Pivot - The screw-up-billionaire, quantum computers, and the skewering of Zuckerberg

Episode Date: October 25, 2019

Kara and Scott take a victory lap as SoftBank buys out Adam Neumann, the founder of weWork for a cool $1.7 billion. They talk about what the future might hold, now that Google has unveiled its quantum computer. Tesla proved Scott wrong and came out with some really big earnings this week. We also hear from Senior Recode reporter, Peter Kafka about what to expect from the streaming wars as Apple debuts its own platform. Winners are the women of Congress, who absolutely skewered Mark Zuckerberg in a Congressional hearing. Here is more information on Peter Kafka's Code Media Conference! 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. 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 HubSpot. Oh, content. We're back from California, actually. That's what we're back. I'm in New York, and God knows where you are. I don't even want to know.

I'm in the only place in the world that doesn't have a spectacular fall, Florida. Worst weather in the world during fall. All right. I'm so glad you're there. Listen, you've got something to brag about this week. Let's go for it. Take your lap, little dog. What's my lap?

I want you to call it out. I'm going to act humble here. I have no idea what you're talking about, Kara. It's the biggest story of the season, the stunning conclusion to the Adam Newman WeWork saga. Yeah, but you know what? And trust me, I'm not someone to be humble here. I'm getting actually, and I appreciate it, I'm getting more credit than it's due. I think his name's Elliot Brown of the Wall Street Journal.

Yes, amazing reporter. Shira Ovide, and I don't know if I'm saying more credit than is due. I think his name is Elliot Brown of The Wall Street Journal. Yes, amazing reporter. Shira Ovide, and I don't know if I'm saying her name correctly. Yes, you are. And then a guy named Matt Levine at Bloomberg. Matt is amazing. Jesus. They're amazing reporters. Every time I read Shira and Matt, I'm like so jealous and angry that I'm like,

I'm so pissed off I didn't write that. You must get that a lot. You must get that a lot. No, I'm what, being jealous? No, not usually. Yeah, not usually. I'm usually up there when I was a reporter. I'm getting a ton of credit, but I'm not sure it's earned, to be honest. You earned it. It's the commentary that really brought it. It's a combination. It's like with the Uber story. There were a lot of reporters involved in that particular one. But let me go through it very quickly. SoftBank is paying Adam Neumann $1.7 billion

to leave and leave his stock behind. It includes $185 million consulting fee. I'm not sure what he's going to consult on. Partying, I guess. The company needs the last minute funding to fund, to afford the severance packages of 2,000 employees it plans to lay off on the 15,000 person workforce, and they internally confirm layoffs that have not been announced in publicly. Scott, go take this apart, please. So, supposedly, it's 4,000 employees, but think about this. You had to give—I mean, he's the equivalent, and I'm going to get a ton of shit for this,

but he's the equivalent of an information age terrorist because he realizes he has controlling shares. So, he basically said, and he also correctly, I mean, this guy is the smartest person in the room, Adam Neumann. He really is. He realized that the most important thing to Masayoshi-san was one, saving face, and two, giving Vision One Fund any chance of recovering and potentially having a Vision Two Fund. So he said, well, look, boss, you fucked up. You gave me control of this company in the form of super voting shares, and I'm not going to improve the deal unless you convince me. So they came up with a buyout structure where they're going to

repurchase $3 billion of people's existing shares, which is just stupid to begin with. And then they said, okay, Newman's not going along. He still controls the company. He's going to potentially opt for a package, a rescue package put together by his own personal banker, Jamie Dimon, who he gave $50 million to regardless of whether or not they chose that package. So, JP Morgan walks away with $50 million for creating a stocking horse bid. And he said, I'm not leaving the room. I'm not leaving unless you give me X. And they said, okay, well, enough shareholders have agreed to sell at this ridiculous valuation of $8 billion because they want to get the hell out of Dodge and they realize this thing's worth less than zero.

But Adam said no. So they had to top it up with another $185 million consulting fee. So the smartest person in the room is Adam Newman. And Adam Newman, the reporting has been that SoftBank has bent over backwards for Adam Newman. No, SoftBank was bent over by Adam Newman. I mean, we have never seen a founder. Think about this. They put $15 or $17 billion now into the company, and he's walking away with somewhere between $2.5 and $3 billion of that for taking a company up and down. Think, if 2,000 people laid off, they had to pay Adam Neumann. Think about how just crazy this is. They had to pay Adam Neumann

$850,000 per employee they're laying off such that they could secure the funding to then give those 2,000 people, what, $50,000 or $100,000 in severance? I mean, this will go down. The real loser here is- Saudis. You know something? Okay, so this is my theory. I know I'm babbling on. The real loser is Masayoshi Son and SoftBank that have just lost all credibility. I'm convinced, I'm convinced, and I'm becoming more of a conspiracy theorist as I get older, that the Central Intelligence Agency decided that the best way to investigate the power of the Gulf was to bankrupt them. And what they did was they said, okay, Masayoshi, they got something on Masasan, and they said, you're going to convince the Saudis

to, because of this incredibly lucky, biggest, best investment in history, your investment in Alibaba for $20 million. You got like, I don't know, something like $100 billion. You're going to convince them to give you $45 billion. We're going to play. We're going to leverage the Jesus complex, the total lack of self-awareness and tone-deaf demeanor of Silicon Valley venture capitalists and entrepreneurs. And you are literally going to burn $40 billion of their money. You're going to create war and agita within the families in the empire, in the kingdom of Saudi Arabia because of one thing. Okay, that's a – I see where you're going.

And basically it's working. Masayoshi San. Masayoshi San is an asset. He's an asset of the Central Intelligence Agency. Okay, all right. Chris – he's not an asset. Chris Anderson, former Wired editor, goes, but if you think of WeWork as a massive transfer of wealth from Saudi Arabia to an Israeli entrepreneur via an ethnic Korean-Japanese visionary, it's really a heartwarming story of cross-cultural trade worthy of Model UN. That was the best tweet.

That was absolutely the best tweet of the week. That was fantastic. So where's it going to go from here? We're going to get to Google quantum computing in a minute. Where does it go from here? He just takes his money and becomes the most, like, he's sort of the wandering Travis Kalanick, the next version of, like, having all this money and walking away with it. What happens to him?

He just has his money and he does something else, right? He's about to get some serious hate. I mean, at least the people at Uber got to cash out something. It's still a company incredibly overvalued. I mean, to a certain extent, Uber is the reason that we got. Uber was the fire that breached the firewall. Investors got burned, and they said they saw this other blazing firestorm coming. They said, no, we're not.

Close the doors. We're not letting this happen. I don't know what happens to him, although I think it involves lawsuits. But he's played this, I mean, beyond perfect. There'll be case studies on what a disaster this was and how he showed a certain level of crazy and bravado to get the best deal in the history of business. But the big – okay, so what do you have here? You have a company. If they can cut costs fast enough, it'll be a nice differentiated coworking company worth $3 to $5 billion, maybe $7.

So SoftBank's not going to get their money back. This is the most expensive face-saving move in history. This is the most expensive kicking the can down the road because this thing still could involve a restructuring in Q4 of 21. Obviously, the losers here, the people being laid off at one, you know, one-fourth-thousandth of the severance payment that your leader got. You're going to have every private market unicorn over a billion dollars has lost 30 to 70 percent of its value in the last 45 days. But the good news that might come out of this is what this really is, is a cautionary tale around dual-class shareholder companies. Because effectively, the investors—

100%, that is my column next week for the New York Times. I just keep banging against it. I keep banging against this idea of why they need to have total control. Well, dual-class shareholder companies don't matter until they matter. As long as everything's fine, they're fine. But the problem is when you give one individual total control, he can be someone who's responsible for the destruction of value. He can be someone who's—

Well, they always matter, Scott. I don't think it matters until it matters. I think it always matters because it always—like, look, with Facebook this week, and he just flummoxed it in Congress. We'll get to that in a second. But, you know, they get to do anything they want, and then they get to do anything they want at any time. Including burn the village to save it and show up and say, I'm crazy, and I got a bomb stra strapped to my vest and I'm going to blow up the whole thing unless you give me exactly what I want. Let's move on from the terrorist company. I'm watching too much Homeland. Yeah, I'm going to get a lot of shit for that.

Okay, all right. They're not nice people. All right, we're going to move on to the next story. Google unveils its quantum computer. The big brain strikes again. What does that mean? Let me explain. Okay, go ahead.

The sycamore solved a 10,000-year problem in seconds. Sundar Pichai, the CEO of Google, compared the achievement to building the first rocket to leave the Earth's atmosphere and touch the edge of space. So what does it mean? What does it mean? What does it open up to? This is what the New York Times says. A quantum machine could one day drive big advances in areas like artificial intelligence and make even the most powerful supercomputer look like toys. They could compute everything.

There's so much data in this world. They could just compute the hell out of things, I guess. Yeah, but what my question for you is, as a tech journalist, is I understand it's a big deal. I understand the notion of faster processing speeds. And everyone says, oh, the ultimate test here is the ability to predict the weather, because no one can do that. But what does that mean? Bring it down to you and me. Does it mean better autonomous driving? Does it mean Skynet? Yes, that's a very good example. I'll give just,

we don't know. Here's a lot of examples, the calculations. Quantum computing needs to be used. I did a really good interview with the CTO of Ford. If you're going to have autonomous vehicles all over the place, it's a massive computing problem that is so complex and so many variables. You need quantum computing to be able to make the calculations necessary for those systems to work. That's a highly complex that people are applying it to. But there's all kinds of cancer research. Weather is another thing. All kinds of things. It has lots of inputs of data that are random and stuff. It can make these calculations in ways that are heretofore

not like toys. They are. Again, it's a further downgrading of humanity. That's what I say. It's the upgrading of computers and the downgrading of humanity. That's what's happening. My question for you is, and I have a view on this, but a lot of people think at

some point processing speed and quantum computing that turns into artificial intelligence, that there might be an actual point where these machines become sentient and they make a decision in about a billionth of a second that other than In-N-Out Burger and Breaking Bad, this species adds no value and it turns on us. Do you think that's a... No, it doesn't. No, it doesn't turn on us. Here's what I have interviewed Elon Musk about this

and many other people. He compares it to... I just saw the new Terminator movie with Linda Hamilton and it's so good. What it is, is he called it, they treat us like house cats. They don't want to kill us. It's not a Terminator-like future. It's more that we're like house cats. Like, they don't want to kill us. It's not a Terminator like future. It's more

that we're like house cats, and that's why he's moving into this putting computers in your brains and things like that. And recently when I saw him, he compared it more towards if we're building a highway and we run over an anthill, we don't really pay attention to the anthill, but we don't purposely

go, let's run over that anthill. It just is in the way. And so anything in the way is what we do. But them becoming like these robotic terminator things seems far-fetched. Okay, that made absolutely no fucking sense, what you just said there. I'm more confused now. Cats, anthills?

You're like an anthill. Like when you cross it, when you walk over an anthill, you don't think about it. It's in your way. But you don't like purposely seek out an anthill. It depends if I just got out of my yoga class. All right,, you don't think about it. It's in your way. But you don't purposely seek out an anthill. It depends if I just got out of my yoga class. All right. But you don't seek out. You might seek out an anthill, I'm guessing.

But most people, when they're building a highway, they just plow on through and they don't think of the ants or anything else. What does that have to do with supercomputing? Quantum computing? Because it will plow on through. It won't think, oh, I'm going to get the humans. Humans aren't a problem to the computer until they're a problem. I'm literally more worried now. Is there in the way?

Your explanation has scared the shit out of me. They don't care. We're like – they'll either feed us and if we don't feel like feeding us, they don't care. They don't care. They don't care about you, Scott. That's really what it is. What they don't have, my understanding is what they don't have and no amount of processing power can provide is intention. Somebody programming it has to have an intention.

They don't care. They're indifferent. What they always will have and never have and the difference between them and indifference is they have no intention. And what they are is they're indifferent. It's like, I'll just do what the program tells me. Indifferent. The way I feel about you sometimes. Oh, God.

Come on. Come on. All right. Listen. God, come on. Come on. All right, listen. We're moving on to Elon Musk. We're moving fast this week, all right? Tesla with the earnings report. The release marks the first financial report from the company without co-founder and former CTO J.B. Strobel at this helm with Musk. This quarter showed revenue of $6.3 billion versus an expected $6.33 billion.

Quarters showed revenue of $6.3 billion versus an expected $6.33 billion. Back in April, you said it was about to become undone and fall apart, especially because a bunch of key players left the company. I did. But what do you think? Where are you with Tesla, this prediction you made back in April? There's just no getting around it. I got this wildly wrong. In March of this year at South by Southwest, I said that this was the year that Tesla was going to come undone. The stock was at $300 and immediately dove to $200, And I thought the dog was about to earn a pig's ear.

I thought I'd gotten this one right. And then all of a sudden, the stock started recovering. And their earnings yesterday, there's just no doubt about it. They blew away everything except for production metrics. The profitability was up. It looks like they're getting scale. So there's just no getting around it. I got this one wrong. Congratulations to Tesla. So where do you think it's going?

So I have just been so wrong on Tesla. But you know what it is? It's confirmation bias. And that is, as someone, I do value corporate governance. And I feel like the corporate governance is so bad here. I keep kind of hoping it'll catch up to them and so far it hasn't. And I'm reconnecting with an old mentor of mine from San Francisco, a guy named Paul Stevens who founded the investment bank, Robertson Stevens. And it's just a very decent man. And it's one of these guys I really benefited from

as a young man who for whatever reason took an interest in me. But he always said to me, he's been listening to my kind of my bearish views on Tesla and he said, Scott, never bet against a company that has a great product. And that kind of stuck with me. He told me that about a month ago. And he's right. It does have a great product. It does have a great brand. I still think the company is wildly overvalued. But there's just like, this is their day. They blew away the earnings. The millions of fake Twitter accounts are all being run by Tesla longs.

I'm going to hear from them, and they're going to rub it in my face, and to a certain extent, I deserve it. The stock is back to where it was. All right, good. Oh, so you're taking your licks. Yeah, I deserve it on this one. Well, here's the deal. You know, they still have – you're right. The corporate governance thing is just incredible.

And I do hear from – I ran into someone at our event at Stanford who worked there, and it was like he's such a jerk. Like it's still a really – he's really quite a piece of work there at Tesla. At the same time, it's a great product. People love it. My brother has one. He drove it down to Stanford. So it really is. It's a great product.

You're right. And so the question is can he keep it on track really? That's really – but it's tough. It's tough. Yeah. You know what we should do? You and me and Elon should go see Porsche vs. Ford, that movie with Matt Damon. I told you.

I'm done. My new motto is because I know you, I keep getting contacted by what I'll affectionately call all these powerful old white men who want to meet with me because I'm saying negative things about them. So they think, well, if I could just meet Scott, he would love me and stop trashing me. I've decided I've spent too much of my life meeting with powerful white men. I'm going to start, I'm spending all my time meeting with young and the possible. I am done meeting with the old and the powerful. So no, I have no desire to hang out with you, Ilana.

I'll do that for you. All right. Okay, fine. It's just a movie, for goodness sake. It's just a movie. We have some popcorn. It's fine. Oh, by the way, for goodness sake. It's just a movie. We have some popcorn. It's fine. Oh, by the way, because I know you, just literally because I know you, I got invited to the premiere of that new Apple Tackles Me Too series with Jennifer Aniston, Reese Witherspoon.

Oh, yeah. Oh, good. Good. Yeah. Yeah. Good. You're going to that? You should go to that.

Oh, yeah. I'll go. Definitely. The dog likes to put on his nice outfit every once in a while. Yeah, I'm really excited. Yeah. You know, the thing you do now is you don't go to them after you're invited. Let me just – I'm going to teach you some power games.

Oh, you're showing me what it's like to be, like, really important? No. I'm sort of new money. I'm new money important. Is that what you're saying? I'm new money important. Yeah, exactly. You'll go.

You'll show up and be eager at these parties. So here's – I'm going to teach you a little thing, and then we're going to go to break. I'm going to teach you a little thing. Oh, my God to go to break. I'm going to teach you a little thing. Oh, my God. When you get invited to important things, you go like this. You go, no. No? Like that.

You go, no. That sounds like it involves a look. Yeah, you go, no. No? And then they're like, oh, are you busy? And you go, no. No. And they go, you don't want to come?

And you go, uh-huh, like that. Okay? We'll be right back with more Pivot and Scott can take a break in Florida. There you go, uh-huh, like that. Okay. We'll be right back with more Pivot and Scott can take a break in Florida. There you go. 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? 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. Welcome back to Pivot, Scott. We're going to hear from a Pivot friend. We have so many smart Pivot friends before we get to wins and fails. So by this time next week, November 1st, Apple will have launched its own streaming service. They're debuting with their own content with some megastars like Reese Witherspoon and Jennifer Aniston. This said party you're going to, please try to leave them alone, Scott, when you go. We asked Peter Kofka, senior reporter of Recode and host of the Recode podcast, Recode Media, to sum up the state of streaming wars as things start to ramp up.

Everyone is chasing Netflix. Netflix, they're not ahead of the pack. They've lapped the pack. They're just around the track many times. They're at 160 million subscribers worldwide, right in front of the big media companies. And they haven't answered back. This is the year they're doing it. This is the year that Disney says, all right, we're changing our business model and we're going to compete

directly with Netflix. This is the year that Apple, who's been dancing around TV for years and unsuccessfully trying to get into it and false starts and stops, says, all right, we're going to try it too. And by the way, even for Apple, it's kind of a toe in the water. It's billions of dollars, but it's just a toe in the water for them. So everyone's chasing them. Everyone's trying to compete with them. They're so far ahead. Even though they're under a lot of pressure, it's going to be a long time before we actually see any sort of effect from Apple and Disney, et cetera, going after them. Kara and Scott, you guys are smart people. You're also people who like to watch TV, like to watch videos.

Where are you going to spend your money and who do you think is going to win? Wow. Wow, Scott. So you start, Kara. I'm going to start. I spend it everywhere. I don't pick. I do it on the show. I do get HBO because I love Succession. I tried Watchmen, which I didn't like as much as I thought.

But I'm going to stick with it because I love Regina King. I watch Hulu if the thing is on Hulu. I don't think about it at all. I just don't think about it at all. Like, I just don't think about it at all. I'm not brand sensitive to it. And I think I will buy each of the individual.

I have a Hulu account. I have a Netflix account. I have a HBO. And I might have a Disney if they have the movies I want. But if they happen to be on Comcast for free, wherever I can get the content is where I get them. So that's how I feel about it. But I do like Netflix

and I'm always interested in the shows they put up. And whenever I see something cool, it always turns out to be a Netflix thing. That's interesting. So there you have it.

Yeah, so first off, with respect to the Watchmen, it's just cool to see DJ, that's what I call him, Don Johnson, working again. I know him. Do you know him?

I get the sense he's a nice guy. Is he a nice guy? He's a lovely guy. He was the parent of friends of mine. They were all in school together, and I've been to several parent-type things with him. He's just fantastic as a person. Oh, that's nice.

That's so nice to hear. I may give you his email. And you know what? I think he's also a good actor. Anyway, so you're right. I think a lot of this is additive. People will, for $5, just some of the big-name high production value you can expect from Apple, I think a lot of people will add on. Everyone's saying that Netflix is going to be the big loser here. But what people fail to realize is the majority – Netflix is going to live and die by their international growth because the reality is domestically everybody already has Netflix.

And it's unlikely you're going to swap out Netflix for Apple or Hulu or Amazon Prime. The bigger picture story here, and arguably Tim Cook, who's added $600 billion in market value, who's taken a ton of barrage for not coming up with the iPhone, but the reality is the iPhone 11 is just a different product than the iPhone was five years ago. So I would argue he's innovated like crazy. But what they're doing here is if you think Netflix has 150 million members, I think Amazon Prime, I don't know how many Amazon Prime, it's 77% of households. I don't know what that is. It translates in terms of people. But potentially with Apple TV, it's not an attempt to go into the streaming wars. As much as it is an attempt to change the complexion of their business and move from a transactional company to a recurring revenue company.

And if they take Arcade, Apple+, their news clipping service, not iTunes, excuse me, Apple Music, they killed iTunes. And then they add an Apple+, and figure out a way to give it to everybody for a year, which they're doing with every purchase of an iPhone and then get people to renew, they could have the mother of all recurring, what's the word? What's the word, Kara? Rundle. Rundle. There's my girl. They could have a corporate membership program with a half a billion people.

And that would be second only to the ultimate Rundle, which is Microsoft Office, which has even more than that. So what is Tim Cook, probably the smartest operator in the world right now, saying? You know what? We're at a point where everyone has an iPhone. We've tapped out on all the globally affluent. So we're going to take the same level of top-line revenue with modest growth, and we're going to transition it from a transactional business to a recurring revenue business, and we're going to increase the stock price 50%. By the way, Fang, not performing that well except for the Apple. Apple is up like crazy this year. I think Apple's up 56% this year. So Tim Cook, Apple TV Plus is not a streaming thing. That's the small picture. The big picture

here is another piece in the puzzle to move to the second largest rundle in history just behind Microsoft Office from Apple. All right, good. All right, but doesn't it depend on the content? I think one of the things we have to think about is the actual content and where content creators want to go. So Netflix attracted Shonda Rhimes, has attracted Ryan Murphy, all kinds of people. So I think it's where the content is created. And look, Amazon has Jennifer Salke there, who they hired for NBC. They've got their stuff.

You have all kinds. And Google sort of isn't – YouTube has not really entered the picture in any significant way, although they've certainly tried around the edges. I just don't think they've jumped in in quite the way that others have. I think it's still going to be hard to beat Netflix at this point, although Disney certainly, I think Bob Iger is super aggressive in these efforts. I think this is super important to him. And I do agree with you on Apple. Again, their culture, even though they've hired some really interesting people to do this stuff,

is not interested in this stuff. That's the only thing I would say. But the delivery system is great, and you certainly would use it if it was there. But I do want to give kudos to Netflix for constantly innovating and being just like having everybody, like Peter says, everyone is chasing them, and they deserve the kudos they get for what they've created. I think Reed Hastings is one of my – I really admire what they've done there. Yeah, it's absolutely incredible. And you said, where does the talent go? The talent goes two places. It goes to Benjamins.

In other words, it goes to the highest bidder. Or it goes to HBO. What HBO has done that's so impressive is a fraction of the budget, they continue to attract the best talent because it's almost like what PBS used to be. People used to do stuff at PBS for a lot less money because of the prestige factor. HBO is now the new PBS in that people will take a huge cut in salary. They'll always show up. Al Pacino isn't going to Netflix.

I don't care how much they pay him. He'll do something with HBO, though. I don't know. There's a lot of people over at Netflix. You'd be surprised how many people go over to Netflix. In any case, it's a good time for content makers. We should have a show. We should make a show.

It's a good time for content consumers. Consumers, too. Yes, 100%. I mean, even you. I know we're bragging now. You and I have been approached about doing a TV show, which shows you how much money is out there and how many leads they're chasing down. We're like the WeWork of content, though. Oh, God out there and how many leads they're chasing down. It is. We're like the WeWork of content, though.

Oh, gosh. That's how it's going to go down. There you go. I like it. There's going to be parties. I still haven't read about these sex parties that someone mentioned in Stanford. Yeah, I haven't heard about that either. You've got to read up on that for me. I don't remember either.

I didn't either. Yeah, we're not doing those. Anyway, by the way, Peter Kofka is hosting his annual Code Media Conference in Los Angeles in November. We have a link to tickets in our show notes. Now, let's get back to wins and fails. That guy, Peter Kafka, is going to be, like, I'm going to be found in a hot tub with my Kabbalah spiritual advisor, and that person will be Peter Kafka. That guy just makes me feel more calm. Every time I talk to him, I feel like, I just feel more zen about everything. Do you? He's so calming.

Seriously. That guy's like a giant foot rub collided with a priest. Oh, I don't know. He's so nice. I've never heard anyone describe Peter Kafka that way, but okay. Okay. I'm glad that it's nice. I find him very calming.

Okay. All right. Okay. Very relaxing. All right. Good. Well, you know what? We all find our people.

You know, that's a really important thing. In any case. I'll see him and he'll be like, Scott, I love your work and how are you, buddy? And I'm like, oh, Peter. Hold me, Peter. Wins and loses. Go to his conference. He has great people.

John Stanky is there. Tig Notaro is there. There's all kinds of really cool people he's brought together in Los Angeles. Anyway, listen. Wins. I'm going to go first with wins. The women of Congress. I was going to say the ladies, but Representative Katie Porter, AOC, asking Zuckerberg stuff at the event.

I just have to say it's a huge win. He really got owned by Representative Ocasio and Representative Porter. Let's play each of them. Do you see a potential problem here with a complete lack of fact-checking on political advertisements? Well, Congresswoman, I think lying is bad, and I think if you were to run an ad that had a lie, that would be bad. That's different from it being, in our position, the right thing to do to prevent your constituents or people in an election from seeing that you had lied. So we can, so you won't take down lies or you will take down lies. I think

it's just a pretty simple yes or no. And now here's our representative Katie Porter asking Zuckerberg if he would spend one hour a week moderating content on Facebook. Would you be willing to commit to spending one hour a day for the next year watching these videos and acting as a content monitor and only accessing the same benefits available to your workers? Congresswoman, we work hard to make sure that we give good benefits to all the folks who are doing this. Mr. Zuckerberg, reclaiming my time, I would appreciate a yes or a no. Would you be willing to act as a content monitor to have that life

experience? I'm not sure that it would best serve our community for me to spend that much time. Reclaiming my time. Mr. Zuckerberg? So I think this was just, these were really great questions. I think they zoned in very quickly, zeroed in, excuse me, on the problems, and he is unable to answer it. I found him incredibly unprepared for this hearing, because I think he thought it was going to be about Libra, which he couldn't talk about, and he was going to sail out of there like last time, and he could, you know, he could, these people were prepared and ready to rumble, and I thought it was great. Yeah, and here's the thing. It wasn't that he did poorly. It's that there is no right answer for doing something that is blatantly wrong.

And that is their argument is that by allowing people to post false advertisements with misinformation, and misinformation has ramifications, their argument is they're creating discourse. And that's just a ridiculous argument. What they're creating is discourse that is unproductive, false, misleading, and divisive. And there's just, it's indefensible given their history that they would not. And she absolutely kind of saw this, saw this open gashing wound of hypocrisy and inconsistency. And here's the bottom line. Every decision, every narrative, every talking point, we want to give people voice, we want to create discourse, is created by a corporate communications department of 750 people with

one objective, and that is say whatever we need to say such that we can continue to cash anybody's check. That's all it is. Every – and by the way, the other interview that got kind of overshadowed by this was Katie Couric's interview of Sheryl Sandberg. But every – and where she – You make that your win then. Well, she promoted – Sheryl Sandberg promoted this junk science and said when people go on Facebook, they end up being exposed more to both sides. At 24% of the content they see is from both sides. That is such junk science. Every piece of academic research shows the more time you spend on Facebook, the more polarized you get, the more you enter into your own filter bubble,

even if it's false information. And the algorithms recognize you don't want discourse that were tribal, that you want to go to one pole or the other so that you can get angrier and angrier. And it's terrible for society. And my win, it's literally as if you kind of read my mind. We have one mind on this. My win was or is Representative Maxine Waters, the chairman of the House Financial Services Committee. And also a shout out to the ranking member, Patrick McHenry from North Carolina. But I thought the hearing was exactly what it was supposed to be. I thought it was respectful. I thought, it's interesting, the Republicans kind

of took the side of, you know, the idolatry of innovators, leave him alone, he's an innovator, although most of them can't actually describe what innovation is. In my opinion, there needs to be more innovation at the Department of Justice and the FTC. And I thought these, like you said, this hearing did exactly what it was supposed to do. And also, I thought Mark Zuckerberg did as good a job as he could given that he has to lie and he has to support a corrupt organization. I do know. I think he – yes, he did as good as he could. But the fact of the matter is these people own it.

He couldn't answer – that's exactly what I'm – I have a column coming out right like now in the New York Times talking about they think in a binary term, which is they cannot – that's why that speech last week drove me so crazy that he did at Georgetown. It was like either free speech or China or free speech or chaos. And like it's so complex. And what they did, which I think Porter did when she was talking about content moderators, AOC, when she was talking about ads, Maxine Waters, any of them, and it was fascinating. It was all three women doing most of the really hard questions. They were pointing out how complex this is. And the same thing last week with Bernice King, the daughter of Martin Luther King. Mark used a quote by Martin Luther King in his speech.

And she was like, oh, no, my friend. That is not what my father said. And that is not what he meant. And he was very hurt by disinformation from other politicians. So I think it's the complexity is what's hard for these people. Making it because binary is the way they like. Reductive and twitchy is what they like. And so, you know, that's what's hard here is that it is complex.

And they have been hiding in the complexity by saying, well, go this way, go that way, when you can just make simple decisions and just pick a lane, like, and this is the way we're going to be. And so that's what they were pointing out. I thought that was great. Yeah, I thought it was. I thought it was. So this feeds right into my fail. What is your – that's your fail. Well, I just want to highlight.

We always talk about Mark Zuckerberg and Sheryl Sandberg, but this company has a board of directors. So Peggy Alford recently joined, I believe, the board of directors. So Peggy, your refusal or your continued enabling of this company's perversion of our democracy that you have clearly benefited from, I see above you're on the board of Facebook. Mark Andreessen, you are in fact attacking or ripping at the fabric of our society by enabling these twos. Ken Chenal, who I know and I think is a very decent man. Ken, I'm incredibly disappointed that you have not done anything to encourage these people and the organization to take this cycle off, given the fact that we already see a perversion and damage of our democracy happening again. Susan Desmond-Hellman, what are you thinking, Susan, not refuting or

enabling or continuing to be a co-conspirator in the slow erosion of our democracy by enabling these two to continue to take money for false ads? Peter Thiel, I don't even know what to say to Peter, par for the course here. Jeffrey Zintz, I don't know who you are, Jeffrey, but you are on the board of a company, former Obama person. Way to go, folks. You are, in fact, going to, this is, we know what's going to happen. It's already happening. They're going to find out that either voter suppression or misleading ads, and what do

you know, it was a net negative for what is a key component of our society that all of you have benefited from, and that is safe and fair elections. We know it's not going to go well. And rather than sitting out this election cycle, you've decided to cash that check so you can get a little bit richer. And I think all of these people are absolutely complicit in what is one of the most outrageous infractions of justice, something that at some point in retrospect will be seen as a crime by sitting on your hands. And then they all throw up their arms and say, well, we couldn't do anything. Why? Because Mark Zuckerberg had super voting shares. All it takes is one of you to say,

I am leaving the board unless we decide to not take political action. Well, I think that sort of happened. What they do is they go quiet. I think Reed Hastings and Erskine Bowles did that. Just left. I think – what they do is they try to do this, and we got to then wrap up for another ad and then get back with predictions. But what they try to do, and I just did an interview with Gary Cohen, is like you don't know what was said in the room. I didn't say something – I was talking to him about Charlottesville, and he's like, maybe hypothetically I said something in another private room. And I'm sort of like, I'm done with private rooms, like being angry at Mark Zuckerberg in a private room. I think public is the way to go.

Anyway, we have to take a break. We'll be back after this with predictions. Thank you. have shifted their career trajectories. And how do they find their next great idea? Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. Support for this show comes from Constant Contact. You know what's not easy? Marketing.

And when you're starting your small business, while you're so focused on the day-to-day, the personnel, and the finances, marketing is the last thing on your mind. But if customers don't know about you, the rest of it doesn't really matter. Luckily, there's Constant Contact. Constant Contact's award-winning marketing platform can help your businesses stand out, stay top of mind, and see big results. Sell more, raise more, and build more genuine relationships with your audience through a suite of digital marketing tools made to fast track your growth.

With Constant Contact, you can get email marketing that helps you create and send the perfect email to every customer, and create, promote, and manage your events with ease all in one place. Get all the automation, integration, and reporting tools that get your marketing running seamlessly, all backed by Constant Contact's expert live customer support. Ready, set, grow. Go to constantcontact.ca and start your free trial today. Go to ConstantContact.ca for your free trial. ConstantContact.ca Okay, we're back. Let's get to predictions.

Scott, obviously you've predicted a whole lot about WeWork. What else have you got? What have you done for us lately, Scott? You know, now that you have this vaunted position as a predictor. Other than be wrong. But, yeah, you're right more than wrong. But go ahead. So, yeah, I'm doubling down. You have 50 points of share between Bernie Sanders and Joe Biden. And I think that that is all going to go somewhere else

in the next 60 days. So I'm doubling down. I think in the next 30 days, and I don't know if it's going to be, it'll probably be Warren, but I think there's a decent chance that the front runner in the Democratic primary is going to be a name we're not talking about a lot. And I said the same thing in our podcast last week, or earlier this week, but I think Mayor Pete is about to surge and or we're going to have a new entrant. I mean, even Hillary Clinton's talking about getting back in the race, Mayor Bloomberg, or an unknown. But this thing is a lot more wide open than people think, because the reality is a lot of us watch the Democratic debates and we just sort of go, meh.

It's just – there's a lot of – So who of those people – you discussed this last week. Who – I want you – a person. I want a prediction. Which of those – who's going to enter if you had to pick one and I shall pick one and we'll see who's correct? So the – I'm not – the reality is I don't know. I'm not willing to make a prediction. That's not an answer. I need you to make one. My prediction is the biggest

winner of the next 30 days is going to be Mayor Pete. Okay. And then who would enter if you had to pick? So I'm going with other. I don't think Hillary, I think the Secretary Clinton, I think she's going to get— Kerry? Oh, gosh. Or, you know, someone even said Al Gore. I want to flip this to you. You're obviously pregnant. I like Big Al.

You're pregnant with a prediction. Pregnant with a prediction. I have told you, I already made mine with Bloomberg, but I think he's going to choke. He's a choker. But when you say choker, you mean someone who decides not to do it, right? Yeah. He like mulls, mulls, mulls. He does polls, and then he doesn't do it.

Yeah, he's right. He did it several times. On the other hand, I don't know if it's a choker to be worth $60 billion, be 77, spend half your year in London, and decide, you know what? I don't need this shit. Yeah, but he was mayor of New York. He loved it. It was the best time of his life. Yeah.

He'd have a great time to be president. I hope you're right. He'd have a great time to be president. I hope you're right. He'd have a great time. He's not going to do it. So who do you think is getting in? Someone's going to – a new person is going to come in. Nobody. I think none of the – I think you're wrong, and I think nobody is.

I think this is the field. This is the field we have. And so I think Biden is going to have a surge. That's what I think. You think Biden is going to have a surge? Biden. I'm going with a Biden surge, yes. That's just because Lucky, You think Biden's going to have a surge? Biden. I'm going with a Biden surge. Yeah. That's just because lucky your mom likes Joe, right? No, no. I just have a feeling

that Biden's going to have a surge. That's all I'm saying. Yeah. Yeah. So we should revisit that because I think he's going to give up a lot of share. You think he's going to gain share. So we should timestamp that. I think it's going to be Biden-Klobuchar. Thank you. Wow. Amy, Senator Klobuchar. There you go Wow. Amy, Senator Klobuchar. There you go. Okay, we're going to go. We got to go. I'm getting a look from the producers.

I just threw up in my mouth a little bit. If you want to shoot us an email at pivot at voxmedia.com. And we're hiring a new producer for Pivot also. And you don't have to interview with Scott. That's the most important part of that. And you don't have to be qualified. Please apply at voxmedia.com slash careers. If you think you're the right person to join this crazy team, there's all kinds of fun.

We are a fun gang, and Scott really is a quiet, introspective person. All the Chipotle you can eat. All the Chipotle you can eat. Anyway, Scott, please read the credits. We have credits. There's other people involved in this. Today's show was produced by Rebecca Sinanis and Eric Johnson. Erica Anderson is Pivot's executive producer.

Thanks also to Rebecca Castro, Drew Burrows, and Nishat Kirwa. Make sure you've subscribed to the show on Apple Podcasts. And if you liked this week's episode, leave us a review. Thanks for listening to Pivot from Vox Media. We'll be back next week for another breakdown of all things tech and business. 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. 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, performed by a select few. Thank you. writing, and reason through hard problems better than any model before. You can discover how Clawed can transform your business at anthropic.com slash clawed.