Sharp Tech with Ben Thompson - Clown Car History Lessons, Both Sides of the Twitter-Substack Fight, Parenthood Tech Strategies

Episode Date: April 10, 2023

Parsing the latest Twitter controversy with a look back at pre-Musk decisions, the motivations driving Substack and Twitter last week, and big picture thoughts on the future of Substack. At the end: children in the age of AI proliferating, screen time dilemmas, and more.

Hello and welcome back to another episode of Sharp Tech. I'm Andrew Sharp and on the other line, Ben Thompson. Ben, how you doing? Good. Is this our vacation episode or what's going on here? I think we're a week late. Yeah, bit of a programming note to all the listeners. There was no bonus vacation episode last week because about an hour before we were scheduled to record, I was welcoming my first child. into the world. So Charlie is here healthy and happy. My wife, Alice is doing great also. And now it's just great to be podcasting again, man. I've missed this. Well, I mean, Charlie is already a team player. I, you know, I brought up maybe months ago. I'm not sure when it first came up. Like, when's the due date exactly? When are my kids spring break? Boy, what to be great if Charlie showed up

that week. And not only does he show up that week. He shows up like the first. possible day of that week. Like the Saturday before we could overlap, you know, my vacation, your hilariously brief paternity leave. I'm a terrible boss, I guess. But yes, great job by Charlie. He's already on the Kentucky Plus team. And we're glad to have you along with the ride as well.

Yes. We're still going to be on a reduced schedule this week. We should be back to normal next week. But we get a lot of emails from listeners who ask. Like, how does Ben do it? Like, what's his production function? What does he read? How does he produce all this stuff?

I just want everyone to know you should be most mystified by Ben's ability to manifest the birth of my son. Two weeks early. Perfectly. Yeah, two and a half weeks early. I have no idea how he did it. But I'm glad he did. It's been a whirlwind of a week here. Do you have any one week takeaways from being a dad?

Um, one week takeaway. So I was talking to Duman, our colleague and said, you know, it's a little bit disappointing because I like to zag, but so far, every parenting cliche has been true. And so that's true for the good cliches. Like, it's probably the coolest experience. It's definitely the coolest experience I've ever had. And there are little windows of each day where you're just totally blowing away. And then at the same time, people are always saying like parenting is exhausting and it sort of reminds me of like when I was moving out to L.A. and people would talk about the traffic and I sit there and think like it doesn't really matter. Simmons mentioned this in his interview with you. He's like, it was idiotic for him to live in

Santa Monica and try to work downtown. And it was in fact idiotic. But coming from D.C., I was like, I've been in traffic. Like I can survive. And it's a completely different level in L.A. and it's a completely different level of exhaustion in parenting. But, you know, we're having fun with it. So I can't complain so far. Oh, good. Well, we have a topic that I'm fairly fired up about. So I think that we can get through it okay.

But congratulations to you. Very happy for you. Cannot wait to meet Charlie. And yeah, I mean, Charlie already contributing, it's a great sign. That's right. He's a team player here. All right. Well, we'll come back to a couple parenting questions later in the show that we're

supposed to be on the bonus episode. But first and foremost, you mentioned being fired up. There was a bit of a kerfuffle over the past few days. So John on Twitter asks, when at Ben Thompson returns from vacation, can you please discuss Elon's decision to censor substack from Twitter? And I'll just provide some context for anyone who's been offline for the past couple of days. from Nilai Patel at the verge. He writes, Substack, the popular subscription

newsletter platform for writers, launched a new feature called notes last week, which is fairly similar to Twitter. Twitter, the world historical clown car of a company currently operated by Elon Musk.

Oh, do you know why it's this reference, by the way? Actually, I love the word. I want to call it. I mean,

I love Delay, and this is great wording. The world historical clown car of a company currently operated by Elon Musk. What is important to note is it's always been a clown car of a company and it's currently operated by Elon Musk. This is not an insult on Elon.

This is a reference to an apocryphal quote that's ascribed to Mark Zuckerberg, although he's denied it. He said that he didn't actually say this. But that Twitter is a clown car that fell in a gold mine, which is basically this company that's been incompetent and dysfunctional from. literally day one, but the product was so good and it fit the market so well that they can't help but continue to exist and be valuable. So, you know, there's just, this is a reference that's useful.

I think it's going to be useful in this conversation. So I just want to make sure everyone understands, Neely here is not insulting Elon Musk per se. He's referring to Twitter generally. And that said, Elon Musk is continuing the tradition. But sorry, continue. Well, that's why I was laughing as you were explaining that. First of all, very valuable context. I was not aware that that was a reference to an apocryphal Mark Zuckerberg quote.

I fully believe that he called them a clown car that fell into a gold mine. I'm just going to choose to buy that one. But what's great about Twitter is that literally any year over the last 17 years, you could call them a clown car. And it would be factually correct, including perhaps especially over the last six months under good old Elon. But that's why it's so great, currently operated by Elon Musk. It's like this is the chapter.

This is the current chapter. The current model year. It's like a clown car that gets different model years. This is the Elon Musk model. Well, Twitter says, or excuse me, the verge says, Twitter responded by blocking the ability to like or retweet any posts containing the word substack, throwing up a warning message if users clicked on substack links. And finally, blocking even the word substact.

from being searched. Substack users, the vast majority of whom are independent small business owners who depend on substack as an enterprise software provider, mostly responded to this by saying they would leave Twitter and use substack notes. So I should note that there has also been back and forth between Elon Musk and Matt Taibi, Musk unfollowed Taibi. And the substack leadership has made a few statements along the way that I've omitted here. And as of Sunday night, it does appear that Twitter has stopped throttling the substack content, although I still can't search for the word substack on Twitter, which is hilarious. You can't search from M. Taibi and for like Twitter files, for example, which is a lots of people are making the leopard spotted party, you know, attacked by a leopard or whatever might be, which does seem, does seem useful analogy in this case. But the other thing is Twitter did quote unquote open source the algorithm.

I'm not claiming that I was wrong because it's not the real algorithm. And it doesn't have the actual weights. It was interesting. But we also don't know what does no longer throttling mean. Like you couldn't retweet and like a tweet with substack in it. And even if you use the redirect sort of URL, it would throw up this warning. That's gone. But I wouldn't be surprised.

if the, if they are severely penalized in this sort of Twitter algorithm. But anyhow, yeah, neither here or there. It's not as extreme and hilariously petty as it was on Friday, but I'm quite sure that there's still like some weird stuff that happens if you're trying to promote a substack on Twitter.

Right. Oh, no, by the way, more credit to Charles because, uh, this is a case where we were able to podcast. It's true.

After the Elon Musk reversal instead of, uh, you know, commenting on it too soon. So thanks to Chuck. Yes, perfect timing from my new son. So in general, Ben, what do you think of all this? Like, how do you answer John's question, looking for a reaction? Where do you want to start?

Well, I think there's an underappreciated, which seems like obvious. But everyone, of course, this is the whole Elon Musk sort of conundrum of talking about Twitter. everyone's talking about Twitter, how stupid Twitter is, XYZ. And this is the problem with all these discussions is everyone, like Elon Musk has become sort of this partisan character. And people start with that and then sort of back into their opinions when there are two companies involved in this dispute. It's not just Twitter. It's also substack. And the substack part actually in some respects has me a little more fired up.

But I'm sure the people want to hear about Twitter. so we can start we can start with Twitter there you go give the people what they want one for them and then we'll do one for you with a little substack mini segment excellent thank you I appreciate that I appreciate the the fortitude offering me a little bit at the end

after we throw some red meat out with the Twitter bit there is more historical context beyond just being a clown car and this goes back to the birth of Instagram so Instagram you know Twitter back in the early days is this API utopia, right? Everyone build apps and do XYZ and the whole, this is the whole Web 2.0 era and the futures APIs and third party developers

innovating on your platform, which by the way, I think is the path Twitter should have always stayed on. Like I think that Twitter would be a much different, more interesting, more valuable company had they become like a short message protocol for the web, like email, but like something different and unlike email owned by a single company. But the problem with that is that would have taken a tremendous amount of strategy and foresight and long-term planning and building. And we just established that's not what Twitter has ever had or sort of been capable

of. Well, and they were also a public company, which sort of complicated their incentive structure. Well, but back when they killed sort of the third party, the third party developer ecosystem, they were not a private company. They were not a public company. They were not a public company. That's right. They had tremendous pressure to become a public company because they were like five or six years in.

And back then being five or six years in and not going public was actually a bad thing. Like it's been different over the last sort of few years. But so they, you know, they have pressure. And they sort of picked the lowest hanging fruit. Or the way I would put it is, I think Twitter had the potential to like go to like a Michelin Star restaurant to be this incredible sort of basically be web information. structure and to have a complete, not just short message, but all sorts of clients built on top of this and being like this protocol for short form communications. Like you think about email, email is not just communication. It's also notifications. It's also sort of transaction stuff. It's

also, you know, it's newsletters. Like all sorts of stuff can travel across email. It would have been interesting to see Twitter be this, not just be tweets, but what else could they be? Could it be like, could there be machines talking to machines via Twitter, right? Like it's sort of this, this idea of a public a public web that sort of connects all sorts of things together. But instead of sort of arriving at that restaurant, they stopped off at McDonald's and they just sort of bought a Big Mac, right? And that Big Mac was basically, we're going to be an ad supported business like Facebook. And as part of that, we're going to make everyone use our app.

Now, of course, they didn't go all the way, right? I think we talked about this last year where part of the irony of everyone getting upset about Elon Musk killing all the third party Twitter apps is that's what Twitter's management should have done a decade ago. If you're going to go in that direction, go in that direction. Instead, they didn't have the guts to sort of like follow through their strategic decision to its logical endpoint. And they let this third party ecosystem sort of limp along that did not contribute to their strategic where they were going. And which should have been, which was going to be the Twitter app. And that's where ads are. And we're going to pull all.

the data in. And the fact that that was universally panned as Elon Musk is a moron kind of speaks to why it's hard to talk about Twitter and Elon Musk because I think the more interesting point is the historical point is why didn't Twitter do this a decade ago. And now, I think Elon Musk had an opportunity to reverse that to lean back into being an API. I talked about this before, like separate Twitter into the service component and the app component. But obviously Elon Musk, Elon Musk makes Twitter's for management with far-sighted and strategic. So it's all sort of a mess all the way down. It has also been one of the most frustrating aspects of his tenure, which has been frustrating in a lot of different ways. But the idea that he might have reimagined Twitter and taken it

in a more interesting direction, business model-wise, now looks pretty foolish in retrospect, because he's basically running the same playbook that previous management did, albeit with a a little bit more of like a comprehensive, like coherent ability to follow through on some of those decisions. Well, I mean, it depends how you want to define that. But yes, I think that's actually a good point, right? So you go back to like the Twitter files thing, right, which is, you know, we mentioned Matt Taiyb here. And one of the conditions on getting access to all this internal Twitter documentation was that you had to post it on Twitter, right? And that sort of follows through from the we want people to like that's the Big Mac Twitter strategy,

which is keep content on Twitter, keep people engaged on Twitter, make Twitter essential, and we're going to show ads to you on Twitter. Like that's just, it's, there's an aspect here where Musk actually is following through on that strategy to a much greater extent than sort of former management was. And, you know, I guess it sort of makes sense, except unless you think the overall management, you know, to your point, was a chance to rethink the whole thing. Right. It was Pennywise found foolish. over the last 10 to 15 years, the way you're characterizing it. That's where his entire history is penny wise and pound foolish, right? And so, so anyhow, so all this is sort of general context.

Actually, that was a side card to the general context, which is Instagram. So Instagram comes along in this world of APIs. And Instagram, you know, is a very exemplary company for lots of ways, one of which is how do you actually build a social network? And you don't build a social network from day one. You don't become a platform from day one. You have to start out by being useful, right? you, you, like, there's a, I've written about this a lot,

kind of like Apple and Microsoft, for example. Microsoft's a great platform company. Apple's a great product company. Guess what? Apple gets to be the platform because you have to build a great product first, right? That's why the iPhone succeeded where, you know, Windows 8 and all those sorts of things did not. And so the, in this case, Instagram built this filtering capability, right? And it wasn't just them, like, hipstomatic and like some other ones, but they included.

Hipsomatic. Haven't heard that one in years. Yes. Okay. Continue. Yeah. So this was like your original sort of iPhone, iPhone 3G, I think it might have been. And the quality is terrible. And so you put up by these filters and it's like, oh, corkily terrible, right?

Right. And then you would take a picture and then you could select all your social networks. You can link them up because, again, open APIs. Everyone has an API. And then you could post them to Facebook, post them to Twitter with one button, one click of a button. And in the meantime, though, Instagram's adding on their own feed, their own social network. But the hard part of the social network is how do you actually get your friends? How do you find them?

How do you discover them? Well, we're in the open API world. Instagram just takes all your friends from Twitter, right? Basically, you link up your Instagram account with your Twitter account, and then it just ingests your entire network. And the thing is, is that from a strategic business perspective, this was a disaster for Twitter. Twitter arguably, at the time, six months or nine months on, Twitter cut this off, right? It was a big controversy in Silicon Valley at the time because it was against this open API ethos and against the web and people like, what's Twitter doing? Bad company.

My reaction is Twitter should have done this six months ago, just like the kicking developers off. If you're going to, like, you have to understand what the value sort of you have. And their network was a super valuable piece that Instagram basically completely completely. completely lifted off of them. And it wasn't, they didn't break any laws. Like the API was available to that Twitter made it, made it possible to do. And so Instagram basically takes on your whole network and then they attach it to a much more pleasant social networking experience, which is just photos. It's not text.

Like photos are. And it's a cheat code to the hardest part of building a social network is pulling in all your contacts and making it very easy for people. That's right. And the Twitter network in particular is the most valuable network in many regards because Facebook is friends and family who you probably also have their phone numbers, right? And so you can, the sort of shortcut is to upload your contacts. I don't have the phone numbers for the vast, vast majority of people I follow on Twitter, right? Like Twitter has always been compelling because their graph is interest based. It's not sort of physical location or like who you grew up.

with base. It's something completely different. Twitter's creation of a completely new kind of social network, that's why it's the clown car in a gold mine. That is gold. It's like incredibly valuable. And Instagram basically just took the whole thing. And so I think in retrospect, everyone now does agree with the assertion that Twitter made a mistake in not acting sooner to sort of cut Instagram off. And I think you can see where we're going with this news with substack. But this goes both the ways, right? There is this clear sort of adjacency or not adjacency. What's the word I'm looking for? Symbiosis between Twitter and substack, right? And I know this from strategy. Like, as I've talked about for large publications, by and large, Facebook and Google are way more important.

Twitter doesn't even figure in sort of growth. Where Twitter is valuable is, again, it goes back to the power the Trinet Network. It's about your interest. It's very nichey, right? And that's great for a small publication that is very nichey, like Stratory or most substack writers. And so you have this bit where Twitter is the marketing vehicle and Substack is sort of the business, right? And it obviously fits together. And as I've talked about, the power isn't just the authors sharing their links, but the fact that the readers can share the links and sort of direct other people in and Twitter gives them a megaphone. And that's why. Twitter bought review, which is review was another newsletter platform.

And so Twitter did this to Substack first, where it's like, okay, we clearly go together. We're going to move into your space and provide a newsletter product that people can monetize. And you could see this being a real threat to substack as well. What if review links are promoted more? What if they generally drive more users? The big thing, like substack at the end of the day, they've done a good job on the user interface and making it easy to use. at the end of the day, the only thing that really matters is customer acquisition. To what extent can you drive new readers and help them convert to sort of being paying readers?

And Twitter has the distribution. They have the network. You could see a world where they actually build up review and sort of take out substack because it's just like, look, if I post on review, I get so many more subscribers than I do on substack. And they could play games with the algorithm. They could suppress substack links and no one would know, right? and the review ones are just more, sort of more popular.

That was one of the most interesting quirks of this whole thing. It's like, it's now over the last 10 to 15 years in digital media publishing, it's sort of like a cliche. Twitter does not drive any traffic. Don't even worry about Twitter. Don't even think about Twitter. It's a complete non-event. And yet, with Substack,

you're marketing to like the hyperliterate news addicts. Like it's a meaningful. platform and megaphone for people who are trying to like pull in subscribers. And it's honestly how I use Twitter more than anything else these days. It's like a discovery mechanism for interesting long reads that are often on substack. And so I understand the creators being like, well, oh shit. Like this is a real problem for us if Twitter's going to start throttling everything. And this promotional avenue is just going away.

Right. Well, this is an example of how Twitter is a clown car because Twitter should have bought Substack, like when Substack was small and cheap, right? Like there was a long time where Substack's total number of subscribers was lower than trajectory, right? But Twitter should have seen this adjacency. Should have seen this makes total sense. And should have been, oh, that makes sense.

Let's buy them up, you know, give them, you know, the founders a nice return. that is what they should have done. When they didn't, when substance act sort of blew up during the pandemic, then Twitter, the review acquisition made sense. The problem is you're dealing with a company that is just can't execute and is slow. And one thing I heard is that like, I heard like the actual acquisition of review took months. And what I heard is because, yeah, Twitter, that's Twitter. They're slow.

They can't even get an acquisition executed in a decent amount of time. And so ultimately, it all goes back to Twitter just being. a poorly managed company that can't execute and can't follow through on strategic plans and the strategic plans they had were dumb, right? Like the, there is an inevitable competition between Twitter and Substack to your point. And Twitter should have done better, right? Now, let's turn to Substack. That goes both ways.

Substack has already seen that Twitter sees them as a threat, even pre-Elon Musk because they bought review. Now, Elon Musk comes along and kills review because Elon Musk doesn't have any sort of plan. that we can see other than sort of like pursuing the previous subop big back plan and basically saying like what if we put 47 bigbacks in the car? Well, yeah. And let's have the Twitter files be like 85 tweets threaded together instead of something that anybody can actually sit down and read. No, the Twitter files thing is a perfect example where they have, I think people want to complain that the Twitter files didn't have any big impact because like the mainststs. stream media is sort of like suppressing the bad news. And I mean, you can't disprove a negative, but you can also say that why would any news organization want to write about like with the whole

problem with news is once it's out there, it's out there. It sort of loses its valence, right? The reason why you go to a publication with an exclusive or you're like the Facebook quote unquote whistleblower is because then they get to have this big breaking news story and they're going to make a big deal out of it. Right. There's a there's a there's a given take here. And once it's out on Twitter. Why do you want to, like, what, like, what do you do? Write a story that says, oh, on Twitter, X, Y, Z about this sort of thing, which again, tweet number 28, they said this.

Even if you want to grant that the, the sort of news organization was biased against this news or whatever sort of, you know, political partisan sort of are you want to put on that, you have to also acknowledge the real fundamental, there's no motivation to go against that. Right. Yeah. And it is, it's also a real challenge for Twitter more generally because like I said, it's sort of a discovery mechanism. It's most effective as a discovery mechanism for all sorts of other media. Twitter isn't an end in itself. But that's what it's become. Right? Like the, and I think this goes, this goes back to poor decisions made over a decade where Twitter, they chose the big Mac because they needed the IPO and they decided we're going to be a platform where

you come to it for the tweets and we're going to show you ads, as opposed to being something that was a protocol that put that distributed, that push people that was essential, that was inescapable, that was a situation where you can imagine a decade out of substack comes along and Twitter charges them through the wazoo for API access to so because it's essential for distributing their content. And they're basically taking attacks off of substack.

Right. Because substack knows they need Twitter for distribution, like this world of Twitter. an API service that's distinct from the advertising app service. What was, you know, I wrote this when you want to go right. It'd be great if under private ownership, you actually revisited the 2012 decision. Go back to being a service and protocol. And you end up in a situation where a substack exists and instead of it being a competitive

threat, it's a, it's a compliment. Yeah. For like, you have a value chain, right? in a value chain, whoever has control of the most important piece ought to be able to extract value from the other pieces of the value chain, right? Apple gets to pull 30% from every app because they control the most important part of the value chain and you have to be there as a developer. You can't sort of say, I'm going to go, I'm going to take my app and go home because you're

you take your app and go home and be out of business, right? You're going to pay that 30% whether you want to or not. Twitter ought to have way back in the day put themselves in a position. so that when a company like substack comes along, they're like, oh, substack. It's a no brainer. We're going to take 70% from your writers. We're going to take 70% from you because.

So in that version of events, the theory is that Twitter licenses its API to a bunch of more creative third party developers that come up with additional use cases that make it more the way. The way that they should have done it is they should have monetized their API way back with. Right. And the, you know, you can build what. whatever app you want on Twitter, all sorts of things, but you're going to pay for access and we're going to, you know, extract rents from you and maybe we're going to be fairly arbitrary

and we're going to charge you different rates based on what you do and all these sorts of things. And a substack comes along. Look, you're explicitly monetizing on the Twitter graph. We are going to, we're going to extract our sort of fair share from that. But they abandoned that, again, a decade ago. And so you end up with this dispute this week where, again, the substack Twitter dispute is not only an inevitable one. It actually kicked off previously when Twitter bought review, but Twitter can't Twitter is incompetent. Cloud car. It's the theme of the podcast.

Yep. And so this is where I do have a substack, I think deserves criticism. What did they expect was going to happen? Yeah. Do you think it's a strategic mistake on substack's part? Like regardless of the actual reaction for Musk, shouldn't they have anticipated something like this and recognize that most of their customers, or I guess creators are vulnerable if Twitter decides to pull the plug and really screw with them? On one hand, on a certain sort of, you know, 10,000 foot level, you can see substacks seeing this opportunity, right?

Twitter is a mess. People are looking for something elsewhere. This is a well-known brand. We have actual creators that people have a demonstrated willingness to pay for. We have this substack app that presumably lots of people have installed on their phone. and this is a way that we can like pull more people in. The more people we pull in, the more we can promote other substackers. So we start developing this ability to drive new users, drive new subscribers,

or further develop it beyond their sort of like, oh, sign up for these other substacks when you, you know, which has been pretty successful for them. And so you can understand the allure here. But there is a view you needed to step back to the 20,000 foot level and think about what's still the most. important challenge here. Why are we doing this? Why are we trying to get people in the app? Because we want to help people get distribution and acquire new users. You need to think about

where are they getting distribution and acquiring new users today? They're getting it on Twitter. Well, it's a huge risk. Yeah. If you're starting from scratch trying to build out that network, I mean, it's unlikely that it's going to succeed. And as I said, I'm rooting for substack. But for me, thinking about it, it was, you know, what Twitter did on Friday looked creepy and paranoid and obviously unfair to a lot of individual substack writers. And what Twitter's doing isn't necessarily illegal, but if more social media companies did this to third party businesses and did it as explicitly as Twitter was doing it last week. Oh, it's blatantly anti-competitive. I would bet good money. It would become like per se illegal to do this.

And so it's an abuse of market power. At the same time... But they have very little market. Yeah, I know. It's Twitter. Good old clown car. You go back to that value chain sort of bit. My critique of Twitter is they didn't build in the extraction tools to properly monetize their position in the value chain.

That doesn't change their position in the value chain, which is very important and essential to substack. And substack needs to sort of be aware of this. But there's a broader point I want to make. Well, first off, it's worth no. quoting subset might still get away within the end, right? Musk gave in over the weekend. You can now sort of share winks.

And maybe he got shamed into doing, you know. That happened the last time he tried to do this. Right. Remember it was a World Cup final. Sharing Mastodon or Instagram. Totally. Whatever might be. So maybe they looked at that.

And if they did, like that's a machiaveal and shit, which I have to tip my hat too. It's like, well, he's probably going to overreact. But there's going to be a huge internet push back and then he'll back down and it'll be fine. And in the meantime, we'll get a Streisand effect where everyone will hear about our new notes feature. So, you know, honestly, that might have happened. Like, like, I don't want to short, short shrift substack at all.

Because if that's the case and it ends up working out, there is a path here where this is the best thing to happen in notes and actually its likelihood of success increased significantly because of this brouhaha this weekend. Well, if that's what happened and that's what the strategy was, I move to replace all galaxy brain memes with the substack icon moving forward on the internet. I'm not sure I buy that they thought through like seven and eight steps of the response here, but it's possible. It's definitely possible.

I mean, it's not like any of this was that unpredictable, right? Again, to your point, we have, it happened last year where he's blocking all the Macedon links, right? And then, you know, uh,

so anyhow. So, so, so, but there is a point that I did want to make sort of here about substack. which you sort of talked about the poor substack writers that are just stuck in the middle, right? And look, we just want to share our work and why are we getting punished because we're not part of this? And there were ways around it, particularly if you got a custom domain.

It was literally just a rejects blocksubstack.com. It wasn't like an IP block or something along those lines. Substack has talked a lot about how they're unabashedly pro-writer. And every decision they make is pro-writer. And it's always rubbed me the wrong way. And I think I complained about this a few weeks ago in the con, you know, and the reason why, and I said they didn't make some of the rights decisions, particularly on getting the rights to bundle. And as far as locking in their writers, because my point was they can never be truly maximal pro writer because the maximal pro writer is always going to be like open source software. Like WordPress is maximally pro writer, right?

You can go to WordPress.com, which could be blocked or they could censor you. you or whatever, you can take the software because it's open source and set it up on another computer and have your writing there, right? That is just from a technical perspective, open source publishing software is always going to be maximally pro writer. And substack is never going to be that. And the problem with asserting your something that you cannot be is that you end up in situations like this weekend.

Substack has raised a lot of money. they're losing a lot of money. They did this raise over the last couple weeks that frankly really bothered me where they asked their writers to give them money and to give them money at the same valuation they got in the crazy 2021 era that's ridiculously high. And I can rant about that in a moment. But this move to do a Twitter competitor makes sense for a company that is desperate to justify its valuation and to grow into something meaningful.

and maybe one day IPO, right? It makes sense for substack. It does not make sense for the writers, right? The writers were fine with distributing on Twitter and monetizing on substack. Again, this isn't a critique of substack per se. I think, like, why not go ahead, try to build a Twitter competitor. If you're ever going to do it, this is the time. It's an interesting thing to do, right?

But don't tell me your above everything pro-referral. because you're not because this isn't a pro writer move. And again, that's not a critique. And it's not a pro writer move that stems not from the substander founders being bad actors. It stems from the fact they raised a lot of venture capital money and they have a goal to build a successful company. And that is misaligned with what is the goal and priority of the individual writer. That misalignment is okay, right? you can still deliver, look, we have the easiest use platform.

Everyone knows what it is. We're going to try to build up network effects. We're going to deliver more users. And I as a writer can say, okay, there is a tradeoff here. It's a for-profit company that has raised a lot of money and they might do some stuff. But you know what? I'm not technical. I don't know how to do this sort of stuff.

I'll sign up for substack. Everyone knows what it is. It's easy to monetize. They've done a lot of work on the UI. I'll still do it. And oh, by the way, the terms of service say they have the right to bundle my content at some point in the future XYZ did it out or whatever like I'm not going to think too much about that I'm just going to sign up and do it right like this this is this is this is this is the way if I could use

you a current sort of thing but instead they're like no we're pro writer we're pro writer we're pro writer we're not going to lock you and we're not to do XYZ it's like that's fine to say but the structure of your company inevitably means there's going to be conflict between what's best for writers and what's best for you and it would have been better for substack to take that head on and to then be able to be free to make business decisions that are good for the company. And I would argue if there's like a substack bundle like $25 a month get access to all substack, I think that would be good for substack writers in the long run. Right.

You know, I do too. It's one thing I wanted to add because on a couple podcasts over the last couple months I've said how much I have enjoyed reading substack and enjoyed discovering all these new people. It is expensive to read substack. And it's not something that, at least to read as many different substacks as I'm reading to prepare for these shows. And it's not something that's that accessible to normal people. But if you made- You are the classic, you get too expensive.

I was going to say, these are like actual expenses. But if you made it into a bundled product that was $25 to $30 a month, I think that would be a really compelling product for people. And your point is they have basically half-assed it and made it impossible to bundle. It's not half-assed it. It's, I believe them, I believe them when they say we were going to be maximally pro-writer. We're not going to lock you in. We're not going to assert any sort of rights to your content. It's your content.

It's your customers. I'm not saying that was fake. What I'm saying was that was an unrealistic position to hold in the long run. because at some point what's best for Substack was going to be in conflict with what's best for writers. We reached that point this weekend. It would have been better for Substack to reach that point on their own terms in a way that would be more beneficial to the company. So that they could come to writers and say you sign over X, Y, or Z, we may include you in a bundled product, but in the long run, it will be better for everyone. Correct?

I mean, that's my angle. Well, again, to be fair, it's unclear what that would look like, you know, would they have gotten the biggest name writers that they might have sort of along the time. But they built a great product. Like, that's what they should have focused on. Look. The U.S. is phenomenal. Yeah. And a lot of writers, honestly, they just don't like, you could have built your own newsletter before, as I did.

Right. I showed how to do it. Why did no one do what I did? In part because it was hard. You had to put all these different pieces together. Right. Substack absolutely filled a market need to have a one-stop shop. We'll take care of everything. And I will pay the 10% because I have no idea how to code and do the stuff that you're doing with WordPress.

I think it's totally fine. Like, for what you're getting, you're getting a lot of value. And that's what they should have sold. And it'll be like, look, if you care about having no control, no one can do anything with you, what to do. Well, there's a bunch of open source software over here. we advise you can even put a blog post if you want xmozz we you know we've partnered with wordpress.com or i go or work you know all these sort like other sort of alternate not wordvis dot com that's the that's the that's the fort pay one but wordpress dot org and again this is my i i i

know the sub stack guys i like them i like substack i'm cheering for it right i feel i view substack as a part of my personal legacy and i'm so i want the company to succeed massively like and so I almost feel not subjective, not objective talking about it precisely because I feel like I view everything they do with such angst because I do want them to sort of succeed and be a big thing because I think it's good. I'm proud of it. I'm proud that it exists. And I'm frustrated about it. What I've always been the most frustrated about is this statement. I'm like, you can't be the most pro-writer company as long as you're a for-profit company that's raising money that's raising VC money is going to be such.

platform. You're going to have to make decisions that are not the best for any one individual writer, even if they might be best for the, the, the whole. And, and I don't know, that's just sort of the angle this weekend. Now, again, maybe their eight dimensional chess worked out. Everyone's going to learn about substack notes. Elon will be shamed into not blocking the links sort of on Twitter. Again, this is part of the Elon experience. You have no idea what's going to happen. What's, what's going to go on? And, hey, if they actually build a Twitter alternative, like, like, That's a home run, right? That's a grand slam.

And you know what? I should note that I've enjoyed using it early on. The reason I'm saying it's difficult to imagine it succeeding and at least succeeding in a meaningful way is it's just really hard to port over the giant networks that exist on Twitter and make it so white. Because Twitter's not off that, that, that, that, that, that, that, that, that, that, that, that, that, well, not only that. It's just everyone's on Twitter. And that's where all the intersections sort of happen. And so it's just going to be really hard to recreate that anywhere. Like, I'll be shocked if anyone replaces Twitter with that sort of core function going forward.

Yeah. Well, I mean, here's the thing. I'll just sort of attack on to this. From a substack the company perspective, I think notes is great. I think they should absolutely try to build a Twitter competitor. It's the only way they're going to justify their valuation is like to really like meaningfully shift people to, you know, using their app where they actually can meaningful, you know, control delivery or discovery and can drive new users.

I think it makes a ton of sense for Substack the business. Now, to go back to my other bit where I think that Substack has made a mistake is it's not just the getting the right to bundle, but also they should have locked in their writers more. Guess what? If writers are locked in and it's really hard to sort of transfer their subscriptions from them, because Substack doesn't just let you transfer your email with. you can also shift the subscriptions themselves. So people don't have to like resubscribe on another site

because it's in your stripe account and you can sort of shift them over. And so they're handicapped. If they do this, if Elon Musk had actually held the line here, they would be in real danger of losing writers because they'd never lock them in, right? If you walk them in, you have more strategic flexibility to do this broader thing.

And again, I recognize that, like there's a bit, this goes back to a whole tradeoff discussion. If you want to operate a business and make sure you've got to sort of like do stuff that makes people unhappy, right? Like you need to at some point make your writers mad because it's best for the company as a whole. And Twitter, Elon Musk, like I said, arguably this was the right thing to do. Like he, like, now it would have been better at you not fire review when he had his own alternative instead of asking people to write 4,000 word essays and tweets, which is just an insanely ridiculous experience. Right. And so this is why it's fun to talk about because there's this value chain of writing on the internet is totally screwed up.

And it's basically screwed up because Twitter's been such a mess for so long. But it's also frustrated to write about because no one can like do the right thing. It's just a mess. It's a total mess. It's a mess on all sides. And I think that's a good place. This is why I wanted to build my own software. Like I don't, I don't want.

I was very, I used to use a software called memberful. required by Patreon. I did not feel comfortable with Patreon just because decisions they've made in the past. They've raised a ton of money also. I'm not clear like what their long run fortunes are. When you're in a situation where you're dependent on a platform that has to make decisions to justify their valuation, it's a iffy place to be. Right. And like I don't want my fortunes to be governed by other people's incentives. Well, and on the substake front, my one question would be, I know they're a private company, but are they losing money or are they not making enough money? Okay. So it's not necessarily a viable business now. Is that the problem or is the problem that

they're not multiplying growth and revenue and profit to the extent people would want to see? Well, so they, they released their 2020, 2021 financials in the talent of this like fundraise from their writers sort of thing. They didn't release 2022, which is not a great sign. You'd think you'd want to like if it was great you'd want to release it. They did spend a lot of money on those writer guarantees. And so if you took that away, they would be closer to profitability. But I don't think quite profitable yet. But I honestly haven't dug in yet.

So we can come back to that one if I'm wrong. But you know, this we have the evidence that they went out to raise more money and they couldn't. Everybody you see what's like, yeah, no, I don't think so. $650 million valuation. No, I don't think so. And that's it. This is actually another example.

substack went to their writers who, to Substack's immense credit, has created these new careers for these writers. That's amazing. We both have friends that are on Substack that have wonderful careers doing it. And it's great. And I'm glad they exist. And I'm cheering for them. And I want them to succeed. I was extremely bothered that they went to those writers who have a total dependence on Substack and who have a natural love for Substack.

and who have a natural love for substack because substack made this new life possible for them and said, hey, do you want to give us some money and invest in this company? That's great. And oh, by the way, you're going to invest at this totally unrealistic valuation that we raised one of the biggest tech bubbles ever.

That's right. This is that pro-writer? That feels pretty anti-writer to me. It sounds like you're playing on writer's sort of emotions and affection for you to rip them off. Like, I would have, I just have a problem with raising for your writers in general. Like, you're asking them to put all their eggs and sort of one, one bucket. But at least do it at a realistic valuation.

To do it at a $650 million valuation with no VC and all of tech would touch you at that number. Just like, what happened to being pro writer? This is what happens if you're not honest from the beginning. You do stuff that's really bad. I think that was bad. That fundraise really bothered me. But hey, it worked. Well, and hey, maybe somewhere down the line, the eight dimensional chess from

Substack leadership will pay off. If this works out and they actually build the new Twitter, guess what? The writers who invested them are going to make their money. So. Yeah. And look, sincerely, both you and I are cheering for Substack. So hopefully it works out. Right.

But this is, it's just like, if you're, you got to be honest about your incentives and your structure. Like, like, just structurally speaking, you can't be the most pro writer platform because you're not open source. Like, it sounds cliche, but the most pro-writer is every single decision is always in the right of interest. Now, there are things like UI,

are you need the best UI with open source software? You'll be able to put it? No, you're not. So there's things you can sell that are really beneficial and you can be honest about the reality of your business. But it's just like asking writers to invest at a ridiculous valuation

and basically praying on their affection and then getting in a war that, I mean, I guess maybe if you want to eight dimensional chess, let's go to 16 dimensional chess. That war is maybe going to, if it works out, will justify the valuation. So maybe it'll all be fine in the end. So hey, there you go.

Yeah. And I think your point is, look, sell low maintenance, back end software, sell promotional value. And you don't necessarily have to like over promise in terms of how. Yeah, well, this is the problem is. It's not clear how big of a business that is, right? I mean, there is a bit where substack is actually pursuing the optimal path. being a Twitter replacement is by far the most valuable sort of outcome that they could get.

One of the problems they do have is they're so anti-advertising when I think that's probably, like you can see, this is like the athletic, right? No word, no ads, no ads, no ads. New York Times buy those, what's the first thing they do? Add ads. Guess what? Ads and attention and reading stuff goes hand in hand, right? Like there's ads, there's this, the whole anti-adds sort of thing, it's such an,

the elitist rich person's view of the world, right? Like the, oh, if you have lots of disposable income, like, that's the way, the whole internet should have been that way. There should be nothing ad support. You should have had to pay for everything. It's like, well, yeah, that's one thing if you, you know, if you make a lot of money. If you don't, is that actually equitable. Is that actually a great outcome for everyone?

And I think there's a bit here where, you know, in the long run. It's also tricky, though, because if you're trying to be. an ad supported business without any subscription revenue. What we've seen over the last 10 years, particularly, is that ads just cannibalize like the entire user experience and it's fucking terrible. Yeah, no, that's true. That's true. I'm not saying some tax actually have ads today. No, but they could do it tastefully because they have the subscription revenue as a base.

And, you know, like the New York Times has ads and subscriptions, but the ads are not like horribly intrusive. They can have the user experience be the priority. It's not there. Yeah, that's right. That's a very good distinction. I agree with you. You know, in the long run, the problem outcome is substack does have enterprise value, I think,

because it has all these writers on it that would be interesting to someone. Like, it would actually be kind of funny, but I could see The New York Times buying Substack at some point. Like, they're just sort of, they're the real sort of like monster in publishing generally. And, you know, but this would be, you know, at a much cheaper price at $650 million. And then we'd probably get ads. and it'd probably be a bundle. And we'll all survive.

I do think that's a good take. Ads are not this evil thing that's coming to poison the well for everybody. In any event, I promised a couple parenting questions. I'll read three here. Yeah, sorry. I,

the rant went even longer than I anticipated. Well, we said at the top, Ben was fired up. Greg says, Tyler Cowan posits, in the future, every middle class kid will grow up with a personalized AI assistant

so long as the parent. parents are okay with that. So I ask, Andrew, are you okay with your child having a personalized AI assistant? How do you think you'll prepare your kid to exist in a world with prevalent AI? Jeremy asks, Andrew, what are your plans for introducing your child to screens? And Ben, what was the screen time timeline for your kids? And then Dan asks, Andrew, I'm curious if you thought about how you'll handle your son's relationship with technology, has doing the show, changed your point of view at all. Good questions across the board. I put the AI assistant question to my wife, Alice, and she looked at me like I was insane. She, because we're right now just trying

to feed the kid every three hours. And I don't think her brain could could really compute the, the idea of a personalized AI assistant. Maybe she needed an AI assistant to answer the question for her. Yeah. Or she like, look, she will take any help she could get right now. But I would say, I'm going to be crowdsourcing the wisdom on what to do with AI and children. I'm not going to be arrogant enough to think that I have the best ideas on that front. So we'll probably just go with whatever his classmates are doing. What I'll say, though. It's funny because that is a real thing that happens with phones, right?

The pressure that comes on parents who want to hold off on getting their kid a phone is when you get to the point that all the classmates have one, And then it's like you're like you're harming your kids like social life. Right. Well, and look, the question about whether the show has changed my point of view is a good one because it has changed my point of view in two key respects. Number one, talking to you is instructive for me because I found out that you also derive a ton of benefits from getting out in the world and seeing people. and you came to that epiphany on your own over the last five years or so. And in the past, there was always sort of like a voice in the back of my head, because I obviously believe all that too. But I was like, well, maybe you're just a complete leadite.

You, Ben, are like the savvious tech user I know. And you've reached the same conclusion. So I'm obviously going to be emphasizing touchgrass principles in young Charlie's life here. But that at the same time, talking to you every week, like, You can't press pause on the rest of the world's tech progress. It goes back to the open letter AI conversation we had. Like, I'm just not sure it's useful to like say, oh, you're not going to get a smartphone until you're 18 years old.

Like, if that's going to be the way the world is communicating, then I want my son to be fluent in all of that. And so while I am going to remain a Luddite, I'm not going to be imposing all of those constraints on my little kid there. Yeah. And what you want to instill is self-control and discipline, right? And I don't, you know, there's a, this goes back to, you know, I was raised, you know, never touch alcohol, you know, X, Y, Z.

Guess what? Never touching alcohol and then going to the University of Wisconsin. Not a good combination, right? You know, when I have hands and knees in the middle of Park Street, puking my guts out, I kind of wish I had, you know, weren't out of handle off. Soft launch your drinking career. Yeah.

Yeah. And I do think there's, there's something, there's like, what's, what's the goal, right? Is the goal, if you're just saying no screens, uh, and I'm going to, you know, be hovering over you, making sure that doesn't happen. What are you actually accomplishing, right? You're accomplishing your, your kids probably mad. They feel left out. They're not a part of their, their friend group who's into.

this sort of stuff was more lenient parents. They're going to resent you. And then they're going to leave the house and guess what they're going to do? Like be utterly obsessed with and have no actual ability or context to sort of control themselves. And no, like the role of a parent, particularly when your kids are young, you see people like they try like reason with their kids. They can't reason. They're like you're developing this ability to think broadly to have context and logic.

your job is to provide guardrails and discipline, not discipline that's like a punishment, but setting examples and how you do stuff and like, and, you know, and what's, what expectations are. And to your point, I think this goes with the reality that technology is sort of essential going forward. And so my, again, I'm not saying I'm the best at this one. I think this screen time issue is challenging. My son and YouTube have a very strong relationship, as I think a lot of kids his age. But there is a bit where that's the way it's going to sort of be going forward.

There are real benefits. And to the whole sort of touchgrass bit, you're going to get more from your touchgrass experiences when you're excited about and pursuing those touchgrass experiences is because they're so much better than the experiences that you're on a screen, right? If you, if you, if you're, like, no, you're going to live on the grass. And when you're 18, they even come in and check out the big screen TV. Like, not only is there going to be as unhealthy relationship as you're sort of suddenly plunged into the deep end,

but also you have grown up to resent the thing that was actually the best part of life, right? And so I do think there's a balance and moderation in everything. this is a general principle, but I do think it applies to this screen thing. Your goal as a parent should be for your kids to be able to control themselves, to know when to put the phone down, no one to put the iPad down,

know to appreciate and understand why being with people in person is better, that it is fun to go outside and play. And you think about your kid, if it's like, if they're outside, and all they're thinking about is how resentful they are of you because they're not allowed to do this way, either I'm even in the right state of mind to enjoy what you're trying to get them to enjoy.

So, you know, that's sort of broadly how I think about it. Am I successful at that? I think it, you know, like any parent, and it's really hard when you're trying to impart discipline. Like I've babysat in the past. My experience with young Charles is like pretty limited. But when I've been babysitting, the magnetism of screens for young children is fucking unbelievable. And so, you know, it's hard to impart restraint when there's like a physical reaction

to it. But I will do my best to model behavior, touch grass as often as possible. The one thing I will say is I have no problem with and in fact endorse the like for I mean, I grew, you know, my kids, I was traveling back from Taiwan to the US, right? Guess what's phenomenal for making that trip with? little kids. Being able to give them an iPad. It works very well.

Guess what's really good for a kid. It's good for a kid for their parents to have a really strong relationship and to still have their own life that's not necessarily kid dependent. How can you accomplish that? Well, you could get a babysitter and the babysitter could let the kids watch an iPad the whole night and just make sure they don't die, right? And the kids are going to be happy. Easiest job ever for a babysitter.

You can go out have a nice meal with your wife. You could actually go to a nice restaurant if you can teach your kids to sit properly at a table and eat nicely. And by the way, let them look at a phone. Right. Like when I see, some people will see people in a restaurant and their kids are on iPads or whatever and they're like taught them. It's like, no, me sitting here. I appreciate you have ballified. Yeah.

Thank you so much. Yeah. And, you know, kudos to you enjoying a nice meal and me also enjoying a nice meal with my kids. and everyone sort of the winner here. Like, now, again, it's a great take. No, no, no. That's such a good take because there are so many parents that I've come into contact with who are religious about the anti-screen, like, position.

And for the first several years, like no screens whatsoever. And they are, number one, really annoying. And number two, moving forward, I will raise this counterpoint in like dinner party conversation and make the argument that a little bit of, balance is a good thing for a healthy relationship, which ultimately redounds to the children. That's right. That's right. I mean, this is my big picture, sort of parenting take in general, is you need to live your own life. Like, like, if you want to model for your kid the value of touching graphs and having real, real relationships, you don't do that by lecturing them and forcing

them as you hover over them. You know, go play with your friend now. I'm watching you go play with your friend. No, you demonstrate that by you having good friends. By you being clear. And obviously Charlie's not going to comprehend this now, but as he goes older and he sees like, yeah, daddy's going out with his friends tonight. And mommy's cool with it. And mommy's, you know, wants him to go have a good time. And vice versa, like kids learn, kids are memetic machines.

They learn from observing and copying what you do, not from what you tell them to do. If you're living this where you're just always around them and go do this now and go do. go do that. They're, what they're taking away from that is they're going to be seeking out someone to tell them what to do their whole life in general, which is not what you want. You want sort of like an independent thinker of value.

And they're not going to believe you that this experience is valuable because they like, well, my perception of being forced to touch grasses, it sucks and I'm resentful of it. And like, why is daddy always telling me what to do, right? Like so,

so just in general, like, it's important to not get lost in your kids because to the extent you get lost, your kids, it actually hurts them. They need to be their own people and they become their own people by observing you be your own person. And it's important as parents to not lose yourself in the process. And don't feel bad about saying, I need a break. I'm going to go off the boys and watch a basketball game.

Or you know what, Alice, you're like, you know, go out, do whatever, you know, your hobby is. Yeah. And like, like, it's going to be okay. And the one sort of big observation I had when. when, you know, I think I told it before. I read all the books and all over the end. It's all overwhelming. And then you're in a different culture and they're doing stuff that I don't, that the book said that was wrong. You know what?

The human race survived without parenting books for a very, very long time. That was the only bit of advice you gave me when I told you that Alice was pregnant. You were like, you know what? I read like 15 different books and I would suggest you don't do that. And I really appreciated that. You know, like I think that you can really. like kids get screwed up, but they're not loved and not care for.

If you're in the other direction, I think they're probably going to be okay regardless. If you love your kid, like he's going to turn out fine. He's going to turn out. He's probably going to turn out. And parents bend themselves in a pretzel and they take on all this responsibility.

At the end of the day, like your kid's life is going to be his responsibility. It's going to be up to him to make of, uh, of his life, whatever he's going to make of it. And your goal as a parent is to empower him to have the capability to make right decisions, to have a sense of right and wrong. And you do that by letting him figure it out, by letting him live his life.

And so many parents want to live the life for their kids. They're so focused on the outcome. They have to get to the right college. They have to get the right test score. They have to do XYZ. And they're missing the fact that it's the actual struggle and figuring it out. that's what you're supposed to be teaching. And this goes back to the AI model thing, right?

What's the goal here? The reason why so much of this homework stuff is messed up is because we're focused on the output. It's the process that actually matters. And, you know, it's like, I mean, you know, trust the results or trust the process. The best results come from the best process. Yeah. Well, in all seriousness, that would be my answer to Greg. It's like if the person grows up with a personalized AI assistant, I think that's

fine if that's the way society is trending. Not just that, but they're probably going to be better off if they can, if they know how to leverage it and handle it, right? Exactly. And how to balance it in your own life and, you know, and how to make what you do better. And how to make what you do better. Yeah.

So a lot of wisdom there at the end of the podcast. I do need to emphasize that at this moment in time, I am just trying to establish a regular feeding schedule with my son. And we're really just trying to keep our heads above water here. But this was a great podcast. It's great to be back. We are coming back next week. We'll be back to the regular schedule.

No, we might be back to the regular schedule. Let's take it one week at a time. We have one episode this week. We will let you sort of ease in. And, you know, let's under promise and over-deliver here. Just like Charlie. Just like Alice, I guess I should say. I think that's a good policy.

All right. Well, until next week, Ben, I will talk to you soon. Talk to you later.