The Knowledge Project with Shane Parrish - #40 Ben Thompson: Thriving in a Digital World

Episode Date: September 5, 2018

Today’s guest is Stratechery author and founder Ben Thompson. If you’re an investor in Silicon Valley, work at a tech start-up, or just love to geek out on technology and business analysis, odds are good that Stratechery is on your short list of must-read blogs. What started as a side project, quickly ballooned into one of the most influential tech blogs on the web. The New York Times called Stratechery, “one of the most interesting sources of analysis on any subject.” I agree. In this interview, Ben and I cover a lot of ground. Here are a few of the things we discuss: Learn once and for all how to pronounce Stratechery. :) How Ben’s business model was developed and how he massaged it over the years to become what it is today The one metric Ben looks at each day to gauge the health of his business How Ben deals with people who rip off his work and pass it off as their own Ben’s thoughts on pricing, free trials, content and other important aspects of online membership sites How Ben structures his day to churn out such incredible content so consistently How Ben handles being wrong on his site, and his process for screening his work for confirmation bias How the internet has changed the traditional view of supply and demand, and what companies should do about it What Ben would teach an MBA class about internet strategy (if you do any business online, you need to hear this) What it would take for a start-up to overtake Google or Apple, and the vulnerabilities that all companies share, no matter how big or profitable The new era of technology and how companies like Netflix, Airbnb, and Amazon are doing it right (and what you can do in your own business to take full advantage) This is one of the most jam-packed interviews I’ve done on the Knowledge Project. Ben’s answers are so thoughtful and informative that you’re going to want to have a notebook handy.   Go Premium: Members get early access, ad-free episodes, hand-edited transcripts, searchable transcripts, member-only episodes, and more. Sign up at: https://fs.blog/membership/   Every Sunday our newsletter shares timeless insights and ideas that you can use at work and home. Add it to your inbox: https://fs.blog/newsletter/   Follow Shane on Twitter at: https://twitter.com/ShaneAParrish   Learn more about your ad choices. Visit megaphone.fm/adchoices

You need to learn to consistently and repeatedly start with new assumptions. Hello and welcome. I'm Shane Parrish, and this is The Knowledge Project, a podcast exploring the ideas, methods, and mental models that help you learn from the best of what other people have already figured out. To learn more about the show or our previous guests, go to FS.Blog slash podcast. My guest today is Ben Thompson, author of the technology site, Stratecary. I reached out to Ben because Straterey, which provides an analysis on the strategy and business side of technology on society, is one of the few sites that I read. Just like us at FS, Stratacery also offers both free content and paid content as a means to sustain a living. As you'll soon find out, Ben has an interesting take. on most things.

Enjoy the conversation. Is that even how you say it? Is it stretecary? It is. It is strategy and tech. I like to say that naming things is clearly not my forte. It's weird though. I mean, you can, I, it's kind of a running joke with me, my subscribers, about the name.

but there is a good reason that I chose it and it's very sort of prosaic which is it was I was poor in debt and I started a website and it was available it returned zero Google search results there was a Twitter handle available and you know it was broadly in line with where I was going and I think someone I was inspired by

was Horace Deju with Asimco and Asimco is such a great name I think the mistake clearly that I made is a name that is unclear how to pronounce and unclear how to spell is a bad idea. And so if I could do it over, would I do something different? Probably. But, you know, I think it just, you know, the challenge of building the brand is just a more pressing one, given that sort of like hurdles I managed to put my own way. But yes, it is, that is a long

way to say, yes, it is trajectory. It's kind of interesting. I mean, it's like a super unique take on business in the sense that you're hitting on the intersection kind of between technology, media, business strategy, but also, like, you're hitting on undercurrents of psychology and behavior to a degree. I mean, your insights are pretty consistently incredible. What is it about to you? What does trajectory mean? That's a good question. I mean, I think the way I describe it, as you kind of noted, is the sort of strategy and business of technology. And I've kind of appended, you know, and it's sort of impact on society. I think one of the great things about writing about technology is it kind of gives you a license to write about almost everything because

technology is impacting everything, whether that be, I mean, clearly we've seen in the context of politics, you know, I wrote about Zuckerberg being in, in Washington, D.C. this week, but, you know, I've written other articles about, you know, how the structural changes that Facebook has imposed on the media, which is inextricably linked to the power of political parties is what enabled the large of Trump, for example, right? And, you know, that was very, that was very much a in my wheelhouse of what I read about but it was also a deeply sort of like political you know piece not a partisan piece but just kind of like a political science more sort of piece and which so that's definitely kind of a cool thing about being where I'm at and I think just

kind of backing up broadly I've used chertechery as sort of my personal intellectual journal in many respects of trying to understand the world and how it works and I start from technology I start with technology lens but again just the nature of the industry fortunately aligns well with my sort of personal interest and desire to to understand a whole bunch of things, not just, not just Google or Apple or Facebook. How did you get interesting in tech? I mean, you worked at Microsoft, you worked at Apple, you worked at automatic. Like, where did this sort of tech interest come from? Well, I've always been interested in technology. So I mean, going back to, you know, I remember

being in, you know, the stereotypical sort of being in middle school and getting a computer and and was very into it and very interested in, you know, discovering the web when it came out. And, you know, all those sorts of things, the, the, but also kind of like a stereotype sort of thing. I lived, you know, my family was, you know, I would say probably blue class, a little lower, lower white class, depends on how you define it. You know, we grew up small town, Wisconsin. And, you know, no one around me had any interest or understanding about this stuff. It was really just me. But interestingly, I didn't gravitate to the sort of traditional, like, computer science angle or programming angle, like, so it would be a better way of put it.

You know, I did pick up some sort of programming skills along the way, but it never sort of, like, gripped me the way that, you know, you often hear from other folks that are in my situation. I was always much more interested in sort of the, just the broader picture, the broad, broader implications, what, you know, and so that that started from junior high school. But I think going back to my background, my family was, you know, didn't really have any sort of background. Both my parents grew up extremely poor. They, you kind of like broken households. And no one was there pushing me to go into business or go into things like that. And so for me, the most obvious outcome was I would go work in academia. Like that, that was something that was visible to me and accessible.

But even then, you know, my world was very small. I mean, for me, it was a big sort of like jump to go to the big public school that being University of Wisconsin. I didn't even apply to like, you know, your Ivy schools or something like that. Like that world wasn't even a world that I was even aware of. That was that that was even a possibility for me. And so this weird sort of juxtaposition of growing up in a very sort of like small world environment while having this sort of innate curiosity and and the access that the internet enabled to me to, to there's being a big. bigger world out there, you know, was kind of where it all started. And you could probably see, you know, reflection of that even in what I do today.

And kind of from them, I just always follow technology. It's always my hobby. But again, it never occurred to me to make it a career. I was just going to, I was going to, you know, take a lot of classes, was an honor student, probably go to graduate school and, you know, maybe be a professor. Like, that was, that seemed like the thing to do. And I ended up going to Taiwan after I graduated. thought that I would, you know, just kind of take a year, travel, see the world.

And I ended up loving it here. I really enjoyed it. I enjoyed being here. Enjoyed the country. Enjoyed the people. Met a girl. You know, all the sorts of things. And in all along, my hobby was technology.

I was obsessed with technology. Always reading about it. Always when I know what was going on. I'd read it all over through college. I've been reading all the sites, you know, understanding how these, how everything worked, you know, and really a background that has benefited me greatly is I wasn't a programmer per se, although, you know, even in college, I took multiple classes and some. like that. Like, I could do it. But more just having a broad sort of understanding of how stuff

works. Like, how does a computer actually work? How does the internet actually work? Like, what is possible? What isn't possible? And, and what happened was I was in Taiwan. And at some point, my wife's like, all you do when your free time is read about and obsess about technology, why don't you go work in technology? And at this point, I'm like 27, 28 years old. I'm like, that's probably a good idea. I should probably do that. And so that's when I went back to the States and attended business school. And with business school, I kind of had the, you know, technologies always had a sort of bias against the MBA. So I'd certainly picked up on that. But the reason I did it was it was the sort of shortest, fastest route to legitimacy in the

U.S. job market. And it ended up being along the way, I got a tremendous benefit from it. And perhaps because I went there with the, you know, not thinking it was going to be an end-all be-all that I ended up getting more out of it than most. But it worked. I mean, because of being a business school, I was introduced to, you know, recruiters. I got this opportunity at Apple to work at Apple University, which was, you know, a fantastic experience. Once you had Apple on your resume, it was easier to get more interviews. I ended up going to work at Microsoft. And, and then, you know, that got me sort of the foot in. But the, that's just where tech first showed up in a resume. Like, where tech first showed up in my head, as it were, you know, goes back to middle

school. Was it, was it an escape in Wisconsin or like, was it a mechanism for you to kind of like zone out of the reality that you were living? Or was it something else that was just like completely engaging? Yeah, I had a happy childhood. I wasn't, I wasn't one of those like, I just, you know, I just got to sort of get out of here sort of thing. You know, I generally had, had a happy childhood. No, no big complaints.

It was, I just was genuinely interested in it. Like, I just found this stuff fascinating. And, you know, and like when I was in high school was sort of the, when the, when the World Web came out and then, you know, my first year of college was sort of the dot-com bubble really, starting to take off like crazy and uh you know and all like we would you know i actually had a little business in the dorms you know putting computers together and selling that i mean because you could get like all the pieces unlike value act dot com or something like that or something value mart or something you could buy already where you could buy intel processors for like a quarter

of the price because it stupid dot com bubble stuff and so would buy all this stuff and put it together and sell it to get to get uh spending money but so you know it was just there's an aspect of, you know, my age was just, you know, there's a really interesting article I've linked to a few times just on Twitter about the it's called the Oregon Trail Generation. And the idea is there's a sort of really

distinct group of people around kind of five or six year range where we grew up such that we had basically no internet stuff in our lives and then switched to having internet lives in our lives completely. It was interesting is everyone before

us, the internet sort of came along when they were already into their life, and they learned it, and a lot of them created it, but it was a different experience, whereas the ones after us grew up immersed in the internet, whereas our sort of generation had a very clear delineation between before and after and could remember what was like to go to a payphone, can remember what is like to not be able to find a friend at a party, but was also young enough to become fully immersed and sort of a digitally native, as it were, will retain the memory of what came before. it's quite a unique place to be you're also operating in this this you I mean like everybody's

writing about technology and media today but you're different you stand out when I talk to people consistently it's like oh I read Straitagery Ben Thompson like he's my guy what makes you so different what's your why is your take so different on this than all of these other smart educated people who are you know operating in the same space trying to provide people insight into technology. So when I started trajectory, it was interesting because at the time,

I actually felt pretty confident about the prospects for the site. I had sort of like a five-year plan. I wanted it to be my job from the beginning. I thought it would take longer than it did. But I did feel there was an opportunity. And specifically, you're right, there were tons of sites writing about technology,

but the vast majority, all of them basically were writing about technology from a product perspective, for sort of product lens. And I thought there was a real opportunity to write about things from the other side, from the business side, from the strategic side. Like, to the extent I would write about products, it would be how does a company's business model influence the type of products it creates or the way it thinks about them or the way it does decision making? And I thought there was a, you know, a significant void in that area that, you know, I felt pretty confident that I could fill. And I think that's turned out to be the case where so I think to the extent my viewpoint is unique.

It's the starting point is different. I start from business models. I start from trying to gain an understanding of a company's culture, you know, which I think goes back to a company's founding and the lessons it learns early on. And from that, look at what they do, look at what they might do, look at the products that come out. Whereas, you know, most sites start with the products, then kind of go backwards. Where did you develop the ability to pull apart the business model? Yeah, I mean, it's one of those things where, you know, I showed up at business school,

and certainly business school gave me a lot of the language to do. this, but it was almost like a, wow, I'm actually really good at this stuff. Like, this, this comes very easy and, and naturally to me. And, you know, business school, I think was a lot more about giving me the language and specifics to, to, to understand this stuff. Just in general, I'm a very, very extremely, to the extreme, very systematic thinker where I see things in systems in the way they interconnect and how, you know, one thing over here will connect the other thing over there, you know, all the way down the chain. And whereas, you know, I'm not a great detail person right when it gets into like get zooming all the way down and getting to

specific in the specifics like i'm not great at that which is why you know i think working in corporate america you know it was challenging because on one hand i could see where to go what we needed to do but i didn't know how to communicate that well because i was a young whippersnapper that and thought i knew everything and on the flip side you know when you're young and just implementing stuff you have to take care of all all the little stuff and that's just you know that's a pain if you know i'm a strong believer that anyone their strengths are their weaknesses and they're the one is the same if you're super strong when there you're said inevitably going to be be weak in its sort of corresponding area and and so I think my

my talent such that it is is this ability to view things systematically and to see very clearly and quickly how a business model flows through to product decisions and I say that you know I hope with sufficient humility knowing that just because I can see that it means there's other stuff I'm not very good at. I'm just, I'm just fortunate, I think, enough to have found a career and a job where that is rewarded and I can sort of minimize the other stuff, my exposure to the other stuff, as it were. So you have a model where you release like one article a week that I think is free to the world, the four articles a week to kind of paying content. How did you arrive at that? Was that business model driven? How did you come

up with that model of making a living? So I mentioned when I started that trajectory, I started with the goal of making money. And well, in the first couple months, I was sort of figuring, you know, kind of figuring out what the public schedules be, but quickly arrived at, I'm going to only do one or two articles a week. And the goal of it was the reason I didn't want to write every day at the beginning, even when I was trying to build an audience, is that in the long run, I knew I wanted to have a subscription offering.

and I wanted that subscription offering to be get more as opposed to and it's a very subtle distinction but I think you know paywalls to that day like the only really person who had done the one the one person blog sort of paywall thing was Andrew Sullivan and he went from this you know he was publishing like crazy with an advertising based model which which the incentives are that you should publish more not less and they just kind of threw a paywall up and it worked because he had such fervent fans and such a large audience but he never sort of adjusted his editorial strategy he just kept pumping stuff out. I think that's part of the reason why he burned out. Whereas, whereas I had the sort of luxury of starting with the knowledge of the business model I wanted to have in the future. And I always want to be a, I'm going to deliver this product consistently for free. It's going to always be there for free. And then if you want more, you can pay to get more. So I wanted the feeling of paying to be a positive feeling where you're getting, this is such great stuff. I want more. Can I pay to get more? As opposed to, oh, you're being in this for free and I'm to drop a wall on you and tough luck it's gone now and I think you know obviously that that sort

of psychological impact only really applied to the earliest subscribers but I think there's still you know I still hope I have that spirit sort of on the trajectory site as a whole I don't push the paywall hard at all a lot of people say well I didn't even know you had a product you know that for for months or years and that's okay because I want the I want the sense of being people who are exploring the site will find the paywall they will find the content but those are the people that I want to attract anyway, the people who are eager for more that want to read more things. And so that's sort of the, that's the model as a whole.

And, you know, I think a way to illustrate this is the metric that I used when figure out when I wanted to actually launch it was I was looking at the number of visitors to the homepage on days that I didn't post because those were people that were searching out new content. They were going to just check everything saying, did Ben post something today? And those were the people that were sort of my initial customers, the people. that already demonstrated they were hoping that I would publish more stuff. And so that that is the model sort of today.

So today as it is, I do one free article. I do three, three additional articles a week. So then I do a podcast. So basically I do one piece of content a day. And it actually started out being much more aggressive. You know, this sort of when you start a company, you're hustling, you want to make it work. So when I actually started the day of date, I was doing, I was doing two free articles a week, plus five daily updates, plus a podcast. So I was doing a piece of the content week.

Yeah, that was pretty insane. So I pretty soon cut it down to one free article and five daily updates. Then I went to one and four. And then I settled on the one in three plus a podcast a couple years ago. It stayed at this level for a while now. And I think it's a much more sustainable sort of level. But like I said, I just do one piece every day. And it'd be nice to have an extra day to do administrative stuff and things like that.

But I think it's a good level for now. So I'm sticking with it. So you mentioned one of the metrics you looked at was, number of visitors to your site when you didn't post? What sort of metrics do you look at today to see in sort of like your relevance to people, your offering, and how it's resonating? I honestly don't look at metrics at all, to be totally honest. I mean, I, every day when I send the email, I see how many people are receiving the update. And as long as that number is larger than it was the day before, then I figure everything's going fine. And certainly it's a

sort of luxury, you know, the brilliant thing about sort of this description, model is all you have to do is keep your existing subscribers happy and everything else is going to take care of itself. I don't need to worry about the, I mean, I stress a lot about the weekly articles, like the free ones.

They're usually, you know, I want them to be, I want them to be great. And they're a little harder to write because they're spread much more widely, which means your readers have less of a sort of like shared background. Whereas the daily update, I write much more. I think I'm much more familiarly

and I presume much more knowledge on the on the side of my readers but or at least some at least some extent of knowledge on having registered checkery before uh and so it's a different sort of writing a little more challenging in that regard but but at the end of the day what really matters is that my subscribers are happy because if they're happy they will not cancel and i'll just keep making money from them and they will tell they're they will tell people to sign up and the you know i've never done any marketing you know and this is i think a thing where the internet is is a huge huge benefit for publishers if you have this sort of model because the friction for my subscribers

to tell other people to try it out is zero. They can post it social media. They can email. They can tell folks to go sign up and there's no sort of like it's a self-serve. You walk up put in a credit card. And there you go. And the other thing that I do that I think is maybe folks don't expect is I don't have trials. And the reason I don't have a trial is one, I'm already giving away 25% of my content, uh, if that's not enough to convince you that you should try it out, then like how is a couple extra articles really going to make a difference. But to the, you know, I'm writing around 2,000 words every day. It's a, you know, so it'd be, I think if I did a trial tomorrow, I'd get all kinds of

people to sign up, but then they start getting this huge email every day and people are busy. They don't, they don't want to read that. And then the trial's over and they're like, oh, well, I guess that wasn't worth it. Whereas, you know, there's a human sort of like the sun cost fallacy. Once someone has given you $10, like they're going to carve out the time because They feel like they already paid for it. They better do it. And what's great about that is it's a forcing function for habit building, where people get in the habit of reading it every day using the same place on the subway or over coffee or whatever it might be. And once they're in the habit, then they can't imagine not reading it.

And then you have that sort of subscriber for a long time. And, you know, it's absolutely the case that my business model and my editorial content and all the different pieces of my business all interact and all interact with each other. And I think that's what publishers of all types, whatever their business model, have to be thinking about. Your editorial strategy has to be aligned with your business strategy, has to be aligned with your customer acquisition strategy, has to be aligned with your customer acquisition strategy. They have to all be working in concert, given that the internet just makes the competition so much greater because you're quite literally competing with everyone in the world. Do people take your paid for stuff and then make it free, but in their own words? Oh, absolutely all the time. I mean, that's something you just have to get over and accept that that's going to happen.

I mean, there's, you'll see it show up in, in other columns or P&P pieces a day or two later. And, you know, not always, but sometimes more with some pieces than others. And, you know, I think at some point, it's a little frustrating at first, but what I quickly realized was what's kind of my goal here, like my goal here, and it sounds cliche, but my goal is to make money or get rich or it might be. I wanted, obviously I wanted to make a living and to, you know, be, have a good provision for my family. But at the end of the day, like, this is stuff that I care about and I'm passionate about. And the, the opportunity to literally spend every day thinking and writing about stuff that I'm really fascinated and interested about is a tremendous privilege.

And so to the extent that I am influencing other people to also write similar things that I've written in similar lines, that's actually a tremendous. That's a tremendous outcome because it shows that, you know, you can never have, you know, the brilliance of the business model is the way it scales on the back end, right? The amount of work I do for one subscribers, the amount of work I do for a hundred subscribers. But the way to truly scale, the truly have impact is not, is not to just influence the people who read you directly. It's to influence the influencers, as it were. And so to the extent that people do echo themes that I've written about, that that's actually,

if my goal is, is to have a positive change and not to sort of feed my ego and not to be credited, then it's actually a tremendous thing. We have very similar sort of business models. You mentioned that you kind of didn't promote and, you know, that resonates with us because we also have like a membership site. We don't really promote it. People are surprised when they find it. And it's extra. It's not like we cut you off. And then when we. we sell you something. One of the differences when I was doing some research between you and I is you offer a monthly, whereas we only offer a yearly. Why do you offer a monthly? Well, I mean,

I already don't offer a trial. I think monthly gives you a way in that, you know, it's pretty accessible. It's, you know, it's $10. It's kind of on the edge of fine, I'll give it a try, sort of territory. And actually what happens is, you know, the people will try for a month. And a lot of people will sign up and immediately cancel their auto renew because, like, I'm just trying it out. I don't want to get charged again. And that's fine. So, but it means when I look at churn numbers, I need to, like, exclude the one month folks because they kind of mess it up. But what happens is a lot of times is people start out with a month and then they switch to a year because they're like, oh, this is great. Of course, I'm going to keep getting this. And the year happens to be, you know,

$20 cheaper because it's, you know, $100 a year. So, so I think it's just an easier, a more accessible entry point. And, you know, I feel, you know, over time, you know, I see people moving, more people go from monthly to annual than I think turn out by and large. And, you know, at this point, for a long time, they're actually 50-50, but at this point, my annual membership is actually a fair bit larger than my monthly membership. And I think that's great. Yeah, that's awesome.

What's your day like now? Like, walk me through, like you wake up, I want to know kind of like what it looks like in a broad strokes, but also what are your habits, your routines? And then I want to, like, deep dive on some of, like, how you read content, how you consume information. I wake up and I deal with this super annoying puppy. And then make breakfast for my daughter, walk her to school, come back, you know, my son, my son grabs a bus. And then I sit down and I have a meeting. So I now have like a someone that assists me with some of the a lot of the administrative stuff. And so

that's usually the first thing because he's based in the US. And so the given the time zone sort of alignment, that's the first like hour or two my day is, is just dealing with administrative stuff, which isn't great. It's kind of sometimes a pain to dive right into it. It's kind of just a matter of of time zone

that it has to be first. But that that's usually what happens. And then and then be, then after that, once we're done, you know, I, uh, theoretically I dive into research and planning from daily update and work diligently. Usually it's a much more sort of winding road where I'm reading stuff and I'm on Twitter and I'm flitting around and I think, you know, I'm usually thinking about, what I do I do

very early right when I wake up is I do look at all the headlines and if that happened the day before. And so kind of ongoing through my head is an outline of what I'm probably going to write about that day. And this is where also the other distinction is weekly updates. I usually have an ideal to write about a weekly update quite a while in advance. Like, I knew this week I was probably to write about Zuckerberg in Congress, you know, a while ago. You know, the case of Mike, I wrote about Microsoft last week in the reorganization.

Like, the reorganization happened on a Thursday, and so I knew I would write about the following week. And so usually I'm thinking about those for several days ahead of times. I usually already know which day I'm going to write them. And so those days are different. The daily update is usually more responsive to what happened the day before. Again, not always. I always have a sort of like a list of stuff that's going on such that if what if nothing happened, I can go back to it or two, if a bunch happened one day and there's multiple

things I want to cover. You know, I'll take a few days to get over everything. So, again, the days vary a little bit. But usually I want to have an idea of what I'm writing about. And then it's kind of percolating. So it's kind of in the back of my mind. I'm thinking about it. What are the points I'm going to make?

And that middle part of the day is spent sort of fleshing it out, making sure I have the angle, you know, what I'm going to write about generally. And then, you know, sometime in the early to mid-afternoon, I receive the necessary sort of dose of sheer panic of terror that I have a deadline coming up in three or four hours. And I better buckle down and start writing. And so then I spend the afternoon and early evening writing. And my goal is to publish by 7 o'clock or my goal is 6 o'clock. Usually it ends up being closer to 7 o'clock.

And then go have dinner, you know, hang out with the kids. play the dog, and then go to bed and do it again the next day. It's a fascinating approach. So you never have writer's block because you always have this list. Is that list ever empty? Well, I think the most common misconception people have about what I do, especially given the amount of things I write about, is it's not like every day you're starting from nothing and kind of scratching together an opinion on stuff that goes on.

Like, I have a view of the world. I have, you know, the way I think that things work is a sort of like mental model in my head of, and so things happen, I kind of pass them through that model. And most of the time, they fit the model. And that's easy to read about it. Like, I, it's pretty easy to see what's going on here. Sometimes they don't. And usually, that means there's something else going on. There's like, oh, maybe something else's going to happen soon or, or sometimes I'm wrong.

And when I'm wrong, he's arguably the most interesting. and the spur of a lot of weekly articles where it's really sort of modifying the model, like expanding and better articulating my sort of view of the world. And so I think from my perspective, it's less the coming up with opinions that is difficult and more the trying to keep a very strong sort of guard up against like confirmation bias, where things happen and, oh, that fits my view of the world. that must be true. Whereas making sure you always take the time to go back and say, wait, let me double check, make sure this is right, because it would be awfully easy to follow

this or say something, oh, that must be wrong. Well, maybe no, maybe it's right. Maybe I'm wrong. And so I think it's more about the discipline of avoiding confirmation biases. I think the bigger challenge as opposed to consistently coming up with things to write about. How much pressure do you have to agree with things you've already written about versus going the world's changed or something is different and I was wrong? Like, when's the last time you came out and were like, I was completely wrong and blew this? And how was that mentally? All the time.

I did it a couple weeks ago. And actually, it turned out I think I was probably right. But the, no, I do it all the time. And I think a strong commitment to that is critical and key to what I do. So it's key in a few areas. So one, it's very free. A friend of mine once said, I love to be right, which is why I always say when I'm wrong, because that's the fastest and shortest way to be right.

I don't like that. Yeah. So, so one, if you want to be right, like, admit you're wrong. Number two, I write with a fairly sort of authoritative tone and voice just because that's better writing in general. And also I'm saying what I think, but, you know, the cliche, strong opinions weekly held is exactly what I abide by. Like, I'm going to pursue what I believe to be true, and I'm going to always be testing the

assumptions and underlying it. And again, this is where the sort of having a systematic sort of view of the world is very beneficial because it's, it's sort of my innate nature to always be challenging the assumptions that are underlying something as opposed to just looking at the sort of outcomes. And then the other end, you know, it aligns my business model. Like people are paying me money because they think what I read is, what I write is worth reading. And from that perspective, for me to come out and say, I got this wrong. And not only that, every time I get something wrong, I always try to recount what I was thinking. thinking when I got it wrong. What led me to make a mistake? And probably 60% of the time

it's confirmation bias. I will come out and say, I got this wrong because of confirmation bias. I was looking, I presumed it would be this and I didn't consider this and this is why it was wrong. And you ask my readers, like, you could probably do a search for confirmation bias. You'll get several examples of me saying where I got wrong. Other times, yeah, circumstances change or or other, you know, sometimes circumstances change. It was because I wasn't wrong, but my opinion changed. A lot of times things that get wrong are issues of timing. like where I can see structurally why a company is facing a particular issue, but I maybe don't appreciate the extent to which their current route has lots of legs in it,

right? So what I say is correct. It's just not going to be correct until like 2020. But, you know, that's no excuse because to be wrong in timing is to be wrong. But no, I am wrong all the time. And I relish the opportunity to say when I'm wrong. And is it painful? Sometimes it's painful.

It certainly is. I think there was probably one of my more painful ones was like the Snapchat Spectacles thing. It was painful one because there was a few people that just always kind of rubbed it in my face constantly. And so it's always irritating as I guess you were right. I was wrong. But it was also painful because it was one of those things where I knew better. Like I should have known better. And those are the most irritating ones where it wasn't even a confirmation bias thing.

It was it was a I kind of fell in love with my own sort of theory. And the theory wasn't wrong. It was just misapplied. I think in that particular case. And those are the irritating ones. But at the same time, you know, if I don't come out and say that, say, this is why I got it wrong, I did this, I made this mistake, then why should people trust me or pay me money to read what I have to say?

Completely agree with that line of reasoning. How do you filter what you read? Like the information that goes in, you said you wake up, you kind of read the headlines. Like, what is it, what are your trusted sources if you're other people's trusted sources? Yeah, so I very much, I started sort of like first principles by which I, in the case of content, by which I mean like just news. Like, and so I read like, so I wake up, I open up tech meme, like just like where are the headlines of the day. And when I'm reading something, I try to get into like original sources as much as possible. Sometimes if something comes up, I will try to find like more opinion and analysis pieces that have written about it more just because I find a useful way.

It's like a knife sharper where it prompts me. to think through my own sort of view, but usually by and large, I form my opinions directly from the sort of the core content. And so people are like, oh, who are there writers you read or whatever? Usually if I read other writers, it's more as a happenstance of researching a particular topic. What I actually read on a day-to-day basis is just news, like what is actually happening. And in, you know, and then in the context of writing a daily update, I will do extensive amounts of research. Like, I mean, my typical day, I end with, like, 150 browser tabs of Finn, right? I have an IMac with 40 gigabytes of RAM because I have so many browser,

brochurely for handling browser tap. That was going to be my question for you. I was going to see how many browser tabs you had open. Oh, hundreds, 100 every day. Like, when I write about stuff, I want to, it's really important me to get everything right down to the details. Because I see, you see things like, like, for example, like Mark Zuckerberg's in Congress this week. And he was let off the hook on at least three occasions of the Senate. And, and, and, And I had an economy of times in the house because people talked about Facebook selling data. Well, Facebook doesn't sell data. Like, is Facebook's handling of data a okay?

Of course not. But if you are not precise and understand exactly how the business works, then your analysis may be right in spirit, but it's not right because the details are wrong. And more importantly, the people that matter are not going to hear what you have to say because they're going to get caught up on the details. And so for me, getting the details right is critical, not just to make sure my analysis is right, but to make sure that people will hear the analysis, because people won't hear what you have to say if you get details wrong, even if those details don't matter. So to me, getting stuff right is really important, just from a sort of reatorical standpoint. But then also, like, I want to know, I don't want to say stuff that I don't think I understand. And sometimes it's things like, like I wrote an article about GPUs a year ago. I remember this one I was really proud of. in part because I knew how they worked at a sort of high level, but to me, that was a great example where I really got down into the weeds on understanding a very granular level, how they work. And to my mind, that was an example of a daily article where it read like any other

daily update, but there were hours of research that we knew that to make it feel like just another daily update. And, you know, I think my absolute favorite compliments that I get from people is when people in other fields are like, this is the first time someone's actually. she'd written something about this field that understands how it works. You know, like, uh, and, and those are gratifying because it shows that the time I put in to make sure I got the details right were worth it. And, and I think, you know, and I think that's the, that's the flip part to the saying

when you're wrong, like if you say when you're wrong and you put in the time to get the details right the rest of the time, that's the best way to sort of build sort of trust and reputation in the long run. You know, there's always a challenge about a broad based sort of publication where it's like, oh, this publication is really great. They always have, they always know what they're talking about. And then they write about the field that you're in. And if they get the details wrong, it's like, wait, I know about this one.

They're getting it wrong and you start to question everything else. And so, to me, it's so important to take the time to get the details right. There's so many things I want to go into there. Like, let's rewind a little bit to Facebook. Like, to what extent do you think these people are asking questions based on what they believe or based on what they believe their constituents believe and it's possible? or signaling? I mean, Facebook is an entire morass there.

I think the part of the challenge with Facebook currently is I think there's an aspect where Facebook is a bit of a scapegoat for the last election. But I think Facebook is very attuned to that and feels resentful about that. But that doesn't change the fact that Facebook did a lot of bad things. And, you know, I actually think Facebook is responsible for the last election, not because of Russian ads or fake news, but because of the, you know, I kind of referenced earlier, the way they fundamentally changed the structure of,

politics and media in America. But that's, that's a very different sort of cause. And so, you know, it's hard to, um, it's, I think it's a challenging to, to pull apart what are the causes here. And I think it's such a challenge just in general. Now, Facebook is, is probably the most prominent example, particularly currently, but by and large to sort of break out of your bubble. And, you know, and it feels like the bubble has gotten so much stronger and more pervasive, particularly since the last election. And, you know, I think to this point, I'm grateful for, one, having grown up in the sort of environment that I did, because I feel at least more aware of the, just, I mean, imagine

growing up and not even knowing that you should apply to, like, to, like, a Harvard or something. Like, that was me. Like, and I think that's a mindset and a view of the world that most people that I deal with on a daily basis can't even fathom, like, like, to grow up in that sort of, but that, that's the experience of a lot of people. That's one, but then two, on a day-to-day basis, to not be in San Francisco, to not be immersed in tech in a sort of environmental basis, but to be, you know, living abroad, in a different country, talking to people who mostly aren't really interested or don't really care

that much, I think is tremendously, you know, there are certainly downsides, many of which are ameliorated by the internet, you know, things like Twitter and messaging that lets you stay in touch with people. But there are tremendous upsides, which is being on the sort of outside looking in brings, I think, a lot of clarity and skepticism, I think, probably more than anything. You probably see the system better than anybody because you're outside of it, right? You're not a part of it and you don't have these nudges to see only what's right in front of you. Yeah, I mean, and like I said, everything is a strength and a weakness. So I'm less in touch with the details and the day to day.

But just by definition, because I'm not immersed in it. But the payoff is, yeah, being on the outside looking in. And that happens to align with, again, my sort of natural way to view the world. So, again, I think it's another area where my life and sort of business model is in alignment, I think, to sort of my benefit. Two questions I want to follow up on before we get back to kind of like your habits, which one is like, okay, so tell me about Facebook and how they had an effect on the election. because I don't think anybody listening or not everybody listening will be familiar with your work. And the second is, talk to me about this information bubble that we're in. Well, I mean, my theory with Facebook is, there's that famous book, The Party Decides.

And that was sort of the theories in that kind of drove, like Nate Silver, for example, to ignore his own polling data and to say that Trump wasn't going anywhere. And the sort of thesis of that book, the Party decides, is that after the sort of like Democratic reforms of the of the parties of the presidential nomination process in the 60s and 70s. And it used to be like a smoky room. Like a smoky room, they would go choose the presidential nominee. But then there was this push to be more democratic. I think particularly the Democratic side after was a Herbert Hoover was sort of just like picked out of nowhere.

And the thesis of the book is that, yes, it became more democratic with the primary in caucuses and all those sorts of things. But it actually was still the parties deciding who is the president's nominee. And their point was the party is not like politicians. The party is all the broad sort of interest groups and donors and activists who are care about outcomes. And their collective sort of preferences drive this is making. They're the ones that actually do stuff. They actually do the work.

They actually pay the money. They actually do all the sort of stuff. And they will make the selection by virtue of their only being a possible selection. which means only some candidates would get money, only some candidates would get the sort of necessary support, only some candidates get the sort of media coverage that's driven by all sorts of other things that is necessary to even make a presidential run. And I think what was implicit in that and what was missed and underappreciated is all that sort of implicit power, no longer explicit power, but implicit power was inextricably tied up to the gateholders, gatekeepers in media, in that to, in order. to get your name out, you needed money for advertising, or you needed earned media, what's called, where the newspapers were right about you and television stations would cover you and all those sorts of things. And that only happened if you were in a position that was enabled

by sort of the party, again, the party speaking broadly, not just the politicians. And so people would vote in primaries, but they were always voting for broadly acceptable candidates to the sort of party as a whole. And so that's kind of part one. Part two is what has happened to the media over the last 20 years. The media has completely lost its sort of gatekeeper status. The media was predicated on controlling, the media was not predicated on writing content that people wanted to read. They're predicated on owning printing presses and owning delivery trucks. So they own the mechanism for delivery. Exactly. And so what the internet did is completely made all that obsolete. And the internet made distribution cost zero, made transaction cost zero,

made it possible for anyone to go anywhere to read anything and basically destroyed the power on which those gatekeeper functions rested. And so what happened was the media completely switched to being, from being a gatekeeper to being a subservient supplier to platforms like Google and Facebook, where they had to go on the platforms according to the platforms dictates and could compete for readers according to the way they were allowed, which is by quicks or getting attention or whatever it might be, as opposed to being we are sort of like, we own the printing presses. you'll read what we have to say.

And so the implication of that is once the media lost its power and its gatekeeper status, the parties at the same time, because they were inextricably tied to the media, lost their power and gatekeeping status. And no one sort of realized this happened until, really, Obama came along and came out of nowhere and totally overwhelmed the party's choice, which was Clinton, and he did it through grassroots, through being something that broke through and people were attracted to. And then Trump took it up to 11. in the party establishment wanted him

or supported him. But he had celebrity, had attraction. And why did the news cover Trump? The news didn't make Trump. The news covered Trump because people wanted to see more Trump. They wanted and so the news in media organizations were responding to the incentives that they

had in a world where they were no longer gatekeepers. They were sort of serfs in Google and Facebook's kingdoms. And what else would they do? If they didn't cover Trump, someone else would. And that's where the audience would go. And so And so this is the, this is the effect that Facebook had in Trump being elected is by virtue of being the mechanism by which media and media entities lost a sort of gatekeeper status and what was acceptable, what was not acceptable, they were by extension the mechanism by which political parties lost their sort of controlling function such that no one could control it. And once no one could control it, it laid the groundwork for Trump to come along and be nominated and be elected, which.

is what the actual voters wanted, you know, whether you agree it or not, even though the party didn't want that. And so it just flipped it around on its head. Do you think we're going to see more sort of implications along these lines as technology continues to expand its role and ubiquity in our lives? Unquestionably. I mean, we are switching from a world where it used to be a world where market power and economic power and social power was gained. by controlling supply to a new world where where power is gained by controlling demand. The fundamental difference between, let's say, a newspaper previously that control the printing presses and Facebook is that Facebook has the users such that suppliers, and this being

content organizations, these organizations, have no choice but to go to users on Facebook's terms. A great example is Google. Google is kind of the king of what I call these sort of arrogators. like what do what does any website do what do i do what do you do what does the new york times do what does anyone do they put up a a map of their website that according to google's terms that that makes their site easier for for google to understand and to put in search index right like we are all doing work on google's behalf to make google service better that is because google controls demand they control the the customer in where they enter the internet and that's a perfect

example of how controlling demand is the true locus of power going forward, not controlling supply. Do you think that's sticky or do you think that they'll be these like Google came out of nowhere to where they are today and, you know, like, do you think? Yes, because there's multiple virtuous cycles going on. So in the case of Google, you have, they have a data network advantage, which is the more people search, the more data and results they get on what searches work, what searches don't, people's preferences. It makes a search result. results better. So there's one network effect there where the more people that use Google, the better Google gets. And if you had two search engines and they had, they started out with

identical technology and wanted 51% share, one and 49% share, over time, the 51% share would grow and would improve just because they have a data advantage. So that's number one. Number two is you get a two-sided network effect where the more users, the users come to a platform initially because it has a great user experience or fits their specific need. And those users give that that aggregator power over suppliers, such as suppliers will come onto their platform on the aggregator's terms. You can see this with Google or Facebook.

You can do it with Netflix, for example, where they go there to get access to the customers, and that makes the offering more attractive to end users, such as they get more users. And you get more users, now you have more power over suppliers. More attractive platform. Exactly. And so you get a virtuous cycle.

And so there's sort of the, and you're seeing this play out, where the sort of the end game of controlling demand, And because, again, the two key things are there being zero distribution costs, which means you can pull all suppliers of all types on your platform and reach all customers at effectively zero marginal costs, whereas it used to be, you know, to print up newspaper and deliver it to doorstep that cost money, such that a newspaper couldn't scale infinitely. Google can scale infinitely, and there's no transaction costs.

Google can legitimately serve every person in the world. Facebook can legitimately serve 2 billion people. Like, there's no way any business with any sort of marginal costs could ever. served 2 billion people. And so it's the fact that there are no marginal cost is a consequence of the internet. And, you know, the thing with internet, the thing with business school is always very critical. I remember going to business school and a strategy class and there was no classes about like the internet that involved in internet companies. And I went to the, the professor, I'm like, how can you have a strategy class with without anything about the internet?

Like, well, the thing about strategy and the, in doing case studies is you learn these broad principles that can be applied. And it's bullshit because it's true. true, but what the internet has effectively done is if you think there's like this big complex math equation, if you put a zero into that equation, the whole thing kind of blows up, right? Like, you can still use the equation and with zeros in it, but it's most people don't think that way. They can't think through all the implications. And so, again, my sort of systematic view of the world sort of let me sort of figure out what

happens if you put a zero in this equation. What are the implications of that? But a lot of what I read about with aggregation theory is, is, okay, this equation, let's lose the equation, let's go through to the simplified equation, which is, looks completely different than the equation I came before because after the zeros are there, like, it looks totally different. And now, how does this actually apply to the real world? How can this actually apply to your business and your industry and things along those lines? What would you teach an MBA strategy class for internet strategy? If you came in to give a lecture on internet strategy, what would be the core idea? of that sort of lecture?

I think the most important takeaway would be, I'm sure I could do case studies about different industries and companies, but I think the more important thing is the examining the implications of changing assumptions. Like what happens when you start with zero marginal costs? And I would probably want to go through different industries and show how when you change the assumptions, the implication for that business and what is attractive completely changes. Like, take like CPG companies, like consumer package goods, which is a huge focus at Kellogg where I went to, went to school.

And the, these sort of companies, they were predicated. The single most important thing to understand about a CPG company is that their most important sort of strategic tool was shelf space. Like, if you control shelf space, then what you do, then you do R&D to get like sort of, they invest a lot R&D to get marginally better products. they would run a bunch of TV advertising, reaching the lowest condominator, and they'd go in the store and it would be a brand extension where they'd be next to the tide detergent because, oh, if a grocery store owner, if you want tied detergent, you better carry this brand extension next to it. And then they would be there and you'd buy it. And that's how they would drive growth. And if you think about it, if you have a strategy, and that's obviously dramatically simplified, but if you have a strategy that is quite literally predicated on physical space, that probably is not going to be a very, like, if you do you think with the internet, what happens if there are no shelves? And if you start with no shelves, everything changes. It turns out that brand actually, brand already mattered, but brand matters more in a different way on the internet, where it used to be a brand mattered from a recognition perspective, like recognition perspective, like you're in the grocery store, oh, I need some deodorant, and you're looking at a shelf with like 20 kinds of deodorant.

Why do you pick the one that you pick? Most people don't know, but a lot of it has to do with advertising and sort of implied preference and things that they've picked up over time. whereas on the if you go to amazon for deodorant you search for deodorant you search for old spice or you search for rickart which means the recollection of a specific brand name is much more important than the sort of recognition of a brand if that makes sense which means your advertising strategy needs to be different all those things need like everything you do about your business needs to be different you probably want fewer brand extension and more investment in a sort of like stand out sort of thing and you have to deal with competitors that are super niche focused Because the internet enables niche in an unbelievable sort of way. I mean, like, our business is our examples of that. And so my point would not, so if I were to guest lecture in an MBA program, I would not, maybe I would use CPG as a case study. But my goal would be you need to learn to consistently and repeatedly start with new assumptions. Like, what is the controlling assumption in this industry?

What happens if that controlling assumption goes to completely changes? Here's another example. Hotels. Like if you're trying to figure out what is the most important thing for a hotel traditionally? It's the name on the sign. Why? You are going to go and close your eyes in a strange place and you need to feel safe. And so if you don't feel safe, if you don't feel like that it's a place that is trustworthy,

it doesn't matter, location doesn't matter, amenities don't matter, you know, all the quality of the sheets don't matter. Like nothing matters unless that one priority. is taken care of. And so what a company like Airbnb, for example, did was it took that trust, which was very hard to build and develop, and companies would spend, you know, hundreds of millions of dollars and lots of time at building brands. They basically digitized trust to being this sort of reputation system and ratings and things like that.

Again, crypto from eBay, for example, eBay is a huge pioneer and lots of this stuff. But they digitized trust. And what that did was it didn't make trust not matter. What it did was it lowered trust from being the only thing that matters to be one of many things that matter, along with maybe I want a kitchen, maybe I want to live in a particular neighborhood, maybe I want to do all these sorts of things. And you can see this in industry after industry where the assumptions fundamentally change. And so, again, the lesson I would want to impart is how can you train yourself to question and look at assumptions because most people don't. They stay on the surface. You mentioned the shelf space.

I think that's super interesting. You go to Amazon, you search for deodorant, but you also have this weird thing where if you're not in a physical store, I mean, when you reach for a product in a physical store, even if you're searching for it, it's there. But on the internet, you could reach for deodorant on Amazon, and it can show you like six deodorants before you get to the one you want, even if you're searching by the brand name. Yeah, I think that's a mistake by the brands. It should, like they have too many versions, too many variations.

And that's, I think, of the world that came before. And I think, you know, the, all of these brands and so much of the sort of modern economy was built on this like mass market lowest condominator sort of model where you're going to watch the big sports game that everybody watches. And you're going to see the commercial for the big beer or the big yoderant or the big whatever might be that everyone sees. And you're going to drive your, your big car to a big box retailer. And you're going to bump into it on the shelf. You're going to grab it. You're going to go home. And every single piece of that story that I just told is being fundamentally disrupted by the internet.

You know, sports, like the shared experience of watching a football game, certainly still strong. And there's a reason why it's still valuable and still drives a lot of, you know, particularly the bundle and things on those lines. But there's so many more things to watch. There's e-sports. There's Reddit. There's, you know, listening to podcasts. Like, there's so many more outlets for free time that that is inevitably going to weaken over time. You see the driving a car.

Well, or maybe you're going to take an Uber or maybe you're going to ride a bus or maybe you're going to the fundamental nature of our cities is going to slowly transform as new forms of transportation become viable. Big box retailers. Well, what about just going to Amazon? What about searching for it? You know, a lowest commoner brand that sort of applies. What about the micro brand that can target me on Facebook or. or Instagram, because it understands who I am and what is it, try about it. And like, oh, that's actually really interesting.

And they can reach me spending a fraction of the price that these companies spend to do these mass market advertising. But the implication of being very niche is they can be much more specialized. Like, like, if you don't have to bear huge fixed costs of being on shelf space and running TV ads, you can, you can spend that money on building a better product that appeals to a narrower segment and charge more. And now I'm buying, you know, my custom, you know, my custom deodorant that's meant for men in the Oregon Trail generation. And I'm lost as a customer for P&G kind of completely.

And there's no real way to get me back. So I'm like the Board of Heinz. We bring you in. What do you tell us? What do you tell us about what we're doing wrong and what we should be doing differently then? I say, I say you're owned by Warren Buffett, so you should probably do what he says. But that's a prototypical example of a CPG company, right? Like, how would you tangibly, other than reduce brand extensions and invest in brand?

Like, how is the internet changing that business in your eyes? I think you just said it. I think the internet has a barbell effect where there are returns to the biggest and returns to the smallest. And if you're stuck in the middle, it's just a very dangerous sort of place to be. And so if I were Heinz, I would double down on on Heinz and the Heinz brand. And I would seek to dominate even further all the traditional distribution channels that I do, whether that be restaurants, whether that be schools or, you know, all this sort of like the B2B sort of selling space, because that's going to be a space where being big and bringing to barrier assets is going to be much more impactful than the sort of consumer space where it's getting more challenging. So that that would be another aspect of what I would do.

And, you know, and, and I think that that's probably relatively consistent advice, but, but, you know, certainly it's going to be, I think Heinz is probably a better shape than a lot of folks, to be honest, because, you know, did you read that New York article about trying to vent new kinds of ketchup? No. Oh, it's a classic, one of those Gladwell pieces from a few years ago. But it turns out, it's really hard to improve on Heinz, which is, which is a good place to be. But, but, yeah, but no, I think, but yeah, I think the thinking about your go-to-market, your target customer. customers, what your brand is, is it worth doubling down on? Can you do extensions? What makes sense? Oh, yeah, all those are going to be key questions. You mentioned controlling demand is kind of the future. Who do you think and why has a better controlling demand position

in a relative basis between not only now, but going forward between Google, Facebook, and maybe Amazon? Well, I think they're in pretty distinct categories, I think going forward. In that, you know, Amazon is clearly, clearly focused on, from a consumer perspective anyway, on they want to be where you buy everything. And kind of the one-stop shop and you're, if you want something to buy, you should just go to Amazon. They even bother going, going anywhere else. And they've been, you know, very effective in that regard.

Google, if you want to know something, you go to Google. And Facebook is, Facebook is where you waste time. And that is a surprisingly valuable thing to be where. you waste time because, in part because, one, people have a lot of time to waste more than they think. And mobile has really unlocked huge amounts of new places for people to waste time, you know, whether it be waiting for the bus, you know, going to the bathroom, whatever it might be. There's lots of places to waste time.

And the other thing, and the good thing about wasting time is that is one of the most attractive and compelling places to advertise because when you are focused, like Google is about focus. Like, I want this thing and Google is going to help me find it. And to that extent Google's search ads are very compelling because they are helping you find the thing that you want. And it's really a win-win sort of thing. Whereas what about the things that you don't know that you want, that you don't know about, they're not aware of that even exist. And if you're in a focus state where your attention is, you're thinking about one thing, you're not open to new things, to new ideas, to new things coming in.

You're much more open when your mind's kind of shut off, when you're just absently. scrolling through your Facebook feed or through Instagram. And so Facebook is actually an incredibly powerful advertising platform for precisely that reason, because the mental state that people are in when they're on Facebook is different than the one they're in when they're on Google, for example, or even on Amazon. The other thing to think about in this case and why those are the kind of the big companies is you have to think about from an advertiser perspective as well. Advertisers think about it from an ROI.

Everyone thinks about the R. What's the return? Like how many, like how many purchases do I get from this app? But the eye matters as well, like, how much work do I have to do to do this ad out there? Like, do I have to earn the platform? Do I have to invest? I have to make special creative for it. And this is where Instagram is such a powerful tool for Facebook in that if you want to reach, say, teenagers, maybe Snapchat is a better way to reach teenagers.

And Instagram is only 80% as good. But you're already buying Facebook ads. You're already on the platform. And the background tools are so much better. Yeah, that the eye overwhelms whatever. our advantage Snapchat might have. And so the real sort of problematic angle to Google and Facebook is less the consumer front end and more the advertiser backend such that it's not really viable to build

a mass market advertising business in the current, current day, because Facebook and Google are so dominant. Which company would you rather be? I don't know. I mean, I think, I mean, probably, I mean, Google has one of the most perfect models of all time in part because they're such a perfect aggregator where Google. Google's goal is to know everything, and the nature of their model is that everyone voluntarily gives them everything.

Like, users go and literally tell Google, like, you go to go with me, advertise me shoes, right? Yeah, yeah. Now, they're not saying, they're searching for shoes, but, like, it couldn't be clear what they're going for, right? Like, Google certainly has a ton of data on you, and they do do targeting and all those sorts of things. But at the end of the day, the most powerful piece of targeting Google has is what you

tell them in their search box. And if all targeting and data collection went away tomorrow, Google would still be in fantastic shape. And on the backside, you know, like all the suppliers, the websites and all those things, they give Google all their data. Google's like, oh, we have a new format for recipes. Put your recipes in our format. And everyone's like, okay, we'll do your format. Like, because why? Because, you know, it's a win, win, win sort of situation.

You know, in the long run, Google, when we move to voice or is their business model going to make sense, they have challenges certainly going forward. Google is, again, less attractive for the sort of brand advertising. although YouTube is obviously a massive advantage in this case Amazon there's a it's pretty straightforward like you you buy from Amazon and they'll take a skim off it and they're shifting more and more to being a platform model

where third parties sell on Amazon and the third parties pay Amazon to put their stuff in Amazon's warehouses and then they give Amazon sends a sale and Amazon is just facilitating it and again all because they own the storefront they own the customer relationship you know so Facebook is probably the least attractive just because you know the all

those things that I talked about, the ability to reach people when they're bored and the downtime, to understand what those people want implies the sort of like data collection and stuff that Facebook is getting grief about currently. And also, people are more likely, I think, to be critical of just a leisure activity in general. Like it's less clear what societal value Facebook contributes that gives them a defense against their actions. Whereas Google is Like, we, you don't use Google. Everyone uses Google and finds it very valuable. Again, I think that's a little unfair to Facebook.

I think, like, it's like when you're raising kids, like, it's very easy to say, like, oh, my kids should be studying more and taking more classes and doing stuff. But kids need to play, right? They need downtime. You know, I think there's an aspect of, it's okay to be a leisure-focused company. It's okay to be something that people do when they're bored. And, but it's also a much easier way to attack. And does Facebook have addictive qualities?

Are there issues about it? I don't know. I'm glad they're opening up to more research. I think that there is a personal responsibility aspect that goes into this. But it's a much bigger sort of danger zone for Facebook, where they get branded as being like the new smoking or something like that. And given that these companies gain their power through owning the customer relationship, the greatest danger is always a turning customer sentiment. I mean, it is becoming harder, is it insurmountable now that the person in their garage could compete with Google?

Like, is that data advantage cumulative for Google and Facebook and Amazon in the sense that, like, the longer it goes on, the harder it will be to effectively compete with them? Well, it was impossible for someone in their garage to compete with Microsoft. And I think that's what people don't appreciate about these sort of dominant players in these sort of epochs is they are tied to the paradigm of of the moment and their their sort of upheaval and downfall will come not from someone being in a garage alone it will come from someone being in a garage who latches onto the next paradigm shift that makes it impossible for you know the powers that be to compete i mean the issue with with microsoft was you know mobile or two issues one

the internet sort of, you know, it changed the layer of lock-in, if that makes sense, where it didn't matter if you were on the Windows API or not, because everything was within a browser window. It actually mattered what was the first site people went to the browser window, which was Google. And sort of the layer of the chokehold kind of moved up. In the case of mobile, the Microsoft didn't have the right business model. The business model was either you own the device and sell the device like Apple did, or you give the software for free building this massive sort of network,

fact, and then you have another means of monetizing it, which Google and Android did. And Microsoft was stuck with a licensing business model that just didn't make sense, that didn't work. And they also had the wrong mindset. All of Microsoft's mobile phones before the iPhone came along all presumed the presence of a PC. They all assumed the PC would be central to people's lives, and the phone was an adjunct to that.

And it turned out, actually, no, the phone is your senator of real life, and the PC is an adjunct to that. And Microsoft could never get over that culturally from a mindset perspective. And so, and that's what took Microsoft down, was not someone in a garage. It was that the world changed. And I think this is under-appreciated. No one would have recognized it. I think that Microsoft gets a lot of unfair grief for a fate that would have befallen

any manager and any company in the same position because it was a matter of culture and it was a matter of broad changes in the competitive space. It had nothing to do with Microsoft itself. Microsoft didn't miss mobile. Microsoft started building mobile phones in the late 90s. Like, they didn't miss it. They just were fundamentally inequipped to compete in it. And that's what happens.

That's how disruption happens. And the stories of companies moving seamlessly from one paradigm to another are basically non-existent because all the things that make you strong and competitive in one paradigm make you fundamentally ill-equipped to be in the next one. It's what I said at the beginning. Strengths are weaknesses. What makes you strong in one. Yeah. I mean, so I, if I'm competing right now with systematic analysis of technology and society.

If it turned out tomorrow that the only newsletters that matter or ones that got into the nitty-gritty details and whatever, I'd be screwed. Like, I'm not going to fundamentally change who I am. And, you know, that's a very obviously isolated, narrow example, but it absolutely applies broadly to companies as big as Microsoft. Switching gears just a little bit. I mean, there's a massive kind of consolidation going on in old media,

so like cable networks, cable for riders, broadcasters, telecoms, even cell phone providers to that extent. I mean, I feel like a new merger is basically being announced, you know, if not daily, kind of weekly. Why do you think this is happening now? What's the driving force? And how does this find an equilibrium? Well, it's for the reason that story that I told before about watching the big sports game

and then going to the store and buying deodorant. There was a way of organizing the world that held true for 60 some years. after the post-World War II order, and that order is ending. And when orders and eras come to an end, the inevitable outcome is sort of consolidation and coming together. And there's an aspect, too, where technology enables this,

where there's almost like two eras of technology. Like the first era of technology made existing companies and processes better and more efficient. So it was the big companies that would buy big, you know, accounting systems and back-end, you know, mainframes, to run this sort of stuff, and it made what they did better, the internet fundamentally changed the assumptions undergirding their business. And to some extent, it made it more possible to run large companies efficiently.

So, you know, doing a merger became a more viable process. But the broader trend is that the world in which these companies grew up in, in which they're built to operate in, that world is shrinking. And the obvious way to deal with that is to. merge and to see if we can figure it out together because we don't have time to compete with each other because we have to deal with sort of fundamental secular impacts on our on our companies and businesses. Talk to me. You mentioned earlier about bundling and unbundling. Talk to me a little bit about what's going on there, what you see and what you feel is happening and where

we're going to land. Well, what happens with these paradigm shifts is that the point of integration changes, you know, sort of changes in the value chain where it used to be, you know, you integrate at a particular point, and that's where, and everyone around the point of integration sort of modulizes and fits into that framework. So the, the, there used to be a point of integration around sort of putting all the TV channels together, and then on one side, you would have customers that would, that would sign up, and the other side you would have show creators that would make a show and sell to the highest bidder, and then they'd sell it elsewhere, international rights and rerun rights, all these sorts of things. And you had

sort of very modular pieces in this integration in the middle. And then what happened was like Netflix came along and they, what was the key thing that they digitized? If Airbnb sort of digitized trust, Netflix digitized time, like the linear sort of TV schedule that was the sort of like the key constraint on TV was now completely gone. And there's a, there's a great example here, which is Netflix is, it's well known their initial for a to streaming was made possible by a deal to do with stars for 11,000 movies. And the day that Netflix launched streaming, what was the effective catalog size for stars? It was one.

It was whatever movie they were showing on their channel at that time. Right. Whereas for Netflix, the moment they launched, the effective catalog size was 11,000 because you could choose any one of the movies to watch. And what this did was, and then Netflix combined that with that created this fantastic user experience that let them gain customers. They gain customers. They gain more economic power over suppliers. They can

start signing up new suppliers. Eventually, they get to the point where they can start creating their own shows. And what happened is, the entire value chain has been broken up and reformed around this new integration that Netflix has between their service and owning the customer relationship. And now it's broken on individual shows selling the Netflix.

It's no longer like the studio system and all those sorts of things. All that's been is breaking up into pieces. And so, There's a famous quote, the bundling unbundling quote from Jim Barkstell, the co-founder of Netscape, which is there are two ways to make money in business. One is to bundle and the other is to unbundle. And what this gets at is if you find a point of differentiation in a way to integrate in a value chain, you can build a new value chain such as the rest, you build a new bundle, and everyone around you build a new bundle and everyone around and aligns themselves to you. It's like when you have a bunch of magnets and you move, you know, you build a connection to where they all kind of scurry around and line up, right? That's what happens in business is, and it happens on paradigm shifts.

It happens with the internet, where new areas become possible, new points of integration, and then everything else in the value chain reorganizes itself around that. And where do you think that that lands? Is it just the seesaw between bundling and unbundling indefinitely? No, no. I think we're in the middle of a huge transition and probably will have more stability going forward. I think, you know, the long run for TV, for example, the long run, long run is likely that there's the traditional bundle becomes basically all about sports

because sports is better live sports is is advertising driven and so the business model on that side is going to be different and to be very expensive you're going to pay like a lot of money to get not that many channels that are mostly all sports and it's going to become an accidental sports bundle for people that only want sports uh and it's kind of back into that you have Netflix and you're probably going to have like Disney Fox for example and maybe one or two other services like that are like Amazon prime but but the goal there is Amazon it's not to be an entertainment bundle itself and what's going to happen is people are going to end up paying about the same amount of money every month they do for content today there's going to be paying

different people and and I think that that's going to be the case this idea that there's going to be this this you know you're to suddenly be paying $15 a month for all the entertainment you want is a fantasy that's not going to happen what's going to happen is you're paying different people than you paid before you know see that in lots of industries like Like, there will be new giants that emerge in the new area that, that are created with, like, when I started strategically, I started it with the business model in place, which gave me lots of advantages relative to other folks, right? You're going to see the same thing at a much larger scale, companies that are started with internet assumptions that are started with a view of how the world works today. It was started with the assumption of zero distribution cost for information and the ability to sort of scale are going to be the new. new giants. And we're just kind of, I think, in the middle of this, what's going to be a, you know,

a multi-year, probably multi-decade sort of shift. Talk to me about how VC is shaping kind of this space. I mean, we have things that have never really happened before. We have private companies that are allegedly valued at like $60 billion. We have companies staying private longer. We have companies willing to sustain losses longer in order to try and compete with these companies. How is that all playing out? Well, I would say there's there's two points. One, I think VC is inextricably tied to technology. And the reason is that the nature of technology is massive upfront investment followed by basically zero marginal costs and and huge amounts of scale. If you write a piece of software, it takes a lot of time, a lot of money. But once that software

is written, it can be reproduced infinitely. And the same thing with like chips, which is where VC really started was in chip production. Like chips are. They're made out of sand, right, for all kinds of purposes. Their marginal cost is nothing. Astronomical amounts of fixed costs up front. And so VC is the financial equivalent of software. It is the mechanism by which to put a lot of money in up front such that you can earn, you know, uncapped returns on the back end. So it's always been a key component of technology.

You can't pull them apart. That said, VC has been fundamentally shifted. I think like AWS has been a huge factor here where it used to be you needed funding to build something to get something out the ground. So you would have to get funding with a PowerPoint just to even do anything. Whereas now, because you had to buy servers. Like even if you wanted to do it in your spare time, you still had to get a server, right? Now you can walk up to Amazon and basically you have as many servers as you could possibly want on a pay-as-you-go basis such that you can build something, get out the ground, prove a concept. and now you walk into a pitch meeting

and you're actually demonstrating a working app as opposed to a PowerPoint. And so that you've seen the entire ecosystem of funding shift where what used to be a series A today is a pre-seed and then there's a seed and then there's a series A which is basically the old series C. So part of that is sort of the structural shift in VC is everything's sort of shifted up the chain.

As far as the huge amounts of private capital being developed with the highest ends, I think that's sort of, that's almost a separate category than V.C. in many respects, it's more a matter of if it's a new investment class, I would say completely. Like, like, it's called venture capital funding, like once you're funding an Uber at like billions of dollars. But to me, it's a completely different, it is called like growth investing, basically. And in this case, you're not, because VC, you're hoping for the 10x return, right? You're doing a bunch of bets and you want a couple to maybe hit in one, like,

one grand slam. And that will make the return for. for your entire fund. Growth investing is not like that. No one is investing at Uber at a $75 billion valuation hoping to get a 10x return. It is much more akin to, I think, traditional sort of equity investing, but obviously with a higher risk profile, a chance, which implies a chance for a higher return, but the fundamental mechanics in thinking and modeling that goes into those investments is completely different than regular venture capital investing. You said it's changed a lot over the years, and that's because Amazon, has equal and Shopify to some extent, I would imagine, have given people the tools that were

commonly unavailable. What do you see as kind of like the next stage of this transition? Well, I would say, I mean, since you mentioned Shopify, I don't think Shopify generally has much to do with a VC startup, for example. What I think is startups in sort of my world are generally like VC funded, right? It's, and they are, the goal is to build a, at least $100 million company, ideally like a billion dollar company, and get a huge, huge amount of return. I actually think, though, there is a massive opportunity and for a completely new type of businesses, you know, derogatory they're referred to as lifestyle businesses, but businesses

that are uniquely enabled by the internet and the ability to access the entire world as your market. And, you know, you and I are examples of this. I can sit in Taiwan and I have customers in literally hundreds of countries around the world because of the Internet. But the fact I can build that business is reliant on, for example, Stripe, like Stripe making it trivial for me to accept payments or WordPress, like the fact that, you know, I can have this platform and all these sorts of pieces. And, you know, and Shopify is a classic example of that sort of company. And these are the companies I'm the most excited about and the most passionate about. Because I think we need to dramatically reduce the barriers for people to build new kinds of business uniquely the Internet.

And I think those are where the jobs of the future are going to come from. They're not going to come from a Facebook or, I mean, I guess a lot are coming from Amazon, frankly. But people tell it, oh, there's the long run trend in lower business formation going in the U.S. And I'm not surprised by that, in part because a lot of the consolidation and the reduction. and friction at the internet allowed bigger companies be bigger and reach out in small towns more and more. I suspect that rate of decline would be even faster if it weren't for these new types of businesses. And my hope and belief in the long run is that kind of like music, like the music industry, their revenue decline for many years and it's like, oh, the music industry is screwed. It turns out the music industry is actually in fantastic shape and their revenue has been increasing a lot and they're actually going to have, they're on pace to have like their best.

ever in like the next couple of years like even more than like the CD era. Why? Because streaming came along and just a fundamentally more cohesive model. Yeah and it took time and you had to weather the decline of the old model but the new model came through and and I believe and and a lot of the sort of policy prescriptions that I have to do are all about enabling this new model for the world where where people are there are platforms. People are uniquely enabled to build new kinds of businesses that were not possible before the internet. It's kind of by definition, right?

If the internet is screwing up all these other businesses, then the businesses that take to place almost by definition have to be predicated on the internet because like the strength has to be the weakness in that regard. And so I don't write about partisan politics much, but things like I do endorse are things like universal healthcare, for example. I'm well aware of all the arguments against it and the challenges in the U.S. particular, but people need to not worry about their family getting sick and to invent these sort of new jobs of the future, for example. And so that's one of the things that I'm extremely

passionate about and is a core belief and for me about how we deal with this sort of ongoing disruption. How do you see like tech influencing payments? So like Stripe came along, but I mean, Visa and MasterCard and where that's going? I mean, I think the people, the thing that people forget about Visa MasterCard is they're incredibly convenient. I mean, the reason why they credit cards are everywhere is because they solved a real pain problem. And they, and anything that, that wants to replace them has to not just be a little bit better. It has to be massively better and massively better in multiple, and again, the, you know, I am well aware of how expensive credit cards are. It's my largest expense by a lot.

But at the same time, it's not going to ever not support credit cards because they cost a lot. Like, the payoff inconvenience for customers to be able to sign up from anywhere over the world is well worth it. And so, you know, I think we're probably having a credit card with us for a lot longer than some of the proponents of alternative payment methods might think. Well, it seems like everything that's new, even like Apple Pay. I mean, it's run on the back end of existing kind of credit card companies or platforms. Yeah, I mean, and you can sketch out a scenario where in the long run, if enough people use Apple Pay, then Apple Pay could, you know, Apple could do something to switch out the back end. But frankly, why would Apple want to do that? I mean, what Apple does, Apple wants to control the user experience and then get, uh, get other people to do the very expensive sort of like infrastructure build out.

Like, think about the iPhone, right? They leveraged the iPhone to sort of control customers and made it so that customers would switch carriers to get the iPhone, which gave them power over the carriers. and the carriers had to spend billions and billions of dollars to build out new infrastructure to support all the data these iPhone people were using, and Apple didn't have to pay a dime. And so that's what Apple wants to do in industry for industry. The messy, high investment, relatively low-charine capital stuff, they would rather gain leverage over other people and force them to do it to get access to Apple's customers. I know we're kind of budding up on time here, so I've got a couple questions left.

But do you think that ultimately, like social media, the ecosystem is healthy for people? I mean, there seems to be a recognition now that we'll Facebook and Instagram and all of these services give us leisure time. Do you think they're good for society? I would say probably not, but it doesn't really matter. And what I mean is, you know, there's something I read a long time, but I can't remember where, but this idea where it used to be, I think the issue goes beyond social media. And what I mean is it used to be that the world that matter to us day to day was our local world and occasionally the outside world would intrude in, like, whereas we've shifted a world where we're all obsessed with the outside world and occasionally the inside world,

the close-by world breaks in. And I think that's challenging, I think, for humans probably generally. I mean, it's not healthy, I think, to be obsessed with the tosses in terms of what happens in Washington, D.C., and let that affect your sort of emotional mood on an ongoing basis. And I think social media exacerbates that and exaggerates that greatly. And it, I think, perpetrates the sort of filter bubbles and the bubbles in general where you think lots of people agree with you. Whereas if you're in your small town, if you define people that agree with you, you're geographically constrained with people that don't agree with you or view the world differently, whereas you can surround yourself through, I think the same thing as you are online. And I think all those are probably problematic.

And the reason why I think it doesn't matter, though, is the genie's not going back in the bottle. And I think this applies to lots of things. applies social media, applies to the economy, applies to advertising, applies to privacy. The temptation is going to be strong to fight battles that have already been decided when we'd be much better off pushing forward and figuring out what we're going to do going forward. How are we going to build the sort of like structures going forward that are healthy? That makes sense.

How are we going to train people to be able to handle 24-7 news, to handle social media? How are we going to create the conditions for the companies of the future going forward, like to bemoan that the world, the post-World War II order is falling apart is completely counterproductive and is a opportunity cost to actually figure out what's next. To an extension of that, to some part, do you think government plays a role in making Facebook or Google provide data to everybody so that everybody can access it? Yeah, this is the real sort of paradox of what's going on right now is Facebook's response and they're being cheered on as they do it for all its purposes,

is to lock down their data. Yeah. Which basically entrenches them. And there's a lot of laws of regulation and the GDPR. The GDPR is, is it going to be very costly for Google and Facebook? Absolutely. But it's going to be, but what's the GDPR for people who don't know? The European general data privacy regulation.

And it's repose all these things around data and data retention. You have to get permission from customers and all these sorts of things. They're like, oh, Facebook, Google, it would be in big trouble. Well, yeah, they are. But if you realize that there is still going to be digital advertising, the alternatives to Google and Facebook are going to be hurt way more. Like, is every site with advertising on it going to get permission from users for each of the individual ad networks that runs on the site?

Like, if you think about the barriers as opposed to a Google or Facebook, which has so much internal data, like Facebook has lots of data, you already told Facebook. If they were cut off from all third-party data, they would still be fine. If Google is cut off from all third-party data, they're still fine. If a publication is cut off from all third-party data, are they going to be fine? No, they're going to be in much more trouble. And I think this is going to be a challenge, such a challenge with government action going forward is the most obvious solutions are going to lock in the biggest players. You're going to lock in the incumbents.

And something that is important to me is continuing to raise. a voice and like remember remember the future little guy that whose business has been started yet. Let's make sure we maintain the conditions for for him or her to get off the ground because we need new jobs. We need jobs that don't exist. We need new industries that are uniquely nailed by the internet. It's going to be awfully easy to shut that off before it even get started. That begs the question like what regulations would you look at enacting if you were in government to give the little guy kind of a chance, but more so to not further embed these or entrench these larger tech companies.

Well, I mean, it's very, there's, there's two ways to argue this. So, so one is that these companies need to be broken up or they need to be like maybe Google or Facebook needs to be separated. So there's more companies in the end market would be one, one argument. Another argument, though, on the flip side is maybe. they actually should be heavily regulated and such that we have sort of stable platforms and foundations on which the future can be built. And you think about something like AT&T, right?

18, like the phone service was costly and didn't evolve very much, but it was a stable sort of base that other stuff could be built on. And I'm not totally sure, I'm not totally sure, it's something I've been wrestling about a lot about what should this sort of regulatory response be to these platforms? Because there's an aspect of the implication of aggregation theory is that to be large and to be dominant is the natural state of affairs because of these feedback loops. Like the end state for an aggregator is to win it all, to take it all. And if I think that the future is, I use it on the exponent podcast, this jungle analogy, where you're going to have the huge trees. that tower of everything and then a huge amount of like undergrowth and like just massive amount

of like life and all kinds of vegetation on the floor and kind of nothing in the middle. If that's sort of the future where you have these massive platforms and you have that stuff in the middle, then maybe maybe maybe like seeking out stability and a fair playing field on top of the platforms is more important than ensuring platform competition, if that makes sense. And, and there's something I, I'm not sure that I've fully articulated that specifically on Strickery yet, but it's certainly something that I am trying to come to term with in my own head. And I, like, there's just going to be different, this barbell effect. There's going to be big, there's going to be small. And, and how do we deal with the one while maintaining room for

the other? I think is, is going to be sort of the critical policy question going forward. I think that's a great segue into kind of my last question, which is you've been running Stratory, I think five years now? I started Structory five years ago, and then it became a business four years ago. Right. So tell me what's changed in those years about what you thought about going into running strategy because you had this business model in mind and kind of what you've learned and honed or changed your mind on over the past five years.

Like what have you learned from running this? Like about technology or about trajectory? No, but the Stratory, the business. I mean, first and foremost, I would say one is the speed. with which you can grow and word of milk has spread, you know, was kind of mind-bullying. Like I said, it's five years now. My goal when I started trajectory was that in five years, it could become my job. It actually became my job in a year, and I am now five years in and far more successful

than I would have ever imagined or made possible. And frankly, and a lot of that success was really ceded in the first few months, you know, going from having, you know, a few readers to having thousands of readers in the remarkably short amount of time. And I think, you know, the social media is viewed as such a bad thing for publications, but that's because they don't have the right business model. For me, social media is absolutely incredible. I mean, it's the, it's the most amazing channel that could ever be invented. I could use it for free. So I think that's probably the biggest surprise. The second one is probably just, it's a big market out there. I mean, like, there's,

there's so many people. And, you know, I constantly on Twitter, you will encounter people who they don't follow me and like you like I think this person would actually really enjoy not saying that you know I'm the and I'll be all of Twitter followers this person clearly doesn't know who I am because I see their tweets that's what they're writing about and they would almost certainly be interested in in stuff that I that I read about or they follow people that that that would make sense they would want to follow me and and that's that's that's actually kind of a great feeling it's I don't not resentful they don't know who I am it reminds me that there's still sort of upside there's like there's still room to grow here and I think this is a mistake that people make

people like, oh, yeah, how many subscription sites can there be? Like, not everyone can have, like, 50 subscriptions. And no, that's not the outcome. The outcome is breadth. There's going to be so many niches, and there's so many people out there that there's going to be enough for everyone. There's enough to go around. We can't talk about this offline before we started recording that, yeah, yeah, we both

have subscription models, but like, are we competitors? I mean, no, like, we're not, it's not like there's a thousand people who will pay for content in the world, and we have to fight over those thousand people. There are hundreds of thousands, probably almost certainly millions, tens of millions, hundreds of millions, that will. And it's more a matter of, it's a great problem to have that, to know that I have customers out there. And the issue is not that I need to convince them to pay. It's that they just don't know who I am yet. And that's a pretty sort of great place to be.

Yeah, I like that a lot. And one of the other things that we touched on earlier before we started recording was we didn't explicitly call it this, but there's the value you and the value you capture, and there needs to be a means for people to capture a percentage of the value you create. And if you overcapture, you kind of go out of business. And if you under capture, you go out of business. And there has to be a mechanism sort of in the middle where you can earn a living and still provide high quality, meaningful content to people. Yeah, no, absolutely. And I mean, the, you know, the internet, like, I don't know, I'm cognizant of the fact that I am inherently biased because my personal life and business

have benefited so greatly from the Internet. But I am also pushed back strongly against the, it's kind of a running joke like, that's fine for Ben, or that's great for Ben, which I think I stole from like Merlin, ma'am. Like, that's fine for Merlin. And this idea that, oh, that my success rests on things that are unique to me. Now, do I bring things to the table that are valuable?

I mean, obviously, I'm not saying anyone can write an internet publication or anyone can start a business. You have to deliver something of value that is differentiated. But I strongly reject that I am the only person in the world that can deliver to differentiate content. I think lots of people can about lots of areas that I know nothing about. And there are lots of examples of that more and more, more than people know and appreciate. And, you know, it's like the example of like saying Microsoft failed because of the actions of Steve Balmer.

It's such a presumptuous and it's human nature to ascribe things to people. people, but it's wrong. Like, what matters far more is the context and environment around Microsoft. And I think it's the same thing with me. Am I successful because of my hard work? I am. And, and, and that's true. But it's, I reject the idea that I am solely responsible. I could I have, I could write the exact same things, the exact things of the person I was, and I've come along 10 years earlier or five years earlier. And, and would not be successful. Had a completely different outcome than you have now. Yeah, absolutely. I'd be writing for, like, you know, some, like, magazine or whatever,

make, you know, probably scratching out a living. I was the right place, right time. And frankly, if I came along 10 years later, I probably wouldn't be successful either because someone would be in my space. Someone would be in my, be in my niche. And I'm very cognizant. I just was in the right place at the right time. And there's nothing wrong. It can be both. It can be both. And I think to the extent I succeed in writing about companies and writing about strategy. It's acknowledging and describing all those contextual factors beyond the sort of like great man theory of history that, you know, Steve Jobs was such a great person. That's why Apple succeeded. Well, well, where are the other things that sort of go into that? It's easy to write

the one. It's more, it's more difficult to write the other, but, but, you know, it's very important. Yeah, I totally agree. One more question. Sorry, I lied about it. Last question, because I could talk to you for hours, but I'd get a ton of emails afterwards. If I didn't ask you how you organize and retain the knowledge that you're consuming, like what is your backend sort of organization system for what you're reading and how you're thinking about things and how that evolves? Like, how do you create your own personal Google or what's your back end system for that? Or is it all literally in your head, in which case the rest of us have no hope? So all that said, all that said, I have three sort of like unique skills that definitely benefit what I do.

One is I read extremely fast. Two is I write extremely fast. And three is I have a very good memory. Like I just like, so I will remember stuff and like Google is my best friend. Or I use like one of the reasons I would upgrade it search on your checkery. Like I just launched a new version of the site with a new search experience is because I use search more than anyone. And like I know I've written about this. I need to find it.

So that said, I've definitely, I'm definitely getting old, man. Like, I can feel I just don't, I could just, I could retain stuff like nobody's business when I was younger. And it's getting harder. So, so I am trying to be better about that. What I do do is I keep a, an outline. I use workflowy and where I'm constantly filling it with links of stories of interest and notes like that.

And, and it does have a search function. And I don't always rely on it exclusively, but I'm always trying to capture stuff as I go along that I think is of interest. And I'll put it in. I'll just put a few notes about what the article is about and then a link. And then I rely on search. Like there's, I remember at Microsoft, the email team did a study about the different kinds of like people, the way people use email, like the filer versus the searcher or something like that or the holder or whatever. I am definitely in the like, if there was no search, I would be screwed. So I'm in the like, I vaguely, I vaguely recall that I saw something about this one time and let me, let me exercise my Google fool or my email inbox search capabilities to find what I was searching for.

I agree with you. I'm very search-oriented as well. Ben, this has been phenomenal. I want to thank you so much for such an amazing conversation. We might have to do this again. Sounds good. I'm happy to be here. And thanks again for the multiple delays in getting it out.

But we've done it, so there you go. Oh, that's awesome. Hey, guys. This is Shane again. Just a few more things before we wrap up. You can find show notes at farnumstreetblog.com slash podcast. That's F-A-R-N-A-M-S-T-R-E-E-E-T-B-L-O-G.com slash podcast. You can also find information there on how to get a transcript.

And if you'd like to receive a weekly email from me filled with all sorts of brain food, go to Farnhamstreetblog.com slash newsletter. This is all the good stuff I've found on the web that week that I've read and shared with close friends, books I'm reading, and so much more. Thank you for listening. Thank you.