i didn't get my dei exactly right but i wanted to see i wanted to increase the number of diverse founders that we saw as a firm yeah um just because i thought maybe the world would be better and if there was a little more diversity here and so i chose to do that but i don't do my hiring or investing based on that so this is a very nuanced discussion i think this is the way they should have been handled is uh connie should create an editorial page she should challenge people to debate stuff in good faith in the editorial page but as full contact as they want and then they should have a regular one and then i agree with you you shouldn't be trying to fire the person you should be trying to engage them based on the merits yeah and i think his style was i don't want to say childish but he's obviously going for like okay you want to brawl we'll brawl right and i'm just going to tell you the f off it wasn't a very sophisticated response i would have actually liked to hear after the f off like something more subtle like you asked for something more subtle from the mei guy i would like to hear something subtle from Q side as well.

36:48Like, can we have a more granular discussion here about what we're talking about? I mean, no, is the answer. Well, we are. Well, generally speaking, this is our little clubhouse that we just let everyone come in and listen to. One last point on the diversity and investments thing, because, you know, I think a lot about the, just sticking with gender for a second, the lack of women investors did lead a blind spot in venture investments on a number of categories. And some firms missed out on deals because they didn't have female perspectives on their investment boards and so forth. They missed some really big companies.

37:21So there is a strictly in very easy to reach economic argument that having their diversity perspective experiences, to point about generations, in an investment committee. And I've learned so much from founders who are Black and from other underrepresented groups in the world of venture. I love the founders over at Rebundle that are doing hair extensions in a more sustainable fashion, manufacturing in the u.s etc and you know if all your people on your investment company investment board look like me you're not going to think much about hair extensions because observe my head you know and so i think there's there's something good to be said about having lots of voices lots of people around the table um and to me like i i'll take diversity and i'll take merit and i don't like the idea that there is an inherent tension between the two and i know that alexander wang in his thing said we don't think that our merit focus is anti-diversity but everyone who wanted it to be read that way did read it that way so i have a suspicion jason we're gonna have this chat roughly every six months until the heat death of the universe and that's probably pretty critical because there are ebbs and flows and you and i've been around long enough to have seen the pendulum go back and forth i just hope that we're all kind yeah i mean it's very popular to be anti-der right now i get it um because you know i think some people felt like if you were a white male uh you know there were in some cases these situations where you couldn't advance when i was at aol i always tell this story they said to me straight up we're giving you svp you can't be evp i said why can't i be evp this to take out just take it down a notch we're going to pay you we're going to give you a bonus like evp you obviously have total autonomy more than an evp even over the weblog sync unit it's all white males in the evp ranks we have to get some women an evp so we're gonna just hire only women for the next like year or two or else we're gonna get killed by time warner which had you know they had merged with this was literally what i was told straight up that my title couldn't be that because of it's all white men and you know what i said i i'm gonna be here for a year people i don't care i don't have to play whatever game and throw you want janitor here i'll just say this on that point people hear stories like that and they presume that there is this massive conspiracy out there to control the working environment.

39:36What you just described was internal corporate policies that were set up to prevent the company from being criticized and therefore maintaining its PR image to allow it to sell more. So the company was taking a business decision that ended up making your life bad, but that doesn't mean that the nanny state is going to AOL and saying, hey, hey, no, you can't give Jason the title. You know, like you're not doing that. Sorry, that was a horrible example. And the best part of it all was they had figured out how to game it. Right. So in all of this, like, I remember when this venture conversation came up, somebody told me, like, oh, we totally have all the journalists off our back.

40:13Listen to this one. They changed every single person's name on their website to partner. Yeah, I remember this. There was like an HR person. There was a comms person of very high note. There was another person who was operations. And they just said, you know what? We'll take the operations PR and HR person who all happen to be diverse females and we'll just call them partners. And I met them one time and I was like, oh, you're a partner. Oh, what are you investing in? And she, oh, I'm not, I'm not an investor. I said, but they get, you have the title partners. Oh yeah, because I have Harry. And I was like, oh.

40:50And so they submitted their diversity. Data. Data. Scared it. It's like, come on people. So on the point about the everyone's now a partner thing, people noticed, like, you know, suddenly everyone's an operating partner. But at the same time, it does give partner titles to more people, which is lovely. All right, founders, you're busy building a product or service for your customers. You need help doing important things like registering your company. With Northwest Registered Agent, you're going to set up your entire business identity in one place. It's going to do everything for you in just 10 clicks or 10 minutes.

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42:31Northwest will handle your complete business identity, getting you up and running in no time. Visit northwestregisteredagent.com slash twist today. On the subject of people and personnel, Amazon has done a deal that I think is very much worth our time, Jason. So have you heard about the Adept AI Amazon transaction? Okay. I have not. I need you to fill me in on this because this seems a little complex. Okay, so Amazon recently snapped up essentially the talent and licensed technology from a company called Adept AI. The company is working in the AI-powered agents space, and it has now been essentially, I think, subsumed into the Amazon corporate machine.

43:13The company had raised$415 million to date, including a$350 million Series B led by General Catalyst and Spark Capital. And Jason, here's where I need you to come in because the company is saying that it's not dead because while its co-founders are going to Amazon and its tech is being licensed, they're moving the head of engineering into the new CEO spot. But if your investment seeded its founders in technology to a major tech company, would you write that investment off to zero? Yes, of course. Yeah. So this is the second time this has happened. Microsoft did something similar. so what we have now is speaking of gaming any system one of the great things about capitalists uh capitalism or any game is that you can figure out a hack and so you know three pointers are worth 15 more than twos maybe everybody on the team goes to three pointing summer camp and gets five percent better at it and then you win a championship and you have steph curry you have clay you figured out a cheat code right so lena con it was selected uh in order to you know really clamp down on the the scale of amazon specifically and amazon comes up in her she had written some papers i don't know if she went to yale or where she went but she had written some seminal papers lena con and and amazon comes up a lot in it because of the fact that they have a third party seller system and they have primary and they have amazon prime and they invest in companies or they buy a company like ring but then they have ring competitors selling and then they're selling things direct that they make and then they also have third parties selling things it's all very convoluted and so what she started looking at was well future competition we want to protect against future competition as if you know somewhere in the government uh the justice department or the ftc they could create precogs like in the minority report and predict what would happen if they added third-party sellers or if instagram got bought by facebook or youtube got bought by a company or other things got bought that failed and went to zero so now companies are like okay we want we don't want to pass scrutiny venture capitalists are saying hey this company's going to be a dud we're not going to go public with it we put 300 million into it we put a billion into it how do we get out from under this investment well if they ship you a bunch of money to be a customer of the product or and then you distribute that to the investors and you shut the company down the investors get a save they have to pay some tax i guess and we'll see when the irs unpacks these companies and how that money flowed because when you sell a company you need to sell the shares so that you get capital gains treatment and then there's something called an asset purchase okay so when i sold weblogs inc to aol they wanted to be an asset purchase so they raised the price a little bit knowing i would have to pay a certain uh type of tax and then the shell company sold the assets of weblogs inc and gadget, et cetera, to AOL.

46:29AOL didn't have to deal with a bunch of buying a company issues with the Justice Department or other people because they bought an asset. So since it was such a small$30 million token acquisition, they did an asset sell. And that was the only way they were willing to do it. But we had an LLC, which meant we had a certain tax treatment as the owners. Mark Cuban, as our only investor who had put$300 ,000 in, I think for 15 % and turned it to six million like in 18 months another great trade you know there's all the well done mark yeah he's pretty good at this um if you have been paying attention and so how the taxes and all that flows through the devil's in the details but that's what we're seeing here now if trump wins which i think is still the likely scenario this is why we talk about politics circus it has a big impact the ftc uh will change over they'll allow these tuck in acquisitions i predict they'll probably say any acquisition under 100 billion or under 50 billion or by a company who's not over two trillion dollars in or over a trillion dollars they'll set up some framework that brings back mid-market m &a but all of this weirdness that we are trying to understand is because that company was probably going to fail in some way that the investors want to say it's a great asset and it would have been a tuck-in acquisition it would have been a 50 to 1 billion dollar acquisition not 10 billion not whole foods not you know uh uber eats buying postmates or doordash buying instacart it's it's not something that's not going to cut you know mustard with with the regulators especially in the uk and eu now who are pretty tight so that's all we're seeing is just weird hacks in the system that will be over come january six seven days at the end well we have a tweet from uh mike noop the uh co-founder of zapier zapier makes you happier yeah zapier yes and um i just have to go through that little monoc they taught me every time so here is mike saying the same thing that jason and i are saying and i bring this up not just to underscore that we are correct but to point out that this perspective is pretty widely held and that means that the regulators aren't stupid to it they're smart to it the question is do they get busy before the election and with concern that they might lose their uh seat at the table if the election goes the other way or not i wonder if lena khan's actually going to try to dig too far into these two deals because there's not a lot of time left before the election and so they might just she's done skate on through yep these are going to go through um and uh unless biden you know pulls off a miracle or the the hot swap theory that i've been saying you know results in a win which i think right now you know the biden chances of winning or 20 or 30 percent which doesn't mean it's impossible right because remember there was a point in time where trump and hillary he was 35 or 40 percent so yeah yeah long odds happen if you play cards you can hit a two-outer you can hit a four-outer you could be 80 with your aces and still lose to somebody's kings putting all that aside i think that many percent chance we're sitting here with the trump administration you know six months from now and mna is going to be like a backlog of mna there'll be all kinds of tax cuts that occur market rips mna rips so there's probably a backlog of mna that is going to rip if trump if trump wins and he gets his tariffs in place that's not gonna i think the tariff thing is like a trial balloon um he always does these weird trial balloons things you know and i don't think it's actually happening but maybe who controls his uh his policy let me show you something here that i ran into in amazon and i want you to open your amazon app because this could be a breaking news story i open my amazon up i'm shipping some beautiful anchor power base stations that i love i love my anchor stuff shout out to anchor not a sponsor of the show yet and so i open up amazon and in the bottom right is an ai button you see it there on the screen the orange and blue one and uh it says rufus and you can ask rufus not alexa but rufus a question hi i'm rufus you can ask me all your shopping questions my answers are powered by ai so i may not always get things right learn more keep shopping for coffee makers i have been looking for a new coffee machine and you can just ask the questions what's the highest quality um usb c cable maker on amazon and uh zip zip zip this and it's doing you know rufus is at work usb c cable market is flooded with options making it challenging to identify the best brands however some brands stand out for their commitment to quality durability and performance here are some great options sure enough anchor usb c cables and then the second one cable matters third amazon basics fourth belkin um and then the fourth is something i've never heard of you green but the first four i have heard of and it understood my question and gave me a great answer so here we go shopping assistance on amazon starting now yeah and this is a thing that's been um relatively long coming i don't actually use the amazon app that often i'm more of a web guy but they announced roof is back in february so i think this must mean that they announced it worked on it shipped it and now we're seeing it in the market that's big companies take a while to get things done do you have it in your app i'm curious or you don't have the app on your phone i have a band-aid on my thumb and so i'm not going to unwrap that use my phone and check live because that would be a mistake um i got into a avocado slicing competition with my thumb oh okay as one does yeah use a spoon next time gosh one last note on the helpful information for you also you ripe ones in a spoon look when you the baby puts a whole half avocado in her mouth at a time i i there's a lot of chopping that i that i do more i feel like a sous chef now to this child so anyways this deal with amazon is the second time we have seen a major venture-backed company essentially get subsumed into a big tech company microsoft inflection ai had raised even more money so a billion dollars in capital race is not a a an end to this type of transaction and i do think if we do have a new administration, as Jason says, there'll be a change in the playing field, if you will.

52:40And we'll have to see how this all plays out. But I want to talk about another acquisition that came out just a couple of days ago. Chime is buying Salt Labs. And I love FinTech. I love FinTech M &A. And I had never heard of Salt Labs. So when this actually came down, I was a little bit perplexed and I had to go backwards in time to do some research. But Jason, you know, Chime, the massive neobank that everyone's heard of. sure of course yeah great company considered a really great company yeah now salt labs is uh what this is sorry i don't know salt labs but um i'm looking at the website right now why would your employees act like owners if you don't give them something to own salt labs has created the first ownership asset that frontline workers earn with each hour they work rooted in behavioral science and tested over hundreds of thousands of workers so it radically changes employee behavior through an asset that is universally understood by workers and seamlessly enables by technology uh okay are you talking about shares in a company because you cannot give shares in a company on an hourly basis you can invest it i think monthly but you it's very hard to give um equity to all employees obviously so what is this yeah that was exactly my question because i saw this deal get announced and much like yourself i was like salt labs is that like salt and straw the san francisco ice cream company no so what they do is they tie essentially an airline style points system to your hourly work and then okay i want to dig into that why is that your first reaction well because equity is very complicated and unless you're an affluent person who lives in silicon valley and has like you and i seen some dip hit the the employee stock lottery and some smart people say you know what i worked at google i saw facebook i was fully vested i went to facebook got more equity and then i saw facebook and i went to airbnb and then i got some equity there and then i went to uber and they hit it four times in a row and there are developers sales executives they know how to do this perfectly in silicon valley that's 1 % of society.

54:52Other 99 % of society is like, you want to scam me how? And they hear stock options or they hear carrying a venture fund and they're like, that's a scam. But those same people will get a credit card because it gets them 10 ,000 bonus miles for signing up for it. In other words, 90, 100 % of people understand airline miles. 1 % of people understand the value of equity. This is brilliant. Yes, and I agree with all of that. And it is translating essentially a thing that they have to get via credit into something they can get via labor, which is cool because it means they don't have to have an unsecured credit line to get these points.

55:29Now, the points are redeemable for a number of things. I think they mentioned vacations for one and also investments. So you can convert them into savings, which is when I went from to I love it. One thing that I have learned reading personal financial coverage for a really long time is that if you automatically opt your employees into a 401k plan, even at one or two or 3 % of their salary, most will be like, oh, hell no, I need that money. And so their point is, people who are making hourly wages, saving is pretty hard. Inflation has been hot. Everyone's kind of worked. They won't act in their own best interest.

56:04Let's just call it what it is. And I think the last time I went through this, which was a while ago in a board meeting, you're not allowed to auto opt people into 401ks. they have to be given the choice and that's my thinking now i could be wrong and that could be outdated i'll ask the producers to look that up can you automatically force an employee into a 401k or can you even default them into a 401k yeah because defaults always matter to your point it's one of these very dicey issues in america now in australia they have something called super annotation or yeah they're called super funds you are required instead of like having um what do we call it here in america so i'm drawing a black 401ks for uh no um social security instead of paying into social security you are essentially being forced into a 401k i think in australia might be as high as like 10 or 12 percent of your salary is forced into that australians are so happy you know why they're all happy because they put their money in equity over the last 30 40 years and they are in amazon and they're in nvidia and whatever you know mutual funds sure and instead of relying on the government to manage the the these portfolios they have like six or seven companies i think you can switch between if you don't like them and you just pick your low index fund fee anyway continue uh we just got the note from the producers by the way according to the secure 2.0 act that means in 2025 most new 401k plans must automatically enroll but prior rules say you cannot force participation so it does seem that you can auto enroll but people can be like i'm out and that's what they do that's where salt comes in um going back to the deal really quickly salt had raised uh 18 million dollars its last round in december 2023 transaction very recent was 8 million on a 60 million pre according to pitch book and the total value of this transaction including earnouts is 173 so almost a 3x if the full earnouts are done for money invested in december it's july that's very irr positive but not probably the the exact level of return they were hoping with with this company call this a single in the business single double um you know if you're an investor it's absolutely delightful to get a save once in a while So the previous acquisition by Amazon probably would be a save.

58:28You're getting back 0.5 to 1.5 what you put in. You put in a million dollars, you got back 500 to 1.5. All it does is let you recycle that capital. So in a venture fund, typically the paperwork says the first 10 % back can be reinvested. So let's say you were my LP. I had a$10 million fund. You're the LP. I'm the GP. You gave me 10 million. let's say one of our companies we you know we put in a hundred we put in a million dollars into a company it returned two million instead of me sending that two million to you to you know take the 10 million that we've invested and cut it down to eight million so the hurdle now is eight before i start getting carried as the gp that two million i can say you know what i have the ability in our documents to recycle 10 so i'm going to distribute one million i'm going to take the million i'm going to invest it in the next best company in our portfolio oh we have robin hood or uber or calm in our portfolio let's call the ceo and see if we can slide that million in there so the and then that's how you goose performance in a totally legit great way in you know your venture fund and and when lps sign up they do that that's what that first acquisition probably will happen with it and in this one yeah maybe it's nice to get a little single or double because your lps on the other side when they get that they're like oh this gp is good at their job yeah they got some of my money back so three acts a million dollars in a 50 million dollar fund you're getting back six percent of the fund it just shows that you're good and this is why the lena khan discussion is so important we have to move on from that if we're going to have a viable venture ecosystem and you know listen i don't want to make this political but this administration killed the mid-market m &a and that has been terrible for capitalism and it's been terrible for returns for lps which is putting ice cold water on the venture capital space which then is putting ice cold water on company formation because less will be invested if we don't have a mid-market my way of saying to the democrats um this strategy that you're pursuing is going to be profoundly unpopular over time with people who make donations to presidential candidates and it's probably why people showed up in a major way for trump in silicon valley this one issue is there a way to not or avoid allowing the most wealthy technology companies to become immortal while preserving the ability for major companies to buy smaller companies essentially say one more time so right now lena con doesn't want google microsoft amazon and apple and meta to just buy every company that challenges them and therefore they never die they never so this is a great this is the key question alex we're only like a month into this and already you are asking the exact perfect question what you need to understand here is there is a very simple proposal that i've made no less than a hundred times there should be one set of rules for companies who are at scale there's a very simple way to determine who is at scale the number of users or the amount of revenue okay if a company has more than a billion customers or a company has more than i don't know a hundred billion in revenue a year okay 250 billion i mean we're talking big amazon or better you know tesla might not even fall into this so you know under three four hundred billion no so you know companies coming up coinbase dropbox instacart reddit all of those would be excluded from this because they are the ones who might challenge amazon right so an uber you don't want bought by amazon you don't want doordash or instacart bought by amazon obviously they consolidate the market then they can do things against consumers like raise the prices uh and reduce choice but if uber could buy instacart or doordash and uber could merge this would create a stronger company against amazon we would want that if target and uber could merge if doordash and whole foods could have merged i mean now i'm starting to get frisky you start seeing those now you've actually got a competitor to those so who makes great smartphones today that's not apple who's the leading handset vendor samsung okay if samsung yeah okay take samsung huawei they spin out they make a handset company who could they merge with uh that would make an interesting combination let's just think out loud here for a second let's pick five companies five companies that if they started merging and acquiring and it could happen either way but let's just say samsung spins out the handset department it's worth a hundred billion dollars they buy uber and doordash two great amazing companies on demand that are connected to smartphones okay now you got something maybe now you have a samsung one membership that gets you everything for free if you have a samsung headset right handset who else could they buy that would be super interesting oh coinbase or paypal venmo okay now you got paypal and samsung and uber you put these three things together hey now i'm gonna go buy an apple phone or there's a samsung phone right that comes with a coinbase paypal uber doordash instacart exclusive offering that's kick-ass now you created some competition so let it be a free-for-all under i'm gonna pick a number here yeah under 300 billion in no nuts value or revenue i was thinking market cap so under 300 billion in market now over a trillion no more buying companies right same scrutiny they're under right now okay so you just want to take take the bar and don't lower it or delete it you just want to raise it up.

1:04:44I'm actually pretty fine with that. But let's let's put this to the test, because there was a deal that I was very, very skeptical of, which was Adobe buying Figma. I was like, guys, this is such a clearly anti-competitive deal. They're scared of Figma. They're going to drop two exits value to take it off the table. This is an anti-competitive transaction. But I just pulled it up adobe today is worth 244 billion so it's right at that edge of 250 so the question is under a jcal administration under this regime of of regulation and rules for acquisitions do you let adobe buy figma i probably would but it would be one of those it would be to your point it would be pushing the ceiling so it would be one of those ones that you would put a decent amount of scrutiny on and you say hey let's just take a look at this so you i'll steal man your argument absolutely you know it's it overlaps 50 in user base but there's still canva out there sure and what would it cost to make a canva or figma or photoshop competitor and who else is capable of that certainly microsoft could build it in their sleep if they chose to uh not a big deal google has created the whole google office suite salesforce has created all kinds of suites of you know corporate sas products it's not that complicated all due respect to figma and dylan's done an amazing job with it yeah actually not the most complicated software to build let's be honest no no corporate software is so it's not and i do think in letting that one happen now you might have adobe challenge microsoft because they could come out with a word processor they could come out with the spreadsheet and then the adobe suite could include slack and zoom and what if zoom and slack had merged with you know adobe now you've got a really at scale competitor and you can see your clock spinning you're kind of picking it up when i'm dropping here you know how do you build a competitor against google and microsoft's office suites and gmail okay buy superhuman it worked out for me i'm an investor as one of the first two investors me and uh darmesh from hubspot you know if he's incredible i've got to get him back on the program superhuman boom and you know figma boom you got an email client now let's get an office suite on oh there's none available well i said we'll build it so this is what i'm talking about like let's let the let's let the up-and-comers have at it and let's restrict the big ones now you know this does exist in korea in korea they have a um a monopolistic rule that i think is and my knowledge might be 20 years old at this point but i do remember sk telecom south korean telecom had an upper bound i believe it was 70 percent and when you hit a certain market share then a bunch of rules kicked in and one of those rules was you couldn't add more users sure you couldn't you know and so it sounds a little bit weird and and these rules are hard to do it's kind of like the hand checking rules in basketball you and i like basketball you need to come up with rules to try to make the game seem more fair you come up with an upper apron now they got a two apron system it's a hard cap in basketball essentially so they're constantly tweaking those rules to try to make more parody in the league well that's what you're trying to do is make more parody in entrepreneurship right in capitalism and keep a yankees type team from occurring where they just outspend everybody and i think this could work we had a cost cap in formula one get put in and it's worked out medium in the case of south korean conglomerates it's a small country by population and so i think having national champions is a different conversation than here in the united states for example of course to put one more um data point on the on the jcal future ftc regulations visa currently worth 530 so basically a half trillion okay under under your rules the visa plaid no well i think you said 250 i was gonna say 300 but yeah i was i was thinking something like you know that obviously trillion and above is one set of rules i think 300 and less is another set of rules and then you have that that middle where i have to really think it through but okay sure visa plaid feels like maybe too overreaching right so then basically we would allow the adobe figma deal and then the v supplied one would be not allowed and that would be kind of the the line at which we draw between the two i don't i don't hate that the only thing that i'll throw in is that when uh the uh over in the eu with the dma the digital markets act they set thresholds based on user count and so forth okay and people have criticized those as being essentially targeted at the american tech yes yes for a reason they are Right.

1:09:36And so I'm just, you know, I still think if you could get everything you wanted, you would still be in certain Silicon Valley circles viewed as a big government bureaucrat coming to bring down the regulatory hammer on hardworking entrepreneurs and founders. And I'm being ironic here because I think you're being incredibly generous and I would lower the bar more than you just because of my personal views about competition. But I do think that a recalibration wouldn't be entirely poor, but we are seeing deals go through. So this is$175 million deal. I don't think we expect the FTC to show up and throw dirt on it, but I would like to see 10 more of these, you know, within the next month versus two.

1:10:14so it's um i can tell you in um in the lp space the endowments of you know harvard and etc duke etc in the uh high net worth individual space in the family which is like family offices sometimes referred to uh you know people with i think you know family office starts 100 million or more 500 million or more in assets um and in fund to funds and in all number of lp sovereigns um pensions and retirement funds like calpers the one of the big discussions is if we don't have mna maybe we stop investing in uh venture and private equity or we pull back the percentage if we don't think we can get exits we still love it but maybe it's not our focus and we'll do more corporate credit corporate credit is like you know like amazon back to amazon you know you'll see them like they get a billion dollar loan for two percent or something or five percent or some other company gets an eight percent loan or you know even as high as ten percent who does that help it helps the incumbents just to be very very thoughtful about what you're doing here because there's second and third order um uh what do they call them downstream in fact second third order events that occur when you put your scale on capitalism your thumb on the scale of capitalism and just one of the things we have to be wary of.