Pivot - Netflix Breaks a Losing Streak, Zuck Swipes at iMessages, and Guest Ben Smith of Semafor

Episode Date: October 21, 2022

Netflix beat estimates for Q3 and added two million subscribers. Meta has Super-App dreams for WhatsApp, and Mark Zuckerberg is ready to take on iMessage. Plus, Twitter freezes employees' stock accounts, and an activist investor grabs a significant stake in Salesforce. Friend of Pivot Ben Smith joins Kara and Scott to talk about the state of media, and the launch of his news platform, Semafor. You can find Ben on Twitter at @semaforben, and Semafor at semafor.com. You can listen to Kara’s new show, On with Kara Swisher, here. Send us your questions! Call 855-51-PIVOT or go to nymag.com/pivot. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Just go to Indeed.com slash podcast right now and say you heard about Indeed on this podcast. Indeed.com slash podcast. Terms and conditions apply. Need to hire? You need Indeed. Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher.

I just flew in from California and gee, are my arms tired. We're doing dad jokes? Okay, hold on. Hold on. Yeah. What do you call a wolf that meditates? What? A werewolf. Oh, nice. That's good. The dog's lifting you up on a Friday. No, you know, let me just say, I'm at Scott's apartment outside of his fancy studio. He offered me quiche and coffee this morning already. I came in on a red eye. And he was correct that it would take too long to get here. Quiche, coffee. I was on almond pour.

Who says I'm not progressive? Who says I am bringing the bona fides here? Yeah. Yes, you are. Well, thank you for having me. Actually, I'm the new minister of the Conservative Parliament. Are you? The Lettuce One. The Lettuce One.

Let us entertain you. There's so many things. You know, if they had just romained, that's one of the jokes on Twitter. As for taping, Liz Truss just announced her resignation. She'll be the shortest serving prime minister in British history. I don't think we should talk about stature or height. I think that's inappropriate. So, Scott, seriously, you go to London and you're like, everyone wants to invite you to their country to see what could happen.

Literally, it's going to be impossible for me to get a visa anywhere. I know. But I have decided, they've called me and asked me for my advice. And like one, the campaign slogan should absolutely be a chicken in every pot and a Cialis in every cupboard. Uh-huh. Okay. And also, given the dollars a cent, they should change the name of their national sport to soccer ball. Oh, no.

That's a good move. That's not a good move. I mean, really. That's a good move. What's the mood in London? The mood? Yeah. I would say it's kind of dour and cynical.

So, it feels pretty much normal. Right. So, they're not. For the UK. This is not even. They're sort of, you know, kind of, I don't want to say bereft or resigned, but there's a lot of eye rolling. They're funny. And it's one of those things where I think the government there is, I don't know, just like keep calm and carry on.

I don't think the British people scare easily. Yeah. They're not. I don't find them. Maybe it's because I don't know them as well. I don't find them as polarized, nor do I find that they define themselves to the same extent by their politics as we do here. But then again, maybe it's just because I don't know them as well. It's like the functional families are the ones you don't know.

But it strikes me they have a pretty good attitude about all this stuff. Yeah, it doesn't seem quite as partisan. And they're funny, which is important. It doesn't seem quite as. I mean, there's obviously clear partisanship, but it's sort of like the old days of partisanship versus anything else. And it seems like the Tory party is really fighting each other like crazy, trading emails back and forth and different things.

So, it'll be interesting to see who's going to get this job, this Jeremy Hunt. No one's accusing anyone else's father of killing JFK. That's true. I mean, they're just sort of just a little bit more civil. Yeah. Yeah. Well, they have, I like their whole, you know, prime minister's hour where they actually do go at each other on policy in a very strong way, but it's not ridiculously stupid like ours is. Anyway, today, Netflix bounces back, but will it last? Also, Mark Zuckerberg comes for iMessage and will speak with Ben Smith about the launch of

his new publication, Semaphore. Finally, finally debuted. It's quite good, actually. I have to say I'm really impressed so far of the things I've seen. But first, Twitter has frozen employees' stock accounts, which could mean the deal with Elon Musk is moving forward. He himself, on a call about Tesla yesterday, said he was obviously overpaying for it, but he was excited. The company's employee page was updated to let staff know they won't be able to access or trade shares. Twitter shares jumped 1.9% after the news. As is taping, it's at $52, not at $54.20, which is where it needs to be to equal what Elon's going to pay for it. So what thinks you about it? I think it closes next week. I think it's on rails now.

He stopped ship posting the company. He stopped trying to set a pretext for exiting the deal. They clearly are doing all the kind of logistics around what a company does when it's confident it's going to close. So this feels pretty, and the market thinks it's going to close. The merge arb here, the difference between the price and the closing price is pretty small. So the market thinks it's going to close. The merge arb here, the difference between the price and the closing price is pretty small. So the market thinks it's going to close. So I think the more interesting stock to watch next week is Tesla because we don't know. Revenue was up.

Well, it was down a little bit on what were pretty strong earnings. Yes, earnings. Revenue was down. It missed a little bit on top line, but it beat on the bottom line, which I think is impressive in this environment. top line, but a beat on the bottom line, which I think is impressive in this environment. But the thing that might put pressure on it is just concern over the type of forced seller he might become as he tries to find the capital to close. Because I don't think anyone, or maybe he's already got the capital, I don't think anyone knows what the hole is. And that is, people are unsure how ironclad the commitments are from his buddies who wanted to do,

join him in the equity side. Yeah. Because there's still sort of like this $10 to $15 billion hole, and no one knows where it's coming from, except it must come from Elon if someone else doesn't step up. And it's hard to imagine there's going to be new capital at this point. Well, I don't know. What happens when he has to sell out? I'll tell you, I was in San Francisco. They're still like, they want to hang around with him. Not just that, they just want it.

They can't have it not work, right? There's so much stuff not working right now, whether it's their crypto investments or, you know, all the VCs are like, things suck right now, essentially. But this one, they kind of want to work, right? So they're going to help this guy because why not bet on him? What do you mean by that? I'm not sure you mean by that. I don't know. It's just people are very loathe to say, to be anything but, well, if anyone can do it, he can. That's pretty much, which is probably a fair estimation of there's, I couldn't think of someone who could really turn

this around either. And if you had to pick, you know, if there was a group in front of you, he'd be the one you'd pick. You know, I think, you know, he is a sheer force of personality. And so, and they really kind of got each other's back, these guys. And so I think they're going to, And they really kind of got each other's back, these guys. And so I think they're going to – it's de minimis money to them. And if it works, they'll look like geniuses. If it doesn't, they lose a few billion dollars. I don't think they care.

I really don't. I get that sense from them. And I know it sounds crazy because economically it's ridiculous. He himself noted that he's overpaying for the whole thing. So he's just sort of shrug emoji about that. But other people aren't going to be. Let me just say, speaking of Twitter employees, we did a really good session with Bill Cohen the other day, sort of covering this whole thing and where it's going. And one DM'd me with a message for you after the Twitter spaces. And they said,

great space earlier, but with all due respect to Scott, whom I love, even though he doesn't follow me, the big jerk. If Elon keeps parag, it's literally the worst of both worlds for employees. The only reason some people are staying is because they know Parag's days are numbered. He is not popular or respected. The company needs a real CEO, not Parag or an Elon acolyte, but an actual business person with plans or at least a modicum of emotional intelligence. You had suggested that Elon keep Parg just to keep things calm, but he is not popular internally. That is 100% true. It's really, I was shocked to read that. It's just a good reminder. I think I had this,

I don't know, external perception. One, I like Parg because I feel bad for him, and I feel like he's actually handled himself from an external standpoint pretty well. But I clearly don't know what's going on inside the company. That was really eye-opening for me. I didn't realize. And people call you, and this is why you're, you know, part of the reason you became one of the most iconic tech journalists is that people call you and give you the real skinny.

I had no idea there was that sort of animosity or that negative view of him. He just seems so likable, quite frankly. Yeah. Well, I think because he hasn't sort of been a troll about it. I mean, and that's like a low bar. But, you know. Yeah, he sounds like the adult. Yeah. But a lot of these employees aren't going to do very well with this. They're not going to, he's going to get a payout, Parag is. And so are top executives. And you'll probably see him leaving. I wouldn't be surprised if Vijay Gade left, who is the chief counsel, the general counsel, who did a lot of,

who was involved in a lot of those decisions around Trump and stuff. They're all going to get money and very comfortable. Oh, they're all cashing out. Yeah, and why shouldn't they? Nice to know you. See you later. The one that isn't, as Bill noticed, is Prince Alwale. Yeah, because he stayed. And, you know, I think they're just going to, like, muscle it out. That's my, I just get the sense. I mean, things are really somewhat dire in the venture world, the investment world. And so why not make a bet here?

I just feel like. There's some truth to what you're saying. The thing that struck me the most about those text messages that came out was just the level of sycophantry among his close friends, but also people who were so excited to have proximity to him that they were willing to engage in what is just bottom line, a stupid, irrational deal. And what I don't get is, I understand if you're an individual and you want to hang out or you're a friend, you're Larry Ellison, you're worth $100 billion and you're like, you like him, he's your mentee. Sure, boss, here's a billion dollars, let's go, you know, see you on the yacht. Good luck.

And, you know, I want to be supportive. What I don't get is some of these VCs. Yeah, we've talked about this. I mean, Andreessen Horowitz has to answer to their limited partners. Do they? answer to their limited partners. Do they? And they have to mark their book, meaning that they have to have a third party come in and say, this is the value of your investments. And that mark is, it kind of dictates what they get paid, how they raise money. And so oftentimes that ends up being the tail that wags the dog, where somebody on the board will put money into an up round, even though the company isn't worth that, so they can continue these consensual hallucination of marks that don't reflect the actual value

of their portfolio. And I don't understand how anyone is going to put $800 million in this company, as Sequoia is doing, and then not objectively say, okay, in the first quarter, we need to mark that down to $100 million and show a $700 million loss. Well, first of all, it's going to be a private company. We're not going to know a lot. That's one thing. And the other part is he's got, I'm just telling you, it's really interesting because I won't go into it, but he sent me somewhat of a testy email about a tweet he didn't like of mine.

And at the same time, I'm like, I'm kind of in the middle with you, Elon. I'm like, so your stands are super. I think you've been very supportive of Elon, actually. Well, no, he doesn't think so. So, whatever. It doesn't matter. I don't care. Oh, what a shocker.

I don't care. I don't care. I honestly don't care. I think you have, okay, as someone who knows you and knows the situation fairly well, I think you have given him the benefit of the doubt over and over and over. Yes, but he doesn't think that. And it speaks to him. You know him. And you do give him the benefit of the doubt.

But I think that's, gosh, he needs more friends like you that have credibility. Because it seems like you either have to be a total fucking sycophant. Or a detractor. Or that's it. You're either with me or you're against me. Well, there's also his detractors are equally problematic. You know what I mean? When I said, why shouldn't he be paid for services of Starlink?

It's not a charity. Neither the head of Lockheed. I think that's just a very logical thing. They came out of the woodwork. It was crazy. This guy has like, either people are super committed to him who are just, I have to say, really unpleasant on Twitter and unpleasant in general, and just can't like imagine any kind of actual dialogue about the pluses and minuses. And then his detractors are often the same way. It's like he's a heroin dealer and he gave him Starlink and now he's taking it away. I'm like, oh my God, literally, hardly. He doesn't have to. And so it's a weird situation. So I see these people in Silicon Valley sticking with him. It is closing now. We think it is pretty much closing. He kind of acknowledged that on his Tesla call. And we'll see where Tesla goes. Interesting, speaking of companies that are a little bit under pressure now, Jeff Smith, the founder of activist hedge fund Starboard Values, announced a significant stake in Salesforce on Tuesday. Smith noted that significant opportunity remains the company. It could

be giving investors better returns. Its multiple is not the same as others, or there's some number. There's some that enterprise companies, its shares have fallen around 40% this year, but jumped 6% after the news. It's not clear if Starboard intends to take it on the board. In response, Salesforce said it is, quote, focused on continuing to execute its strategy, quote, outlined at Dreamforce. Salesforce is one of our sponsors, but we don't give anyone special treatment. So it's really interesting. I think they're performing not as well as their comparables in a number of statistics around the company. And so Jeff sees, who is a very smart investor, sees a lot of opportunity here. What do you think?

Good luck with that. I mean, yeah, maybe it's underperformed the market for the last couple of years, but Mark Benioff and Salesforce have made so many people so much money. He's considered one of the better CEOs in tech. I don't know what the morale is there, but I actually think he's considered a good CEO. This is such a large market cap company. I don't know what its stake is, but I think it would be very difficult to amass the kind of position you would need to get a lot of board suits. I just don't think this is, I think there are targets that are so much more ripe than this one. People are wondering if he'll step down as CEO. You know, Brett Taylor is his co-CEO, but Mark has ultimate say. The question is, is he interested in other things like his

media investments and some of his social stuff versus this? And they definitely underperform versus other people in the sector on a number of key metrics. I was reading up on a lot of the analyst things. That said, he does have goodwill. He's a larger than life figure. But I don't think Jeff Smith would pounce like this if he didn't. He did this, if you recall, when Ballmer was CEO of Microsoft and a bunch of other times. But the way an activist investor works or the way it usually plays out with a company like this is you lose at the first election.

You basically, when you do this, you're putting the company on notice. That is typically when someone files a 13D like this and raises their hand and says, these are my issues with the company and why it's underperformed, and I'm here to help unlock value, quote, unquote, that the first annual meeting, if he tries to elect directors, which is usually his only means of real influence and change, the shareholders will give the incumbent management team, unless they've done something really awful, the benefit of the doubt. It's the second one where you win if they don't get there. So basically, something like this, at worst for management, gives them sort of, I would call it, 18 to 24 months to try and show that they can get renewed momentum. But I was actually surprised to see this. I didn't think, I thought, I just think there's so many more opportunities out there that are riper. And I think Mark Benioff, I can't imagine, he just doesn't have very good relationships with his biggest shareholders.

Yeah. I think it might give him an opportunity to retire upstairs, like chairman and stuff like that. I don't know. Well, you would think when he appoints a co-CEO, that's a route to that. But his co-CEO is like off, like fielding missives from Elon Musk. Well, that'll be over. That'll be over and he'll move along. So I don't think they're going to ask Brett on the board of Twitter.

Brett's a lovely guy, by the way. I think it's just a question of they can sort of improve it a little bit. I think Jeff will be very happy with the stock going up. It's certainly undervalued, again, compared to other things. We'll see. We'll see. He does have goodwill. Although you hear stuff inside of all these companies. There's always like sort of a

kind of thing. So let's get on to our first big story. Netflix has been renewed for another season. The streaming giant broke its losing streak and added more than 2 million new subscribers in the last quarter, many of them outside the U.S., beating estimates and forcing the market to take red notice. Netflix stock rose, pulling off a small money heist. Oh my God, these are all shows on Netflix. But when it comes to continued growth, Netflix says, don't look up. Going forward, the company won't offer guidance on the number of subscribers. This is really interesting, but instead focus on revenue. And its ad tier will roll out very soon with Microsoft. There's also, interestingly, on the call,

they were talking about their very good relationship with Microsoft. So some people are thinking about a merger there. Microsoft certainly could buy Netflix. They're very aligned on gaming and a bunch of things. I thought that was really interesting. I still think Netflix is a purchase opportunity for someone. So what do we think? There's new subscribers. Only 100,000 were in North America, 2.4 million new subscribers. Yeah, this was a great quarter for them.

I mean, more than anything, the market takes your multiple on EBITDA way up or way down based on momentum. And their momentum has largely been negative for the last several quarters. And this kind of changes the momentum. They're growing again. Operating income was down, but everything else was up. Paid net subscribers increased two and a half million, which is, you know, when you add the population of Sacramento and San Francisco in a quarter of subscribers, I think everyone had worried that they're just, we'd run out of people or that these companies had run out of people with credit cards to find. And that's not true here.

Revenue grew 6 percent. You know, and it looks like the stock might have been oversold. Cash flow from operations skyrocketed. They kind of had their chest out and their shoulders back and said they expect four and a half million paid net sub additions in the next quarter. So it's you know, this there's just no getting around it. This was this was we're not going anywhere. We're still the big dog in the space. And they, you know, are very aggressive.

And then this deal with Microsoft, I don't see how this would, that would be a really interesting combination in terms of, I mean, that would be a juggernaut. I don't know. That's a deal that I think would get a lot of FTC scrutiny. Will it? Why? You know, they're worried about the Activision one going through. There's some rumors about that. If Activision are going through, this is what I would go for. You know, they looked at Discord. They looked at TikTok. They're not uninterested in the space. And they,

you know, Netflix is moving forward with gaming, announced it will open a gaming studio in California. Satya Nadella is close to Reed Hastings. Reese Hastings is on the board of Microsoft. Brad Smith, I think, is on the board of Netflix. It's just there's – he's obviously have to recuse himself. But there's a lot of really interesting – I just, you know, I just – when I was hearing some of the comments of the – I think it was the CFO on the call, it was interesting. I was like, huh. It just tickled my little tickler. It tickled my tickler, whatever that is.

Well, it makes, as you think about it, it hits your gut. And it's one of those things when it hits your gut and you start thinking about it, it's more feasible than you think. Microsoft has a $1.8 trillion market cap, and I think Netflix is around $120 billion. So they'd have to pay a premium, so call it $200 billion. They have about a 10% dilution. So it's doable for Microsoft. It's absolutely doable.

And it would also provide— They have so many good brands there now. It would really push them. You know what they could do? Steal the cloud service from AWS, too. FYI, for Azure. I don't know if that would be something that's not attractive to them. That's interesting. Netflix has to be one of the biggest cloud services consumers in the world.

It made AWS. That would be a real blow to Andy Jassy. Anyway, just interesting. That is interesting. This is just literally, I was sitting in the cab on the way here and going, huh, this seems interesting. And just some of the comments seemed interesting. There's so many links between these two companies that are really significant links and, you know, mutual respect links kind of things. And they just, Reed has a very similar personality to Satya, which is to say they're very easy to deal with, smart kind of people. I was going to say, you mean they're not assholes? They've been difficult, you know, but well, Satya's probably one of the nicest people I've met in tech in many, many years. But Reid has an edge to him, but he's also really smart.

It's hard to deny, and he doesn't take cheap shots. He's never taken a cheap shot at me, at least. And arguably one of the greatest pivots in the history of business. 100%. I mean, they were mailing out DVDs. Yep, they were. You know, I think I'm working on my book on Silicon Valley, and there's a scene I just wrote of, I had him, Jason Kylar from Hulu, and Chad Hurley from YouTube. This is early on in all these people's careers at Sundance.

I don't know when it was. It was 20 years, 15, 20 years ago. And they put us in the basement, and we kept saying, this streaming is going to be big. And no one paid attention to us. They're like, theaters, theaters, theaters, you know. And this online stuff is silly. And I'll never forget. I thought, oh, my God, I had the three really important people in this space in one place.

And I just always thought he was quite visionary. I always thought he was visionary around a lot of stuff. Yeah, but most importantly, who had the best cocaine? I've never seen cocaine, Scott. Do you know that? I've never seen cocaine, Scott. Do you know that? I've never seen it in person. I don't know if it's in the drawer here. I'll be looking after we get off.

But I've actually, I told you that story when I went back to my college reunion. I went back to the reunion, the fifth reunion, and someone was like, man, you had a cocaine problem in college. I was like, I've never seen cocaine. They thought I was on cocaine even when I wasn't. I've never done blow. That's one drug I've never tried. It's very Wall Street-y. I'm surprised you didn't with your Wall Street career. Anyway. No, no cocaine. All right, Leo DiCaprio, let's go on a quick break. When we come back, Mark Zuckerberg has a message for iMessage, and we'll speak to Semaphore's Ben Smith.

to Semaphore's Ben Smith. 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,

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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. Thumbtack presents the ins and outs of caring for your home. Out. Uncertainty. Self-doubt. Stressing about not knowing where to start. In. Plans and guides that make it easy to get home projects done. Out. Word art. Sorry, Live Laugh Lovers.

In. Knowing what to do, when to do it, and who to hire. Start caring for your home with confidence. Download Thumbtack today. Let's pivot to some listener mail, which is going to be our big story. This one came in via voice mail, but Lara likes it a lot, so let's play. Hi, Karen, Scott. My name is Khalid. I grew up in Oakland and I'm now settled in Montreal, Quebec, where I can confirm the American dream is alive and well. Why wasn't there way more pushback in the press on Tim Cook's dismissive buy your mom an iPhone comment in Kara's interview with him a couple

weeks ago? iPhones are luxury devices that most of us cannot afford or don't see the value in. Will this comment be remembered as Tim Cook's let them eat cake moment before someone's head is severed? I laugh uncontrollably and cry unexpectedly listening to the podcast. And your advice has saved my marriage with three young kids. So what you're doing is important for all of us. Thanks. I like him. I like him.

Wow. There's so much in there. We saved his marriage. We're going to be doing an episode about kids. Just so you know, we're going to be doing one Montreal. That's where so you know. We're going to be doing one. Montreal, that's where I'll be living soon, I suspect, at some point. Let me just say, that was an interesting comment.

And actually, it wasn't dismissive. He was joking with the guy who was talking about some issues around Android, I believe. Not to make it personal, but I can't send my mom certain videos, or she can't send me certain videos. And so we leave her out of it. Buy your mom an iPhone. And I don't think he was being like, buy my expensive device. This is what they sell for. I think he was like, they're easier to use. I don't think he was talking, you know, in a snotty way. That's not what I recall. I don't know. I didn't think that was anything different. I don't

know. What do you think, Scott? So first off, he's right. The average median household income in Brazil is around $40,000. I mean, in Hungary, I think an iPhone is a month of salary. Yeah. So he's right. But here's the thing. That's on purpose. The iPhone and Apple are the strongest luxury brand in the history of mankind.

And key to a luxury brand is scarcity and also self-expressive benefit. One of the features of the iPhone is that not everyone gets one. And that way, if you're one of the billion people that can afford it or finds it important enough to have that kind of technology that you're willing to save for it, you communicate to the rest of the world that I'm one of the billion, I'm one of the 14% of the people on this planet who's a storyteller, has money, is good at what they do, is creative, and that makes me a more interesting person and a better potential mate. So the whole point of the iPhone is to have the highest margins and to be not available or to be scarce.

When you're talking about an iPhone and what it's defied gravity, and it's really kind of the first in business history, is the market leader is the high-priced product. It's usually Toyota that's the market leader. It's usually Budweiser that is the market leader. This is what Apple has done here. 50%. They passed 50%. They did. They passed 50%. In a very wealthy country, though, globally, it's still Android. It's where they're making the money.

I mean, he's right. In most developing markets, most people could just never afford an iPhone. But what you have with the iPhone is you have the production volumes if it was a car. You have the production volumes of Toyota

with the margins of Ferrari. And they never make a really cheap one. They've never gone there. They've thought about smaller ones. They don't want to do it. They don't want to do it.

In the product world, everyone says it's the strongest brand in the world. And I'm saying, bullshit, the strongest brands in the world are MIT and Stanford and education brands.

But in terms of a consumer product or a traditional consumer product, there's nothing like the aspirational value of Apple. Because if you have money, you buy an iPhone. And that's their strategy. Yeah. I think they see that exclusivity. They see that as a feature, not a bug. Yeah, there's one real vulnerability. Well, two, really, is what regulators are going to do around the App Store and China. And those are their vulnerabilities. Those are their big—this is not one of them in that regard.

And I don't think he was too—he was actually making a joke at that moment. Oh, yeah, that was fine. He wasn't being fine. Interesting. By the way, Montreal, I used to go there every year for Formula One. That is the most European city in North America. It's a great city. It's a great city.

Great food. Bagels. Good. Everything. It's wonderful. We thought about living there, actually. Interestingly. You thought about living in Montreal?

Yeah, it's just beautiful. Amanda speaks French. We like Canada. Have you been there in the winter? Yes, I know. I'm aware. I mean, it's rough. There's a lot of snow.

Just getting back to Apple, Mark Zuckerberg took a swipe at iMessage earlier this week, trying to push himself up, I guess, with a photo of a billboard making fun of the way the app makes Android messages show up in green bubbles. That'll show them. Oh, my God. They must be panicked at Apple. In an Instagram post, he called WhatsApp, quote, far more private and secure than iMessage. Oh, no. Oh, no.

Use Signal then. Yeah. Use Signal. I literally don't use Instagram, WhatsApp, or Facebook because I don't trust them with my data. I just don't. By the way, I trust Apple with my data, but I'm still wary about everything they do. And there's just

no way I would, you know, would trust data to Zuckerberg compared to me. But you know what? Look, WhatsApp is a very nice application. It's not a bad product. It's just, I don't know why he's doing this. I have no idea. I use WhatsApp.

But I was on a board call yesterday, and everyone's like, should we start communicating on, was it Signal or Telegram where it disappears? I'm like, folks, just assume at some point everyone gets everything. I mean, we keep going further and further to the fringe. I remember thinking about when I was in my late 20s, I had a group of guys and we used to take trips together. And we were always like going to the edge of it. You know, we went to Eastern Europe. We were always going to these crazier and crazier edge of the envelope places. And it feels like with communications, everyone's trying to find the next thing that they are under the illusion is secure and that no one can hack.

And I just don't think it exists. I think it's, you got to be just. I know. I mean, do you realize that the CIA, the Central Intelligence Agency, if you go into a facility, you're not allowed to bring your phone. Yeah, no, same with the White House. They've just given up. Same with the White House. Same thing.

You can't bring your phone. You have to put it in a little box. It's kind of cute, you know. Anyway, interestingly, Meta has super app ambition for WhatsApp, but I just, I don't know. And the rest of the world is super popular. They're trying to do that the same way Twitter, Elon has talked about at Twitter. Good luck with that.

And also, there's a downside. In Korea, there was a big outage in South Korea. The super app Kakao crashed last weekend, and people were stranded. These super apps make me nervous. Had you heard of Kakao? Is it called Kakao? Sure. Yeah, I wrote about it. I've written about it. Yeah, I didn't. I mean, it's basically 90% of South Korea's population uses it, and $6 billion in revenue. I mean, it is really ubiquitous. Asia is a very different way of using apps. They do use super apps. It's one-size-fits-all kind of thing. And it's just different.

We're different in a lot of ways. Anyway, let's bring in our friend of Pivot. Ben Smith is the co-founder and editor-in-chief of Semaphore, a news publication that launched online this week for his inaugural article. Ben looked at the culture clash inside the newsroom of his last employer, The New York Times, and had some fiery quotes from James Bennett, who actually hired me into The Times,

about his departure there over the Tom Cotton op-ed. It was really fantastic. And I got to say, I'm getting their newsletters and they are really good. Welcome, Ben Smith. First, congratulations on your launch. Tell us how it's going. How's traffic?

Have your employees unionized yet? Thank you. Yeah, no, we're feeling great, congratulations on your launch. Tell us how it's going. How's traffic? Have your employees unionized yet? I think people basically were interested in what we were doing and mostly just made kind of like funny, friendly jokes about us, which I really think is the absolute best case scenario for a launch. And then a couple of our stories really hit. So yeah, they did. I'm happy. And now we just have to do it every day for the next hundred years. Let me say, and then Scott's going to jump in because he, I have been reading it and looking at it. It's really well done. It's very easy to navigate. It reminds me of that column in the Wall Street Journal years ago, where you learned all your news really quick, except a little more lively. I think your newsletters are quite good and easy to read and fast and really thought out well. I was surprised because I get them all and some of them just are onerous, I have to say. They're just too long and too much information. Yeah. If we could just stop this interview right here and tell your

readers to sign up at summitfor.com and I'll turn off the interface and go on my merry way. Yeah, then you hit with a big column about the New York Times. A lot of it resonated quite a bit with me. But tell me why you picked that. And you managed to get James Bennett, who we both know pretty well, to give a pretty fiery quote. He hasn't really talked about it, but he still seems pretty pissed about what happened to him. I mean, I think the Times is the most important institution in American news, maybe with the BBC in global news. And so it just seemed like it made sense to write about it. I just left there. My first column when I got there was about the Times. And so it seemed like there was some symmetry to it. But no, I mean, I think it's an institution that's, you know, genuinely very successful right now. I think, you know, really well managed in a lot of ways on the business side in particular, just really dynamic. You know, I think Meredith Kopit-Levine is making a lot of moves that are really interesting,

was, you know, very fast to acquire Wordle, took a big risk on The Athletic, and we'll see how it plays out. But there's a lot of action on the business side and the editorial side. A, you know, in the best of times is hard to manage. I mean, the editorial sides are hard to manage. I've never really been in a place, except for so far, when I ask people to do things, they do it. And that's shocking to me. That's not how newsrooms normally work. And my colleague, Gina Chua, who you may know, is I think basically the reason anybody ever does anything here. But it's very hard to get people to do things in newsrooms.

The more people you have, the harder it is. And they have hired a lot of journalists. And so I think they have these kind of – and then, you know, 2020 was this very public moment of the Times, you know, sort of at least in this big public symbolism, taking a real stand on a big journalistic question, which was like, should we include Tom Cotton's controversial op-ed or not? And they decided the answer was no, and that that op-ed could get people hurt. I don't think the leadership, I don't know if they thought it then, they don't think it now. And they're trying in a lot of kind of subtle and quiet ways to roll it back. And there's a question of, can you take a huge moment like that and roll it back quietly? And I'm not sure. And I think that's something people disagree about. Yeah, I think the idea, you know, James had other issues, like the Sarah Palin thing was tough, but every editor does, obviously, which you didn't ask him about,

which was interesting. But I think it was a really, it was a very insightful column, I thought, having been there. And the thing you're referencing is the advice you got is just don't try to change anything. And I think I did not get that advice. And that, you know, don't go changing to try to please me, you know, was pretty much they don't try to please anybody in that regard. Yeah, and there's another great old line, great old Jill Abramson line, that when reporters would come asking for special things and promotions, she would say, look, the New York Times is the prettiest girl at the dance. Like, not you. And I think there's definitely, which is fair. That's fair. I wouldn't say that. It's just the willingness to change is less so than other places. In any case, whatever, you know, you just move on to places where you can do that. And in their defense, some of their really successful things, like The Daily,

are products of experimentation and change. It's not, it's just a complicated, big, complicated place. Yes, exactly. So, Scott, it's just a complicated, big, complicated place. Yes, exactly. So Scott, start. Good to see you, Ben. Nice to see you. Thank you for your, I think I wound up, you know, we talked for that column and then I was looking through the quotes and all the good ones had so many curses in them that

it was like, I don't even know it's going to be distracting. And I wound up cutting them. Well, trust me, I'm used to that. And by the way, I really enjoy spending my weekend day with you for pieces that I don't end up in. So please continue to call on me. No, it's sort of the cost at that level of self-promotion. Anyways, Ben, this isn't about me. I owe you one, Scott. What is the opportunity? Where did you think the white space was with Semaphore? What's the need that's not being met? I mean, I guess we saw it more in terms of, you know, if you either talk to people or look at all the sort of scads of public opinion research on the media that tons and tons of consumers are really unhappy with what they're getting feel.

I think maybe the two biggest things feel really overwhelmed and then also don't know what to trust. Yeah. And so I think we sort of saw it less as sort of looking at the map and circling white space and more as how do you, particularly, how do you try to do better at those two things that people are really volubly complaining about all the time and take consumer complaints seriously, which is like every industry other than news routinely thinks about, like, oh, do people not like our razors? We should make the handles longer or shorter. And I think in news, usually when consumers complain, people are like, you are being lied to by evil people, and I'm sorry, but we're not going to change. Right. Yeah, that's a fair point. What's different about the format or channels? Are you going to try and be in podcasts? Is it newsletters? Is it chart? What's the thought around kind of channel and distribution strategy? Yeah, I mean, I guess just to take format first, we really are kind of making a big

bet on this transparent format that is really trying to take very literally people's complaints about news articles, which is they can't tell the difference between what's the news here and what's the journalist's opinion. It's not like they think journalists aren't supposed to have opinions or don't have opinions. They just kind of want to know that you know the difference between a fact and your point of view on that fact. And you're an expert. I care what Kara's point of view is on the fact, but want to know that you know the difference between a fact and your point of view on that fact. And you're an expert. Like, I care what Kara's point of view is on the fact, but I also like that she knows the difference between her point of view and the fact.

And so we're trying to do that just in a totally literal sense and break the article up that way, include room for legitimate disagreement and leave space for that and for global perspectives. So we're doing that very literally on the web and in the newsletters and sort of thinking about it in all our products. And then in terms of distribution, I mean, it's an interesting moment, I think. And this is like, I don't know, you may want to edit this riff out because it's like relevant to those of us who kind of came up in the blogosphere. But I feel like there was this moment when blogs were a unprofessional first person analytical sort of rambly, unedited form. And then in 04, 05, 06, 07, places like Recode, The Verge, Politico, essentially professionalized that form. And BuzzFeed a bit later, actually, kind of professionalized that form and said, oh, you can actually take

the sort of conventional values of journalism and reporting and use reverse chronological digital publishing for them. And I think newsletters are in a similar place. They had been a kind of first person, a sub stack had meant, this is my take. It has a lot of typos and is very long. Now, a newsletter is a delivery vehicle for professional journalism, does need to connect to the values of newsletters and have a level of personal connection, but can be professionalized and edited. And, you know, I think a lot, you know, I think you can see sort of an evolution from in one space from Politico and what Mike Allen did there to Axios to Morning Brew, which was looking very hard at Axios.

Well, this is interesting because you, I just got Jim Vanderhey's book about brevity. And sometimes in Axios, it works. The idea is a good one, but sometimes it feels bereft, right? Well, I think that's huge. Look'm a huge fan. And I think that they also were like, what are consumers complain about? Like, one of the things they complain about is shit is just too long. Like, oh my God, that's a legitimate complaint. And they just addressed it totally, literally and frontally. I don't think sort of CliffsNotes are the only useful thing in the world, but I think they're really useful and that short

updates on the news are really useful. But that doesn't mean that people don't want insight, they don't want nuance, they don't also want depth. I think there are different problems that you can solve. We called it reported analysis. That's what we called it at Recode at the time. That's how I thought of it. Yeah. And it's an old reported analysis. It's this old newspaper genre that is like, at the times, it was only the metro columnist and the media columnists were permitted to do it for sort of random historical reasons in a voicey way. But I do think that's a thing. That's a very transparent way to communicate. And in a way, what we're doing is a very stylized version of that. I would say that we're not thinking of ourselves as a newsletter company. I mean, the web is definitely a first-class citizen for us.

We're very heavily invested in video and events. You'll be doing other things. But you built out newsrooms at BuzzFeed, for example. What are you worried about in building out a newsroom? Oh my God, it's the second day. I'm worried about everything. I'm sorry you have to answer that question today. The moment is very, very different. BuzzFeed really rode the rise of social media in a very strategic way that Jonah really got before anybody else. And this is Jonah Peretti. Yeah, my boss there is, you know, and I think that social media

moment is basically over. And so we're building into a new moment that's much more about a kind of direct connection to readers who really know who you are, and listeners and, you know, and watchers and everybody else. I think that we know we're certainly making a big bet on journalists who are going to sort of operate in a very open way and have to then, there's no trick to showing that you can be fair to people. Like, it's not like we're saying our social media policy is you have to hide your actual views. It's more like we're saying our social media policy is you better not have insane views in real life. And so that that's a, you know, I think I think we've hired incredibly ambitious, great, fair minded people, but also we're certainly

betting that they, yeah, that that's that that's who we've hired. And because I don't think I don't think you can fundamentally kind of hide the ball about who you are. These days, if you do want an audience and people to connect to you, like they have to know that you not that you have intensely passionate politics that you're devoted to, but that if you're a beat reporter and you're an expert, you really have learned a lot and know things and have analysis, but also know that sometimes you're going to get that wrong and respect people who disagree with you. Yeah. So you mentioned BuzzFeed. BuzzFeed has raised over $700 million through, I think, 11 rounds over the last decade plus, and it's worth

two hundred and eighty five million now. What's the business model and how are you going to avoid being something that's, you know, relevant and something people reference, but has lost investors a lot of money? So, I mean, I think without I mean, I don't want to sort of, you know, spitball about BuzzFeed's valuation. It's not, it's not my, it's not my expertise. I, well, let me phrase it another way. Do you have outside investors? And I think, and one of the things that I, that I just made me most excited about doing this venture is that my partner, Justin Smith, I think is really like the best media operator, or one of them of his generation in media has been really successful in making money for people off high-quality news for his whole career.

And we are certainly building this in a way that really wasn't, you know, through, I think, and I don't mean this as a criticism, but, you know, we were sort of, we started BuzzFeed News at a moment when our investors wanted growth and focused on growth. And, you know, and figure out the exact business model later. That's not how we're doing this. We're certainly thinking incredibly hard about how do we build a business that's totally aligned with quality journalism from the start.

And that's the thing I'm kind of obsessed with too. I don't want to be in a place where the journalism is out of step with the business. But of course, I do want the business to be journalism. And that's what we're doing. And I guess that but of course, I do want the business to be journalism. And that's what we're doing. And that's, I guess, that's part of why I'm so excited about it.

What are your role models? Like when you think we want to be the X of Y, do you have role models and think this is kind of our North Star with a few tweaks? The X of Y. I don't know, actually. What do you think, Scott? I look at Axios and Puck and The Brew as three examples of new media that's

doing really well. And it strikes me that you just scream a podcast to me. You have a nice voice, Ben. Thank you, Scott. And I think a lot of your stuff is longer form. I thought about it. Anyways. Remember when you called me late at night talking about that, Ben? I bet. Should I have a podcast? I did have a podcast, but I have a short attention span. I have other men call me late at night, Scott. Just please. I don't want to talk about it. And she texts me angry in the middle of the night. I don't know what's going on here.

I can only imagine. I don't know if it's some sort of fetish or weird thing, but like expletives late at night. I'm sorry. Go ahead, Beth. All right. Moving along. Semaphore. I do think those places you mentioned, Axios, Brew, what was the third you just mentioned?

Puck. Puck. Yeah. I mean, I do think there is a new, like right now, a generation, you know, these things come in waves and respond to what's happening in the world. And I do think those are great places and that there's sort of a generation right now that I hope we're part of that is trying to think about what people who love news want now and responding really directly to it and with all the advantages that come with starting

from scratch. And I do hope that we are kind of in that cohort. I do think one thing that when you're in the news business is not universally true, but that is really important is if you're in the news business, you have to have news. Like I spent much of my career caring only about scoops and sort of being like, what's the problem with the news? The problem with news is not enough scoops. And like, it took me a while to sort of realize like, oh, actually, like, to most readers, most days, you know, they don't care if it's a scoop. They care if it's interesting to them. They care if it's presented in a way that makes sense. And so my kind of, you know, revised and

kind of humbled theory of this is you have to really focus on building formats and approaches that just totally make sense. People meet them where they are, but they may never see them if you don't break news. So this is my continued justification for scoops. I think you have to be useful. I think useful is now the more important thing. I think entertaining is important. I think must, you can't get anywhere else is important, but useful, I have now begun to cut my reading

into only things that I find useful. I know it sounds, or something that I learned something from. Let me ask you, Scott asked before about other things, and you had done an interview before you launched with Tucker Carlson, got a little bit of pushback on that interview. But is that an area you're interested in, podcasts, or do you feel like you need multiple revenue streams? Everyone's talking about that, obviously. We did that a hundred years ago. I guess I'll quote Scott from our conversation that I didn't quote him on in my article. Oh, now you're trying to be nice.

But yeah, but news is not something where there's a silver bullet and it becomes some massive growth business because you figured out one cool trick. I mean, it's a business, it's a tough business where if you operate really well and are smart, and that's what I've sort of seen Justin do for a long time, you can make a pretty good business, but it means you don't, you can't be ideological about revenue. You got to go sort of where people are. I think that means certainly events. It means the web. It means newsletters for video right now, but certainly audio. I mean, I think we'll sort of all of the above. Do you have any learnings or advice on what you've learned so far to other entrepreneurs? You know, it's like day two. I don't want to give anybody advice. I'm just like, thank incredibly.

One piece of advice is that hiring incredibly capable product and tech people, like not necessarily that many of them, but incredibly capable people who are like even tempered turns out to be a great way to launch a digital product. Do those people exist? Is that what you're saying? Those people do exist? Yeah, we exist. And we're not, I've never actually had a launch before where there was not a moment of everybody screaming at everybody else because the site went down. So, and Mark Wilkie, Kellen Henry, incredible. When you think about what you're doing, a lot of

journalists, of course, have been going off on their own. And you and I have talked about Substack before and things like that, which I think that time is sort of moving in a different direction, I suspect. You know, you tried to get a lot of different people. Everyone I talked to said, oh, I talked to Ben about a job. I talked to everyone and everyone I had a cup of coffee with. Ben never called me, just so you know, Scott.

You're in the Kara Swisher business, Kara. I'm too expensive. Don't we know it. Okay, do journalists need bosses anyway? What was your pitch to them? I'm too expensive. Don't we know it. Okay. Do journalists need bosses anyway? What was your pitch to them? I'm just curious. You've gotten a lot of great journalists there. I like, yeah, I mean, I'm incredibly thrilled. I'm just so thrilled with people we hired and yeah, and people who, you know, Liz Hoffman's maybe the best Wall Street reporter at the Wall Street Journal didn't need to come. And so, and so, I mean, I think my pitch is that for a certain kind of reporter who likes

to break news, who can break news, who's going to have high stakes conflict with powerful people, you know, it's hard to do that when you're on your own at a sub stack. You need editing, you need legal support, you need a brand that will have your back. And maybe sometimes you just need to hide behind when there's some huge conflict. But at the same time, you know that people read you, connect to you, that you're providing more than one thousandth of the value of your big news organization. In fact, you're providing like a huge portion of it. And so my pitch was the best of both worlds. Like some of you have a great newsroom where you have the legal and the design and the editing and the colleagues

that you get with a great newsroom. But also we're really going to be attaching ourselves to your coattails rather than vice versa and be totally invested in your career and see that as a plus, not a minus. Right. Did you give your employees stock options? Yes. Okay. What do you think is the biggest story that hasn't been told in media? And when you're trying to think of things that will differentiate you or you want to own, is there anything you're latching onto? I do think that there's a, in terms of like, I guess just where my head is, which is running a newsroom, there's this cynicism and it's kind of like exhaustion right now in big newsrooms. And actually, I think in TV to a degree with video, like people are like, ah, video, we pivoted to video, pivots to video are so annoying. Like that's insane. Most human beings are watching more and

more digital video in short form and consuming lots of news that way. And people are doing incredibly creative things on TikTok around news. And just because a bunch of the news industry had a bad experience with a particular Facebook program is an insane reason to walk away from this incredibly powerful sort of form and medium. And so that's something that I think is nuts, although maybe not the biggest story in the world. I mean, I would say TikTok broadly is the biggest, most undercovered story in media.

Yeah, absolutely. I would agree with you. I think the video has gotten my attention a lot in my mind, which is really interesting. I don't know why I'm thinking about it all the time, but you're absolutely right. And it's because of TikTok and places. You just see the power and creativity all at once. Anyway, Ben, good luck.

I hope it works out well. I have to say, I don't usually like to slather you in compliments, but I'm really enjoying what you've done. Ben, no joke. She walks into, she as in Kara Swisher from Kara Swisher Inc., walks into my apartment this morning. Doesn't say hi, but we went to well on that. Just says, Semaphore is so good. Those were literally the first words out of her mouth. Thank you guys so much.

I mean, you've been there, and I'm like at this incredibly emotionally fragile place right now, and it's so nice to hear things like that. So thank you. You're emotionally fragile. Anyway. Trust me, it gets worse, Ben. Welcome to the world of entrepreneurship. You think this is the worst day of your life? It's the worst day of your life so far, Ben.

It's a good day so far. So thank you. Yes. All right. Scott, Scott, let him have a day. Let him have a day. Anyway, you can read Ben Smith and plenty of other great writers at semaphore.com. They also have newsletters, of course.

And Ben, good luck. Congrats, Ben. Thanks, Kara. Thanks, Scott. It's a true story. They didn't try to hire me, Scott. What do you think about that? That was a really interesting interview. It's exciting that the market is doing what it's supposed to in journalism,

and these big platforms are shedding acorns that will someday be trees, so to speak. I think it's a very healthy market. And I love that these things are getting funded because it hasn't been traditionally a sector that gets a huge return for investors. Yeah. Well, that's true. That's true. And Puck is similar. I'm very pleased with their success. I find it so useful. All right, Scott, one more quick free data, big savings on plans, and having your unused data roll over to the following month. Every month. At Fizz, you always get more for your money. Terms and conditions for our different programs and policies apply.

Details at Fizz.ca. Okay, Scott, let's hear some wins and fails. My win is just, I just have one win because I wanted it to stand on its own. And I've done this win two or three times. Mackenzie Scott, again, continues to inspire. I don't know if you saw, but she's pledged $85 million to the Girl Scouts. And I think kind of the next big crisis, and there's so many competing, we talk about failing young men a lot. I think there's a real crisis in America of loneliness.

And a recent study came out that one in seven men don't have a single friend. And we're a social species. And I think COVID and our phones has really separated us and sequestered us from one another. And at the end of the day, people, when they don't touch, smell, and feel and socialize with each other, they start to die. We can't accomplish anything, whether it's offspring, whether it's friendships,

whether it's creating great things that move the world forward, whether it's feeling loved or having the chance to love other people. It's kind of the point of all of this is connection, and we're losing those connections. And the Boys and the Girl Scouts are wonderful organizations. The Girl Scouts, I think has about 3 million members globally. It counts amongst its alum, two-thirds of every female senator, the Williams sisters, Taylor Swift. It's just they're wonderful organizations. I was a Boy Scout, and I think it plays a special role for a certain type of young person. Boy Scout, and I think it plays a special role for a certain type of young person. I don't want to stereotype them, but when you're young, and Boy Scouts for me was a place I found my own.

And that was, everyone assumed I was a nerd, right? And a nerd is awkward. But everyone assumes that just because you're awkward and a nerd, that must mean you're super smart and do great in school. No, I was a nerd that didn't do that well in school. And it's like, okay, well, where do you find your people? You're not an athlete. You're not in honors English or whatever. And where I found it was Boy Scouts. And, you know, single mom, it was just such every Wednesday night, Troop 42 in Culver City. I didn't know that, that you were a Boy Scout. They've had their share of controversies and they've tried to fix themselves. As will anything that deals with children.

Well, let me say, my dad is an Eagle Scout, was an Eagle Scout. That's wonderful. And it was interesting, because when they were sort of anti-gay, the whole anti-gay thing, which they've changed, even Spielberg was very integral to changing, lots of people where they did. I said, I'm not going to have my sons join it because of the attitudes they had towards gay people. And they changed, they have changed. And I had a really interesting discussion with someone at the main thing. And because they heard me say my father was an Eagle Scout, and it's one of the greatest disappointments that I won't send my kids there. And it's now too late. Obviously, they're too old. But I always felt it probably

helped him with great, I have a wonderful picture of him in his Boy Scout uniform as a young kid. And you can tell he was with a bunch of kids. And at its best, it's great when it has failings like that or the other controversies around lots of things. It's terrible. But you're right. I think you could just see my dad in this picture. I'll have to show it to you. With his friends as Boy Scouts, you could see their bonding was going on. You could see he was was going on. You could

see he was so happy. It's one of my favorite pictures of him. This is where you learn about the Boy Scouts. And unfortunately, the Boy Scouts, like so many things got politicized. And I think their leadership made some terrible decisions that were very judgmental and not very accepting. But here's what the Boy Scouts was. I was a kid living in a condominium in Westwood. And once a month, we went camping. And we were told the last thing we would do, I always remember this, is we would walk, all of us in a long line, and make sure that the place that we had camped, there was no sign of us ever being there. I got merit badges in like fire safety and not tying. I mean, you just, things you would never, ever be exposed to. And I made friends and just kind of found your own.

And this $85 million investment, again, from Mackenzie Scott, who doesn't want any credit, doesn't want to do press releases, doesn't want her name. They don't want to call it this. She's not asking that it be called the Scott Girl Scouts. You know, we need to restore connective tissue at a very young age. She's really become a very special donator. You know, they still, the Boy Scouts are still, I'm just looking at a story, they had to sell thousands of acres to compensate for sexual assault victims. Let's not leave that out. They didn't handle those complaints very well.

But they're moving forward. At some point, you have to move forward. And the Girl Scouts, you know, I've never had a discussion with Amanda about whether I would have Claire in it, but I would kind of like it. You know, I would kind of like it. And I was very sorry my kids were not in the Boy Scouts. I know it sounds crazy, but I was very sorry I couldn't at the time. But they were so adamant about gay people. It was so unpleasant and nasty, but then they changed. Look, I think the biggest question here is that $85 million gift to the Girl Scouts. The question really on everyone's mind is, where is she going to store 34 million boxes of Thin Mints?

I love Thin Mints. Thin Mints right up there. Those girls really know how to sell. I have to sell. Oh, my God. But you know what? That's important. It's important that young girls and young boys learn how to sell.

Right. Anyways, no doubt, especially the Boy Scouts have had their issues. Wonderful organizations. I can speak from the heart that Boy Scouts have had their issues. Wonderful organizations. I can speak from the heart that it was a really nice part of my growing up. And I was really moved. I think this is not only

a generous gift, but it's a thoughtful one because we are struggling. We are facing a crisis of loneliness and to create more and more connection at a very young age is a wonderful thing. It's their largest single donation.

Do you have a fail? I don't have a fail, but I'm sure I'll think of one. Do you have any wins and fails? Kevin McCarthy making those comments about Ukraine before he gets in office. These people are crowing way too early. They're peaking way too early. Whether they win or not, they'll probably win the House. I don't know. Okay, here's my fail. You just inspired a fail because I always have a tendency to like right of center or left of center reaction. The fail here is a total misunderstanding of economics by the Democratic Party right now. Oh, okay. West Intermediate Crude is trading at $85. That is not historical high. The whole point of our strategic reserves is to ease short-term shocks.

We are not in the midst of a short-term shock. This sends mixed signals to producers who we've been telling to drill. It also is totally ineffective because it's not a lack of oil that's hurting us right now. It's refinery capacity. us right now, it's refinery capacity. And then you have Senator Warren come out and say that she's really worried about Kroger's and Albertson's not realizing the people she needs to break up, whether manufacturers, specifically big ag and big chicken. The retailers, it's actually a fairly competitive low margin business. So the Democratic Party, again, risk snatching defeat from the jaws of victory because they don't understand the basics of economics and don't seem to want to

talk to an economist and say, okay, does this make any sense, what we're talking about? So my fail is continued misjudgment or poor judgment around true economics and how to communicate what is actually going on in the marketplace. That was a rant. All right. You interrupted my Kevin McCarthy is an idiot rant. But that's all right. I don't mind. You offered me quiche this morning, so I'm going to give you a pass.

Wasn't that nice? I do think the Republican Party has to be very careful about how they win. You know, look what happened to Liz Truss. Oh, come on. They're very arrogant. Come on. Their arrogance levels are off the fucking chart right now. And I agree.

The economy has been very important to voters. Everyone sees that. Democrats have not been good enough about touting their wins, especially around their infrastructure bill and the Inflation Reduction Act. In Ukraine. They've done a terrible communications job

about things that were good pieces of legislation. That said, the Republican Party, with the piece that Marjorie Taylor Greene did for the New York Times, it's from a book, was bragging, like, I'll be in power. I literally am like, oh boy, this is, you know, here you go. Here you go. Now you're running things. I think it's a real mistake on their part. I think they need to keep their mouth shut if they want to do all the terrible things they promised. I don't know.

I just feel like they're a little too confident. And that's always, you know, I think voters can shift in a dime these days around. I don't think they're committed to anybody. And maybe that's a good thing. Anyway, that's the show. We'll be back on Tuesday with more Pivots. Scott, it's lovely to be at your lovely home. And now I'm going to go in search of different drugs and things while I'm here because I'm very tired and I need to wake up. Oh, no. She's stealing my stash. Stealing your stash.

But we'll be back. We have so many good shows coming up. We've got year-end things. We're going to be doing a parenting special because we're such good parents. And we have much more to come. There you go. Read us out. Today's show was produced by

Larry Naiman, Evan Engel, and Taylor Griffin. Ernie Indertot engineered this episode. Thanks also to Drew Burrows and Neil Silverio. Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Vox Media. We'll be back next week for another breakdown of all things tech and business. Would you like some quiche? Hands off my Cialis.