Tech Brew Ride Home - (IHP) Eugene Wei On How Amazon Won

Episode Date: June 18, 2023

No joke, this is one of my favorite episodes we've ever done. Eugene Wei was an early employee at Hulu, so we get some details on that company for the first time, and he also worked at Flipboard and Oculus, so we get some important context especially on the future of VR and the like. But the most fascinating stories you'll hear will be about Amazon, where Eugene was the first analyst in the strategic planning department. As you'll hear, Eugene had a unique perspective on Amazon's early strategy and business structure, almost a historically unique perspective... he could see month to month, how Amazon was built, what Amazon was trying to do, and why. This is such an amazing perspective on such an important company. Sponsors: Grammarly.com/go Hillsdale.edu/ride Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Internet History Podcast. I'm your host, Brian McCullough. To those of you who have subscribed to my new podcast,

the TechMeme Ride Home, I thank you. To those of you who haven't subscribed, please do so. I think you'll like it. It's a daily Monday through Friday Tech News Roundup podcast. But today on this pod, we're going to have absolutely one of my favorite episodes we've ever done. Eugene Way was an early employee at, Hulu, so we'll get some details on that company for the very first time. And he worked at

Flipboard and also Oculus, so we'll get some important context, especially on the future of VR and the like. But the most fascinating stories you'll hear today will be about Amazon, where Eugene was the first analyst in the strategic planning department. As you'll hear, Eugene had a unique perspective on Amazon's early strategy, growth, business structure, really almost a historically unique perspective. He could see month to month how Amazon was built in the mid to late 90s, what Amazon was trying to do and why, because he was the guy actually writing the strategic reports. This is such an amazing perspective on such an important company, again, historically. Please enjoy this conversation with Eugene Way because I'm really proud of this one.

Eugene Way, thanks for coming on the Internet History Podcast. Thanks for having me. This is, I'm going to inject myself at the very beginning here, which is probably not the professional thing to do. So I was a kid obsessed with film and went to school for film and ended up accidentally in tech. And I kind of feel like maybe that's sort of something of a profile to you. But when you were growing up, what was it that you wanted to be due, that sort of thing? I actually really didn't know. And even I would say when I was going through undergraduate, you had this sense that all the jobs that were out there were the companies that would come recruit,

draw like consulting companies, investment banks, an occasional Fortune 500 company. And so I think my whole career post-undergrad has been a path to discover that there are so many more things you can do in the world. then you may think early in life. We'll come back to the film thing because I do want to explore that. Absolutely. So by nature of the subject matter, you know, entrepreneurs, engineers, tech people, I get a lot of children of immigrants. And the pattern often is that parents want their children to do something safe.

Did your parents want you to do the lawyer route, the doctor route, that sort of thing? I would, you know, to their credit, I think they probably did think that was the prudent route, but they never really pushed me in a certain direction. And I think that is unusual for a second generation Chinese American like myself. Definitely medicine, law, you know, be an engineer, be something stable and deterministic. I like to tell people that, you know, the environment that they grew up in in China and Taiwan, it wasn't guaranteed that you would get to go to college. You know, you constantly had tests to get into the next level of school.

And if you ever got pushed out of that system, it was really disastrous from a life perspective, you know, socially. And so there was real wisdom in choosing a more deterministic career where hard work equals success. America is just a different, more forgiving environment in many ways. And so I think to their credit, they've always said, well, if you really want to chase after something, we support you on that. So if you don't want to be a doctor, you don't want to be a lawyer. When I graduated undergrad, I actually didn't know what I wanted to do.

And I had applied to law school and was going to go to law school. What was your degree? I double majored in industrial engineering in English undergrad. And, yeah, law was just the thing I did because I was like, maybe that's what I should do. But I don't know what else I want to do. But I broke my leg right before graduation. And I think just a summer sort of sitting around with my leg propped up instead of backpacking through Europe or something. You know, by the end of the summer, I was just like, I'm not ready to go back into the school system.

I've just been spending, you know, four years of my life taking like course load for two majors. And I'm just burnt out of being in a classroom. So I didn't know what I wanted to do. I wanted to pay off some school debt. So I stayed home. I got a consulting job and deferred law school. And it was during that time that I was using the web because it had come to prominence during my last few years in college. This was 95 that I graduated.

And the more I looked at it, the more I just realized, you know what, this is going to change everything. And my philosophy from that point forward has always been jump in front of the big wave that you see and let it throw you somewhere. You'll probably end up in the right general direction and then you can course correct once you have a chance to poke your head. head up. So I decided, you know, I had deferred law school another year, but then in that year, I was like, you know what, I don't want to go to business school or law school. I want to get into this internet thing. So I applied to all the leading internet companies of that time, of which Amazon was one that I had been buying books from for a bit. You know, Yahoo, AOL. Back then, you were companies like the motley fool really big, you know, because like these first

internet things. It was the age of pointcast was really popular at work. And I wrote to all these places. I really wanted to work at Amazon. I sent them an application for a VP of business development. It was the only job on their website where I was like, well, I could sort of make a case, but I was completely unqualified. They wanted 10 years of business development experience. I had zero. I was a kid out of college. But all the other positions were hardcore software engineering position so that I wasn't qualified for. I wrote a three-page cover letter. Everybody tells you don't write long cover letters. One paragraph, two paragraphs at most. Exactly. I wrote this impassioned manifesto. And the recruiter who read it was like, well, this person's not qualified at all

for this position, but I love how much effort they put into this cover letter. So she pinned it over her desk and said, look, at some point, if there's a position that opens up, we're going to call this guy back. and I really credit that, you know, cover letter for getting me in the door. Like six months later, they did finally call me. They were like, there's this analyst position. And, yeah, that's how I came to be the, you know, kind of the first analyst in the Strat planning department. What was the interview process like?

It was, it was fine. Back then the company was, you know, just under 300 people. And my interviewed was probably even smaller, maybe two to 250. you know, because of the analyst position interfaces with every other department in the company, I interviewed with basically like the heads of every department. You're interviewing with the CFO, the head of marketing, the head of editorial, the head of, you know, operations. Interview with Joy, the CFO. And it was intense.

I mean, obviously a lot of really smart people you could tell even at that early period. But a lot of rounds You got to do multiple multiple Yeah I actually just had that one time Because I had to fly out I was on a case in London So I flew across You know I didn't even really stop to

Get anything I had my suit from my consulting case And I just went to Seattle for a weekend I didn't know anything about the city I'd never been there It was just that one round And then they called me back And we're like hey

You're in And so that really I see that really I see that as sort of like the defining professional experience of my life, both because I was so early in my career and because the company was early in its life. And so I felt like always that I was growing up side by side as the company was. Yeah, let's talk about that for a second. So this is kind of sort of your first real job. So you don't know at the time when you show up, but now having worked at other tech companies, other startups,

Looking back, what was Amazon like as a company when you show up? Yeah. It was definitely intense. There's no doubt. You know, the thing that people talk about about startups being just crazy intense, that first year I was at Amazon will almost certainly be the most I've ever worked in my life. Other than you're like jamming for finals in college. you know when I first got to Amazon we were growing quickly and still trying to add headcount

but you know with the internet the growth rates can exceed even the rate at which you can staff up so there's always just more work and then anyone can handle and then you add on top of that a company that has really large ambitions uh we were just working all the time I lived at the office seven days a week we had the notorious like slick bags under the desk and sometimes I would sleep at the office. I always remember there was a guy who everybody was jealous of him because he had a futon in his office. So if he wasn't there that night, it's just like you could get dibs and like crash out in the futon was really a step up from a sleeping bag under the desk. But it was definitely intense. And, you know, that I also remember

that first year because, you know, I started in August of 97. You hit that first Christmas wave where you got to supplement the staff in the distribution center. So we went down to the warehouse in Seattle and you're working shifts, packing books, and then you have your day job. And then, you know, that continued the next year. So that for sort of like year and a half was just a blur for me. Disorganized, organized?

Again, using your now frame of reference of other companies. Yeah, certainly it was, you know, I think the strat planning process and being in finance to being a public company, I entered a company that had a certain level of structure imposed on it. You know, you have companies now that don't go public for years and years, but since I joined a public company, when we had the Wall Street schedule to keep up, we had to, you know, prep the forecast every month. And so that always added a level of discipline. Now, around that, with the growth and all the different projects we were trying, there was a certain level of chaos,

but it was always a kind of a controlled chaos. You know, I think the hard part of, and one of the stressful things is, and this is for almost all internet companies that have rocketed to success, you are trying to, you know, deal with your business complications at the same time that you're actually just trying to grow up as a company. You have a lot of young managers, maybe who haven't managed at large companies before. So you're both trying to build the rocket ship and try to drive it at the same time. and that can be, you know, that can be a high stress type of environment. But it's also exhilarating in a way because everything just feels like you can make it happen. Everything is just blank sheet possibility. You can brainstorm ideas on the next thing you know you're just working on it.

And so, you know, you can't trade that level of just, I don't know, craziness. So, as you mentioned, you're an analyst in, the strategic planning department. So what does that mean? Yeah, so if you think of all the accountants in the finance department as sort of backwards looking, strategic planning is their counterpart that's sort of forward-looking. You're projecting what the business is going to do, what the cost structure is going to be, how many orders you're going to get, how many customers you're going to acquire. You're doing analytics. Yeah. And a big part of it was, you know, we were both the forward forecasting part of the business, which is, you know, important for fundraising and, you're doing,

talking to investors and all of that. But we also were sort of the analytics hub of the company. Joy, especially as a CFO, really wanted to have a deep understanding of every part of the business. Joy Covey. Yeah. And so we had this thing called the analytics package, which was something that we would put out that was kind of our, you know, in this day and age now, most people are used to having these dashboards from different software packages. that create graphs so that you can show on TV screens and everywhere. But back then, we actually generated this out of Excel and making graphs

and printing out just thick, hard copies that we would distribute to key managers throughout the company. So that was what I spent a ton of my first year on, was just generating that, expanding it, adding analytics as there were more pieces of the business that needed understanding. And, you know, that's a process of also just figuring out how to actually build build things to track the numbers that you want to have. But I've never, even now with all the tools that we have today, I don't think I've been at a company that had such a rigorous understanding of every aspect of the business. And I think part of it extends to the fact that,

you know, we were a retail company. You know, so many of the internet companies now are software or social media and, you know, super high margin businesses. You know, retail is just an inherently a lower margin business, even though e-commerce has some advantages. So you have to just be more rigorous. You know, every decimal point and everything matters in a business like that. When you are really into operations and logistics, it forces you to a level of rigor that I think has always been healthy. And I have carried that with me. Well, you wrote a great blog post about this that I'm going to link to at the show notes. But so in this analytics package that you're printing up and delivering to people's desks, you basically have a snapshot of the entire company

at any given moment. So I'm going to just quote from some of the things like, you know, the salary of every employee, you know, the time it takes for a book to be delivered, you know, what percentage of customers from every hundred orders will have an issue that they have to reach out to customer service. If you gain a customer, how many of their friends and family would become new customers. So, like, again, you mentioned social media. Like, that's the sort of data that now every tech company is obsessed with. Allow me to geek out as a history nerd. At one of the biggest, greatest companies of all time,

at the very early stage, you have your finger on the pulse of that every single month. Yeah. Wow. Yeah, it was, I often look back on that and just think it was a miracle because, you know, I had not gone to business school or anything. This was my business education. It was like an internet MBA. in a way. And it's, in a way, you get to see because you're presenting to the public on every quarterly earnings call, you're choosing what metrics to share, and then there's gap requirements for

what you have to report out. But then you also see the internal metrics that lie behind that and how you choose what to share with the public. And it gave me a deep appreciation, actually, for what a tough job it is actually to be an external analyst of a company when all you have to go off of our gap required figures that are presented every quarter. There's so much more underneath that that give you a sense of the true dynamics of the business. And that's why that's a tough job. If anyone at Amazon is listening and those packages are sitting in a archive somewhere, donate them to like a business school or a museum or something. I'm not kidding. That would be so amazing to look through like a September 97 report or something like that.

No, absolutely. And it's fine. I think I still may have one or two of the cover letters that accompanied that where you had to look through the numbers and generate some sort of narrative about what happened to the business in that month. And it was good. You know, I think an underappreciated side effect of the analytics package and writing that cover letter was that, you know, I don't know if people remember this now because Amazon gets so much positive press. But back then, a lot of the press was really negative. You know, Amazon.com. famously the headlines. People thought Barnes & Noble was going to crush us. You have a lot of young employees at a company who see all this negative, like my parents would send me press clippings and ask if the business was okay, if I would be out of a job. But when you look at the analytics package, you send out this cover, you're like, wow, the business is great. We're growing. Here's a forecast of the next couple quarters. By the way, we've been right, or within a few percentage points of right on our revenue forecast every other analytics package. You say that in the blog post that you were so granular and so specific about all the data that you're reporting that you could within a two or three percentage point predict quarter on quarter how the growth is going to go.

Yeah. It's one benefit of being in retail where it's a lot of small transactions like books. It would be harder if we just started off and we were selling, I don't know, cars or TVs, like things that don't happen very frequently. But small purchases that happen on a discretionary basis on a high frequency. see sort of like a low average transaction size basis are actually very predictable when you get to a certain scale. And the only variable then is, well, how many people are you going to add? Like, how many customers are you going to add? It turns out if you break that problem down into its component pieces, each of those pieces was actually fairly predictable for us at the time.

I don't know that they would be as much so today, given that the Internet's much larger. There are the smartphones everywhere, you know, the pace of growth can be accelerated to a degree that it wasn't possible back then. But, you know, we knew we were going to acquire a certain number of customers from AOL, excite, Yahoo, the search engines, we paid for those. We knew a certain amount would come through our affiliate program. We had a budget for that. And then we knew that word of mouth was a huge factor and that it was pretty consistent, you know, month after month. Like, if we had a customer this month. On average, they're going to bring in a couple more customers, you know, next month. And so just as long as you know how many you got last month from Mortimer Mouth, on a basis,

you could predict actually the next month you would add that many more. And since the basket size for books was predictable, all the variables were actually very predictable. It's still amazing to me, though. Within a couple percentage points is sort of stunning accuracy. You see now social media companies, right, they have so much trouble quarter to quarter. telling Wall Street, like if you ask Twitter or a company like that, hey, what are your earnings going to be? They have no visibility. We were lucky. We were a public company that had almost absolute control of where that was going.

I'm going to take me through the rest of your time at Amazon and then I'm going to circle back and ask a couple of other questions. So like, I think Amazon passes a billion in sales in 99. I think that's right. Yeah. No. So you guys are, like you said, you can see, even though you only report so much to Wall Street, you can see we're growing, we're doing well. Because I think at Bayes's original business model, he was expecting like $200 million by the year 2000. Right, right.

Right. And so you know things are going well. What is it? And then the bubble bursts. So take me to the time of 99 into 2000, 2001 at Amazon. Yeah. Well, we, even from, you know, the first month or so that I worked at Amazon, we were already working on researching other product lines in businesses.

Oh, that's something that I ask every Amazon person. Yeah, yeah. Did you know from day one that it was going to be everything, or did you, was that something that evolved? I think Jeff knew very early on. Famously, he researched a number of different product lines before starting Amazon. So in the back of his head, I think one of the most critical things about Amazon that is underappreciated is that Amazon was never so deeply attached to just being a bookseller or just a domestic bookseller. From the time I joined Amazon, I worked with the first class of MBAs on business plans for video, music, software, magazines, international.

And we were contemplating which of those to go into next. You know, Jeff had the saying that brands are like quick drying cement. I don't know where he got it from. Some various people have taken credit for coming up with it. But, you know, he's very conscious that the longer that Amazon stayed a bookseller, the more people are just like, oh, Amazon, that's where you go buy books. And he's like, no, I want to be a place that's known for, you know, you can buy anything. We'll find anything.

And so that flexibility in our self-conception as a company allowed Amazon to just continually reinvent itself rapidly. without getting attached to, you know, its earliest customers. I think it's easy. Like if you're building a social media company, for example, and you're not quite sure what you're going to be, there's a temptation to take your earliest high usage cohort and say, okay, that's what our business is. And those are going to be your most vocal heavy users.

But they'll hold you hostage, you know, like the Twitter thing with character limits. And I mean, people are complaining, I don't want more characters and all of that is a classic example of, your first cohort hijacking your business. And the tendency is to play into that because, okay, that's what works. Right. Let's juice that for growth. Yeah.

Yeah. And so the other thing I would say that was really healthy for Amazon from an early start is that we were going into businesses that had a lot of global metrics. So if you wanted to know the size of the global book market, you could find that. Same for music. Same for video. that always gave us a real, tangible sense of sort of the asymptope that we were headed towards. Like, look, if you capture 100% of the global book market, this is as large as ever going to be.

Maybe on the margin you can get a few more people to buy books or things like that, but it's a pretty predictable behavior. And I think what's healthy about that is when you know what your limits are, you know you have to change what you are to expand your ceiling as a company. and so we were consistently aware of, okay, like there is a limit to our business, and to grow it, we will have to change what we are. And so I think just from the beginning,

Amazon has had a fluidity of its self-identity that allows it to do things like Amazon Web Services, which seems highly, you know, tangential or five and also the retail business. And that's good. I wouldn't say that there's no way we knew all of this up first, front, but just having that open mind to it is really, really critical. And so, you know, going into 99 and everything, we famously had a, I had to go to this planning offsite early in my tenure at Amazon.

And I was just really the analyst to bring all the data and all the VPs were there. And it was a meeting to plan out the future of Amazon. And Jeff had asked people, hey, what do you think our revenue will be in like year 2000 or 99 or something like that? I remember, I mean, the numbers were all over the map. And honestly, you know, a lot of it depended on the growth of Internet usage and a lot of factors that people didn't consider. But certainly I think Amazon was exceeding its most optimistic forecasts as we headed into that bubble period.

Now, we could always sense one of the things that in finance, especially we were attuned to, was you remember, like, pre-crash, it was a pretty heady time. There was a lot of capital flowing. And we had a sense in finance that, look, whatever happens in the future, this is a possibility that the market's going to crash. Like it seems a little bit ahead of itself. And if that happens, we don't want to be held hostage by Wall Street or, you know, their ability to restrict our access to capital. So we did at the time the largest sort of convertible debt offering, just in case.

And it ended up working out perfectly because the crash did come. We did have a billion dollars from that convertible debt offering as a treasure chest for rainy day. And what it allowed us to do was as a whole bunch of companies folded, we didn't have to change our strategy

or our plans for ambition, for growth internationally into other product lines, adding headcount. Everything we needed, we could do. do. You know, you spoke about the negative headlines around Amazon. I remember when that debt up, that debt route happened. That was another reason for people to be negative. Oh, if Amazon

needs a billion dollars, like, you know, and they're the cream of the e-commerce crop, you know. So like that's funny. Like you're saying, that that was perfectly timed. It ended up being the right move. But even at the time, that was more food for the thought. Yeah. And, and, you know, that comes with being in a business that had some level of predictability and also having enough forward thinking plans to know that we would need some amount of that capital. Maybe not all of it. I think at the end we didn't need all of that capital because the business ended up generating enough cash to support most of the ambitions we had. But I think the foresight in sort of raising before we necessarily needed it was hugely critical.

And that's one of the tricks of being a public company is dealing with that. But I think, you know, with so many Internet companies now not going public as early, I think there's good and bad to it. Obviously, if you're a public company, to some extent, the stock price and how it's doing and that perception can influence your employees and the morale and things like that. like that. On the other hand, I think it's just very healthy to have the discipline of being a public company and of having to open your books to the public and report on that quarter after quarter, having to refine that narrative that you're going to give on the earnings call and give

the public guidance. It has a bunch of positive effects throughout a company. The bust happens and there was a slew. Everyone remembers the e-commerce company. Everyone remembers the e-commerce companies, you know, the sock puppet and all that stuff. Sure. And Amazon famously goes down to like $5 the stock price. Yeah, yeah. And you're looking at the numbers again. Like, was there ever a fear that, hey, maybe it could be us too?

I never did. And probably from having my pulse on every aspect of business, there was, I had a level of confidence that maybe people who weren't as close to it had. But I never saw anything really fundamentally change about the fundamentals of the business. You know, the Internet was still growing. There were trends that, you know, we all expected to continue. More people would get access to the Internet. The Internet would get faster.

More people would become used to buying online. Exactly. People forget that. Exactly. Even when the bust happens, it still wasn't prevalent. And we saw our customer loyalty was high. It wasn't like we were churning out customers. One thing I want to go back and add, actually, which I think is really important that Amazon understood.

So I talked about how we knew sort of the size of the markets we were going into and that they had limits. The other thing we knew from a very, very early time at Amazon was what people didn't like about online shopping. Like, I think a lot of business today, they're very focused on growth and, hey, who's using our product and why are they using it? and they need to obsess more about the people who used the product and then gave up. Like, why aren't they using your product? For what reason? We had this survey that we would do externally of customers who both shopped at Amazon and didn't shop at Amazon. And the one of people who shop at Amazon was one question after you placed an order.

It would just pop up a question. And the external one was through a market research company. We're like, why don't you shop at Amazon? Or the question would be, why don't you shop more at Amazon? And from the beginning, the answer was very, very consistent. People hated paying for shipping. So it turns out in e-commerce, this is the number one enemy of more online shopping. People have a psychological aversion to paying for shipping.

And so I think it was still beneficial to us as a company to have a single bogey that we could continually iterate around and that we knew would unlock a ton of upside for us. We had super saver shipping. Or actually prior to that, what we did in the shopping basket is we showed you, hey, since you're not paying sales tax, even with shipping, you're saving on the order. But, you know what, people are like, yeah, but I could still drive it. So, I mean, they're irrational about it. It's the guilt.

No, it's not irrational. It's the guilt. If I was just not so lazy and just went out to the real world and got it, I wouldn't have to pay that fee. Exactly. So super saver shipping was the first iteration. And if you buy $25 or more of these items, you would get your shipping free. But the problem with that is then people end up waiting on purchase, and it decreases their purchase frequency. And you don't want that, you want, I have an impulse.

Yeah, you want people not to think about, like, purchasing as this, like, really... Strategy. Yeah, yeah, yeah, yeah. You want them playing a game. So then, you know, all these things end up leading towards Amazon Prime today, which famously sort of really unlocked. the purchase behavior of people when they don't have to think about the shipping fee at all. It turns out, and I think a lot of businesses, it's harder to come up with that single factor that holds back your business.

But I do think analysis of customers that aren't with you is hugely critical. Again, from another great blog post that I'll link to, you point out, that Amazon's core business always generated money, right? And so this fallacy, as you call it, that Amazon doesn't make money, right? It's because... So the point I'm trying to make is you were able to see from day one that in our core businesses, we're making money, it's just we're continually reinvesting. So that's why you had that confidence.

But, and that's, so the reason I bring that up is because that's what sort of killed all the other e-commerce players, right? Is that famously, Pets.com has to pay more to get that 40 pounds of dog food over. How come that wasn't an issue for Amazon? What did Amazon do differently? What did you guys solve about e-commerce that the other guys didn't solve? Well, even, you know, when I joined at August 97, we made money off of, pretty much every order. So, you know, you're right, like people obsess over Amazon's either showing profits or not in a quarter. But as you know, from gap earnings and things like that,

I mean, that is the wrong sort of time horizon to analyze the business. Now, no, most smart analysts understand that, to understand any business, like, people are like, hey, Uber keeps losing money. Like, you really have to analyze the unit economics. What is the, the economic output of one single transaction with the business. And in retail, actually, it's not as hard to analyze as many businesses, but most people just read the headlines. You know, they're like, hey, Amazon lost $100 million this quarter, the business is terrible. But on a single order, we make some gross margin.

So after all the variable costs of the business of that order are accounted for, you have some money left over. And then you apply that to all the fixed costs of your business, which, you you know, there's some part of your infrastructure that it's going to be a fixed cost and all of that. Fix cost business are a well-known quantity in the business world. And you know that it's just about achieving a certain level of scale where your variable, you know, profits can cover your fixed costs. So you want as many orders as possible applied against that same fixed cost base.

And so it's a very simple model, but, you know, look, most financial reporting is very lazy and they're not going to dive into those details. And it doesn't give you the sexy headline. The other aspect of our business, which is unique to e-commerce, is that for books, if you buy a book from Amazon, we charge your credit card and then at the time that the product ships out, that might be about a day. We don't pay the publisher for that book for net 60, net 90.

And so with each order, unlike a traditional retail business, we were actually generating cash. You have that float. Yeah. Most retail businesses, the faster they grow their sales, the more cash poor they get. They often run out of capital and have to go raise money. We were the opposite. The faster we grew, the more cash we generated for our business.

That allowed us to not always have to rely on outside capital to fund our operations. So that's an underappreciated aspect of our business that, you know, some analysts like Bill Gurley and others understood that that effectively, you know, could make your return on investment capital much different than a traditional retail business. So I think, you know, if you look at other commerce businesses, they were also probably fixed cost businesses, but couldn't achieve the scale to cover their fixed costs. Or maybe they spent too much on advertising. I mean, all of them had different challenges to deal with. Retail is a inherently thinner margin business than just selling software and things like that. So your margin for error is lower.

But you make it sound so rational. The calculation has just been, if we turn this into a larger sales base, we'll make more cash, as opposed to flipping that mythical switch or whatever and turn on the profits, which is what everyone supposedly wants Amazon to do for years. But it just seems like a rational calculation. If we can just get a larger sales base, then we'll be fine. Yeah, I mean, it's the best strategies I always say are simple, but hard to execute. Like simple to understand, hard to execute on. Achieving a large customer base is easier said than done. You know, a lot of commerce competitors of ours were focused on one product line or another, you know, e-toys, Pets.com or things like that.

Everyone was going after that category killer, you know. Exactly. That's what happened in retail right before the web, so everyone thinks it's going to... But it turns out those all have challenges, right? Like pets, you've noted that the shipping cost is super high for products. Toys, it's a very lumpy sort of purchase pattern, so you're not going to get that consistent repeatable pattern. And by that time, Amazon was already into multiple product categories. And so as long as we made just Amazon the best shopping experience, period, and continue to add more categories,

we could both increase our share of wallet and potentially add more customers as we added more products that appeal to them. And I think our belief as a company shifted from, hey, we're a better way to shop to, hey, we could be the best way to shop, you know, over time. And we just knew with enough time and enough iterating on that customer experience that we could achieve that at some point, that people would just actually prefer to shop at Amazon versus saying, well, you know, for certain hard-to-find books, I prefer to use Amazon, but I'll still go to, you know, Barnes & Noble to buy other books. No, we want it to be the best way to shop, period. And that takes time, improving your logistics. We knew, right, shipping cost is a huge issue.

Once you solve that, then the next big bogey is shipping speed and reliability. And it turns out to solve that problem is a multi-decade sort of process. of constant small improvements, constant iterating on your distribution network. You know, people forget Amazon once had many super large distribution centers, like a couple of those scattered around the country. Now they have many small distribution centers so they can be closer to the customer. Now you can order certain things on Amazon and get them the same day in certain cities. So I think the ultimate endpoint is to get to that point where, you know,

someone can order something and it's just, is there, like almost instantaneously. Who knows? it'll be, you know, it'll be drones or it'll be some newfangled network. Maybe there will be self-driving vehicles delivering things. But I think the end goal is to shorten that distance between I want something and here it is. You say the best way to buy anything, is it also the only way to buy anything? Like is Bezos's big idea ultimately, I'm going to be retail. We're going to be all of retail.

Well, I think you may have an ideal to be the best way to shop. I don't know that you have to be. I don't even mean that in a like a monopolistic way. I just mean like because if you think about it, Maslow's hierarchy needs type of way. Right, right. I need Amazon is what delivers. Yeah.

Right. Any product. Yeah. I think, well, we always took comfort in the idea that, in certain categories there might be more than one winner and it was okay like it wasn't a winner take-all scenario necessarily like retail tends to be a little more like that than say social networks or things like that where network effects are so powerful but there's certainly no doubt that if you're the best way to shop and you can deliver at scale more and more people should choose to shop with you

over time. So we'll see. I think their obsession will always be, you know, hey, let us be the best way to shop in every way possible. Whatever happens happens. I think the customer focus of the company, well, you know, it sounds so trite to say, hey, we're the most customer focused company in the world or we're obsessed about the customer experience.

And yet there are a number of things culturally that fall from that that are really good. one is you don't have to be unhealthly obsessed with competition or worry about like what the competitions are doing. A second is that you will consistently find that you have to innovate more because customers are always unhappy about one thing or other. The like experience can always be better. I don't think customers are always good at telling you what they want, but they're good at telling you what they don't like or what holds them back. That's why we knew that shipping was a huge issue. for online retail. And so being customer focus, you know,

allows the company to continue to be sort of nimble and continue to work hard to try to improve the experience rather than ever getting self-satisfied. Before we leave Amazon, tell me about Jeff as a boss. Well, I never reported to Jeff directly, but I got to see him in action. And I would say Jeff is,

fascinating to me because he's both brilliant, you know, just like a generally brilliant person. And also, you know, very good about communicating out his thinking to the company so that it can capitalize on. You know, I both think, you know, Jeff was interesting because he's building Amazon the business, you know, know, online retailer and all of that. But he's also been thinking about Amazon as an organism, the organization, and how to improve upon the organization. Like most sort of first principles thinkers, he wasn't prone to accepting all the conventional

wisdom that comes about. This is how you run a company. This is how you run meetings. This is how companies should operate. And he was always asking why we maybe did things, a certain. way and poking at it and if he didn't like it like he's like why are all our meetings like everybody sitting around watching someone present PowerPoint slides this doesn't seem like the most efficient way for us to debate this idea or analyze it famously right essays yeah yeah and so

i don't think that works at every company because you know if you don't have a CEO like jeff and a culture that supports it then that just seems like a silly tactic but if it's if it's part of the culture of the company and supported from the top then it works. And so I think that's a fascinating part is like even if Jeff weren't running Amazon as a retailer, if you were running anything, he would just be an interesting thinker to observe and to learn from. And so that's why I always treat my time at Amazon is, yes, I was learning a little bit about e-commerce and everything, but I was more just learning about how to be just a first principles type thinker about how to build any sort of successful

organization. Did you report directly to Joy? I actually reported to Keith, who ran the Strat Planning Department, and Joy ran both sides of finance. Tell me a little bit about Joy. Yeah, Joy is alongside Jeff, another one of the more brilliant people I knew, unlike most CFOs, which, you know, have a reputation of her being sort of like, you know, numbers, people. She was, but she was very, very, observant about other aspects of the business. And, you know, the analytics package and it's sort of deep analysis of every aspect of the business gave her sort of a, also sort of a comprehensive view of how the business fit together and how it worked. And what I always appreciated about her was, you know,

I think most CFOs are, have a reputation for being very conservative in terms of funding new ventures and things like that. But I think Joy was, you know, she liked to play offense. She, the fact that we went out and raised all that convertible debt, part of it is so we could accelerate our ambitions to grow into new markets and new product lines and all of that. She understood that the economics of some businesses are that, hey, they're our first mover advantages. There can be some level of customer lock-in. And so we have to move faster, not slower on many of these fronts, that that was the right strategic move. So, I always appreciated that about her.

So you leave Amazon in 2004? Yes. And you go to film school? Well, at first, I moved to New York. I knew I wanted to go to filmmaking, which, you know, it's kind of a strange decision at that point. But also, you know, just like when Jeff talks about his regret minimization framework for starting Amazon, I had some element of that. You know, I was young. I wasn't married and I have a family depending on me.

So if you ever have an interest in that, like, what better time to. do it. You know, if you don't do it then, it gets harder and harder. So, went to New York, learn to edit first at this sort of school taught by working professional editors called the Edit Center and started doing a little bit editing work, you know, editing, editing, like, reality TV and documentary, indie documentaries, and friends acting reels. But then I realized, you know, quickly that I actually wanted to write and direct. I wanted to learn more about the whole filmmaking process. So I moved out to L.A. to go to, film school at UCLA. I wish I could have spent more than two years in New York, but I'll always treasure

that time. And after a year of film school, which was a ton of fun, I got a call from my old manager at Amazon. So at Amazon, after finance, I did mostly product work for, you know, six years. And my manager on Amazon video was Jason Kiler. He was like, hey, I've been recruited to run this venture out of LA, which would be. Hulu and what are you doing this summer and if you're a film student you know like the summer jobs are all like hey do script coverage make coffee and you know we'll pay you nothing and I was like that doesn't sound like much fun going to help Jason launch this thing sounds like a better summer job so started helping out on that front and when the summer ended it was

time to go back to school we hadn't launched Hulu yet and I was you know responsible for the product part of it. So I was like, I'm going to just stay on. It's kind of like when I went to Amazon and skipped out in law school, sometimes there are things that are more timely in your career and you have to jump on those. And there are plenty of other things like film school, law school, business school, and things that can happen at any point in your career. But, but you know, with the internet, everything moves quickly. So then I ended up staying on and running the product team there for three and a half years. It's first three and a half years as a company. which is a fun ride.

Let's go into the background of Hulu just for a second. In the history that I'm dealing with, I can't think of another example of a bunch of companies getting together and doing a consortium to fend off a digital threat or whatever that actually kind of has worked out, you know? Yeah. So Hulu is basically formed in the wake of YouTube, right? or maybe even Napster.

So the film companies Hollywood needs an answer for video going digital. Tell me what you, any impressions on the early years of Hulu? Well, look, I'm with you when Jason first told me about it. I had actually first read about it in an article in like Variety or the Hollywood Reporter. And when I saw it, I remember writing something publicly like, oh, this is going to be a disaster. You know, like anytime a couple of old media companies get together to do something. Well, he did it 15 times in music. There was always a, yeah.

And he was just like, I thought it was a joke. And then Jason told me that that was the thing he's been recorded. I was like, oh my gosh, that is crazy. But a couple of things gave me more hope than others. One was that they brought in Jason, who was like a, you know, had grown up in the internet age and understands that world. It's smart. And the second was in meeting with the media companies, it seemed like they were willing to give us more free reign than I had expected.

They'd love us build our own team, have our own office space. And, you know, we definitely had some push and pull with them on things. Notably, what was the initial catalog of content they were going to give us? I mean, it was a constant tug of war to say, look, you should have to put more stuff online. You have to be more aggressive about it. Now, I think the company was formed a lot in that age of the growth of piracy. And so, you know, the idea is to offer sort of a legal alternative that's more convenient than, you know, pirating all this content. And the fact that they gave us the freedom to recruit a team of people from Microsoft, Amazon, Google, you know, like traditional tech companies,

gave me some hope of sort of reforming the industry from within. Because I had no doubt that the internet was going to sweep across that industry, like it's swept across so many industries. It's just a matter of time before these things happen. And there are two paths to sort of dealing with that. One is that you're like the disruptor. You come from the outside and you're like, look, I'm just going to come and outflank this industry and crush it from without.

One of the appealing things about working from within, at least on the Hulu perspective, was just that they already had access to so much great premium content that had word and mouth. I wanted there to be a healthier relationship between, you know, creators and their audiences. I really have always been uneasy with this world

where consumers are like, oh, like, screwed the media companies, and I'm just going to pirate all this stuff. I don't feel any guilt about it because having been a film student, one of my undergrad majors was English, I feel an affinity for creatives. I think creatives should be compensated for their work and I appreciate a world in which creative people create art that makes life enjoyable. And I, you know, it saddens me to see creatives who are struggling to make ends meet and trying to create work. So I've always wanted to come to a business model that made it easier for artists and creatives to make a living. So for a long time, I think at Hulu, we actually had the support, especially of Peter Churnan, who's leading the board, to do things that maybe they wouldn't have not have done had they run Hulu themselves.

I give them a ton of credit for that. The thing we were always going to struggle against was that it was a JV with multiple owners. And secondly, structurally, if you look at media executives, like, their personal success wasn't really directly tied to Hulu's success. And also, the piracy threat sort of dissipated a little bit over time. I think in the wake of YouTube and everything, there was just thought that, oh, my gosh, like, the industry might just go to zero and people might not pay for anything. And quickly, people saw, like, all right, like, you know, some parts of the business might get. chipped away but it's fine you know we can all make our payments on our houses and the Hollywood Hills and everything and so that that Peter leaving like a number of things I

think our air cover as a company and our ability to strategically move quickly diminished a little bit over time and that's you know there's that structural issue in a lot of things you know the fact that congressmen only serve for your terms you How do you incentivize long-term thinking? It's tricky. But, you know, my goal when I went into Hulu was always, I had this conception of the future of media being, you know, not driven around sort of scarcity and windows and restrictions,

but more about abundance and just like, look, you can watch anything. Anywhere on any device, any time, it can be on demand, like all of that, because I just think, a world of infinite content. That's where everything has to go. Yeah. Yeah. Well, you know, you saying that in 2018 seems like, well, duh, it's obvious. But I remember that so clearly from the time that, and again, in 2018, it's hard to imagine this, but a lot of really smart people were like, you know, why do I need this when I've got my TV? I want to watch TV when I get home at night. I don't want to, but now we're living in a world where, you know, where everything's

being watched on little screens and Netflix is eating television. And so what was your strategy at the time or what was your vision at the time for getting to this on-demand, anything you want, anytime you want at World? Yeah. Well, the first big step was when Hulu was first started, the only legal rights we had to content were for ad-supported Windows. So there's a bunch of crazy history around the rights of it. It turned out like if you wanted to show the, you know, an episode.

of 30 Rock, the day after it had aired, there were a couple ways you could do it, but they were illegally restricted to those. One was you could be like iTunes and saw the episode for $2.99 or whatever it was. The other was this carve-out window for ad-supported viewing. So we had to, you know, have ad breaks in all of our content and put in ads and then share that ad revenue back to the media companies. But that allowed us to get the next day access. The office. So for people, people who didn't have TV or miss the episode, you know, you want to see it the next day. You want to catch up on it. We were kind of the one legal way to do that short of.

And I remember that as such a revelation. I missed the office last night. Well, guess what? Don't worry about it. Yeah. Yeah. And, you know, look, our strategy, the product design and development was all oriented around the fact that we had that window of content.

And it was a constant negotiation. Like some programs, it's very complicated in Hollywood. with like some programs might air on Fox, but it was produced by Sony. And so you got to negotiate with them. And they may say, well, look, we don't want to put the last five episodes on Hulu. We only want to put the previous season. Yeah, like something or just one episode. Or maybe you would have off weeks.

Or sometimes, in some cases it was weird. They would only show the last three episodes that had aired on TV. So if there was a rerun, you would get three random out-of-order episodes. And so it was a constant, you know, like tweaking of the rights to try to get to that. The next obvious step was going to mobile devices because we didn't have those rights at first. We were only viewable on a web browser.

And, you know, with smartphones and tablets, getting to it connected devices to the TV. You know, so before I left, we had negotiated that right. Then after that became the struggle to get a subscription service off the ground. Like what rights could we get if we were going to charge for this?

What content would have to be ad-supported? what could be shown ad-free. So it was always like a series of negotiations to continually increase that rights envelope. And then even before I left, we started looking at some original content as well to try to subsidize the overall package. I mean, my envision was always that it would be something that was just available everywhere, anytime, all the stuff was available. There wouldn't be all these restrictions.

And we even went so far as to look into because, coming like a cable company. Like what would it take to be an MVPD? Would that open up access to live as well? Could we do live sports? And it really is going to be like a complete cable replacement, which now is there are many versions of that. You know, you get Sony.

Or there's about to be a whole universe of them. Yeah, there's YouTube TV now or anything. We were trying to get to that before everybody. But it was just, you know, it was hard back then to to negotiate through that thicket of different stakeholders to get to that. But look, whether it happened, like now it's going to happen, you know, like, I always say at the internet,

like, you either make it happen or it happens to you. And it's just a matter of time. And this world that we're going into now doesn't surprise me. But I'm, you know, I'm, I do have some, I think, regrets about not being able to get there sooner.

Because, you know, you could just see it. You can envision what it could be. Let's do a couple quick hits. Tell me about early. Yeah. So I left with some old Hulu folks and moved up to San Francisco and wanted to do a startup. You know, I'd been with Amazon and Hulu I left.

It was a couple hundred people. I just think I wanted to try the startup experience, something small with some friends. The first time through it is always like such a learning experience. for something you do a company and you realize like how much of your time is is spent on like wow I have to find office space and I have to figure out how to do payroll for the people on the team you have to figure out how to get them health insurance and and at the same time then you're trying to figure out how to get to product market fit and we're trying to do this kind of like we had this vision of a programmable calendar in a way but it morphed over time and

into other things and it was a good learning experience it didn't like you know completely work out the way we wanted to do and we ended up selling selling the startup but um i'm i think i learned so much from that that i'm looking forward to sort of applying to the next go-round on this you know we talk about deterministic careers and second generation immigrant families you know entrepreneurship and technology is so much a probabilistic game. And so you do have to take multiple shots on goal. And so, but each time you have to take the learnings away from your previous attempt. So I learned a ton from that.

What did you learn at Flipboard? Flipboard is interesting because, you know, now we debate a lot about news, news on social media, the health of the business. That was the closest sort of I came to working directly at that intersection of news. journalism and technology. And you get an appreciation for the challenge of news reading apps in that business as a whole. And what are the challenges facing companies like the New York Times or any sort of media app? And they're twofold.

One is that the network effects for news reading tend to be pretty low to non-existent. And the virality of news reading also turns out to be. fairly low. And there's a reason that so much of journalism had to go, you know, beg on the doorsteps of Facebook and Twitter and companies like that. Because those companies, they had massive network effects, massive virality. And so all the eyeballs were there. Like, all the attention supply was aggregated in the hands of a few companies. And so it didn't surprise me that those companies would start investigating news. a business, you know, Facebook family, famously, Twitter obviously has a lot of news content

traveling through it and then, you know, even companies like Snapchat are producing media from traditional media companies. But, you know, the challenge for them is that that's sort of not their core business necessarily. It's another type of content that travels through. And so now we're seeing them grapple and struggle with how to deal with their particular issues when it comes to news, you know, the tribalism, the, you know, the virality of like fake news stories and things like that. Well, I think, I'm going to highlight a point that I think you said and correct me if I'm misinterpreting this, but news itself is not inherently viral. It's that these networks have this social effect already built into them, and news is just

something that can plug into it. But in and of itself, it's not intrinsically on its own viral. Yeah. You may have things like BuzzFeed, which can make news stories more viral by putting them into formats, like listicles, and it's like headline writing

and things like that. But if you're running a business itself and you can't make the news, you're just reporting on the news, what are the network effects? You know, if New York Times had 100 million viewers versus 10 million, what are the network effects of that?

It's not so evident when you go to those services. that there's a huge positive effect to that. And the fact that, you know, you have multiple outlets reporting on the same story makes it just the most competitive sort of cutthroat business out there. So I think that will always be the challenge, the economic challenge, of building anything in that space as a business. You couple with that the advertising sort of duopoly of Google and Facebook,

And even prior to that, things like Craigslist knocking out all the classified ad revenue. And then on top of that, you have journalism and industry which always had this idea of Chinese walls and things. So essentially, your top journalists or your top product people are actually separated from the revenue producing part of the business. It's just an entire recipe for a very challenging set of conditions that, you know, journalism companies are continually continuing to grapple with. I almost think that, you know, the future there, like my instinct would be that there probably needs to be some more bundling within the news business. And there needs to be a shift more towards something that is akin to Amazon Prime,

like some sort of bundled membership to support this. I think it's just so hard to sit there and support. subscribe, you know, like if you're a New York Times subscription and then Wall Street Journal and the Washington Post and just like chipping away like that, there would be some benefit if a bunch of these got together and said, look, there is some subscription we're going to offer. And by the way, it's not just a subscription to read our articles. We're going to have videos and, you know, because, hey, the New York Times, we know culture in New York. You'll get discounts on tickets to Broadway and everything. Like, I think the same way that advertising once supported, kind of

of a monopoly on the news business and subsidize that business, they're going to have to find alternative ways to make it a healthy business. And I think we need it. You know, like the the checks and balances provided by an healthy press are super important in a well-functioning democracy. Absolutely. Flipboard. I was moving on to Oculus. Oh, okay. Yeah. Oculus. Yes. You were only there for a year and a half, year and a half? A little over a year and a half, yeah. Tell me about Oculus and then I have a specific question. Okay.

Just tell me about the business and your time and the opportunity. Virtual reality is one of those things that kind of like AI, self-driving cars, smart assistants, number of things. As you know, in tech, the hype cycle moves very quickly. I think all of those things are going to be world-changing, but they're going to take much longer. than people suspect. And virtual reality is the same. I certainly think in terms of the next huge medium that will shift the world,

virtual reality is probably the leading candidate. It's still early, early, early in its life cycle. It's getting better. I mean, they've made a number of huge leaps that make it more comfortable, engaging, and miraculous than ever before. So it's certainly here to stay. I just think that,

you know, in tech, right, like you always can see the far future in absolute clarity. And sort of all the bumps along the way are harder to anticipate. There are a certain number of hardware type of breakthroughs and price point breakthroughs and, you know, content learning that has to happen all for virtual reality to become like this thing that we all do all the time. And it's far from that yet. but I certainly saw in my time at ACU there's just glimpses of the future and what it could be. And so it will come.

Yeah. It will come. Well, I mean, it's one of those things where, you know, because virtual reality was going to come in the mid-90s, I remember. Oh, okay. You know, but, or for years and years and years from the first, me first getting into the web, a video on the web was going to come. It was going to come. It was going to come. It didn't come. And then finally YouTube broke that. So it's just waiting for that use case where I'm like, oh, yeah, I would have to do that. If you were going to place a bet, like if I gave you control of the VC firm and I said only invest in virtual reality startups, what's the use case that you, if you were going to place a bet, what's the most likely use case that will be the breakthrough for VR?

Probably, you know, if I had to place a bet, I would say that the ability to overcome the friction of physical distance to interact with people in what feels like sort of direct proximity. I think for all the advances in connectivity that come from the Internet and smartphones and everything, I do actually think that there's a void in the world that in America, and places like that may come from, you know, the decline of religion and institutions like the church and things like that. I just sense that there's this ambient sort of a sense of a loss of community. And technology is partially to blame. Like, we tend to live in our homes now and watch Netflix.

I think we don't go out and interact with people. And there's just like this latent sense of loneliness that has pervaded modern society. And virtual reality, once it achieves a number of technical breakthroughs, can make it just much easier to have that ambient sense of intimacy that comes from being around people. Presence. Presence. Yeah, that sense of presence is really important. This sort of random conversation and that that comes.

And, you know, I think we really underestimate how much physical distance is a huge source of, friction in the world. Like, it's one of the largest shadow costs on the economy that we've never really had to grapple with. And the moment that you can overcome that and be anywhere with anyone doing anything at any moment is going to change the world in a fundamental way. You know, just the fact that, like, you don't want to go out on Friday when it's, you know, it's raining out. I don't want to go outside right now. I don't want to go back out in the rain either. You know, it's cold and rain. You're like, I'm just going to stay in, just watch some Netflix and stuff. And and that's fine, it's entertaining, but humans are social creatures.

We want to be around people, so things like second life and all these things that have tried to tackle that problem. I do think there's something there. It's going to take some time to get to that. But that, more than gaming or passive entertainment or things in virtual reality, I think, has the best chance to make it something that appeals to everybody. I like to end with asking people what they're excited about now. and I'm not asking you to blow up your spot and like, oh, here's what Eugene's about to do or anything like that.

But you could do that if you wanted. Or, you know, O'Mallick said he's into photography these days, and that's his jam right now. So what are you interested in, excited about, want to learn about today? Yeah, yeah. Well, plenty of things. One of the great things about working in tech is I think you have just this endless, boundless sense of possibility. to change the world, I actually am still very, very excited and bullish on video as a medium. And, you know, it's like trite to say because all the media companies are trying to pivot

to video. But I actually think that video as a medium is still under-exploited by most of tech. And the reason I say that is that unlike text or even music to some extent, video is not a medium that most people learn growing up. It's hard to master. The reason I think most media companies fail when they say, like, hey, we're going to pivot to video is not that, like, I think the economic case for them pivoting to video is actually very strong. Like, the economics for video ads are much higher and all of that. It's just that they don't know how to do video.

You know, I know many people in many fields who I would consider to be very good writers. I know very few people who I consider, like, I would hand them a camera and expect them to be able to make a compelling video. And why would they? Like, we never learned that. Until I went to film school, really, I loved movies. movies, but I wouldn't say I was a gifted filmmaker. And there are so many mediums now where I still feel like their usage of video is point a camera at a person. Like MOOCs are an example where most of the videos I see are a camera pointed statically at an instructor and then showing

PowerPoint slides. Yeah. Which to me is somewhat visual, but not really video. Like if you were to really use video to storytell and to employ the medium to its fullest potential, it could impact education, it could impact the press and media, it could impact all sorts of online directories and things like that. There's so many places where that skill hasn't really been put to the test that I just in general feel like we have yet to see that video really put to its best use. So that's definitely probably something that will, you know, from my time in film school, will always be an obsession of mine. Will we ever see a movie directed by Eugene Le? You could see some of my student films.

I'm not sure I would subject you to that. But Sunday I do plan to do some work behind the camera again. So, you know, that's the fun thing. I see product development and tech filmmaking and the creative disciplines. Actually, have a lot in common. And I'm glad to see that both Silicon Valley and Hollywood are starting to work more closely together and to better appreciate each other's strengths. Because I think a long time there was just resentment and misunderstanding.

And when you... Uncomprehension, really. Yeah, really, really. But they're both beautiful, amazing crafts and a huge and important part of our society. Well, Eugene, thank you for coming on the show. You're going to think I'm blowing smoke, but that was one of the most interesting, whitest, ranging conversations we've had on the show. Thank you.

It's been an honor. I really enjoyed it. If this is the first time you're listening to this podcast, please subscribe to us on your podcast app of choice. There's plenty more great internet history where that came from. And if you're a long-time listener, then you know what to do to help us out. rate and review us on iTunes. Because iTunes gives credit to reviews and ratings, and the more great reviews we get,

the more people will discover us. As always, there's more info on our website, www.com. www.com. The show's Twitter handle is At NetHistoryPod, and my personal Twitter is at Brian MCC. Thanks for listening.