Sharp Tech with Ben Thompson - The FTC Sues Adobe, Keynote Season and Progress, A Few More Apple Questions

Episode Date: June 20, 2024

Lessons from the FTC's lawsuit alleging that Adobe has violated consumer protection laws in its cloud services business, a question about the vibes at WWDC and other tentpole keynotes across big tech, and a few more notes on Apple, including Facebook's data calculus, the DRI model, and stress-testing the developer concerns with respect to the Vision Pro.

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? Doing okay, Andrew. How are you? I'm doing all right. And we have to start with two notes up top. First of all, I know this is going to be difficult, but we do have to congratulate all the Celtics fans in the audience, NBA champions. We do. They were thoroughly the better team. I'm not having this like Dallas just got lucky.

They beat the one, three, and four seats in the Western Conference. We have to give credit to the Celtics. They kicked the rear end. So credit to them. And yes, you know, you talk a lot. You got to take it when it comes. To the Celtics haters out there, you can take solace knowing that this was one of the least enjoyable finals matchups of my adult life.

But beyond that, there wasn't very much to nitpick. So congrats to all the Celtics fans. One of my good friends, you know, he flew in just for game five. That was the only game you can go to, the whole series. I am happy for him and him alone and like 2% Drew Holiday. And yeah, screw the rest of you. So no, you know, I'm serious. Congratulations in Boston.

It was a thorough, thorough ass kicking. We talked about that friend on the podcast, I believe, two years ago because he left the group chat in a fury in the middle of the 2020. NBA files. So it's been a long journey for Celtic fans. Steph Curry went off. So yes. Congratulations to him. Congratulations to the Celtics.

Congratulations to everyone I antagonize on Twitter. Don't worry. Number one, I will obviously be back talking a lot of junk next year. Great. Yep. No, but the great thing is, is the Celtics fans are just,

they're not, it's not going to touch them, right? We saw this with, we have another mutual friends, a big Denver Nuggets fan. Like when you're the, you know, I felt this one in the bucks one. Yeah.

The whole next year, you are untouchable as far as like trolling on Twitter goes. And it's infuriating for the rest of us. So just, just know, just enjoy it. Yes. Savor that glow. Second programming note, there will only be one episode next week. And it's going to be a pre-July 4th podcast. And in person pre-July 4th podcast.

Yes. It's going to be a mailbag. Send all questions to email at sharptech.fm. And make them fun. You know, it's going to be. sort of a summary festive mood as Ben and I gather together in person. So if you have anything fun or stupid, feel free to fire away and we'll see what we get into next week.

And that is the start of sort of our summer schedule in general. So I stopped doing interviews in July in the first couple weeks of August. We will go down to once a week. Maybe we'll go a little longer on those ones. So keep you occupied. But this happens every year. It's happening again this year. And you know why?

What's that? Because what's the number one principle of our podcast, Andrew? Touch grass. That's right. It's a very important. Touch grass season. That's right. That's right.

It's touch grass season. Yes. Well, we'll start today with a new lawsuit from the FTC that was filed this week. Thank you, Lena. You know what? Lena Kahn stepped up last year this week or so.

I think filing actually a somewhat similar lawsuit against Amazon and which, you know, I was able to to write about. out and she stepped up this week. So thank you. I appreciate it. That's right. Keeping us busy. That's right. Yeah, we appreciate it. To begin, I will read from Bloomberg. This requires a little bit of foundation, but Bloomberg writes, the U.S. Federal Trade Commission sued Adobe, alleging the software company violated consumer protection laws by making it too difficult for consumers to cancel their subscriptions. Adobe pushed users toward annual subscriptions to its creative software, such as Photoshop without, quote, adequately disclosing, end quote, that canceling in the first year could

cost hundreds of dollars, the FTC said Monday in a statement. The company also designed the cancellation process to be difficult, requiring navigating many online pages or transfers between customer services representatives, the regulator said. And Ben, the core claim from the FTC centers on the subscription options to Adobe Creative Cloud, where you're using. Users can choose between either the annual paid monthly plan, which is basically an installment plan. And if you cancel, the early termination fee is 50% of what you would pay if you had subscribed for the full year. And that plan costs about $660 per year. The second option is an annual prepaid plan, which is a single lump sum payment.

And that is a little bit cheaper than the annual paid monthly plan. That's $600 a year. And then the monthly plan is monthly, and you can cancel anytime, but it's far more expensive. That costs $990 per year. I just have a question here. Okay. You appropriately, someone say graciously, I would say appropriately cited that you were quoting Bloomberg for the first part of that. I did not hear a citation that you were quoting chertechery for the second part of that.

The one and only Ben Thompson. I did the math for all that. I want credit. Okay, that was quoting trajectory, except the only difference is you did round it to round numbers. I calculated it down to the sense. So yes, just want to make sure that's clear. I decided to use round numbers for the podcast audience. But thank you for doing the math. The FTC argues that Adobe is violating the law by failing to clearly and conspicuously disclose to customers that canceling the annual paid monthly option will result in a 50% termination.

fee. You wrote about it on Tuesday. You clearly. Yes, I did. The final section of your update was very good. So can you summarize your take in broad strokes here? Well, before that, actually, there's a few things I didn't get to in the update that that I want to address sort of as long as we're here. I didn't really talk about the difficult to cancel. I think this is ridiculous. Like, this is the same thing. This is the main thing they'd nailed Amazon for last year. Like, I'm sorry you had to do like three extra mouse clicks. Like this, this drives me insane.

Like it's like you had to go out and code up every page as you went to exit. And the reason why I, and it's not just that it's ridiculous, you can click the mouse three extra times. It's fine. Okay. You know, and companies get a chance to sell you one last time.

Say, are you sure you want to cancel? Here's all the benefits you're going to get. Here's what you're going to lose. There's nothing wrong with that. I just wholeheartedly object to this entire train. of objection as far as can i ask how do you draw the line there because trying to cancel certain subscriptions is a real pain in the ass this is an example okay i have two takes on this number one one of the objections to including this is it kind of gives the game away about how political this

stuff is if you have say a newspaper that requires let you sign up on the web but call to unsubscribed I almost cited the Wall Street Journal by name. I've tried to cancel the New York Times did this for years and years. And I think after the like 100th time, they wrote complaining about or writing cases like this. And people are like, why do we have to call to cancel for you? They finally, I believe, instituted sort of on the web cancellation. So just it's this is just a bad line of attack all around. Number one, it's overstated.

Number two, if you're going to attack this, attack the actual problems. Otherwise you look like a political stooge. Okay. So that's take number one. Take number two, this is one of the more powerful pro-Apple arguments as far as their strong control of the app store. By forcing all subscription-based apps to offer an Apple App Store version of subscription, what they are delivering to consumers is a guarantee that you'll have one place to go to view your subscriptions and cancel them easily. It is incredibly convenient and easy to cancel. cancel any sort of Apple subscription. Yeah.

And that's a real benefit. And there's a bit here where there's a lot of good developers that are not playing tricks. Strategore does not play any tricks. You can go to your account page and cancel at any time. But there is a, you know, it's not, it's one click, by the way. There's not like a bunch of jumping through multiple hoops and things on those lines. But there should be an acknowledgement that there has been a spoiling of the commons. And a lot of that has been by the biggest companies, like Adobe, like the Wall Street Journal, like the New York Times for years and years until previously.

And that is a legitimate reason for Apple to force everyone to go through their system so that their customers cannot get screwed by unscrupulous actors. So it's always worth calling out these pieces. There's lots of good and bad things for lots of things. And the app store is definitely one of them. Yeah. Well, and on that point, I think it's reasonable for Apple to force everybody to use their payment system and play by Apple's rules. The pushback comes when Apple tries to extract a 30% or 27% fee for doing that. Well, I mean, we get what you pay for. I guess. Sure. I would be fine if Apple wants to ratchet it down.

Yeah. Well, you know, that's just a matter of they're delivering this. This is a consumer benefit, right? And the consumer doesn't eat that 30%. developers do. Right. Apple's like, well, that's the privilege of being on our platform. And then whatever. We can go around this one.

Round and round. Round and round. Yes, absolutely. But it is, it is interesting because I, you know, yeah, I just averted a long sort of a rat hole that we could have got

down for a very long time. It's one long conversation about the app store here on Sharp Tech. Absolutely. So that's number one. Number two. I, let's remember these options. If you look on.

the page. And I was actually kind of confused. So I put the screenshot from the complaint in my update, even though it was super blurry because I wanted to emphasize I didn't pick like a recent screenshot that didn't seem so bad because it doesn't seem so bad. It says on the page that annual paid monthly has a termination fee. It says annual prepaid is a one time payment. And it says monthly, it says underneath it cancel any time. Right. There is two important things to note. There's two sort of consumers at play here.

One, you're kind of in a rush. You just click through. You grab the cheapest one. Okay. Is this, whose fault is this that you were not looking at it sort of carefully? Number two, this is going to sound mean, but it actually, I mean, in a sort of philosophical way. There's people that can be just kind of dumb and they just don't understand what they're

clicking. And I actually have a lot more sympathy for this sort of individual. Like the truth is navigating the modern world, everything moving to online, all this fine print and things that you have to know what you're signing up for is tough. And there are probably a disturbing number of internet services, particularly subscription-based ones, that prey on these sorts of folks. And so I think it's worth acknowledging that. It's kind of an uncomfortable thing to say or admit, but we kind of all know it's true.

And that is something that I think that gets into the broader. Is this the right thing to do sort of bit? That's number two. There is number three. And on that point, I will just add that I don't consider myself simple to sort of frame it the way you frame it or whatever. I'm not a rube, but it can be really frustrating trying to find the right product. And like I remember a couple years ago, I needed to get a copy of Microsoft Word and I just needed Word. I didn't need the entire Microsoft 365 package and trying to find only Word was really, really exhausting.

And purposely so. Yeah, exactly. And it's fine. I get that Microsoft is a business. but at the same time it can be incredibly frustrating even if you're a relatively sophisticated consumer. And the capacity to make it frustrating is so much higher on a website than it is like in a store where you're holding the object in your hand and you know what you're getting.

I just bring up that one to address number three, which is people who are cheap. And at the end of the day, like, I think it's a reasonable tradeoff from Adobe to say, okay, look, if you can get the one that you can cancel at any time, it's just going to cost more because you're by definition going to be a less valuable customer. Like, we're probably going to lose you sooner.

So we have to make back our money sooner. And I think there's a bit here. I didn't put this in my update, but I think Adobe is a hard company to write about and talk about because I think there is still a massive amount of angst and irritation. about their shift to subscription pricing sort of a year ago. And I did write about that shift, which was a very sort of meaningful one in a business sense. But there is a bit where there's a lot of people that are still mad about that.

There's a lot of people that never paid for Adobe software. They just fell off the back of a truck and are irritated that it's harder to get now. And I can imagine there being a sense within Adobe of, look, all these people complaining were just trying to get one over on us. They picked the, we said on the page, if you want the cancelable one, buy the more expensive one. And they didn't because they just assumed they could get the cheaper one and get out of it. And that's not everyone, to be clear. That's why I called all those other categories earlier.

But I think there is a contingent of that. And there is a bit like almost like Apple where there are a lot of people that acts badly in the app store. And there are good reasons they do what they do. And they might believe and convince themselves about X, Y, Z. and when you're in the middle of it and you're fighting these complaints, you sort of become deaf to more sophisticated or more

sort of like nuanced sort of critiques. Just everything gets sort of dismissed. And that could be a case with Adobe, which has been dealing with people mad at them for their business model for years and years and years. So that's just sort of off the top, I think, something important context about this broadly. So you go back to Adobe generally.

you have this you know this shift to you know this is a decade ago it was right when Shrek started and I wrote about the time you used to be able to buy it Photoshop and now you had to subscribe to Photoshop and it was a one-time fee

and then it was a recurring fee and there was really no choice in the matter they're just like nope this is the way it is now which in many respects is like I wrote in my update I respect it like they went out there and said like guess what the world needs Photoshop and Illustrator and all or other apps. This is an essential product.

Yep. So they are going to pay by a subscription even if they don't like it. And you know what? They were right. And moreover, I think it's okay they were right. I think subscriptions are better for software. Like we talk a lot about software being a zero marginal cost good. And it is sort of in isolation.

But the realities of continual improvement, the realities of sort of maintenance, bug fixes, keeping up with the underlying platforms means that it is zero marginal cost in terms of the end customer, but it's not a fixed cost in terms of investment. You need continuous R&D on any of these products. And there's a bit with a subscription model that better aligns the accrual of revenue with the effort required to build and sort of maintain these apps over time. That's number one. Number two, it's just better from a go-to-market perspective.

You can get into Creative Cloud for, you know, what is it, monthly, $90 a month or $80 a month or whatever it is. You can get just Photoshop for like $29 a month or something like that. And then you can cancel and you can get out. Or if you're, you know, that is actually much more approachable than when your choices were pay $500 or pirate a copy, right? Like they've actually made it easier to do the right thing as far as just trying it out or using it for one project or sort of getting in and out. And then meanwhile, if you use it all the time, it was actually unfair in favor of the customer. I mean, unfair in quotes, but you would pay $500 and you would derive hundreds of thousands of dollars of value out of it, right? The idea that Adobe gets to sort of share in your ongoing profession in work, which is dependent on their tools, to me, is a reasonable one.

And I get that consumers didn't like that. I think it felt worse because it went from one model to the other. but I think the model's fair and they were in a market position they could pull it off and this whole market position bit is interesting you have this kind of like

also like a two-sided market where employers expect their employees to know Photoshop and employees have Photoshop skills and they're marketable but it's like it's not quite an network effect

but it kind of is a network effect that really walks. It sort of is. That's what you were writing about and it brought me back to my time in law where everybody uses Adobe products So you have to learn how to use Adobe products.

And then also when you're working with, you know, co-counsel at a different law firm, they're using Adobe products. And so it is sort of a network effect. And it's a baseline that everyone needs. Well, look at you trying to find Microsoft Word, right? Like, I mean, it's the same sort of thing. Exactly. Just searching in the wilderness for a loan copy of Microsoft Word. But yeah. And I think that's where some of the resentment arises is everybody feels like they need to pay this.

And they do. Whatever Adobe charges people are going to have to pay. Yeah. No, that's exactly it. That's why Adobe breeds a lot of resentment because they have, they have power and they made it so that people feel it. And they did it to the tremendous benefit of their shareholders and their stock price and all these sorts of things. And I think it was justified. But they're starting from a tough position PR-wise.

And my take here, just sort of my initial take, even before I get to the one that you appreciated, which I appreciate your appreciation, is. If you're in this position where you have power, and not just that, you're you have demonstrated that you know you have the power. And everyone knows that you have the power and they feel that demonstration of power every single month when the bill sort of hits their credit card statement. In that scenario, you need to be absolutely pristine clean, right? Like don't screw around. Now, what did they screw up here? Like I said, I think the options are fairly clear, but it is almost impossible to find out what that termination fee is.

You have to dig through multiple links. You have to get down. It only says 50%. You have to calculate that in your head. That is what the actual number is. I think if they had just put on there that, look, you're cancelate, put it right up there, 50% cancellation fee, put $300 or whatever it might be. Would they get fewer people clicking the wrong option, right? would they get people that or that came to their senses and said,

I don't actually need Photoshop, we'll find alternatives. Yes, they would probably lose some customers. Are those customers you actually need in the long run? Are those customers that are trying to be cheap, that are trying to or that don't understand what's going on or whatever the sort of categorization is?

And knowing that the outcome is they're just filled with rage because they got a missed, suddenly got a $300 charge that they didn't expect coming, or they thought that they could get around from. Like, what is the, what's the gain here? And you can understand how this happens in a sort of incentive-based, KPI-based, AB testing culture. Well, if we do this, we actually get more money.

And the gaining factor for that, everyone was like, well, what do you do about the incentive problem? What you do about the incentive problem is you just do the right thing. And it sounds kind of, it sounds almost like rubesque, right? Like, just do the right thing. But if someone at Adobe is like, look, who are we actually signing up by not saying the termination fee? That, like, we're getting people that don't know what they're doing or they don't understand it or they're trying to be cheap. And like, we're, this is not good money.

Like, we should not do this. I think the key point is that the gains are marginal and the potential costs are meaningful as evidenced by this lawsuit and the just sort of rising resentment that Adolfi. has encountered, including is Adobe purchased Figma and encountered backlash all over the world? Yeah, I mean, that's the thing. I mean, like did those KPIs and measurements in A-B testing that probably drove this particular design include the risk of being sued by the FTC? Probably not, right? But there's always a ton of stuff that can't be measured.

And I think, I don't know, it's just one of those things where it's a hard thing to write as a business analyst because you want to have something that's actionable and what's an incentive you can form. You can't as a manager, manufacture incentives for everything, right? There's too many things that might happen in the world. If you could, then central planning would work,

and it doesn't, right? And so you need this sort of core culture and fabric of sort of doing the right thing. And I drew an analogy here to Apple and the app store, right? Like we talked on the last episode about the fact that Apple is in a situation where they need developers for the Vision Pro, and they especially need developers for Apple intelligence

to really make it sing, to make it live up to its potential. And they don't have good vibes with developers these days because of their App Store policies, which one of the frustrations of the app store over the years was once I sort of dug into the law and understood, look, what Apple is doing is perfectly legal. Your kind of response to Apple is, Apple, yes, you can do this,

but it's not the right thing to do. You've got to chill out a little bit. You need to soften your rhetoric. You need to give some grace to small developers, not go chasing the random, you know, SaaS app that is built. Like I remember this story back in 2020. There was like some application that service small farms. And it was like this, it was a long run. It started as like a forum like 30 years ago.

And it had this little basic application to help you calculate certain costs or something or other. And they created an app to help do that. And this was not targeted at the big agribusiness. This is really actually like small, small farms. And they created an app that duplicated this or let you access this functionality on your phone. 2020 or 2021, whenever Apple is doing this shakedown comes down. Apple shows up at their door, or doesn't show up their door, but doesn't approve their update and says you have to implement in app purchase. And they're like, this is one developer who's been doing this in his spare time because his family had a family farm and he made it broadly available.

And suddenly Apple is there saying you have to completely rearchitect your app. You have to implement this new thing. You have to figure out new ways to track the money and all these sorts of things. App shut down. It's so bizarrely draconian. You had to what end. Yeah, you know, things are in COVID of like people who couldn't have in person classes trying to do classes sort of online. And then Apple tried to take 30%.

Now, they did back down in some cases because the PR was so bad. But there was a cultural drift that even got to that point of considering it. And what is interesting about this story. What's interesting about the Apple VR thing is I can't point to an incentive structure. You can put it as a manager to get people to do the right thing. What I can say, though, is doing the right thing is important. And it pays off in the full arc of time. And I think this example is a good one.

Like, I don't think Adobe broke the law that egregiously. I think the FTC overstates their case. I talk about the cancellation bit. But it does say clear and conspicuous terms. And they buried the hell out of that early termination fee. As far as the law is written, I think it's a pretty black and white case. And to what end? To what end?

That's the point. Yeah. Well, and it's interesting. With the Adobe example specifically, I agree with you that it's not that confusing when I look at the screenshots. It also occurred to me that I run a satellite business with greatest of all talk. And I would not feel good about putting those options in front of my customers if customers then got confused and got hit with a 50% termination fee. Yeah, I mean, maybe dumb was the wrong way. But it was just like the people that don't live online, right? You're up there.

And it's like confusion paralysis by by analysis or whatever it is. Right. It's, it's, it's tough. Like. And it's deliberately deceptive. I'm sure they have numbers that show that people are making that mistake. This stuff is tested up and down. They absolutely have numbers to know what, what, what is what? Right. And I as a business owner, I would just straight up never do that to my customers, but maybe that's why Goat will never have a 10-figure market cap, who can say. But it's not the biggest story in the world, but I do think you hit on something that I've wondered about for a long time. And I too, it's something I mentioned very specifically in some of the App Store conversations we've had, which is the real cost of refusing to compromise on any

front and continuing to extract maximum profits, is that long term you are putting yourself in jeopardy for Congress or court to come through and wreck the business model entirely. And I don't know whether I'm naive for considering that possibility because Apple's been doing fine for the past 10 years and maybe that will continue for another 10 to 20 years. I don't know. That's part of the challenge of talking about this, right? Because that's the response is like, look, they're doing fine. Look, they're doing fine.

But there's a bit here. We talk about this in the context of Intel. You know, another very early article is checking, saying Intel is screwed. They need to get into the foundry business. Like they can't just have their individual model forever. What happened to their stock over the next decade? Up, up, up, up, up, up, up, up, up, up, up, up, up, up, up, they were fine.

And they were fine, you know, you needed servers for mobile. So they won in mobile, even though they didn't have mobile chips. And then they were very suddenly not fine. And I think Intel is doing a lot of good things right now. And I feel bad for Pat Gelsinger because he is presiding over. a disaster stock and terrible earnings that are downstream from decisions that were made by Brian Krasanich a decade ago and his sort of predecessors. That's just the reality of there's a bit here where the foundry business making chips because it requires so much investment and so much lead time. It's kind of like the closest analogy we have to the ineffable value and difficulty in building and ease of destructing sort of.

sort of like a good reputation and sort of a good relationship with developers or a good relationship with consumers. And Apple spent decades and decades building that and they get to a court case with Epic and they get up on the stand and basically make developers feel worthless and then they do this crackdown in 2020.

I guess it was pre-Eptic. And suddenly it's like you had one of the biggest assets ever, which is developers would jump at your, when you said jump, they would say how high. and now it's not that they're abandoning your platform. Of course they won't. The iPhone is super valuable. You have leverage.

People don't like to be reminded that someone else has leverage over them. Or particularly if you have like, and so you should like, you have to choose when you're going to use that leverage very, very wisely and understand that when you use your leverage, you're making a massive draw on your bank account. and you should be careful, number one, not to make further draws that you don't need to, and number two, that you're putting money back in sort of as often as possible. This is the Adobe bit, right? That draw in 2013, when they shifted to subscription, was one of the all-time greatest draws on a bank account of all time. And it paid off.

But every single person in Adobe should have known and should have had it in their heads. Look, we now have to spend the, we spent 20 years getting to the business, position that we could make that withdrawal. And now we made the withdrawal. It paid off, but we're going to need to spend the next 20 years rebuilding that balance. And instead, they just chasing pennies and dollars from people who signed up for the wrong plan. It's pathetic. Yeah, absolutely. Two notes on behalf of my friends at the FTC. Number one, I will say from a structural standpoint, if you're looking for companies to consider the potential long-term consequences of penny-pinching like this, that's the value of having some regulatory presence is that it forces

companies to consider the possibility of backlash when they're making decisions like this. Because absent the threat of that kind of intervention, companies are being irresponsible to shareholders if they're not maximizing profit in every conceivable way like this. Well, I mean, this is part of the bit where it's hard to talk about, like, we used, companies used to not do this because it wasn't the right thing to do. And, you know, we, we've talked about this on the podcast previously. This is not, you know, there's a bit where I draw to Wall Street, particularly, you know, years, years ago. If it's legal, it's not wrong. That is not the way, that's not the sort of society you want to live in in the long run. If, if morality and legality are meant to be equivalent, you're going to live in a stifling bureaucracy. That's because, you're, because, you're, you're, you're going to have so many laws and they're going to be unequally applied because you can't apply all of them and if you applied all them the entire economy would ground to a halt the reason the way you can have sort of a lightweight regulatory regime you can have fewer laws and more freedom is by people actually policing themselves and doing the right thing and there is a broader

societal drift that is represented in what adobe has done here i don't have good answers i want to do with it other than to sort of recognize, recognize that has happened. But I do have a question for you. One interesting thing about this case is the FTC is not just suing Adobe. They also are suing two Adobe executives. Now, this bit about the executives is redacted in the complaint, presumably because it's individual sort of people. What are your sort of thoughts about that, that it's not just suing a company, but actually suing two named individuals? Well, so the law in question is restore online shoppers confidence act i don't know exactly how that would apply to individual executives it does say it shall be unlawful for any person to charge or attempt to to

charge and for prices are people we know this yeah yeah exactly so i i don't know exactly what they're trying to accomplish by suing the individuals the reason why i was thought to ask you is you brought up the deterrent sort of factor that seems to be the goal right like to yeah make people feel it's not just that the company will lose money, but I will personally have the book thrown at me. Yeah, if I don't sort of do the right thing. That's true. It's a very interesting little wrinkle.

Yeah. And I guess I'll be interested to see how that aspect of the case plays out. I just feel like this is the type of thing that the FTC should be doing because it's a gimmick that a lot of companies try to get away with. And it does sort of harm the consumer experience. Right. But this gets at the broader like systemic tension here, right? So in this case, let's do you individuals.

Like on one hand, there's a good, like people should be scared to do stuff like this. On the other hand, if we're going to be mad about four clicks in a cancellation process, but not sue a newspaper broadly aligned with our politics that makes you call to cancel, is this way? Is this actually a power and precedent we want to unlock, right? It's the same thing with the FTC generally. Yeah, good case. Like I think this is a like and going against deceptive practices, I am as, you know, theoretical rule sort of in favor of that.

Am I in favor of this particular FTC given what I think is does things that don't make sense, that does seem politically motivated, further opening the aperture on what they will do, right? Like that's sort of there, there's attention here. And so I don't know the answer to that. I will say by and large, I'm happy to write about this because I bag on the FTC and Lena Con enough. And I think that this is a valid case. And I think Adobe is in the wrong here. Again, I don't think it's as bad as they're stating. I think the cancellation stuff's dumb.

But they were not following the law, which, by the way, the other good thing I like about this case is it is clearly enforcing a congressional law. Like I quoted the congressional law and then you can draw that to Adobe's behavior. and there's a clear link. This isn't some arbitrary rule that was sort of made up and, oh, now you're in violation. So that's the other bit about this case that I sort of like. There is a, like I talk about in the context of antitrust, like, look, Congress can pass new laws. In this case, Congress passed a law, and the FTC is enforcing it. It's hard to sort of be upset about that. You can, you quibble with the law, but then it's like, well, Congress, I can use my own medicine against me. Congress should change the law or pass a different law. In this case, there isn't an arbitrary interpretation. To me, it's a pretty

clear-cut violation. Again, there's lots of clear-cut violations. Why are you choosing this one? Yeah. And it's not the biggest story in the world. But I think it's worth pursuing the other tech angle to this lawsuit, final note on the case. Well, the basketball angle is I've been having on one episode to have to praise both the Boston Celtics and Lena Con. I didn't realize how dire this is. My goodness. L's across the board. Absolutely. Well, you mentioned in your update and on the pod that the Adobe screenshots in the complaint were fuzzy. Do you know why that is? I assume it's because these PDS get compressed to all get out. They're doing redacting. Yeah. It's really weird. Well, every time you compress something, the quality is lower and lower and lower.

So you can imagine they do the screenshots. What's weird is that court websites have this bizarrely low file size limit for anything that you want to file. And so if you want to integrate inline photos or upload exhibits, you. you have to just compress the images and distort them in all kinds of weird ways. I don't know that that's what happened. No, I think that's why. I assume that's what happened. Yeah. You have these systems that were put up years and years ago. The government is not sort of like real, you know, really updating them and improving

their sort of performance. You know, this is the whole bit about what are they going to do, go out of business. So, yes, you end up with the most compressed screenshots you've ever seen. Well, speaking of progress, on the way out of keynote season, I have to double back on behalf of Carthick, who is an A-plus emailer in general. And he writes and says, hey, guys, just listen to the latest episode of Sharp Tech, where you were talking WWDC mailbag questions. My question didn't come up directly, but I feel like Ben may have been referring to it

during the last five minutes of the most recent podcast. Oh, I think I was. Yes, that's right. You are correct, Carthick, and people could go revisit that conversation if they want context here. he says, I wanted to write back and make sure I'm clear about my complaint. By the way, Carthick, Carthick must be a great emailer because if you get elevated to the point of you get to have an ongoing conversation referring to questions. I mean, there's a lot of good nuance takes coming from Carthick, some of which are too long for the podcast. But he says, I want to write back and make sure I'm clear about my complaint.

I very much appreciate incremental improvements. Ben mentioned Ways in the last episode, and that's a great example. I'm a loyal Ways user because as someone who drives eight plus hours every week, the incremental improvements to Ways really add up for me. What rubs me the wrong way about the first 20 minutes of WWDC is the vibes and the way they talk about improvements to I message as if they're going to uplift our species. They remind me of axed deodorant ads promising to do wonders for your sex life. rather than reminding me of Toyota's decades of incremental improvements on cars,

or even those of Volvo or BMW, if we want to compare against higher-end consumer products. My concern is, once companies go down the path of act-style marketing, they seem unlikely to stay focused on product innovation much longer. I guess my fear here is the CPGization of tech, where the main game becomes hyping up trivial changes rather than making good incremental improvements in communicating them well. And to end a mailbag question with a question mark, do regular attendees at WWDC and other such events actually like the way companies communicate all this, or do they put up with it as a cost of doing business? So, Ben, as a newcomer to the

keynote space, I do have thoughts, but what's your reaction to Carthick there? I would just note, I think Carthic actually makes me appreciate it. I complain constantly that Apple has not gone back to live keynotes everyone else has. There's a great vibe to them. And I think there's probably a bit here where these pre-recorded keynotes make the self-congratulary tone a gazillion times worse, right? When they get on stage and they make these sort of things, there will always be sort of a chuckle and a grievous of the audience.

And you can't stand up there and say, wow, we invented reactions to messages and I message. You can put messages in my talent now. You're the last one to do it. And it's been around for sort of ages and ages. and you can't do it with a stray face. So it comes across as much more, in a live context, as much more sort of self-effacing. And it's like we're all in on the joke.

Whereas you have these marketing videos and it just comes across as incredibly out of touch and absurd. So I think this is actually a really good insight by Carthick about this tone. And I think it is a function. And I think this is probably a really underappreciated cost of these recorded keynotes. I mean, Apple does get the benefit of the doubt. because what Apple has been good at for years and years and years is we remember the flashing introductions,

but it's the grind of year over year improvements. That is what actually makes their product special and makes them such a compelling company. And there's a bit where they are, they're diminishing that by overselling the sort of short term. And I think it's a great sort of take in that regard. Yeah. And I would say the aesthetics of the Apple. event. Like if we're complaining, I have more problems with the aesthetics. I hate them. No, I hate them. I can't stand there. It's so tangibly a two-hour long commercial.

And, you know, maybe I'm talking my own book here as I like, I'm an analyst who's interested in like sort of specific details. And there is a bit where, and maybe I've underappreciated. I just like the vibes of a live thing. And maybe part of the vibes is just having the comfort that the executives are in on the joke to a certain extent, right? Totally. That's a useful thing. Yeah. Well, and it's just these hopelessly sterile atmospheres and it can feel a little bit dystopian where the $3 trillion tech company is talking to you from an empty room about

how you're going to communicate with friends and family for the rest of your life. It's a tangible representation of being out of touch. They're literally not in the same place of the people they're talking to. Yes. I think Carthic, the dissonance he's hitting on there is an interesting feature of the end of the beginning era where there are some categories that have matured to a point where the rhetoric is still radical. The changes are all minor and practical and welcome. But it's just important to keep in mind that the minor and practical changes do still accrue to more radical transformations over time.

I think that's one of the ideas that has crystallized as you and I have been talking over the past couple of weeks in terms of how change actually happens. Right. And there's a bit here. Apple is making a withdrawal on this reputation bank account with this Apple intelligence stuff. It's not in the betas now. It's not coming. A lot of it's not coming even until next year. And people like me who will criticize Google for Vaporware or Microsoft or Vaporware are not delivering the same crisis into Apple because they have generally delivered on their promises over time. Real changes and improvements.

But it's something that they ought to be more cognizant of that they are making withdrawals. and one way to make a deposit is to actually talk to people in real life to not come across as look at how amazing we are. We invented emoji reactions and I message. But to be it on the joke, say, yeah, we probably should have had this a few years ago. It's like, we know you miss it. We know you're using I message because other people use I message, even though it's not that good in my estimation. Like, yeah. And there's a bit where they're missing that.

And they've been missing that for ever since, you know, they went to this new format. Well, and, you know, thinking about it, I actually think what Carthick is saying applies most to Open AI, where I know that I personally would be less of an Open AI hater if there weren't a new interview every week talking about how nothing will ever be the same again. And we're only a few short years away from universal basic income and universal compute for people. Like if Open AI and ChatGPT were sold to me as something that can just help with basic tasks throughout the day. Chat GPT, super helpful as I was prepping for the goat and trying to remember old Celtics trades earlier this week. I would be far less skeptical of open AI and more likely to embrace the tech if they weren't sort of overpromising on everything it was going to change and be in the future. But there's actually a part two here. As a side note, I wanted to share an example of a field where my experience has been revolutionized by decades of incremental improvements. Dentistry. I've had recurring dental issues for 30 years now and have tons of experience

visiting dentists, mostly in India. My typical experience at a dentist is easily 10 times better today. For example, a root canal that would take multiple visits spanning two to six weeks is now just one 60-minute appointment and your life goes back to normal by the next day. At no point during those 30 years did anyone ever say this new thing is going to change your life and yet changed by life they did when all the improvements were stacked on top of each other. So I just appreciate Carthick shoring up his incremental improvement bona fides there. Maybe we should get into dentistry tech later this summer. I'm not very helpful with that regard.

I have, I've never had a cavity. My kids are in a cavity. My dad's some sort of genetic mutation that means we never ever get cavities. So I can't relate. I go to the dentist every time. What a superpower. Yeah. He's like,

he's like, he's like, he's like pointless once again. Good to see you. See in a couple years. Yeah, exactly. No,

my dentist told me you don't need to come in that often. He's like, don't even worry about it. The only dentist in the world who tells a patient that that's incredible. Or I guess the only patient who hears that from a dentist. Congratulations. The more we learn about Ben as we continue to peel the onion here. Yeah.

So my apologies, Carthick, I stole all the dentistry points from you. I'm sure you made up in other ways. I think there is a, I do wonder if there is some sort of broader takeaway about, and maybe this is something about just life in general

being more software mediated in that bit I said before about how, yes, there's additional customers zero marginal cost, but software isn't really a fixed thing. Like software grew out of, in the whole industry and VC, grew out of the chip industry, which, you know,

a chip is still a manufactured device. What made it different, it's like a physical object, right? And that was unique because you could do it at such scale, much greater scale. Like before that, what was the big sort of at-scale thing, like automobiles or something? You had sort of the assembly line. But even there, like, there's some sort of transformation that happens with software and this continual maintenance that lends itself maybe to more of this sort of incremental improvement where you look back over 30 years and you're like, wow, a lot has changed. I didn't really appreciate it as opposed to maybe the, you know,

century of innovation before that where it's like, I did not have a toilet and now I do, right? I did not have a washing machine and now I do. And that has also been there is a bit and people complain about this, whereas software has become more important. The importance of the hardware is diminished. The quality is arguably gone down in the pursuit of sort of efficiency and disposable things.

And so there's tradeoffs sort of along the way. but I think maybe that is something that also breeds a lot of the general discontent with the world generally, which is somehow we're in a position where we are richer than ever. There's far fewer people in poverty worldwide than ever before,

and yet everyone is more miserable than they can imagine, right? And maybe there's a bit where, and there's complaints about, look, we had so much innovation. The life of a person is so much different in 100 years than it was because of indoor plans. plumbing because of the wash machine, because of the automobile, sort of all these sorts of things, all of which are true and tangible, but it makes it really hard to see or feel those smaller incremental innovations. And maybe the haters want to say, look, were any of them actually good, right? I seem to recall my 90s childhood, my 90s or teenage childhood, 80s childhood is being pretty great. But at the same time, if I went back to 1997, an era that I pine for on a regular basis, there are so.

many aspects of like seriously if i time traveled and landed in july or june 1997 there are so many aspects of modern life that i would immediately be pining for back in june of 1997 like what what comes to mine well i mean i habitually check twitter all day and it's pretty entertaining i talk to you halfway across the world and i love it we talk the podcast never stops we talk seven days a week for 14 hours a day. And like there are different things that have just become sort of elemental to how I experienced the world. And I would be back in in June of 1997 and be like, all right, I guess I got to watch Jordan win his fifth title. That's cool. But I mean, what else am I going to do with my summer here?

Yeah. Well, guess I'll go for a walk or way in the havoc. So it is a tradeoff. I like your bit about Twitter because you say that I'm on Twitter all day. And we're conditioned to say, wow, what a miserable experience. You know, the 90s were so much better. That's a great example. What you said was super honest. The reason we're on Twitter all day is because it is unbelievably entertaining, right? And like there was a, like there's a bit where your garden variety meme or joke on Twitter

that in the context of Twitter as a whole is mildly humorous and entertaining would have been arguably the single funniest thing you saw for an entire year in like the 90s. Right. Right. Like just they're like the heroin of humor online is unbelievable. And I think actually stuff like that would be the hardest to go back. Like we live in this unbelievable abundance of smart and witty people. Just like just commenting on things, making jokes, you know, all. And I think there's a bit where we are so deep into it.

It's impossible to even appreciate it. but would actually, I think your bit was right. That's actually the thing that we would all miss the most. Yes. And as I've thought harder about all this through keynote season, it's become clearer to me. So I appreciate Carthick for inspiring that latest epiphany. All right. A couple final questions for Apple.

First, Finn says Apple intelligence capabilities are limited by what's available to its data pool, i.e. what's accessible to rag through their own apps or open standards. standards. This would decrease the value of WhatsApp, parentheses, which I, as a European, heavily rely on, and other silo apps. I might tell my mom to, the proof that he's European, I might tell my mom to send me her flight details via mail. I might also make a point of sending her the reservation via I message, because I know the data needs to be available to Siri. So just real quick to confirm with you, Ben, at the moment, we have no idea. whether Facebook will allow for that kind of access to WhatsApp data.

And that's one of the bigger outstanding questions in the wake of the Apple intelligence announcement. Is that right? Yeah, I would say probably not. I mean, you know, just from a, if not security, perception of security perspective. I mean, all your WhatsApp data needs to be, it's decrypted on your device, but that's how you can read it. But to go the step further and make it available to the operating system, that is sort of betraying one of their promises. And something that they've actually tried to patch up over the last few years. If you turned on iCloud backups, that used to be a way to get into your WhatsApp data.

Now they decrypt the backup. So they're still backed up, but they're not sort of accessible. I mean, just the way computers work, you have to decrypt it to actually view it. And so on a theoretical level, they could make that available. And like, because they really trust Apple and they want to have sort of a great experience. They don't get along with Apple. And it would be a difficult thing to message as far as like, way, I thought, I thought, on WhatsApp messages were encrypted.

Why are they showing up to Apple's AI to search, right? Like there's, which, by the way, this is a potential casualty of Apple treating Facebook like the devil, right? Like now they're going to have a diminished AI experience because they won't have access to Facebook content, I would guess. Now, I, maybe speaking of Europeans, maybe Finn comes from a different culture than us. And he's going to make his mom change her habits to accommodate his Apple intelligence usage. I mean, I will not be doing that just for the record. But no, it does point to where a lot of this can sort of fall short.

Now, there are bits where there is also going to be a reward for being in the Apple ecosystem, right? If you like, the more Apple stuff you use, the better experience you're going to have. But this tension is going to be a really important one sort of going forward. Yes. It will be interesting to see how companies like Facebook end up handling it. And I guess it will probably depend on some of the early adoption that we see of the Apple intelligence features and how compelling it actually is to the masses. But for now, Ian says this is a broader Apple question. I've heard Apple's corporate structure mentioned a few times lately, especially around the directly responsible individual model.

Can you explain how and why this works in a little more detail and why more companies don't seem to copy this model? It's always stuck out to me, especially during developer keynote season. Google's keynotes always feel like a mess. I wouldn't be surprised to learn if 30 different PMs take turns sending slides to each other to all make sure they get their 15 minutes in. It feels like there's a lack of cohesion. I recall Ben saying something similar about Microsoft when he was working there, whereas WWDC usually feels more directed or structured.

Am I off base in thinking this? Is this at all reflective of each company's culture and organizational structure? Do you have any thoughts there? Yeah, so I've written a lot about this, particularly in the earlier years of trajectory. So we'll have to dig up sort of relevant links. I would, we have like five minutes left of this podcast. And this is like a multi-podcast series. Any new company, like a startup, is going to be a functional organization.

And what that means is you have one person or one team doing development. You have one person's team doing marketing. one person team doing product research. Now, a lot of those functions may be in one individual, right? Maybe the founder does it all, right? The founder, and the founder should probably be basically the product manager defining the direction of the product, what customer needs are for a very long time, probably as long as that is a one product company. The problem is that at some point you scale, it starts to fall apart. Like maybe you realize that, okay, I am a, I've reached the limits of my market and I need to,

land and expand like a SaaS company, right? So I might have product A, I need product B that is adjacent. It will work together with product A, but now I have a new product. I need, and so the challenge is if you have a functional organization, how do you actually manage that new product, right? Everyone will be motivated to work on the big product, the one that actually makes money that does all the sort of things. What you do is you set up a different team with a different sort of development team and a different marketing director, a different product manager, And then now you have a management problem. How do you manage them?

Well, you have KPIs. You need to do sort of you, you implement sort of a legible incentive structure to get people going in the right direction. And just the reality is it's a coordination problem. Like you're going to generally going to run into a wall as a functional organization or as a one product organizations. You need to expand products. And so you need to sort of build out teams. When you build out teams, you need an incentive structure that aligns. with them, which is usually going to be profit and loss.

And so you end up in a divisional structure. This is the course of every business basically ever, except for Apple. And we'll get to the Apple exception in a moment, but it's just because it's the only way to scale. It just bogs down. It falls apart. You don't have anyone sort of responsible for it. Now, Apple, Steve Jobs is a huge believer that this is a great way to make mediocre products,

which is correct because you're trying to mow. motivate behavior using things like P&L statements, and you end up with crap like Adobe, right? Like that, that's the problem. And so he, you know, Apple, of course, went to a divisional structure. He comes in, undoes it all, makes it back into a functional organization. And we're going to have this DRI structure. We'll have directly responsible individuals who will pull together the appropriate people and focus on sort of building a product. What's important to understand is the reason Apple could do this, particularly,

when Steve Jobs came around is they were still a one product company. All they had was the Mac, right? And so, and even beyond that, the products that came along, and this is one of the benefits of technology was there is an extent to which they are the same product, right? All Apple products run the same kernel, the same core, like the core piece of the operating system. And then you have bits like around iPhone and iOS and TV. They all share sort of components. But what you do see. is where Apple falls short is stuff falls through the cracks. And the great example here is the Vision Pro. We've talked about it appears no one was responsible for content on the Vision Pro, even though content is the key thing. Every Apple product to date has mostly sold on the integration of hardware and software. And so their functional organization, it's in the culture that that's how it works. The hardware team and software teams know they need to work together.

They've been working together on products for 40 years. And so there's a cultural expectation of how to do that. The Vision Pro needs a massive services story. It needs an ongoing content story. Apple's been seeking to build up that capability for a while, but you can see in the failure that it's not nearly as in grade. The Vision Pro has incredible hardware and software integration. It even ties into your Mac really well, right?

Like you, where you the screen, like as much as we complain about issues the screen, it's actually amazing how well it works. And the coherence. Yeah. It's incredible, right? And they can pull that up. And they'll be better than ever shortly. That's right. And so, but this new bit that they need that is actually probably the key to success has completely fallen through the floor.

If there was someone in charge of the Apple Vision pro whose paycheck depended on the profit and loss numbers of the Applevision Pro, that person would move heaven and earth. to make sure the Applevision Pro had content and that content was coming out weekly and it was super compelling. And people were talking about on Twitter and they would move mountains in the organization to make sure Netflix was there, to make sure YouTube was there,

understanding that we have to give us every chance of success. There's no one at Apple. The only person that is ultimately responsible for the P&L is Tim Cook. And no executive can scale that broadly to manage all these sorts of pieces. Apple is, it's incredible.

They've carried the structure as long as they have. And I applaud them sort of sticking to it because, and the payoffs, because when you get these cohesive teams that are super focused on a goal, like I remember I was at Apple as an intern back, you know, 15 years ago. And I went in and I was, we're doing something about like, I got all these old sort of like manuals, HR manuals or whatever. And one of them was, or training manuals. And one that said right at the top is the manual on meetings. The first line was, we love meetings, which is the opposite of what you hear of where else. But the point was, no, the way we do development at Apple is we sit in a room for hours, if it need be, and get everyone on the same page. And we work in an integrated fashion to accomplish goals.

And this is not the only way to do things. Amazon is the exact opposite. They famously don't want any meetings. They want to have clean interfaces where different components can plug into each other at will. This is the AWS philosophy. the AWS is the exact opposite of the Apple philosophy, and both are amazing and successful. So this isn't necessarily the right or sort of wrong thing to do it. It is the Apple way to do it, but the bigger they get, the more you do see where it falls down.

And that's, you know, it's a hard thing to scale. And it's incredible apples carried it as long as they have. I think it's a function of all their products at the end of the day are ultimately kind of similar. And it's a function of an unbelievably strong culture that, that lets them overcome the entropy of organizations because they know what an Apple product is supposed to look like. They know it's supposed to be integrated. What they don't know is you need, for some products,

a great services story. And so let me make sure that I'm understanding correctly. There are directly responsible individuals for other product categories at Apple, or it's sort of all one thing. Well, the DRI sort of concept, you have someone coming in to solve a problem. It's not an ongoing organizational structure in the company.

If you were to go into the Apple sort of directory and see who is this person report to and who reports to them, it's none of the people, right? And so it's meant to be this sort of temporary, flexible, amoeba-like sort of thing that can come together to solve a problem. But what you need for the Apple Vision Pro, for example, is you need a sustained strategic approach that is going to extend over years. And that's not there. And the other thing Apple has benefited from is when your products are so popular that you're just scrambling to fill in the holes like the iPhone or like the iPod, it's very easy to like your your P&L is the company's P&L, but that's fine because it's directly connected. The Applevision Pro people will say, oh, don't worry, it's just a small business. It's not material to Apple. They have time to build it.

Actually, that's the problem. If it was material to Apple, they would be doing a much better job with it. And right now it's not material to anyone. Well, that's a perfect segue to this final note, which I feel like is a fair rejoinder from Anonymous who says, this has been nagging me for a while. Ben keeps talking about how Apple would have been better off getting developers, especially YouTube and Netflix, on board prior to the Vision Pro release. For example, from dithering this week, he says, last fall, you're talking about Vision

Pro. That's the time to say, wow, imagine this experience. and they should have been pushing it so much harder to get it out there at getting people on board, and you're stuck now because you need apps to sell the platform. Anonymous says, however, isn't it likely that even if YouTube and Netflix had created Native Vision Pro apps prior to release, and even if new Native Vision Pro content was released weekly, that the Vision Pro would still be in essentially the same position as it is now, barely anyone buying it and at least way less than any threshold Apple would ever care about.

I think Apple is in a much better position than if it had convinced developers to create native content for a platform that Apple probably knew was not going to get wide adoption for at least a few more years. Apple probably knew it was out of their control to be able to fast forward adoption. They didn't have to use a political capital with developers. P.S. he says, I say this as a small, bootstrapped B2B SaaS founder whose app has been blocked from updating in the app store for several years now. So I am no fan of Apple's developer relations by any means. I just think in the case of the Vision Pro, it might have been worse for Apple and developers if lots of third-party apps had been created for the Vision Pro and it had still been languishing at this point. Do you have any

thoughts, Ben? No, it's a great, it's a great email. I agree with the overall sort of all the pieces in this, but I disagree with sort of the conclusion. So I think this bit with the Vision Pro will be better or worse, maybe largely the same. That is probably true, but this stuff is like a tipping point. Like you're trying to get a two-sided network going on between developers and users. And the closer you are, like, it's like the famous bankruptcy statement. I'll speak as a consumer. I, the only time in the past 12 months that I've wanted a Vision Pro was when John Gruber

did his talk show live and you got to experience what it was like to watch in the Vision Pro. And I was like, I would like to watch Gruber's show and I'd love to see it in a Vision Pro, but I'm not going to go out and spend $3,500 to have that experience. But if there were a native Netflix app or a native YouTube app, whatever it may be, offering unique entertainment experiences, I think Anonymous is right. That wouldn't be enough to tip the scales and convince me to go out and spend $3,500. to get a vision pro, but I would want a vision pro.

Yeah, well, it's introduced way more barriers now. Yeah, exactly. Like, there's really been nothing compelling. That's right. When you think about buying one, it's like,

well, $3,500, it doesn't even have Netflix or it doesn't even have YouTube. Right. Right. Like, there's very easily easy to, it's easier for me that it would be to rationalize

making a responsible choice. That's right. And not buying a $3,500 headset. Right. And every irresponsible choice made by you makes the point. the platform more compelling for developers. And suddenly you, you, you need to get to the point where people do have real formal and it's actually legitimized formal because they're missing out on stuff because there is this sort of these ecosystems are so hard. Like, they're either going in a

positive direction or a negative direction. There's no sitting still. And I think Netflix and YouTube are particularly damaging just because everyone knows they're not there. Right. It's almost like the brand sentiment. Like you would never actually watch them or use them, but it's a real powerful reason not to buy. And it's a real powerful reason for other developers not to develop for it. It's like, well, not even Netflix is developing for it. Why should I bother? Right.

And you need, we talk about this in the context of like bubbles and stuff, right? You need some degree of irrationality to get this stuff off the ground. And the problem for Apple is all their developers are being very rational right now. And so you're never getting to the point where it pays off for everyone because no one was irrational enough to get it off the ground sort of in the first place. So that's sort of response number one. Why Apple, you know, yes, it would probably be just as bad, but it would be just as bad and yet closer to being good if that sort of makes sense because you'd be closer to that tipping point. That's number one. Number two, would Apple be wasting political capital to do this? Yes, that's my whole point is you need to spend political capital. They wasted their political capital by rejecting your B2B SaaS app. Wouldn't it have been better to have made overtures to you such that they could spend that capital now on developers being irration? so that they get to the tipping point so that it suddenly becomes rational for everyone.

And this sounds sort of like fuzzy. This gets into people being mad about like executives like Elon Musk today, Steve Jobs back in the day of complaining that they are not being quote unquote honest or the Steve Jobs reality distortion field. The reason why reality distortion fields are such a complicated topic is on one sense, yeah, it's not true. On the other sense, if everyone believes it's true, it will. actually become true. Eventually become true. Yeah. There is a valley of irrationality that requires

faith to leap over when it comes to building ecosystems. And a one way to leap over that is to have instilled a desire and an enthusiasm amongst the leapers to do so. Another way is to just pay them to do it. Right. Like when back some I had to do it. People would make, the Apple people would make fun of Microsoft back in the day for paying people to build apps for their platform for, for Windows 8 or for Windows phone. And it's like you're speaking from having already reached the mountain top. Like you, if you want to build a bridge, it costs money. And the reality is, is these ecosystem effects are so powerful that Microsoft spent a lot

of money and didn't make any difference, right? And so not to say it would work out. The safe bet is to say that it won't. But if you want it to work out, that's when you need to spend. So yes, would Apple be wasting political capital? Probably this is a way better place to waste it than this crap they've been wasting it on for the last decade. decade. Yes. Point well taken. I hope to one day try a vision pro or have a reason to try a

vision pro, but we're just not there. Wait, you're trying to run in the store at least, right? Well, yes, I tried one in the store, but I mean like hanging out with one. Exactly. I'm really not missing all that much. But maybe next year, if Gruber does another live show in the Vision Pro. For now, Ben, enjoy the weekend. Summer is here. Get out there and touch grass. Try not to think about the Celtics lifting the Larry O'Brien. Oh, don't worry. I'm not going to think about it at all. It's going to be great.

Good. All right. I will talk to you next week. Send questions. Email at sharptech. FM, a fun little summer mailbag on the agenda. Ben, have a good weekend. Talk to you later.