Pivot - DoorDash and Airbnb IPOs, WarnerMedia streaming updates, and Casey Newton on Substack

Episode Date: December 8, 2020

Kara and Scott talk about Airbnb and DoorDash's IPOs expected this week. They also discuss Warner Media potentially launching more streaming services in 2021. In Friend of Pivot we hear from Casey Newton about his jump to Substack and his new newsletter. Send us your Listener Mail questions through our site, nymag.com/pivot and use Yappa to leave a video or audio message. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for Pivot comes from Virgin Atlantic. Too many of us are so focused on getting to our destination that we forgot to embrace the journey. Well, when you fly Virgin Atlantic, that memorable trip begins right from the moment you check in. On board, you'll find everything you need to relax, recharge, or carry on working. Buy flat, private suites, fast Wi-Fi,

hours of entertainment, delicious dining, and warm, welcoming service that's designed around you. Check out virginatlantic.com for your next trip to London and beyond and see for yourself how traveling for business can always be a pleasure. Hi, everyone. Get started at HubSp hell. It's lovely. Carousel and hell. Look at my plants. I've got a succulent there. I got some greenery. That's very nice. I didn't put any pineapple, but I have a pineapple rug. In any case, I'm so sick of being home, Scott. I can't even tell you. What is going on? There's so much going on. We have a correction. I have a correction. Go ahead. Go ahead. So on last week's show, you correctly identified the CEO of Wondery as Hernan Lopez, which is correct. Yes, I am correct a lot of the time. And then I said, because I had read

an excerpt from his very thoughtful book that morning and his name was on my brain, I said that, that morning and his name was on my brain, I said that, no, it was Hamantaneha. Hernan Lopez is the CEO of Wondery. Hamantaneha is this really thoughtful and hugely successful venture capitalist, also has a thoughtful book on healthcare called Unhealthcare. So, I want to apologize to both for getting their names wrong, but there is a silver lining here. I don't know what it is. I should just get out right now. Go ahead. Here comes the other mistake.

Here comes the other mistake. So word is that Hernan's deal flow of SaaS-based healthcare companies has skyrocketed, and Hamant has been offered the rights to several serial podcast crime dramas. Oh, my God. See what I did there? No, I do. This is an opportunity for them to reinvent their lives. Oh, my God. See what I did there? No, I do. This is an opportunity for them to reinvent their lives. What is my name?

That's what I need to know. Do you know my name at all? Carol Channing. Carol Channing. You know, one time, let me just tell you very briefly, at an All Things Decoms, we were making millions of dollars for Dow Jones. She called me Carrie Fisher, the publisher of Dow Jones.

What's wrong with that? Carrie Fisher. She introduced me as Carrie Fisher. She's talented and, you know. I understand it, but I felt like I, so I came on with C. Joe nuts on the side of my head. I look like that right now, Carrie Fisher, but nonetheless, I'm just saying. I was the host of the Dow Jones show. I want to do some research into this because there is something about getting older and being a narcissist and I'm both those things where you just, I will be in a room of friends and I'll look around and think, if someone forced me to say all their names right now, I couldn't. I mean, I just, that part of your brain just gets switched off.

Hey, you. Hey, buddy. Hey, buddy. How you doing? Yes, it's true. Hey, boss. Hey, brother. Yeah, that's bro, bro, bro.

Speaking of, there's so many new things we have to talk about really quickly. There's a lot going on. And we have so much to do. Obviously, there was some really. Oh, wait. Big news. I'm sorry. I didn't have to. All right. Okay. Go ahead. My least favorite person in the world and my favorite person in the world have COVID-19. Who? Rudy Giuliani. Rudy Giuliani. Okay. That's easy one. My least favorite person in the world. I couldn't believe he avoided it. I was like, what is this vampire doing not to get it? And who is my favorite person in the world? Also announced this person has it. Who? I don't know.

Oh, come on. Stephanie Ruhl. Oh, Stephanie Ruhl. Yes, Stephanie Ruhl got it. Yes, I know. That means everybody has it. Because if there are two people that could be less like each other, it's those two. Yeah, but she's sort of in Trumpistan where she's staying.

So I can see how she got it. There were a lot of people not wearing masks in her neighborhood, she was telling me. Like there was a lot of like COVID denial around where she's locating herself. Yeah. Anyways, the good news is supposedly Rudy Giuliani was airlifted to Walter Reed and Son's piano repair. And we're hoping— We don't wish ill, Rudy, but honestly, you're such a super-spirited— He tried to get a woman to take off her mask during the hearing, and he had COVID, full-blown COVID.

It was ridiculous. Now, we're wishing him a speedy and total landscaping. Yeah. Right, right. Come on, that's good. By the way, that's the genius of Zach Bornstein and Best Called, two Twitter accounts that I constantly steal their humor. I'm going to try to bring this down a little bit. Did you read the two pieces on Tony Hsieh?

One was in Forbes, one was in the Wall Street Journal. I'm curious to get your take on that. I've thought a lot about that. The facilitation of billionaires by sycophants is not a small thing. Like, it just depends on who you are. I mean, that's one of the reasons. I used to know a lot of them quite well, and I just can't stand standing around. They have so many sycophants around them.

It's really kind of depressing. And when you push back, they're confused and surprised that you do because they're so used to yes. Tony is such a gentle soul. And so it's such a searcher, you know, for someone who was delivering happiness. Actually, he was seeking happiness because he had a sadness to him. And that's why he, you know, he wasn't, I would, when he did that book, I was like, you're not the happiest person. I know you seem rather troubled. You know what I mean? Like in terms of looking for happiness, he was always sort of searching for the next thing.

And so I think, you know, the combination of, of COVID and isolation, he was somebody who didn't like isolation. Um, he had people around him all the time, like all the time. I think it must've been a whammy. And then, you know, the drug use, which he'd already, you know, he drank quite a bit. Um, and, and so I think it all, it all added up and the, and the, the not being able to reach him, his friends were not able to reach him was really critical in terms of bringing him down. And it looked like he was being his, he was with his family in new London. And so I think they were

moving him to some sort of facility to get off of all this stuff. And that's when this happened. I think it looks like they were making moves to remove him from Park City where he was and he paid people to be there. The whole thing, not a surprise at all, unfortunately, but so sad that he couldn't make it out and get to some recovery place where he could have healed himself. some recovery place where he could have healed himself. Yeah, I've been thinking a lot about this. I know a lot of men in that sort of cohort,

and that is people who are very wealthy and to a certain extent suffer from a bit of a Peter Pan complex, and that is if you recognize success at a very young age, especially as a male, you're able to outsource a lot of the more substantive, meaningful parts of your life. You can have, I'm not saying they're fake friends, but you attract a lot of what feel like meaningful relationships. Men like drugs.

Well, I think they're sycophants. You'd have to see them. Well, I think it's probably a continuum. Well, they get paid. Everyone around you is paid. That was the one quote that Jewel had, which was, if everyone around you is getting paid, something is wrong, you know? Yeah, but there's some people—well, anyways, Jewel, case in point, he did have some very genuine, real friends. at adolescence around drugs, sex, experiences, and not feel the temptation or not feel the urge to,

at some point, for lack of a better term, settle down and develop more substantive relationships, specifically a family. And I think you run the risk of waking up at a later stage in life and realizing you're kind of alone. And it's very tempting when you, and I'm not comparing myself to Tony Hsieh, but I had a 10-year period after I moved from San Francisco to New York where I was able to, I had some money, I was single living in New York, and the world was sort of optimized for me to stay that way. So what got you out? I fell in love and had a son. And also when my mom died, I realized that if you don't establish those sort of substantive relationships, you can have, you know, I've been watching The Crown. You can move into Buckingham Palace. You can surround yourself with beauty, but it can still be very depressing. And I think he's a cautionary tale to young and older successful men that you can't outsource everything.

And at the end of the day, your ballast for happiness really is deep, meaningful relationships and specifically family. I have found, and I would not have said this 10 years ago. He had some very significant relationships too, though. I think that his COVID then got him more and more isolated. He did have a lot of friendships. He was not, you know, like a lot of people in a lot of ways when they're surrounded by sick events, I'm like, good, they're assholes anyway. Like, what the hell?

This guy had some significant friendships, and I think he managed that COVID allowed him to isolate himself and then got taken advantage. I don't blame these people because this is Tony's journey, right? He makes his own decisions. But I do think when people are licking you up and down all day, it has an effect that you have to, you know. Well, let me ask you this, though.

Let me ask you this. And I am not a guy that says you have to be married to be happy. Do you think if you had a wife and three kids, there might have been other gating factors? I think a lot of his friends moved that way. They had sort of a party-hardy world, and then a lot of them moved on, and he didn't. He didn't. Well, that's my point. Most of us do move on at some point. I don't't know i don't know if he would have moved on i think he was just

one of those seeker searcher type of personalities with lots of money and so um i'm thinking about writing about it because it is it is not uncommon it's just some of them can resist it but even you know and then later some of them then have a midlife crisis because that's classic right like oh i know about it trust me i know about dozen who did the baby thing and then with their first wives and now they're on their second wives. I should not zip myself out of this situation because that's what I did. You're not having the mother of all midlife crises. You're having the father of all midlife crises. But I think it was just – it was so sad.

I'm trying to figure out what to say about it that was unique to him, but there was something about him that was broken a little bit, but not. You know what I mean? I think a lot of very creative people are broken a little bit. I don't see how anyone, if you read like the shit that was going down toward the end, I don't think there's any way you can say there wasn't a piece of him that was very broken. Yeah, but he used it to his advantage before, and then when things got hard, it was the brokenness won out. I mean, seeking and his creativity were related to his seeking and questioning. I think it's much more basic than that.

I think every study on happiness all comes down to one thing. The key to happiness, the key to emotional health is deep, meaningful relationships. And my sense is his lifestyle resulted in a series of broad, but not that deep and not that meaningful relationships. Yeah. Restlessness is a disease. I have relatives who are restless. You know what I mean? But it's interesting because I do think the last part of it is when the Silicon Valley is particularly because these people are so wealthy, do let them get the act wacky when it's just weird. I remember.

That's just true of rich men in general. Yeah, but I'm not going to say who it was, but someone was very clearly distressed. And walking around one of my conferences with his shoes off in a circle, it was crazy. And I was like, that's fucking nuts. And I was like, oh, it's just him. I'm like, no, that's nuts. And then proceeded to do a bunch of things at the conference that were crazy. And everyone was like, oh, it's just him.

I'm like, is it? Because it seems troubling to me. Like I was the only person going, okay, but that seems like he needs some mental health time with a professional. So anyway, it's really hard to control a billionaire is what it is. All right. Last one little thing. President Trump is speaking of sycophants and suck-ups. He's building a grand finale exit from the White House. Apparently, the plan would be a departure on Marine One and final

Air Force One flight to Florida where he'd host a political rally during Joe Biden's inauguration, where he's apparently going to announce his 2024 fund. Just what a frigging horse's ass this guy is. First of all, don't give him our taxpayer money to do that. Like, drop him off, like, somewhere before he gets to where he's going so he can hire his own damn plane. Secondly, people are dying and need intervention right now on lots of things that we're not going to get the vaccine until a while. It's just like, I just can't even believe this is what he's spending his friggin' time. I guess I can. This is just, ugh, God. God. Yeah, I'm just, you know what he's spending his frigging time. I guess I can. This is just, ugh, God. God.

Yeah, I'm just, you know, it's like this notion. It's shocking but not surprising. And I just hope young people are registering that democracy isn't something we should take for granted, that the peaceful transfer of power isn't something we should take for granted, that people and men should have a code around how they behave. Behavior, yeah. Did you read the note that Bush left for Clinton after he lost? Lovely, lovely. I mean, it was just like. Well, he knew how to write thank you notes, right?

He was a man who wrote thank you notes for a living. But it was very heartfelt. I mean, that couldn't have been easy to do, right? I mean, let's be clear. Bill Clinton didn't win that election. Ross Perot won it for him. And George Bush couldn't have been the elder. He couldn't have been more of a statesman.

Honestly, this guy. Like, drop him off in, like, Sarasota or wherever the hell down there is hardest to get to, wherever he wants to go, and let him drive home, drive himself home. It's just, like, the money he spends on this endless fucking bullshit is crazy. Like, I just was, I just was like, yeah, we're in agreement. We're in agreement. All right. We're going to get onto a big story. Speaking of which, let's talk IPOs.

Airbnb plans to boost the proposed price range, which is great for its initial public offering. I think they should be doing that. The company is expected to go public this Thursday. The range would now be between $56 and $60 a share, up from $44 and $50. You were right, Mr. Galloway. The range would give the home rental company a valuation of as much as $42

billion. Meanwhile, DoorDash is expected to go public the day before on Wednesday. The Wall Street Journal is reporting that the company plans to price its shares at the high end or above its range of $90 to $95 a share. That would give the delivery company a valuation of $36 billion. I don't think it's comparable to Airbnb, but it's close. That's a close valuation. So far this year, more than $140 billion has been raised in initial public offerings on U.S. exchanges. That exceeds the previous year record high in 1999. There's a

ton, like a firm, a whole bunch of them. So what do you think about the IPO situation? And they're trying to get the most money because there was that big push in Silicon Valley to get more money and not let these pops happen. They're trying to prevent a pop, right? Yeah. So that's the first obvious thing is that their current shareholders have said, why are we deluding ourselves just for a branding event and giving a bunch of money to the clients of Morgan Stanley and Goldman Sachs with kind of an unearned pop, right? Right.

And leaving money on the table. So they're both raising the ranges. They will both absolutely, in my viewpoint, even with these increased ranges, have very successful one-day gains. These companies are both seen as disruptors. There is a contrast between them now. And tomorrow night, I'm teaching my last of 12 brand strategy classes for my NYU Stern class. And I think there's a lesson here in why I like Airbnb more over the long term than DoorDash. And that is, I think you have to look at every

company and every strategy and every capital allocation decision through the lens of three hurdles. First, it's differentiated. The second is relevant. And finally, it's sustainable. So, differentiated. Do you truly offer a unique product where you could say, this is different than anything else? That's brand. When we say brand, what we really mean is different, right? Is this business podcast truly different from the other 700,000 podcasts? Okay, we clear that hurdle. Let's talk about DoorDash. DoorDash, first off, super impressive.

It's up 200% on the year. Its revenues are up, tripled. Its losses have declined dramatically. It is an impressive company. Obviously, food delivery has not only gone through a cyclical sugar high, but you got to think structurally, more restaurants are going to be delivering a lot more food. But is it differentiated? And people are used to delivery now, as opposed to just New York and the big cities. New consumer behavior, a lot of wind in its sails.

Across the country. But let's look at differentiated for both of them. So DoorDash has Grubhub, and it also has Uber. I would argue that those three are not, the moment one is charging a dollar more or a dollar less, or one restaurant picks one over the other, I think there are substitutes here. I don't think that it's highly differentiated. Whereas, in my opinion, Airbnb is the most differentiated travel brand in the history of hospitality already. And nobody says, everyone says, well, no, booking.com. No one says, I got a booking.com. I mean, it's just, it's singular in terms of its user interface, its brand, its penetration.

And if you say, well, who competes against Airbnb? A bunch of smart people will go, well, really, it's like, you know, it's like this company or this company. No, it's not. It's singular. So Airbnb wins on differentiation. Relevance. They're both highly relevant, right? They're both food delivery is increasingly relevant.

Travel and renting apartments in the share economy is also increasingly relevant. Sustainability, in my view, is really where Airbnb rocks here. And that is they have kind of global supply and global demand. If you and I wanted to start a food delivery company with 50 million bucks, we could do it. We could get the restaurants, we could just subsidize, pay the restaurants at zero commission, and we could get raised enough demand and we could get drivers and we could start Karen Scott's or better yet, Hernan Lopez food Delivery. Stay away from those guys. Stay away from names.

Anyways, we could start it with 50 million bucks. We could not start an apartment sharing because you need global demand because 95% of the people. So you have, I think, a superior differentiated product with Airbnb and you have a more sustainable one. So they'll both get a pop,

but I think over the long term- Can I add one more too? When this pandemic is over, people may not go back to delivery where it has now been introduced, even though you'll get a bigger audience. Great point. Now lots of people are going to, are going to be using delivery. So they're going to get more customers than before. But I don't, I think. It'll come down. By the way, I live in a city. If I never get another delivery again, I'm going to be happy after, right? I'm going to have a year of not having deliveries and doing only going out.

The way I would describe it, you're exactly right. And that is DoorDash is going public because of COVID-19. Airbnb is going public despite COVID-19. And on the other side for Airbnb, it's just as good. Which would you rather own when the vaccine comes, right? Right. So this is really exciting. I think it's – and by the way, I think they're both – even with the repricing, I think you're going to see somewhere between a 30% and 60% pop on the opening trade.

Yeah. Because these companies are both iconic, disruptive companies, and so it's all become about the narrative. The company, the IPO, no one's talking about. Which one? I think will be probably the best-performing IPO the next six months. Which is? Roblox, social gaming. Roblox. So talk about that because there's Rob about that. I think we'll be probably the best performing IPO the next six months. Which is? Roblox, social gaming. Roblox.

So talk about that because there's Roblox, there's Affirm, there's a bunch of people. Why still Roblox, may I ask? If you think about. That's 2020 probably, right? Or no, it might be the end of December. No, it's coming up in December. It's in a couple of weeks. I want to learn more about it because gaming is one of those things where, you know, these

moments of engagement where you're trying to find things to do with your kid. I'm trying to play Fortnite with my 10-year-old because he's obsessed with it. I think it's hard for you, isn't it? It is one of those things where I, you know, these moments of engagement where you're trying to find things to do with your kid. I'm trying to play Fortnite with my 10-year-old because he's obsessed with it. I think it's hard for you, isn't it? It is difficult for me. I think Hernan Lopez is the CEO of that company. All right. Enough. Okay. So, anyways, but if you think about, I think the biggest trend in business that's going to reallocate trillions of dollars in stakeholder value is what I'm calling the great dispersion. And if you think about content and the creativity economy and the ability to take creativity and disperse it to the end users without the traditional gatekeepers of movie theaters, agents, or platforms, or handsets, or Sony, or game makers, or game makers. Roblox basically has created a platform that says, if you come up with a cute thing called, I think it's called Piggy or something, and it takes off, we'll give you,

and it's free and people buy additional items in the game, and we'll give you a percentage of it. And it just strikes me, they have created this platform that's gotten to a certain scale. Yeah, platform is, I mean, compared to Zynga, which went like, I don't even know what happened. That's a really good... But here's the thing. The other phenomena is CNBC and all of us and investors and media

tend to overcover and undercover based on the shit they use. Everybody uses DoorDash, Uber, and Google, but most of us aren't on Roblox. Our kids are. Or Affirm, another one, by Max of us aren't on Roblox. Our kids are. Or Affirm, another one by Max Levchin. He started PayPal, and this is a different way to do credit. There's one in Europe that's another, I think, forget the name. You want to talk about a monster. Affirm's going to go public on the heels. It's going to draft

off of Afterpay, which has a $27 billion market capitalization. I just interviewed- What's the one in Europe? There's one in Sweden. Well, this one's an Australian one. It's Nick Molnar, who's a really impressive 30 years old. Jesus Christ, can you get over that kid out of Australia? I had him on my Prop G podcast. But they have a $27 billion market capitalization. And it's the idea of moving from a credit economy to a debit economy, which I didn't understand until Nick explained it to me.

economy, to a debit economy, which I didn't understand until Nick explained it to me. But a lot of young people like payments, but they don't want to go on credit and enter into this downward cycle where the partner they're dealing with is actively encouraging them to have more and more debt. This is, all right, you can pay for it over four or six payments, but if you don't make those payments, we're shutting it off. You need to pay up. And it's an interesting thought. It's an interesting pivot to a debit economy versus a credit economy, which I kind of like. There's a lot of these companies. I think a firm, it's interesting because Max did a whole bunch of stuff afterwards. He did a bunch of shitty companies, really. He and I joke about it, but he's done a couple of really interesting ones since PayPal. This is Max Levchin,

who's behind a firm. So yeah, there's a lot of really promising and interesting companies coming that are actually substantive companies. The one I would worry the most about would be DoorDash, I'd have to say. I have this feeling people are just going to be not, it'll drop off the face of the earth. Yeah, the sugar high goes away. And at any point, if you're on the demand side or the supply side, is there any real moats? If you're a restaurant or if you're a consumer, you want to get rid of that a consumer, are the switching costs really that great for you? Yeah, you can go to any of them and you'll strike the best deal. Anyway. The other thing is, and I do think DoorDash is part of the menace economy, where its business

model is largely driven by the exploitation and arbitrage of human capital that are trying to circumvent minimum wage laws. Is that your next book, The Menace Economy? No, my next, I'm glad you asked. My next book is going to be called The Algebra of Wealth, Strategies for Economic and Personal Security. Why don't you do another math thing? It was the algebra of happiness. Why don't you make it the calculus of-

The geometry? The geometry. There you go. There you go. Other math terms. All right. So just so you know, everybody, we're going to go to the next story. But the last time the market hit a record, I was during the dot-com bubble in the late 1990s. So let's put that into context.

Oh, there's canaries everywhere. You want to talk about canaries? Talk about SPACs. Oh, my gosh. That shit's crazy. I decided to go public as a SPAC. I just got caught in some of my hours. Well, you know who just sold all the rights?

Another interesting story we didn't talk about. Bob Dylan. Bob Dylan. Bob Dylan just sold his entire catalog. Yeah. That is really interesting, isn't it? Yeah, we'll get to that in a second. All right, Scott, let's go on a quick break.

When we come back, we'll be talking streaming wars and bring on friend of Pivot, Casey Newton, to talk about Substack, which is another kind of interesting trend happening in media. Fox Creative. This is advertiser content from Zelle. When you picture an online scammer, what do you see? For the longest time, we have these images of somebody sitting crouched over their computer with a hoodie on, just kind of typing away in the middle of the night. And honestly, that's not what it is anymore. That's Ian Mitchell, a banker turned fraud fighter. These days, online scams look more like crime syndicates

than individual con artists. And they're making bank. Last year, scammers made off with more than $10 billion. It's mind-blowing to see the kind of infrastructure that's been built to facilitate scamming at scale. There are hundreds, if not thousands, of scam centers all around the world. These are very savvy business people. These are organized criminal rings.

And so once we understand the magnitude of this problem, we can protect people better. One challenge that fraud fighters like Ian face is that scam victims sometimes feel too ashamed to discuss what happened to them. But Ian says one of our best defenses is simple. We need to talk to each other. We need to have those awkward conversations around what do you do if you have text messages you don't recognize? What do you do if you start getting asked to send information that's more sensitive? What do you do if you start getting asked to send information that's more sensitive? Even my own father fell victim to a, thank goodness, a smaller dollar scam, but he fell victim.

And we have these conversations all the time. So we are all at risk and we all need to work together to protect each other. Learn more about how to protect yourself at vox.com slash zelle. And when using digital payment platforms, remember to only send money to people you know and trust. Do you feel like your leads never lead anywhere? And you're making content that no one sees, and it takes forever to build a campaign? Well, that's why we built HubSpot.

It's an AI-powered customer platform that builds campaigns for you, tells you which leads are worth knowing, and makes writing blogs, creating videos, and posting on social a breeze. So now, it's easier than ever to be a marketer. Get started at HubSpot.com slash marketers. Scott, we're back. Let's talk about streaming war updates. We predicted this. Reports that Gizmodo is saying that WarnerMedia is discussing launching CNN streaming service. We also talked about CNN being sold, of course, launching in 2021. WarnerMedia's other big streaming platform also throwing down the gauntlet. HBO Max will be home to Warner Brothers' most popular movies on day one, at least through, extends through 2021,

including major releases Dune, The Matrix 4, The Suicide Squad, Space Jam, and New Legacy. It's also making new stuff, like a new pre-Dragon episode for Game of Thrones and the new Gossip Girl reboot. So I wrote about that this week. I think a lot of people in Hollywood were pissed at me, apparently. Why sad? Why were they pissed? Because I'm wrong. Movie theaters are going to be great.

Just like you wish. Yeah. Literally. Someone was like, well, they really thought you were wrong. You know, you and I will saddle up and we'll take our hearse over to the AMC. No. I was like, AMC is worth – I could almost buy AMC at this point. Right.

So what do you think about CNN having its own streaming service? I would love that, actually. I would love to watch that. The whole world is going iOS, Android. Free Zakaria, Anderson Cooper, Christiane Amanpour are iOS. People would pay for that. And the thing that kills CNN,

two things kill CNN. What? Just absolutely kill it. What? The advertising, opioid-induced constipation, restless leg syndrome, and two, the clock.

And that is, they feel like they've got to have... Moon Cod. Have you watched Moon Cod? Well, they feel like they've got to have... Moon cod. Have you watched Moon cod? Well, they feel like they have to have 12 hours of content. And the reality is they have three to four hours of amazing content. And if they move to subscription, they hold on, they keep the CNN for the masses for a while. They monetize, they soak that thing. But slowly but surely, they put their best content behind a wall. And ultimately, the transition is such a good one here.

You get rid of the ad salespeople. I hate to say that. You get rid of all the shitty advertising. And the reality is CNN at three to four hours a day of content on demand is amazing. If I just had Brian Williams, I have to slog through a whole bunch. There's a lot of it. There's too much. It's not CNN.

The future CNN isn't about what it is. It's about what it is not. They need to seriously pare down. Take out all the crap, all the advertising. Bring the experts in. Bring actual reporters who are analyzing versus all these doughty funders. This is the biggest business story, I think, of the last 30 days. And if you look at it, so I've been thinking a lot about this.

If you look at Microsoft, Netflix, and Apple, and Microsoft and Netflix recurring revenue companies, Apple busting a move to recurring revenue going from 10% to 24%, they each traded approximately nine times revenues. AT&T trades, if you include its debt, it's the most indebted company in the world, it trades at two times revenues. Why?

Because they've lost the script. They've lost the narrative. Stocks are now a component more largely or more strongly a function of their narrative versus the actual numbers. And the narrative around AT&T is one thing. This acquisition didn't work. There's no synergy here. And by doing this, this is a bold move. They took the $30 million of the $180 million and said, we are going to go all in. We're going to do a baller move here. And we're going to sacrifice a billion dollars, a billion dollars a year in box-off revenue. But here's the thing. Right now, they're trading at 2x times revenues.

If they can get some of that 9x-like disruptor recurring revenue multiple, right, all they need to do, if they sign up another 2 million to 3 million subscribers, this is likely— Yes, at 8.6. It's really low. HBO Max has been really a disastrous rollout. And I think it's because they haven't gone for it. Like, I know it sounds crazy. 100%. They haven't crossed the Rubicon. And that is—but if they—and they will get this. I'm all of a sudden looking—I'm all of a sudden saying, and I love HBO, I'm like, do we have HBO Max? My kids are saying, do we have HBO Max? Yeah, so do mine. Because Wonder Woman 1984 is coming out on Christmas Day. Yeah.

This is a great movie. It's almost a no-lose movie. By the way, it's gotten great reviews from previews. It's supposed to be amazing. It's supposed to be amazing. People who've seen it are like gushing over it. Yeah, it's supposed to be amazing. You know, I think it's really true.

I just was thinking I paid last this weekend. There's a new lesbian movie out. You should see it with Kate Winslet and Sershi Ronan. I saw it on Cinemax. Oh, wait, that was something else. Never mind. No, it's called Ammonite and it's wonderful. What's it called? Ammonite. Watch it. It's about a bunch of lesbians wandering by the ocean in Britain, picking up fossils and making out quite a lot, I have to say. You'll like it. It was $19 and I paid for it. I had two people in my house who were watching it. What did you buy through? What charges are $19, and I paid for it. I had two people in my house who were watching it. What did you buy through it?

What charges are $19 to watch? It was like the Mulan thing. Eventually, it'll be free. I just wanted to see it. I wanted to see it early, which is interesting. But eventually, with Wonder Woman just being on HBO Max, I'd have to have HBO Max. I just have to have it. I have HBO, which I got.

That's my point. And that is, if you think about the most accretive actions in business over the last decade, we as business leaders, and I'm using the term we generously, are brought up and have incredible training and reflex memory around it. It's about top-line growth and bottom-line growth. It's about your revenue growth, and it's about your EBITDA growth, and then your gross margins and some other things. The most accretive actions in business history in terms of dollar ad haven't been about revenue growth. They've been about pivots in business model. Right, right.

It took Apple 42 years to get to a trillion. It took them five months to get to $2 trillion because they went from 9% to 24%. Yeah. Netflix has a $225 billion market cap. Let me, go ahead. Yes, yes, I get your point. Here's what's interesting, though.

So Disney does The Mandalorian, which is a thing that's their current, they take their Star Wars franchise and add to it. Yeah. HBO is going to do a Dragon's thing, a prequel or whatever about the dragons. Can't wait for that. I know, I can wait. And then they're going to do a spinoff of Gossip Girl. Now, over at Netflix, they're way ahead already.

They're already up to the next thing, which is making this amazing content like Queen's Gambit or the tiger person or whatever it is. And now their new thing that is like a Gossip Girl is called Bridgerton by Shonda Rhimes. Obviously, drag Shonda Rhimes over and offered her a ton of money and freedom. And so she's making this thing that looks fantastic. It has Julie Andrews in it. It is Gossip Girl, but it's more. It's like new stuff. And so I'm wondering if these guys can get into new stuff and not just like I don't mind them doing this stuff.

But it seems like they've got to. Are they creative enough the way, Netflix seems way ahead of them around the track three or four times. Industry is really interesting. The Outsider, the Stephen King. I mean, HBO is still, HBO still has the original DNA of being, in my opinion, the greatest collision of creativity and media in history. I'm very, I have a lot of experience with HBO. I think Netflix is doing a lot. Like, something has happened at Netflix where it moved up the creative level. But from AT&T's perspective, from a shareholder perspective, this is a no-lose situation because if it works and they can manage—

They're like geniuses. Everyone says, okay, they're losing a billion dollars in revenue. Yeah. That type of revenue is valued at two times revenues. That adds $2 billion in stakeholder value. Yeah. If all of a sudden—here is full stop what John Stanky should say in every earnings call.

Hi, my name is John Stanky. I'm CEO of the largest subscription company in the world. Full stop. I have more recurring revenue than any company in the world. Yeah. And take that multiple

from 2 to 2.2 to 2.8 to 3.2. And this is the baller move they needed. And by the way, if it doesn't work, if it doesn't work, they just spin HBO Max with more subscribers or they sell it to someone in the Gulf or some other company with cheap capital right now. They have lost the narrative. What do I say to these people who are... I really got whacked by all these. I was like, are you crazy? You're on the side of movie theaters, which were, by the way, were a shitty product for so long. Like bad theaters, too expensive, popcorn sucks, shitty way to get tickets. Like the whole experience is bad. It's like going to

the doctor's office. Like you want to back those people who have no creativity and just use like gangster tactics to keep stuff coming in. Well, it's very easy what you tell them. You tell them they should get together with all the commercial real estate owners who claim everybody wants to go back to their office and they should all take a cruise on denial, on denial. Get in a cruise on denial. Denial.

It's entrenched incumbents who make their living through the ecosystem of the media industrial complex are finding reasons why this is a bad idea. No, it's not. It's a baller fucking move. They have to renegotiate all their deals with stars because it was a lot based on box office, right? Like everything has to be redone. That's what someone told me. I'm like, so, your point being, you know, everyone had to stop using phone booths and desk phones. Like,

I don't care. Like, I don't care. Yeah. And there are real risks to this. The agencies, which are incredibly strong at managing human capital, are trying to figure out, do we have incentives around this now? Right. When COVID goes away, the theaters might have—you might see Revenge of the Empire or The Empire Strikes Back. You might find theaters do have a bit of a resurgence and go with the studios that have doubled down on their legacy partners. At the end of the day, this isn't accelerant. Movie theaters have sucked for 20 years. They have—think about the innovation that's taken place in your living room versus the theater. I said, what's the innovation?

They're like seats. I'm like, you's the innovation? They're like, seats. I'm like, you're kidding me. I was like, lay back seats. THX, 1988. That was the last big innovation. And then they were like, oh, poor people can't go to home theaters. No, no, no. Can't go to home.

Can't get big. I was like, screens cost have gone drastically in price. And those chairs are really inexpensive. You can wallpaper your house in TVs for less than it costs in paneling right now. And then movie tickets have gone up, like, amazingly. Like, what are you talking about? You think movie tickets? Anyway, so it was really—and also the popcorn sucks.

So, last question before we get to Casey. This is the biggest move. It is. So, just AT&T has consistently gone down. It's going to hit a new 52-week high in the next 12 months. This is a baller move. There's no downside here. Great move.

So movie releases, they say it's – oh, they're trying really hard, as I said in the column, to say it's just a one-year off. I was like, it's not. Well, this gives them an out. It's not. It gives them an out. But this is over. This is done. They should sell to movie theaters, and they should.

But movie theaters should improve. They should get better. They should do Alamo Drafthouse, that kind of stuff that's experiential, make it better, and not just sucky, shitty. I hate going to movies now, except if it's Alamo Drafthouse or something that's pleasant and it's an evening out. And even then, it's, like, expensive. But it's not a Whole Foods. It's going to, you know, Vons or, I don't know, Publix. And you just think, do I really need to keep doing this? Yeah. That's probably the wrong analogy.

But this is a fundamental change. And AT&T, kudos to them for this was a baller move. Yeah. I think it's exactly what Jason – I'm trying to get Jason Clarke. I'm interviewing him soon today. Yeah. And I'm going to try to get him to say, did you call the code red? Because he'll be like, oh, movie theater. You know, they're trying really nicely to be nice to movie theaters, but I want him to say, yes, I called the code red.

Remember, that's from A Few Good Men. Jack Nicholson yelling at Tom Cruise. You are ready for the truth, or you can't handle the truth. You can't handle the truth. Did you call the code red? You're damn sure I called the code red. I want him to do that. That's what I'm going for. He called the code red? You're damn sure I called the code red. I want him to do that. That's what I'm going for.

He called the code red. Anyway, we are fascinating people today, I have to say. But let's bring on an even more fascinating person, our friend of Pivot today, Casey Newton. Good hair. Good hair. The hair has fantastic hair, but he also is the editor of Platformer, a newsletter about tech and democracy. Before he was an established journalist at The Verge, but recently left to go to work for himself on Substack. Casey, welcome to Pivot.

Hello to the big dog and the jungle cat. It's lovely to see you. Lovely to see you. Come on. There you are in that lovely rental that you have there in San Francisco. That's right. My landlord is a real bear, but the place is nice. All right.

Here's the deal. You've been working at home for the COVID in a lovely place, I might add. But why did you do this? Explain Substack. There's so many journalists doing it now. It's crazy. It reminds me of what I did 10 years ago in that very cottage you're in, which is I did my business out of that cottage. But go ahead.

Yeah, I mean, I am so- Wait, were you guys married? What the fuck is going on here? He lives in my cottage, and that's where I started All Things D. He lives in your cottage? He does, in San Francisco, yes. Oh.

He rents it for me. I started All Things D in that cottage. That's so uncomfortable. That's literally the worst episode a big brother ever imagined. It would be a very fun episode. Let him talk. I'm sorry. Go ahead, Casey. What is Substack? What is Substack? Let's start there.

Explain for the people. Substack is a platform that lets readers support journalism directly. That's how I think about it. You know, look, we know that a giant subscription-based newsroom like the New York Times or the Washington Post can work. We know that a big scaled-up digital network like Vox can work. But at the same time, we've lost 10,000-plus journalism jobs in America alone this year. We need to find another path forward. And something that we're seeing across the internet is people are now willing to fund their favorite creators directly. You see it on YouTube.

You see it on Twitch. You see it on OnlyFans. All I'm doing is trying to take that model, apply it to journalism. We're seeing it on Patreon. Patreon was a real pioneer in that space. Cameo is doing great. So this is the journalism equivalent of that. I love writing about the tech industry and democracy. I want to do it forever. Substack is letting me create a more sustainable future. So explain the technicality of what you're doing. So here you are being a journalist. You're writing for The Verge. You got paid a salary.

And then you wrote a whole bunch of stories, some of which were fantastic. The content moderator story was really, it just like blew up that whole issue. Some of it. Some of it. All right. It was fantastic. Some of it. Anyway, great drills here.

This is what everybody did. You like worked your way up to get here from Arizona or wherever the hell you started. Yeah. So talk about what it took to do that and then explain the technicalities of it. I could describe it a lot of different ways, but one way to think about it is just Twitter happened. It used to be if one of my favorite journalists left a publication, it was like they died because I would visit that web, that publication's homepage every day. And then, you know, once the critic or whoever I read left, I just stopped reading them. Nowadays, I get my news from Twitter. And so if I go to a new publication, you're still following me. The link just goes to a different place. And so over 10 years,

I built up 100,000 Twitter followers. And if I have news to break, people click the link. They don't care where I work. They just want the news. So I was able to have a portable audience. And because my audience is portable now, it just gives me a lot more freedom and flexibility than journalists have ever had before. So what do you do? Walk through the economics. So what do you charge? How do people pay? How much does Substack get? Yeah. So the economics of it are super interesting. The way that it works is Substack takes a 10% cut in order to fund the content management system. The way that my business works is I write four newsletters a week. One of those is free to whoever wants to subscribe.

You go to platformer.news. You can get it for free. But if you want the other three updates that I'm sending throughout the week, you pay me either $10 a month or $100 a year. And that is a lot of money to some people, but many of my customers can't expense it. I've had corporations buy group subscriptions for their teams. And a question that I often get is, well, what about subscription fatigue? Are people fatigued? And if you're Quibi and you spend a billion dollars on content and you need 20 million people

to make your money back, then yeah, subscription fatigue is real because it's hard to compete with Netflix and Hulu. But if you're me and all I have to do is pay the rent in Kara Swisher's cottage, if I can find 3,000 people to pay me 100 bucks a year, I have one of the best jobs in journalism. So the economics for the individual creator are actually amazing.

Yeah, if they create really good content. I mean, like Ben Thompson did this for a while. There's a whole bunch of people who've done this. And in a lot of ways, we went to WordPress. I remember going deciding between journal, whatever, live journal. WordPress was the way we did it. And we, of course, had an advertising business when we should have had a subscription business, but people weren't ready to do it. And Jessica Lesson did it with the information. So what is it like? Were you scared? What was the... Oh, completely. I mean, I love my job at The Verge. I work with some of my best friends. I mean, I got paid a great salary. And so there was no pressing reason to do it. But then the pandemic happened. I was waking up every day in this cottage and writing a newsletter.

I knew that if I went independent, my day-to-day would look the same. Some aspects of the job would be harder. But all of a sudden, as an individual, I had an uncapped upside. I was at a point at Vox where if I wanted a raise, I was going to have to go do something crazy amazing to ever get a raise, again, of any significance. But by going to Substack, all of a sudden... Fucking bank off. That's how I feel. No, that's... That's how I feel.

That is no diss to Jay Bacow. Like, everyone at Box is always facing... Who do I have to blow around here to get healthcare? Who do I have to blow? Seriously. At the end of the day,

there is just a... I am not above that, Casey. I am not above that. Oh, trust me, I know. Just so you know. I've read the reviews of this podcast. Plus, he's cheap, too.

He'd do it for a very little... But look, I mean... Sorry. Set aside any individual media company, there's just always going to be a limit on how much they're going to want to pay you, right? Like who is worth $300,000 to a media company? Very, very few people. But if 3,000 will pay me a hundred bucks,

then I'm worth 300K. So I just thought, can I make a bet on myself that over like a 10 year period, I could attract 3,000 subscribers and two months into it, I'm a bet on myself that over like a 10-year period, I could attract 3,000 subscribers? And two months into it, I'm already well on my way. So this model can't work for everybody, but I do think it can be an alternative and a complement to existing systems. What do you do about things like the companies? Were they helpful, like healthcare,

libel insurance, things like that? Yeah. So great question. And those are two places where Substack is helping out. And this is why, to me, they're worth the 10% that I'm paying them. On the healthcare front, they helped me figure that out. They work with another company, which is called Savvy. And when I started on Substack, they set me up with Savvy. I filled out some forms online. Substack is also giving me a small healthcare subsidy, at least for the first year. But I have healthcare now, that part of my life is taken care of.

It really hasn't been a big deal. On the legal front, they have a legal defender program. And what they've said is that if I get sued by a litigious billionaire, they will step in and protect me up to a million dollars. Now, candidly, that is more of a gentleman's agreement than a signed in stone type of deal. But it's in Substack's interest not to let their writers get sued into oblivion.

So those are, you know, two of the main reasons why people have been afraid to go independent in the past. And Substack is trying to make that easier. All right. So let me ask you a question. So why do you think so many are doing it? Now, there are, speaking of fatigue, you know, Eric Newcomer did. This is just in tech. There's a whole everyone, every five minutes, seems like someone starts a Substack. And a lot of them are not. Eric, you should use his, too. It is just in tech. Every five minutes, someone starts a Substack.

A lot of them are not. Eric, you should use his, too. It focuses on venture capital. He's amazing. He was an amazing reporter, and venture capital and I would pay for him. What happens when it gets so many of them? The ones on

Substack are all conservative, or the top ones, right? Have you broken the top 10 yet? No, I'm not in the top 10 yet. So it'd be great if your readers subscribe, again, at platformer.news. But look, your question is fair. I don't think that everyone is going to succeed here. The way that a lot of these platformers work is that the top creators wind up soaking up like 80% of the profits. And for everybody else, it's just kind of a little bonus revenue. But at the same time, we're at the very beginning of this. And again, I really think people should look at what is happening at some of the other consumer internet properties. OnlyFans is going absolutely bananas right now. That is going to be a unicorn in about 10 minutes. Look at how much

money people are making on Twitch, on YouTube, on Patreon. The next generation that is coming up is willing to pay for content. And no one of those person is going to have 10 subscriptions to creators that they want. But people forget how big the internet is. There are a lot of people who can go find their 3,000 people. And I think that's really exciting. Scott, he's so passionate now. Casey's so passionate. I love it. He's going to be like, oh, I have a job. It's awesome. It really is. Do you feel better? I feel great. I mean, look, I had a really great week last week. There's actually a story worth telling. So I had a scoop last week. I got an email in this case regarding Timnit Gebru,

this prominent AI researcher who got fired from Google. Google says she resigned. It seems pretty clear that she was pushed out. And I happened to get the email that she had sent to this internal listener before anyone else. The post on my own little tiny sub stack now has over 350,000 page views and 50 people signed up and become paid subscribers overnight just because they wanted to see what I was going to have to say about it in my edition. So the scoop I sent out to everyone for free, the analysis was something that people had to pay for and they did. Think about being a journalist, Kara. How amazing would it be if every time you scoop I sent out to everyone for free. The analysis was something that people had to pay for, and they did. Think about being a journalist, Kara. How amazing would it be if every time you had a scoop, you got a $5,000 raise? That's the world that I'm living in now. So it's a pretty exciting time to be a journalist. Yeah, it's like podcasting, Scott.

Early days, early days podcasting. You're the Joe Rogan of this, maybe. But we were just talking about the fact that it's giving creativity the opportunity to bypass the traditional gatekeepers. Like, I think about people don't – people didn't need Jeffrey Katzenberg to tell them what kind of creativity they wanted, right? And it didn't fail. Now there's the technology and the platforms and also a sub-stack 10% versus Apple at 30%. But this is ridiculously fucking hard. I mean, I put out one post a week, and it's a monkey on my back. Four posts a week? Oh, my gosh.

He was doing it anyway. Yeah, but this is what's going to happen. I mean, platforms are still really powerful. They have declined in power, but they'll be—I think you're exactly right. What it's basically doing is it's saying, all right, let's take the two or three best players in every newsroom and they get to go free agent and they get to make more money. 95%, I think of content creators, and I'm curious if you think this is true, Casey and Carrie, but in the field, are still better off at a platform because they need that halo and they need that distribution. Yeah.

Yeah. Although another way of thinking about it might be that maybe there winds up being like a life cycle of a content creator and early in your life cycle, you're hugely incentivized to become associated with a big think that audience is going to remain portable, right? Your Twitter followers are always going to belong to you. And so the people who excel in those, I think later in their careers will be able to step out and have more options. Yeah, I think it's probably true. Both things can be true at the same time. Although I do, when I look at some of the people now signing, I've seen a good dozen this past two weeks. I'm like, lazy, lazy, boring, boring. Like, you know what I mean? two weeks, I'm like, lazy, lazy, boring, boring.

You know what I mean? Lazy and boring is more the rule than the exception with a lot of people, except for people like you and others. And again, get back to the idea that who's popular on Substack right now are people who have a much more conservative, which makes sense. You know what I mean? Because look at someone like Dan Boing. He's not on Substack, is he? He's Boingo.

Dan Bongino is not on Substack. But others are. Others are there. Yeah, I mean. He He's Boingo. Dan Bongino is not on Substack. But others are. Others are there. Yeah, I mean. He just went by himself, Dan Bongino, right? Yeah, I mean, he has kind of a whole media empire.

And, you know, some of the top Substackers, I mean, I think you're probably talking about Glenn Greenwald, Matt Taibbi, Andrew Sullivan. You know, they do have some more conservative ideas.

I think they also have some pretty mainstream liberal ideas as well. Like, you know, they do have some more conservative ideas. I think they also have some pretty mainstream liberal ideas as well. Like, you know, I hope you're not implying that SubSac is becoming like the platform of the alt-right. No, I can see. You know what it is. It's simple. I see why it would work. The contrarians, I guess.

Yes, exactly. The gatekeepers, whether it's Time Warner or whether it's Spotify or whether it's name the biggest media companies in the world are largely populated. The decision makers are populated by wealthy, urban, college-educated people who skew liberal. And the reality is there was a huge white space around people wanting conservative content in this direct-to-consumer. It's happened in podcasting. The reality, I mean, we hate to admit this, but there is an enormous liberal bias, and you can't ignore the fact that the market is soaking up conservative content because it's not finding it to the traditional distribution channels filled by people who went to McGill or Northwestern School of Journalism and now live in New York. They're like, no, I want different types of content. I do think in areas like Casey's, specific areas, it's very helpful.

So how do you, say, compete with the information, which does a broad brush on lots of things? And she's, Jessica Lesson, pioneered the subscription part of it. Everyone sort of made fun of her for a while. And she's built a very big newsroom. You're just one guy. Do you see adding more? You have to go specific, right? You have to go really niche.

That's exactly it. I love the information. I think they've done incredible work. They break a lot of news about the beat that I cover, but they do that once a week, once every two weeks. If you want to know what happened today and you work at Facebook or Google or Twitter or Snap, you want one place where you can go and be confident that you know everything you need to sound smart when your CEO asks you what's going on the next day, right? So the opportunity is to go niche and it's to provide utility.

Like something that I get a little bit frustrated about is when you see who's at the top of this leaderboard. It often is people who are not doing a lot of original reporting, who are not really providing a lot of service to their readers. It's just, you know, it's punditry. And, you know, I do my share of that as well. But I think that the opportunity here is actually to reinvent trade publications and create very small, you know, not newsrooms, but maybe Scooby gangs of five or six people

who are all bringing in their own subscription revenue, but sharing some costs on the back end. And they can go really deep, really niche-y and create a lot of value for industries. It wasn't Axios kind of that, except an advertising base. I mean, it's interesting. There's all these different cuts at this stuff. And one of the things that I worry about, not just you, but everyone else, is like, you get sick, that's that, right? Yeah, I mean, sure. There are definitely some risks here. If I were incapacitated for months

at a time, that would be really difficult. You could definitely imagine ways that this thing could go badly, but I am really inspired by people like Ben Thompson, who's been doing this for something like seven years and has created an incredible business. He gives value. He doesn't pundit. He has insightful thoughts. I don't know if he does reporting as much. I got to be honest, I'm a little bit worried in that cottage. I see a lot of candles and a lot of whippets. Too soon? Too soon?

Too soon? Very soon. Don't. Too soon. Nice man. Don't. Too soon? No, too soon.

In any case. He's an innovator. Let's treat him differently. Anyways, go ahead. Scott. We can make fun of Princess Diana, but don't make fun of an innovator. You already made a mistake last week. He sold shoes over the internet. That means he's our Jesus Christ. He's our Jesus of Princess Diana, but don't make fun of an innovator. You already made a mistake last week. He's over the internet.

That means he's our Jesus Christ. He's our Jesus Christ. Oh, my God. Oh, my God. You know, we just apologized at the beginning of this for a mistake. You're going to be doing an apology a week. Another correction coming our way. Another apology.

You know what? Just knock it out of the park. Sorry. Knock him out of the park. Casey. Sub-sale. Sub-sale. So what advice – I have one more question, Scott.

I have one ridiculous question after me. But what advice, I have one more question, and Scott will have one ridiculous question after me, but what advice do you have for someone starting a subsec? And also be honest with people who want to do it. It's like everyone suddenly has a, when everyone started doing podcasts, same thing. And they all failed. All the ones I knew were going to fail, failed. And I was like, lazy, boring,

don't understand it's a marathon. I mean, what I would say to people is it is hard to get people to pay you for your opinion about anything. And so if your vision for your business starts with people paying you for your opinion, I would think differently about it. You have to be providing original reporting, analysis, insight, make charts, do math for people. There has to be service or utility if you want to make it work over the long term, in my opinion. And it is hard. But journalists, we shouldn't shy away from hard things. There are really good businesses to be built here. And journalists are so pessimistic

because they've spent 20 years getting kicked in the face. They think everything is always going to fail and nothing is going to work. And it's time for some people to try some new stuff. Who do you sound like? Perhaps your landlord? How many lectures do we have in the kitchen about this? Listen, there's a lot of entrepreneurialism in the bones of this cottage. It has affected me by osmosis. We've had so many discussions about this.

You took a while for you to do this, but I think it's like you have a unique— You guys literally should just get married. Listen, we are married. He's my butler. We are. So, Casey— Last question, Scott. Well, it's not—tell me if you think this is going to happen.

This is what I think is going to happen. I think there's going to be sub-substacks, and that is I think you and Ben Thompson and Sam Harris are going to decide that we can – it'll be easy. Ten bucks for your stuff, really niche. Ten bucks for a collection of thoughtful tech reporters, no-brainer. And you'll start to see almost like a hybrid between, and what you're saying really resonates. You know, the reason why, I was thinking about why is the New York Times, in my view, the New York Times is the most bulletproof media company in the world. Facebook and Google could get disrupted through technology.

New York Times, two-thirds of its revenue subscription, and not only that, whenever I do anything on the New York Times, a different person calls me and fact checks everything. And I'm like, that shit is hard and expensive. And what you're doing, actual reporting and rigorous reporting, you know, that whole journalism thing is actually hard and over the long term pays off. But do you think that over time you end up sub-substacking, connecting with three or four other people? Yes. So I think the long-term future, again, it's not newsrooms, it's Scooby gangs. Five or six people in a mystery van

traveling the country doing journalism. Scooby gangs, is that what you called it? Is that an actual term? Yeah. Who are you? This is my thing. You're Shaggy.

That's hilarious. Scooby dooby doo, where are you? We got some work to do now. I'm Shaggy, yeah. You're totally. I'm tall and laconic. You're a total,

oh, you're a total Daphne, Kara. Don't say it short. I'm not Daphne. Daphne's stupid. No, I'm Velma. But here Oh, you're a total Daphne, Kara. Don't say it short. Daphne is stupid. No, I'm Velma. But here's the question though, Scott, and I'm sure you probably have some great thoughts on this. It's like, but how did the economics work out though, right? If you have one creator who's making 300K a year in subscriptions

and they want to bring someone in who's maybe just getting started, how do you make it pencil out? How do you set it up so that over time, everyone benefits more than they would otherwise? And so I think the kind of design of those bundles is a great opportunity for someone to solve and tell me how to do it. I have another question. John Mattel tried to do that, if you remember, a hundred years ago. This kind of brings home my two favorite things and why people come here, too. One, it's an insightful question, and two, it's very narcissistic because it's about me. So, I have a quarter of a million subscribers to my No Mercy, No Malice blog on Friday. If I put it behind Substack, give me the conversion. Give me

your best estimate of what it would convert to. Ten bucks a month, I have a quarter of a million, and if all of a sudden on next Friday I said, sorry, I've gone Substack and joined my friend Casey, would that convert to a thousand, five,000, 100? What does it convert to? You could expect anywhere between like 3% and 7% conversion, I'm guessing. Let me do the math. I'm sorry, Kara, I'm leaving you. I'm leaving you. Is there any room in that cottage, you sexy beast? You need me, Scott. We're the sub stack couple. We're sub stacking in Kara's cottage. I am a match to your Kara scene, my friend. Wait, I'm sorry, you said 3,000 to 7,000?

3% to 7%, I think is probably what you could expect. I mean, once a week is a pretty low frequency. You're lazy is what he's telling you, Scott. But here's the thing. You have a podcast and you're selling your personality. There are many thousands of people who feel like they have a close personal relationship with you even though you've never met them. And you can absolutely turn that into a subscription that will pay a lot of bills for you. So that is real.

Let's go. Kara Swisher and Scott Galloway's new agent, Casey Newton. Seriously. Jake Benkoff's going to fucking kill us. Literally. What the fuck are we doing here? We're plotting his demise on his show. I came here to end Pivot, so hopefully I've succeeded. All right. is going to fucking kill us. Literally. What the fuck are we doing here? I came here to end Pivot,

so hopefully I've succeeded. Kara and I would like to announce that this is our final series finale. Thank you very much for tuning in. If we go out, we're going out big. By the way, that's not going to be a cottage. It's going to be a fat fucking crib after we go sub-sub-stack. That's right.

All right, Casey, how can people get to you? Let me ask you, what is the scary part for you? What made you do it? Because you and I have literally sat in my kitchen, which is right across from the cottage, and I've encouraged you to be entrepreneurial. What was the thing that moved you besides my incredible mentorship?

The scary part was stepping away from the machinery of a giant media company that existed just to promote me and solve all of my like, you know, healthcare and whatever other administrative issues, right? Taking a big leap and then just hoping that some strangers are going to pay me money, right? Journalists are just not trained to believe that that is going to work. And you see in the commentary about Substack, most people say that this is never going to work, right? People are very negative about it. So all of that was scary. What pushed me to do it was the dang pandemic, right? I am living like a retiree. My bills have never been lower. I only buy groceries,

and that's like my entire life. And it's going to be that way for the next four or five months. So if I was ever going to choose to start a business, this was going to be the moment. And I just thought, what the heck? Let's try it. What the heck? You see, he says heck and not hell. That's why he's such a nice man. But that is, you know what?

That's a silver lining of all this. Recessions and change are tremendous for entrepreneurs. H-E double toothpick. What's the H-E double toothpick? What are you talking about? Is this more like wife-husband talk that no one else understands? You guys know we are recording for the whatever. What? All right. Anyway, the 160,000 people who don't pay for this show. Casey, tell people how to get this. You can find Platformer at platformer.news. You can sign up for free and you can hear from me

once a week. And if you like it, you can subscribe and pay more. You should. Casey, I got to tell you, your writing's better since you've done this. I got it. It's really good. You did an amazing thing on Slack. You did. Thank you. It's much, it's about, it's you.

It's you. It's the Casey show and it should be. And I have to say, it's even better than your previous newsletter, which I didn't read. Congratulations, Casey. Thank you guys. I love you. Thank you, Casey. Bye.

Bye. Okay, Scott, isn't he the best? Okay, one more. I had no idea. This guy is, I don't know if he's your lover, your son. I had no idea you guys were this close. He's my dad. Look at your giddy.

You're laughing. No, I'm not. You're blushing. You know what? I'm glad he did this because he's an incredible talent and he needs to be entrepreneurial. He's a talented young man, no doubt about it, with good hair. Okay, we'll be one more quick break. We'll be back for wins and fails.

Okay, we'll be one more quick break. We'll be back for wins and fails. Support for this podcast comes from Anthropic. You already know that AI is transforming the world around us, but lost in all the enthusiasm and excitement is a really important question. How can AI actually work for you? And where should you even start? Claude from Anthropic may be the answer. Claude

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Ready, set, grow. Go to ConstantContact.ca and start your free trial today. Go to ConstantContact.ca for your free trial. ConstantContact.ca. Okay, Scott wins and fails. Give me some give me some give me some do you have any oh just rudy gianni making being a super spread i feel bad he's sick but honestly he was like jetted to the best health care at georgetown down the arizona legislature he shut down the arizona legislature he told people to take off their masks in michigan this guy what the yeah what the fuck is going on here? I'm not celebrating him.

I hope he gets better and I hope he doesn't die of this. But honestly, the kind of bad juju he puts out there to people is just incredibly irresponsible. He's literally like Typhoid Mary of this whole thing. And I just think it's just gross. All right, that's my fail. My win? My win. There's so many wins. I'm trying to think. Well, Cobra Kai on Netflix. Oh, it's not adorable. Cobra Kai. Yes. It's so good. It's so cheesy. And it's so predictable. You get angry and you can't help

but watch the next one. You're like, maybe they shouldn't be friends. They just keep becoming friends to upset each other. Anyway. Yes, exactly. It's really cute. You know, and everything is telegraphed. There's nothing that you don't know is coming. Like Amanda, who's got a higher taste than I, I like a lot of this stuff. We sucked up six episodes like that. And at one point she's like, kick the boba, kick the boba. I know you're going to kick the boba.

And he kicked the boba, of course. But it was like, anyway. That really pulls on my heartstrings. I was raised by a single mother in Encino, and there's so many, like Reseda Boulevard. Oh, Reseda. You were? You are the karate kid without the karate. Yeah, I was the kid with the good hair, except not nearly as handsome. Anyways, or talented athletically.

But other than that, it's the story of me. So my win is when you go to subscription revenue, you have to cross a valley of death, and it requires leadership, and it requires a dramatic commitment to going all in on something. And AT&T has done that. So my win is the baller move of saying to shareholders, all right, this is the future we're going all in. And there's so many reasons not to. So John Stanky and Jason Kilar, is that how you say his name? Kilar. Kilar, excuse me. Lopez, is that right? Lopez. Oh, my God, Steve. Anyways, AT&T is my win. My loss is CNBC. So, Joe Kiernan gets into it with Andrew Ross Sorkin, who, by the way, I think will be senator from New York someday, gets into it

and says, you overreacted. When we have 50,000 deaths, Joe Kiernan is accusing Andrew Ross Sorkin of overreacting to COVID-19. And here we are, 270,000. Hey, Joe, still think we're overreacting? Anyways. And then Rick Santelli comes on and says, I'm not a doctor, but I'm not going to tell people that talking about going into retailers. And they have determined, the scientists,

that retailers don't have the same density, they have better air circulation than restaurants. And we found out there's some crazy research that says that perhaps up to 80% of infections are going through full-service cafes, restaurants, hotels, gyms, and what was the fifth one? And was it restaurants? Churches, probably churches. I'm sorry, places of worship. Thank you for the win. Because you spend time in there.

It's the amount of time you spend, by the way. But here's the scary thing. It's not that Joe Kiernan and Rick Santelli don't get it. That's dangerous. What's scary here is clearly the fact that this has happened twice means that CNBC has decided that, okay, Fox isn't killing enough people. But more importantly, our viewership is these old white male Republicans who want to hear us get angry about their rights. This is an institutional, enterprise-wide decision on the part of CNBC. It is irresponsible.

It is reckless and will result in death and disability. Fucking shame on you, CNBC. This shit doesn't happen by accident twice. This doesn't happen twice. And it's also Sorkin. Thank you, Sorkin, actually. I think he did a good job pushing that. I think Andrew was more dignified and more patient in that exchange, but I can't help but understand.

I can't help but believe. I can't help but believe if this happens once, if they didn't send out a memo after that Kiernan bullshit saying, FYI, we're here to talk about stocks. We probably shouldn't be pretending that we're epidemiologists, especially a bunch of guys, white guys in their seventies who are Trumpers. Maybe we should just avoid the topic. The fact that they did it a second time, they're like, you can tell the producers are in the room with their hands over their eyes and their ears, similar to kind of a Sheryl Sandberg, Mark Zuckerberg kind of move saying, yeah, this is bad for the world, but you know what? Ka-ching. Our advertisers and the guy with the oxygen tank telling his wife to buy more Amazon, who is our audience, they love this shit. So let's go at it. Well, guess what? You are putting the

health of the nation at risk for dollars. This wasn't an accident. The first time, that was Aaron Joe Kernan. The second time, CNBC, you are doing this on purpose. Stop it. Just stop it. Stop it. I'd agree with you. It was gross. It was gross. It was gross and disappointing on so many levels. I sounded so indignant. I like it. I like it. It's fair.

It's fair. It's bullshit. This is bullshit. This whole thing, this whole faking that it's not happening is bullshit. People are dying. Stop it. You can do small things in the interest of public health, including being accurate on broadcast networks. That is absolutely true.

Scott, I love it when you're indignant. It's my favorite Scott. Anyway, speaking of which, Stephanie Ruh Rule, as we said, had COVID. She did a really blistering piece this week, this morning when she came back. And we're going to have her on next week to talk about it because she was talking about the economic implications, which Stephanie had already been talking about. So she's going to talk about her recovery and also what it means to the economy because that's what she talks about. Anyway, we hope she feels better. And we're so sorry her whole family got sick. Okay, Scott, we made it to December and neither of us have been sick, which is amazing. But please be, I know that. I know,

I know. You know what? Please be careful. Everybody try your, this is a really dangerous time. And so think really hard about every choice you make. Even if you've been careful, be more careful. If you haven't been careful, I would say go fuck yourself. First I'd say go fuck yourself. And then I've had some very difficult discussions with some relatives, including my mom about this, about not coming for Christmas if she can't get in line and stuff like that. So anyway, have those difficult decisions because it's worthwhile. Anyway, as a reminder, we love the listener mail questions. We're trying something new. Go to newyorkmag.com slash pivot to submit your question for the Pivot podcast.

The link is also in our show notes. Scott, read us out of this fantastic show. Today's show was produced by Rebecca Sinanis. Fernando Finanze engineered this episode. Erica Anderson is Pivot's executive producer. Thanks also to Hannah Rosen and Drew Burrows. Make sure you subscribe to the show on Apple Podcasts. Or if you're an Android user, check us out on Spotify or, frankly, wherever you listen to podcasts. If you like the show, please recommend it to a friend. Thanks for listening to Pivot from New York Magazine and Vox Media.

We'll be back later this week for another breakdown of all things tech and business. Wonder Woman 1984. Kara, can we agree that 1984 was only 20 years ago? Doesn't it feel like it was just 20 years ago? No, I gotta get out of college then. That was a good time, 1984.

I'm excited for them to be bringing back all kinds of 1984 things. There you go. Including fanny packs. I'm excited about Fanny packs. Support for this podcast comes from Anthropic. It's not always easy to harness the power and potential of AI. For all the talk around its revolutionary potential, a lot of AI systems feel like they're designed for specific tasks

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