Big Technology Podcast - Box CEO Aaron Levie on Trump, the Tech Giants, and the Stock Market

Episode Date: September 2, 2020

As the pandemic flattens much of the U.S. economy, many technology firms are doing just fine. Business is moving online, and they’re well positioned to benefit. For tech CEOs like Box’s Aaron Levie, the experience can be bewildering. While you’re riding a wave most companies can only dream about, you’re watching the rest of the economy — including many of your customers — struggle to get by. In this conversation, Levie says this economy is “not sustainable,” and offers a look into his mindset as he tries to make sense of where this is all heading.

Hey, Aaron, thanks for doing this. Yeah, sure. I do appreciate you coming on. Is it right if we talk a little politics to start? Yeah, I am at your service. Okay, great. All right, so I'll just cue up the intro and then we can jump right in. Hello and welcome to the big technology podcast.

This is Alex Cantroitz, and joining us today is Box CEO Aaron Levy. Welcome to the show, Aaron. Hey, thanks for having me out. My pleasure. You know, usually I would go up with an intro telling everybody about who the guest is, but I feel like everyone knows you. And it's kind of interesting that you've made being an enterprise CEO, enterprise technology CEO, cool. How have you done that? I, well, I appreciate the thought that I've done that. So that's great news. I think probably more than anything, what's happening in the world, and we just happen to be early on this trend, is that people inside of business want the same level of user experience and the same quality of software in their workplace as they have in their home lives. And this idea of, you know, when you are at home, you can use amazing products from Apple and Facebook and Google, but then you go into work and you're just using legacy enterprise software that makes your life suck. like those days are obviously over. And that doesn't mean that all companies on the planet are using all these modern tools. But I think the writing is on the wall that the future of enterprise software has to be consumer-grade applications, simple experiences. And so when we started our company

15 years ago now and then we pivoted in the enterprise, we just felt like the future of enterprise software had to look completely different. And it had to resemble much more of a consumer quality around what business applications would look like in the future. And so that's That's been our, you know, basically job number one and main goal since we, since we pivoted in the enterprise about 13 years ago. That's right. And your public persona is also like very human and authentic and you react like normally. Like it feels like you're one of us, which is like, you know, we get to, we get a chance

to see your perspective on Twitter all day long. I mean, you can probably tell I fave almost everyone in your tweets. So it's kind of great. And, you know, I feel like I have some sort of idea of where you're coming from. So I'm really excited for this conversation. As we go through it, we're going to cover three different topics. One is the current situation in the U.S. You know, talk a little politics, talk a little economy.

Then we'll move into competing with the tech giants and working in an economy dominated by the tech giants. And we'll wrap up with a segment that will cover the future of work. So let's just start with politics if we can. So your stock price was $9.12 on March 13th. And today it's nearing $18. So it's basically double of where it was earlier in. year when the economy was crumbling. And it's largely due to the fact that the Trump administration has infused a good amount of money, more than $2 trillion, and saved essentially the stock

market, also helps some people who aren't traders. But, you know, it's definitely a market-oriented stimulus package. So how do you feel about the Trump administration today? Yeah, well, great, great question, obviously, incredibly important given this, given the time that we're in. I think that this administration is mishandled almost every element of the pandemic, you know, between the health response as well as the economic response. And to your exact point, I think way too much emphasis has been put on how the NASDAQ or the S&P is doing and not as much on how are actual small businesses doing, how are actual employees and workers doing throughout the country. So unfortunately, I think we've got this massive distraction of the stock

market's performance, which, as you know, is heavily weighted toward a couple sectors. And importantly, within those sectors, a few companies that are, you know, really driving up the results of the overall market to a point of it almost being misleading around how well the economy is doing. So I think that, unfortunately, has been a big distraction. And ultimately, the real essence of the problem is You have health crisis and you have an economic crisis. And in a health crisis, I think we've basically done almost everything possible to ensure that we don't recover quickly and that we don't create the right kind of health standards and social norms and infrastructure in the country to respond to the health crisis. And so that's put the onus more on businesses and states and cities. And for something like a health crisis where there's no boundary, there's no territory, there's no dividing lines.

on politics, you really do need a federal response at some point. And that should have been done swiftly in the beginning of this crisis. And I think we know the playbook of what largely should have happened between mask wearing and setting up the right kind of testing infrastructure and making sure that we had the right kind of health norms throughout the country. So that was the health crisis response that, you know, right out of the gate, I think we got wrong. And shockingly still in August of 2020, we're still getting wrong. And then on the economic response, I'm less close to all of the dynamics here. I think the loans to small affected businesses, I think that was absolutely a noble and important effort. We can point to a tremendous amount of flaws with

it around who got money, who didn't get money, all of those issues. But the swiftness, I think, was at least important. But I do think that putting more money in the hands of individuals who are affected by this in terms of if they've had furloughs or job, you know, hour reductions or job loss completely, we do have to get money just into the hands of citizens and people directly. And I think that's ultimately where Congress needs to step up. So I think I and many others in tech have been very conflicted because our businesses are doing well because we happen to be digital platforms that are remaining successful during this. time because of the fact of how our technology, you know, we're only technology companies.

We don't have much of a physical requirement or presence. And so our businesses are doing well. But at the same time, we know that the economy and the health care crisis is very severe in the country. Yeah. And you're a public sector CEO, Aaron. And it's, I mean, it must be interesting to be in your shoes and to, you know, obviously you're critic of the administration, but to see that number tick up the one that

matters, right? The stock number. your stock is doing great. So how does that feel for you internally when you try to balance these two things? Yeah, I think it's, you know, there is a little bit of a conflicting tension there, which again is, is our business is remaining stable and, and I think, you know, relatively strong right now, which which I think is good on its own because we can keep people employed and we can continue to serve our customers. And we've had a very large portion of our customers, you know, fundamentally using our product because they have to enable remote work and they have to keep

their business operations running. So in many respects, our technology is sort of critical to keeping organizations running. Again, to have a stock market that is somewhat or, you know, substantively disconnected from the broader economy, I think does create that cognitive dissonance sometimes. But honestly, I think whether it's today where maybe our stock is doing, you know, well on a relative basis or two years ago where we maybe were underperforming the market, our job is, you know, fundamentally not to pay much attention to the stock price and focus mostly on just execution, serving customers, making sure employees are staying safe and healthy right now. And that's,

that's at least how I think about it from a pure kind of CEO standpoint. Yeah, it's fascinating because the administration has been so focused on keeping this market strong. And of course, you're the beneficiary of that. But then there's also, okay, the customers that you serve. You need people buying your product in order to be able to be a sustainable business that can show the quarterly earnings that, you know, ultimately underpin that numbers. So you guys are speaking with businesses in the economy all the time. What's the sense that you get in terms of like how the middle, I mean, you know, we know the top of the economy is doing good, especially in the tech sector, but you don't just serve tech companies. So what is your sense in terms of like how the middle

and really like the midsized, you know, small to medium and then small businesses are doing right now? Yeah. Yeah. You know, I would say this is such a bizarre experience because it's so dependent on sector and so dependent on where that organization is serving their customers in terms of it could be geographically. It could be where in the supply chain stack do they exist. And so I think, you know, across small businesses, mid-sized companies and large enterprises, you have, you have, it's a very bimonel modal kind of environment where you have some companies that are doing unbelievably well. We've looked at, you've seen some of the earnings from non-tech companies that are in retail like Target, where they're blowing out all their numbers. They're having record, you know, same store sales. Equally, you'll look at other retailers that maybe don't have as much of a digital presence or maybe their products are a little bit more discretionary in nature.

So maybe, you know, fashion or some other kind of retailer and, you know, their numbers are decimated. And so in the exact same sector, with maybe even in some cases the exact same digital strategy, you can have two completely different outcomes. The same is true for small and medium businesses. We have some small and medium businesses who happen to be in spaces that are on fire and they're growing rapidly. We have some small businesses, some in live entertainment as an example, some in retail.

They must be getting crushed. They're completely crushed. And we've done our best to say, okay, hey, you don't have to pay us right now. Just kind of, you know, hang in there. we're going to continue to support you. We have non-profit customers that they're not able to do the same level of fundraising or keep operations running because obviously there's less money going into those areas. So we've had to do our part to say, okay, if you have a really effective business,

we're going to do our part and make sure that you can still use the technology. But at the same time, again, this is sort of this cognitive dissonance right now. If you're in the tech sector, there's probably been more net growth of technology, irrespective of the sector-specific problems because of the fact that what's happened is so many companies, even those that have been impacted, have to move to digital platforms to be able to remain successful and to keep their operations running. Right. So is this a moment where the tech industry just sort of takes over the economy and doesn't

look back? Well, I think there's a real risk of that. And I think that it's interesting to hear you call it a risk. Okay, go ahead. Well, the risk is that is that you've been. basically have this dramatic acceleration of innovation and digital transformation. And it's happening in a time scale that is completely unprecedented. So normally what would happen is you would have technology get adopted over,

you know, five years, 10 years, 15 years. And it would sort of there would be a certain pace to how that adoption would happen in the competitive dynamics within the market as that played out. Right now what's happening is that adoption is happening. in a few quarters or a couple of years. And so, you know, more than anything, the companies that are going to benefit from that digital acceleration are going to be companies that already exist, that already have a customer base that can serve their existing customers and be able to support them.

And so you are having a fairly artificial acceleration of a marketplace that really has never happened before in economic history. And, you know, even if you look at the case of shelter in place, well, who did shelter-in-place benefit the most retail-wise? Well, Amazon. So you do have a situation where our existing patterns and the existing companies that are serving us, their positions are being reinforced and getting stronger, you know, every day. And again, to call it out, I mean, we benefit from that. Like there's, it's probably going to be harder to be a startup that's competing with us right now because our customers are going to be focused

on, you know, how do we go to reliable partners that we're used to working with, that we understand that we can trust, and that's going to benefit anybody who has been able to be well-timed for this market. And I do think it's a risk in terms of it does reinforce and codify some of these market positions that existed pre-pandemic. But again, the counter to all of those risks is the fact that these companies are serving customers during an unbelievable time of crisis. And so I do think these are kind of in many cases critical infrastructure and it's important and it's important that these products exist and it's important that they're able to serve their customers successfully. So I'm of two minds on this situation. Right. And it could be that

this tech acceleration just sort of happened faster than much of the small businesses that have been, you know, waiting to compete with them or waiting to make moves. We're able to adjust. Now, now they're struggling. It is also interesting, you know, because the pace has been so fast. It is also interesting that a company like Amazon has now become more reliable than the U.S. Postal service. But I guess we can, you know, save that discussion for another time. One of the things that I really am interested in is this is the thing that I've been thinking about a lot. I know everyone has, which is like, how are we having an economy that's struggling the way it is? Like, we're definitely in a recession. Our unemployment rate is 10% and yet the stock market continues

to go up. And I know in my head, right, that it just represents the highest performing companies in the economy. Many of them are tech. I think the tech giants, the growth of the tech giants equals the next 50 companies on the S&P 500 this year or something like that. But how is it possible that we have such a rough economy and yet the stock market is shooting up the way it is? We've all read explanations, but I'd love to hear it from your perspective, someone who runs a company who's in the middle of this change. Yeah, I think I have maybe just sort of three small buckets of ideas there.

And this is all based on the same kind of podcasts and videos that both you're doing and that are out there. So, so I, I have no kind of proprietary insight, but, but I think, well, you're it. Okay, I'll pretend it's proprietary. Um, yeah. I think there's, I think, again, this is, I'm like a, I, I probably got like a, a D plus in, um, in microeconomics and macroeconomics and, uh, in college. So, so I wouldn't like trust anything I'm saying, uh, in any, uh, any kind of, uh, you know, uh, you know, kind of, uh, you don't want people trade off of what I'm about to say. Because, especially, because, especially because I'm sure this podcast will go live and the market will collapse like 30%. And so,

so nothing that I'm saying will make any sense. So, so I think you got, I think you have a few big factors. One, um, you have, um, uh, you have a flight from an investment standpoint into the things that, that actually can have returns. And so, so money is moving out of other, uh, you know, from other, other places where you might invest, um, where there might be, you know, now really, really low interest rates. And you want to move that into, um, into the stock market, uh, you know, to drive better returns. And so you have money moving in to the market in some cases just because it's the only place

where you can actually drive returns. The second thing is you have, there's the fact that I think big organizations are actually holding up better than anybody anticipated. And mostly it's big organizations in the stock market because there's just a certain kind of scale that you have to get to before you're a public company. And so if you think about, you know,

if you think about Proctor and Gamble, target the large banks. These organizations are actually are experiencing record revenues and profits in some cases simply because of just the, in some cases, they offer necessary products that are staples. And so you just have to buy soap and you have to buy food. And so their businesses aren't going away. And the government, again, is at times done a good job of making sure that individuals have enough money to be able to afford those things. And so you have money getting pumped into those, into those organizations. And so because so much of the kind of S&P or NASDAQ is represented by a lot of these

sort of staples, organizations that are selling these staples, and we continue to need them. And on a relative basis, the airlines or the car companies make up a smaller portion of the overall stock market, you basically don't have as much, you have a muted impact by the sectors that are most impacted relative to the sectors that are continuing to perform incredibly well. So that's kind of category number two. And then I think category three is specific to technology. And whether you're looking at the big four or five technology companies that are above a trillion dollars or the rise of companies like Tesla or the invidias of the world or the cloud

sector, so Atlassian and Sklunk and all these companies. I think there's just a broader recognition, which is that the markets that these companies are serving are potentially billions of consumers globally. And the barriers to getting to those billions of consumers have gone down dramatically in the past five or 10 years. And so the durability of those investments has actually gone up on a relative basis because of the fact that they're all digital. They don't require in-person interaction. And the markets for the these organizations are just so much larger than than ever before. And so it's sort of ironic because if you went back five or 10 or 15 years ago and you kind of looked at like the Warren

Buffett, you know, style of investing, which is, which is, you know, what's a very stable business where, you know, anybody can run the company and it's going to survive and it doesn't really, it's not very volatile. Well, actually, in some cases, those businesses have been the worse off in this environment, you know, airlines where, where you just sort of, you imagine that every single year, people are going to take air flights 1% more than last year. And it's just very stable business and you eke out profits. And it's actually those businesses where you have the greatest risk. And the companies that we normally think of as being sort of very volatile to innovation

and disruption, the apples, the Facebooks, the Googles of the world, those have actually been performing the best just because of the durability of their business models in this time. So I think those three factors and maybe others that you know of, I think. allow. Yeah, I mean, yeah. Yeah, go ahead. No, I was going to say allow for the market to to exceed or be disconnected from the broader economy. Right. And I mean, I don't think you gave yourself enough credit at the beginning of that answer because I think that was like pretty comprehensive and spot on. It is a very, very interesting economy. If I'm hearing it right, what you're saying is that like we're living in an economy right now that's largely

driven by tech that seems to have a market that's working well right when that market will translate to people's pensions and retirement funds. And one that's just accelerating from, I mean, maybe I'm kind of over my skis a little bit on this, but accelerating from a small and medium-sized business, you know, driven economy or it wasn't really even driven. It was definitely healthier operating to one that is now going largely into technology, largely into big tech companies. Yeah, I think that that is absolutely a big part of it.

And I think, you know, it's interesting. Right. There's this connection back in some way to, you know, interestingly, interestingly enough, I think actually, if you look at like, you know, what Andrew Yang was pushing on and obviously UBI, it was interesting because what the biggest fear was, was automation was going to start to drive out all of these. No one predicted a pandemic. Exactly. And so now. But they've had the same impact. Same exact impact. And it's almost actually, it's interesting. It's almost. actually, it's almost actually a simulation of what, what actually does this sort of end state look like of a very technology driven economy. And we just got to it way faster than anybody imagined. And so the result is, is actually what, you know, again, maybe we could have theorized about, but you can actually have a situation where some small set of companies does

unbelievably well. And the companies that are in that supply chain can likely do very, very well. but then you're going to have a lot of businesses that are impacted and a lot of jobs that are impacted because of that. So my definition then, you actually do need some form of support and government safety net because there's just there just doesn't like the jobs just don't exist. Right, which is what we've, we've had that with the CARES Act. And I think that what you're describing now is the Trump economy, right? And so I'm curious from your standpoint, is the Trump economy sustainable? Maybe you could just define Trump economy for me. So I, I, I build on the right point of that.

Right. Okay. Let's sum it up, right? One that's definitely driven by technology, one where the market does well, even if the rest of the economy isn't doing great. I mean, yeah, that's one that's led by a handful of companies at the top. And everybody else is just getting the, you know, getting the downstream effects from that. Yeah, I guess I wouldn't necessarily associate Trump with that.

I would say that that is, I mean, again, we can debate for better or worse, but That is where the economy... Well, forget the labor. Yeah, yeah. Is this economy sustainable? Absolutely not. This economy is definitely not sustainable. But again, it's hard to separate the pandemic element of this.

And so what would the natural... What would today's natural economy be like if people could get out of their houses and go support businesses? And so I guess what I was saying is like we're simulating kind of complete automation. But this is... We're not actually simulating what people want the economy to look like. I think people want to go out to restaurants and they want to go. out to small businesses and they want to be able to do a lot of these things that can't get

automated. We just happen to be forced into that right now. So I don't think that this, I mean, there's there's no question that this economy can can, you can't sustain what we're experiencing right now. At the same time, I actually don't think people want this to be the economy. I don't think, you know, government or businesses want this to be what the economy looks like. And I think anybody, any of these large tech companies would probably trade, you know, some X percent of their market cap to be able to return back to a more normal environment that we, that where people could support more businesses and you could be mobile and we could actually have a little bit more of a normalcy. I don't think anybody's happy. I just think the stock

market happens to, again, be disconnected from the sort of lived experience of most people right now. Right. And we'll see what happens when everything comes back. But I'm curious, okay, we're a couple months away from the November election. What do you think happens in November? And the only thing I just, let me just say one more, one more with thought. I guess, I guess to me, the nuances, I don't think that I, like, is, is basically separating the economy from the stock market. It's like, like, what we've mostly just talked about right now is why the stock market is, is at all time highs. Yeah, yeah. No, I want to hear about the economy at large.

Yeah, yeah. Is this economy? This economy is absolutely unsustainable. And it is, and you have to, you have to have government stimulus. you have to have higher taxes, you have to have job programs. I mean, there's a lot of stuff you'd have to do to make sure that we can support the broader economy. Totally.

And I wonder, that's, I guess what I was getting at is like we're now seeing an economy where the middle. I mean, I firmly believe you need the middle and the bottom of the economy. You'd be strong can't be led entirely by the top. And I just wonder what happens when we come back from this, you know, if we come back from it. And whether or not that is going to be evenly distributed because we've run the simulation, but now we're living in it.

That's exactly right. And I think to me, the thing that right now is, is we should, you know, with the CARES Act and, you know, not to get overly political, but if a different administration, you know, enters in and we, and we end up, you know, having even more programs that can support, you know, workers, then actually we can start to model out. Like, what is the sustainable way to fund this? And, you know, where do those dollars come from? Is it higher corporate taxes? Is it higher income taxes? And then you can actually get to a point where you can understand, like, what's a sustainable version of this? Yeah, because right now we're just printing money and the value of the dollar is dropping something that's not talked about very much. And it doesn't seem like that's a very good route to do it. Like, we have to create something that can last versus just increase the monetary supply. Okay, I want to ask you before we wrap up this segment on politics, what do you think happens

in November? Well, I was wrong last time. So I don't have a great read on these things. What I would just say is that I think we need to, we need to return to a better model of governance in the country. We need to return to a better model of supporting, you know, all classes of citizens. And we need to return to a model where, you know, we get out of campaign mode all the time. And we focus on, you know, building up the country. And, you know, for, again, all of the people in the country.

And so that's what I'm hoping for. Okay, you sound like a Biden voter. That might be the case, yeah. And yeah, I'd wonder if Biden does win whether there's going to be a peaceful, no, actually, I was going to wrap up, but I want to ask you this. All the stuff about the mail in voting and voter fraud and like Trump obviously trying to sort of discredit the results of the election before a single vote is cast, what does that do from a business standpoint? Does that create some turbulence that makes your job more difficult to do? I think right now that hasn't, that has not seemed to have seeped into the business kind of community or the business context thus far.

I mean, obviously if in November we have a protracted battle for, you know, who's in charge of the government, that could be very disruptive, you know, in terms of world trade. and overall, you know, kind of how the, you know, how businesses sort of think about what, what's the, you know, what direction is the country going in? But right now, that has not been a sort of a corporate issue. It's obviously an issue of, you know, personal concern. But, but hasn't, hasn't gone farther than that. Okay. When we come back with Aaron Levy, CEO of Box, we're going to talk a little bit more about what it's like competing in a world that the tech giants dominate. And we're also going to read some of his tweets and have him react. So hope we, You stay tuned, and we'll be back right after this. Hey, everyone, let me tell you about The Hustle Daily Show, a podcast filled with business, tech news,

and original stories to keep you in the loop on what's trending. More than 2 million professionals read The Hustle's daily email for its irreverent and informative takes on business and tech news. Now, they have a daily podcast called The Hustle Daily Show, where their team of writers break down the biggest business headlines in 15 minutes or less and explain why you should care about them. So, search for The Hustled Daily Show and your favorite podcast app, like the one you're using right now. Okay, and we're back here with Box CEO, Aaron Levy, a man who is so well known, so well liked, I think, in the tech industry.

Oh, God. That we don't need to spend an hour going through his credentials, although you can certainly look him up. He runs a great enterprise technology company and has this amazing view into the economy, which we've been talking about. And, you know, one of the other things that he does is, you know, living, he's living in a world where, he's competing with the tech giants, Apple, Amazon, Facebook, Google, and Microsoft, which dominate the tech economy. And anyone has to, you know, reckon with when they're working today. So, Aaron, what's, have the tech giants, are they sort of like a frenemy for you? Have they been more helpful, more hurtful? What's your relationship been like with them?

And do you want to be competing in an economy that they control the way that they do? Yeah, well, this is a lot to unpack there. What I would say is that I prefer the term co-appetition. So, you know, we are in an environment where you simultaneously have to cooperate and partner with many of these large-scale technology companies as well as you're going to compete in particular categories against them, you know, for customer demand. And, you know, we, you know, we have a unique perspective because we're enterprise focused. And so some of the things that play out in the outside world that are more. pertinent to consumer companies we don't face directly. Yeah, you're not worried about getting booted off the app store. For the most part, we hear to all the policies, and we have a very pleasant experience and

partnership on that front. So I think, for us, what we care deeply about is, I think the number one angle we have is we are very, very focused on a future state where customers have choice around the products that they use and the ability to move their data between different products and the ability to have some degree of interoperability between services that just fundamentally need to connect to one another that come from different technology providers. And so that's our sort of stance on this. I actually think it's very healthy to have a very competitive marketplace, which includes incumbents that can launch competitive products. I think it forces startups to to be at their best. It forces companies to have to continue to innovate and better serve

customers. So I think, you know, by and large, I actually think that the environment that we're in is a healthy one in terms of startups are constantly trying to find the angles that the incumbent isn't going to be able to go and solve for. The incumbent has the ability to try and catch up to better serve their customers. And you continue to have this sort of back and forth that drives more innovation, drives better customer value over time. And so I think that's, to me, the high level view of the market. You do have specific circumstances or situations where clearly the government probably needs to have some degree of consideration for. What I would, what I struggle with right now is that I haven't yet seen any really great or logical proposals

of what that would look like. And so we have a lot of sort of conversation and noise around the idea of big tech and you have to regulate big tech. But we don't have a lot of more precise solutions that that really can be practical to adhere to and that would not over-engineer the regulation to the point where you hobble an incumbent or even maybe worse in some cases where you actually- Yeah, the government could just go ahead. I mean, the government could just level the economy with some poorly thought out regulation. Well, that's exactly right. Like you could take the thing that is probably our greatest long-term competitiveness in America, which is our innovation economy, and you could decimate the ability to actually get to real scale

on a global basis. And that would work against us as a country vastly more than for us. And so this is a very difficult and tricky situation because you have a dimension of in the U.S. you want companies to be able to be very competitive with one another and make sure consumers have choice and make sure that startups can emerge on a global basis. You want to make sure that you're not hobbling your economy and effectively, you know, handicapping the success of these firms. And so I think you've got, there's a lot of considerations. And this is why I think the government has to tread very carefully on these topics. It's a different perspective that you offer than one you typically hear about these companies talking about how smaller companies find the gaps

and push forward and innovate, and that pushes the tech giants, and the tech giants pushes them. Mostly what we hear in public is that the tech giants will squash smaller competitors. And as soon as they find a business there, they're going to go in and grab it. So why do you think the way you do while it seems like the conventional wisdom thinks the other way? I think, and again, this is not to say that I'm anti-regulation, because actually I think there are very particular problems, but I think you have to work backwards from what is the real problem we're trying to solve. and then what is the right type of regulation to solve that problem? So that aside for one second,

we're happy to loop back of what that could look like. I think the reality is that I'm not quite sure in some of the proposals that we've seen around breaking up big tech or you can't do acquisitions of a certain scale, the part that I don't quite understand is how we're imagining that we want these companies to be able to continue to sustain their operations. I mean, is the idea that Facebook basically can't own Instagram, or can't buy WhatsApp, and then thus, and you basically can just guarantee their disruption over time. Like if you can't match the functionality of your disruptive competitor, that could

quite literally spell the fact that your business is not going to exist in the future. That's how disruption works. And so I just don't know how the government is sort of anticipating simultaneously letting these companies continue to thrive and succeed over time and build great products that consumers like, while also at the same time making sure that they can never do. get into, you know, particular categories. Well, you mean, you could also, you could also invent internally versus acquire externally. You could, but it's, in some cases, it's harder. Yeah.

Well, actually, I'm, you absolutely can do that. But, but in some cases, I'm not clear that that is, is good for either consumers or the economy either. If you think about what, what it would mean for big tech to not be able to make acquisitions, I'm not positive that, that you'd get the same level of venture capital or, the same volume of startups entering this. Yeah, cuts off the exit path. Because now you have to basically believe that every category that a startup enters

is going to be able to be a sustained long-term independent company. And that's not the case for all innovation. You know, sometimes you're really just experimenting because you know that maybe at the end of it, you do have a path to get acquired by Facebook or Google or Apple. And so I think if you basically cut that off, you have a huge risk, which is, are we going to be able to sustain the same volume of innovation and startups. And so this is why this is a topic I personally struggle with because as an entrepreneur, you know, you definitely always get really, really upset whenever a bigger company copies

one of your features. Conversely, actually, as an entrepreneur, I, you know, would hope that one day if Box was ever considered so large that, like, you know, we had antitrust concerns that I would still be able to have a path where we could make sure that we don't get disrupted and that we can continue to build a viable company that can serve our customers. And you don't want the government to basically effectively mandate that a company can't remain competitive. And right, but what about what about the other way around also? I mean, your market cap is in the two and a half billion range. Cloud is a place where the tech giants are all fighting it out. Microsoft, Apple,

Google is in there. Amazon. Like, could you ever see box joining forces with one of those companies and with something like the current, you know, anti-trust, anti-tech giant feelings right now sort of cut that path off? Well, you'd probably get a premium on your shares if one of those guys came not. Well, I probably can't use this podcast to describe future, you know, kind of business outcomes of that sort. But what I would say is that, you know, box aside, I do think that it becomes very, very hard for some of these larger technology companies to enter categories where, you know,

even they have customers that are saying, hey, we really need you to support us in this particular space. And that company is looking out at the market and they might have this really difficult choice of, are they even able to buy something or? And then conversely, if they go and compete with one of the independent companies in the market, is it going to be considered, oh, well, now you're just building a copycat feature. And so you kind of, you almost impair the sort of ability for the natural competitive forces to play out. the industry. And it was interesting because, because I, you know, the, I think there's a lot of problems with Facebook, to be clear, especially in the state of social media, online harassment,

the, you know, how Trump uses these platforms. So, so I am not a, I'm definitely not a Facebook apologist. However, it was interesting in the congressional hearings. You know, they read out some of the either emails or text messages from, from, you know, Zuck talking about the Instagram acquisition. And sort of there's this innuendo, which is that we're either going to have to compete with you or buy you. And the government sort of saw that as a threat of like it's extortion, which is like you either sell us this product or or we have to go compete with you. And the interesting thing, though, is that, you know, despite what Zuck texted, you know, Cisterom, the reality was that that is actually his only option, right? He either, if photos are leaving the

Facebook platform and he needs to make sure that they are a great photo sharing tool, they're going to have to be competitive. And all he was kind of giving Kevin the choice of is that like, we're going to have to compete. And that has certain, you know, implications for your business. You should know about those. Or we're happy to try and figure out how to strike a deal. And again, you could read that as extortion of having to acquire business, but I don't really know any other practical way for that conversation to play out because the only alternative is that he doesn't say that to Kevin, they launch an Instagram competitor. Kevin then thinks that, okay well you just copied me and and like that's like that's just also you know it's not clear

how that one is supposed to end up so so I think I just think that that you know some of these things they end up you know feeling like like okay we've got to go chase the the most aggressive solution possible but it's really really important that you think through what are the possible implications downstream if you over rotate toward regulation in some of these categories and I don't think that that anybody would say what we want the technology industry to look like is the airline industry or the three or four big telecom giants that we have in the country. And that is the risk of overregulation as you get to that point. And so I think we have to balance, you know, the very particular points of regulation that matter. So when customers

have their data in these platforms, do they have the ability to get the data out of these platforms, is their privacy able to be controlled in a way that keeps them safe and protected? Are they able to, you know, have very kind of clear choice when, when they don't want to use one of the defaulted products of one of these vendors that kind of comes for free in one of their offerings. Like, you have to be, like, that's sort of the type of regulation we should be looking at, not generic sort of banning M&A or breaking up some of these technology companies. Yeah. No, it's a fascinating perspective. Okay, we're going to read your tweets when we come back from the break. And then we're going to talk a little bit about the future of work. So,

thanks everyone for listening up until this point. Stay with us. We'll be right back. And we're back here with Box CEO, Aaron Levy. And Aaron, it's time to read some of your tweets. It's what I do all day long. Read your tweets and try to think, hey, what's he saying here? Because I feel like you have no problem calling bullshit on the tech industry. And probably it's critics. So I picked out a few that I thought we could just read out quickly.

And maybe you can answer with your like expanding on them. This could be very dangerous, by the way. I have no idea where this is going. Oh, that's why I decided to do it. I'll give you a minute each to respond on each one of these. Okay, so the first one, the conventional wisdom on Apple for the past decade is that they needed to enter a completely new market to grow. As the world's first $2 trillion company, it turns out continuing to build better and better products and services works just fine. No, I mean, this one is, you know, if you remember the past kind of 10 years or so, there was always this commentary of, you know, Apple has to get into cars.

They have to buy Tesla. They have to buy Disney. They have to buy Time Warner. or these are the only ways that they're going to be able to continue to grow. And I think what Apple has proven out is actually like continue to build amazing products, build ecosystems around those products, whether those are in payments or media or, you know, new, just underlying features in the OS. And they've been able to prove out that there's a very, very large scale, in fact,

the largest company in the world, viable business model in just continuing to hone, continue to optimize, build around adjacencies without having to do with a lot of the analysts were thinking they had to do, which is you have to enter $100 billion market categories if you're going to want to continue to scale and survive. Yeah, and we'll see what happens with that market cap, but it's it's impressive and definitely has proven me wrong, at least in the short term. Okay, so the teens on TikTok have no idea that they found themselves smack in the middle of a multi-decade long battle for the future of database architectures. I love this. Well, this one was very esoteric. So I probably shouldn't have even gotten this one out there. But no, this is great.

It just gave me good fodder for the podcast. Oh, great. Yeah, go ahead. Well, this is when it was rumored that Oracle was also looking at TikTok. And there's just a, again, a little bit of an esoteric point of Oracle and Microsoft for about 25 plus years, actually probably longer, maybe 30 years have been battling in the database world and an infrastructure in general. And so it's interesting at this point. I mean, it's beyond interesting. It's actually just like absurd that the two primary bidders of TikTok, at least, you know, that are in the news, our enterprise software companies by and large.

And so that's just a very confusing mashup to me. Yeah. Have you guys looked into buying TikTok? Absolutely. So, and then we, we ended, we ended looking at it about three seconds later. Okay, all right. This is a scoop, by the way. All right.

We'll make sure to make it the headline. Okay, here we go. You know the pandemic is deeply affecting you when you drive by a golf course and think, maybe that could be fun. Well, I don't want to offend any golfers, but I've, I've generally, I've generally felt that's about the most boring sport on the planet. And so somehow last week I was just driving around and actually was like, wow, like imagine being outside for a couple hours and just like hitting a ball.

That sounds actually kind of enjoyable. And then that was a very fleeting thought, much like the TikTok acquisition. And I moved on with my life. Okay. So we'll have Box CEO considers buying TikTok also playing. It'll be a good headline. Okay. And this was about Facebook reels.

You have to hand it to Facebook. They sure do know how to compete when it matters most. Yeah, I think, and this kind of goes back to the prior point, which is, which is, you know, Facebook. Facebook is a company where, you know, it's interesting in the tech industry for decades now, we have always talked about this idea of the innovator's dilemma. And the innovator's dilemma is really simple, which is as you get bigger as a company, you begin to sort of lose you begin to overbuild your product and over serve your customers, which means that then some other competitor can come in and do something different or new or fresh

and then go and disrupt you. And it's interesting because for now decades, we've talked about the idea of like, why is it that these incumbents continue to fail at the individual's dilemma? Like it's an obvious problem. It's a known thing. Like, why does Blockbuster get disrupted by Netflix? Why does Walmart get disrupted by Amazon? And so you're finally seeing a.

crop of technology companies between Google, Facebook, Amazon, and others that actually have this idea built into the DNA of the organization. And they do not want to lose their position. And they know exactly how to lose their position because they themselves got into their leading position because they were disruptive. And so somebody like Zuck doesn't want to let that happen to Facebook. And so it's when they really understand that there's an existential threat to their product or a major market opportunity that they have to respond to, i.e. the banning of TikTok as an example, they move very quickly and very swiftly. And I think as an entrepreneur, you kind of look at that and you have a lot of respect for the organization's ability to respond to those moments

and then be able to remain successful and very competitive. Totally. Facebook's longevity is like one of the most befuddling things to me as a reporter covering the tech giants because they are in the most fickle of all industries, which is social media. Like you look a couple of years ago, TikTok was the big thing. Not TikTok. Well, HQ trivia, right? Everyone was saying HQ trivia is the future of everything and now it's gone and happening to blink and I. Okay, one last tweet. And then we're going to have like a minute for future of work, but I'm excited to ask a question about that. Okay, here it is. I have yet to run into a business strategy problem that can't be solved by a pyramid shape or a flyway. I mean, this one is, uh, uh, these are, I just,

I just, I just want to apologize on behalf of all listeners about the tweet, about which tweets you've chosen. Um, uh, so, this is a, yeah, it's a fun selection. I just happened to be leaving a Zoom corporate strategy review call and where basically the solution to the strategy was we just drew out a pyramid and then that kind of clarified our business problem to everybody on the call. And then since then I found myself putting everything into a pyramid shape strategically and it's actually solved so many of our internal problems. is amazing. This is great. Okay, so things, all the problems at Boxer are on their way to being tough not like there are many, but once you deploy the pyramid strategy, I think you're all you need is, all you need is a pyramid. All you need is a pyramid or a flywheel. But the best part is we can put the flywheel diagram into a pyramid and then you're really cooking with Greece.

Actually, if you have pyramids that are components of the flywheel, that's even better. I would actually recommend that one. Yeah. Okay, we have like two minutes left. I feel bad. I've left like the future of work stuff for the end. But I'm just going to ask you, I think, what the most important question is, which is you're a pretty hands-on CEO. I know you like to walk around the office and spend time with your employees. Now that you're so distant from everyone, how can you keep your leadership style in play and how do you keep morale up in the company? Yeah, I think moving to completely virtual and remote has been a huge adjustment for so many of our employees and me especially because I do like to kind of walk around and get a sense

of what's going on in the organization, how people are doing, what they're working on all of that. So you've had to move that to virtual. And obviously, you can't fully, you know, kind of replicate a lot of that type of interaction style. I think the part that I've found to be compelling about virtual and remote is the fact that you can actually bring together disparate parts of the business in a much more seamless and interactive way. And so for the while there have been trade-offs of the ability to get everybody together in person. We've been able to actually be able to pull together people from across the business that otherwise would not have come together.

And so we've got many teams and many projects internally where you have things like 100 people in a Slack channel all working on a project that normally you would have maybe only had five or ten people on that project and they would be stuck in a conference room and it would be the exact same five or ten people looking at the exact same problem from the same angle and now you've all of a sudden blown that out and more people can participate and begin to work on that that initiative. And so there's a lot of things about going virtual, not necessarily remote but virtual that I think are actually beneficial to collaboration and productivity and innovation. It would be great if you could experience this out of more voluntarily as opposed

to out of a pandemic. But it has been meaningful in terms of how we work and how we operate at Box. Aaron Levy, thank you so much for joining us today. This was a great conversation. Really appreciate you coming on the podcast. I know it's a risk. It's like the beginning of this podcast. And it's just great speaking with you.

And I hope you'll come back again. Thanks, Alex. Thanks, everybody for listening. Please rate the podcast if you can and subscribe to it, share it with a friend. And we will see you next week. Thank you. Thank you. You know,

I don't know.