This Week in Startups - $625M Axie Infinity Ronin Bridge hack, $TWLO insider trading, Subject's learning platform, $HOOD extends trading hours | E1421

Episode Date: March 30, 2022

First we explain the $625M hack of Axie Infinity’s Ronin Bridge (1:34), then we discuss the engineers at Twilio who allegedly insider traded (17:30). Next we discuss Robinhood extending its trading window by four hours a day (29:50) and wrap with our startup of the day is Subject, a company providing high school courses for credit online (37:39). 00:00 Molly tees up today's topics 01:34 Axie Infinity’s Ronin blockchain was hacked for over $600M 13:31 Wealthfront - Get your first $5,000 managed for free, for life at https://wealthfront.com/TWIST15:00 Regulation and Axie Infinity hacks 17:30 SEC has charged three Twilio employees for insider trading 28:39 iTrust Capital - Visit https://itrust.capital/twist to create your Crypto IRA today 29:50 Robinhood extends trading window by 4 hours 36:22 Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain at https://Squarespace.com/TWIST 37:39 Startup of the Day: Subject.com (accredited learning platform) 48:22 Final thoughts on the 2022 Oscars moment FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood

Hey everybody, it's a news Tuesday. We're going to start this show with details of the $600 million hack, Ouch, that impacted Axy Infinity's Ronan Bridge. I think we can all agree. Web 3 is going just great. Then we discussed the genius engineers at Twilio, who allegedly thought insider trading was a great use of their time in a group chat. And we talk about Robin Hood extending its trading window by four hours a day on the

path to 24-7 trading. We also have a startup of the day, subject.com, a company providing high school courses or credit online. In between the Robin Hood and the subject.com stories, we're going to just end up at education. It's a great show. It's quite a journey. Stick with us. This week in startups is brought to you by,

Wealthfront makes it easy to invest and easy to grow your savings with a diversified portfolio that balances your other riskier beds. To start building your wealth and get your first $5,000 managed for free, Go to wealthfront.com slash twist. I trust capital. Did you know that you can invest in crypto through your retirement account and still get the same tax advantages as a traditional IRA? Visititrust.com slash twist to start investing today. And, Squarespace.

Turn your idea into a new website. Go to Squarespace.com slash twist for a free trial. When you're ready to launch, use OfferCubes. To save 10% off your first purchase of a website or domain. Hey, everybody, welcome to Tuesdays this week in startup. It's been a crazy week. Yesterday, we had to cover the insanity at the Oscars. Today, we're going to do part two.

It's just going to take 35 minutes today, not 40. Maybe 40 minutes. No, we're not. At the end, we're going to have a little stinger. We're going to do a little stinger. I have just a little stinger opinion to just put a bow on the mean time to moving on with these memes. So at the end of the show, I'm going to just talk about the slap one last time because I do have an insight. I don't want to share.

But first up, here we go. Everything is fine in Web 3. I mean, this actually is really kind of a bummer because this is, of course, Axi Infinity, the game that has gotten so much buzz. There was a great interview on Twist with the founder. We talked about how if the blockchain and tokens were going to find a home, it was going to be in game mechanics and in-game economies. The only problem, of course, is if your private blockchain gets hacked, which appears to have happened with Axi Infinity's Ronan blockchain, which was hacked for over $600 million. Once again, my ear monitors went out. I thought you said $600 million.

You said $6 million got stolen? You should totally get those replaced. The numbers keep... They don't seem to be working at all. My headphones. 173,600 Ethereum is evidently worth $600 million, over half a billion dollars was stolen. And it seems like maybe they found out when a user notified them.

I have not verified that yet, but I saw it in the Noda gang. And you can kind of trust the Noda gang. Yeah, that's not good. That is bonkers. And I'm just trying to figure out where that sits in, the largest hacks in history because these hacks are different than you know, when the Marriott or, you know,

Yahoo got hacked back in the day. You remember all these hacks that occur. These hacks tend to be data, not cash money. Not cash money. And that's the rub here. The great thing about the Web3 ecosystem, writ large,

is that you've got a currency built in. So when you used to steal data, right, and people would get, I don't know, 100 million accounts, you know, 500 million credit cards. They were like the, I think they're trying to think of the biggest, I'm trying to think of the biggest cash hacks in history. And I can't find a list of that because all the hacks in history. Right. I mean, people have cash, though, that's a bank robbery. This isn't even, it's probably not even appropriate to call it a hack. Like, this is a bank robbery.

Like solar wins was a big one. Solar winds was a big. hack, a data hack, yeah. They're data hacks. They steal the soft source code, the Sony hack. They sold emails. One of our notice, Rory, is pointing out that the Mount Gox hack is probably the closest. That was 740,000 Bitcoin, including my 300 Bitcoin.

Which at the time, we were worth $3,000 in total. 17 cents, exactly. But if it were in today's prices, it would be worth $400 million. And that's still less than this. the entire M.T. Gox hack, which almost wiped out the entire economy because it was such a big deal. It was like the first time an exchange went down is still smaller in today's dollars than this hack of this one game and this one network. Now, here's the good news. Usually these are, it's possible to track these down, right? So we remember those masterminds who had the hack that we just covered.

Oh, at the time, 400 million. I'm sorry. I'm sorry. I don't mean to interrupt. At the time, the Mount Cox was $400 million. So in today's dollar, it's like the entire global economy. Thank you, Roy. Thank you, Roy. So when you look at this, and for people who don't know, these blockchain validators are responsible for verifying transactions on the blockchain. So Sky Maven's Ronan chain has nine validator nodes.

Those nodes verify transactions. Once the transactions are verified, they're added to the ledger. And so Ronan has like a proof of authority blockchain. It's similar to a proof of stake, but slightly different. POA, the validator, state their reputation on the line. So even though Sky Mavis, the company behind Axe Infinity, had plans to decentralize these nodes over time, there are only nine validators. Currently, this means it is more centralized than something like, say, Bitcoin. So, according to the Roaning quote, the attacker managed to get control over Skymaven's four Ronan validators and a third-party validator run by the Axe Dow.

So somehow they got the keys to these validators, and then I guess they just siphoned off the money. So, but now I guess you have to wonder, because these things have to be put into a wallet, we actually are sitting here with the hacker's wallet. Right. So you can point to, and we'll put the ether scan of this, there is a wallet where they know where it is. Yeah. And they can see it just sitting there. Current, current ether value, $597,418,640.

And 59 cents. So, I guess now the. the FBI and everybody is going to be, or perhaps international investigators are going to go try to find this money. But what a disaster. It's just a disaster. It really is.

And what's so interesting is that it is a whole bunch of things coming together at once. One is the idea of these slightly more centralized blockchains, right? Like effectively a private blockchain. So it's not as distributed because it is

like a Dow, not only did they get control of the validator run by the Dow, but they got control over these four other ones, the Ronan validators, and that crosses this majority that is needed to control the validators. There's sort of all of these like things that are in place to supposedly stop this from happening, but each one of those Rubikons was crossed effectively. The Ronin team is taking action, they say, to reduce future risk. They increase the validator requirement from five to eight, so you'd have to hack eight of them instead of just four or five to take control of the entire thing. They're working with exchange security teams, chain analysis, and law enforcement to

monitor the stolen funds and block transfers because they obviously can see this wallet, which is so weird. They've also paused the Ronan Bridge where you can deposit or withdraw assets to Ronan and disabled their decentralized exchange katana. But what does this mean for the business? I'd say a great question. Can they weather this store? And so there is something, basically when you run a company, you get hacker insurance, right? And I don't know. I'm going to need a fact check on this if blockchain companies have, or Web3 companies

writ large, you know, all of the different umbrella ones, if they have, you know, hacking insurance, or if they are even qualified for it. I wonder, yeah. which is to say, would anybody insure them? So I'm going to need a fact check. Producers at This Week in Startups.com. If anybody can tell us or are Notie Gang in their super secret, a signal group.

For tomorrow's show, I just want to get some expertise on cyber insurance is the silly term. It's really hacking insurance, but they call it cyber insurance for whatever reason, as if there are like cyberpunk, people with spiked mohawks and green hair. They're hacking the Gibson. Yes.

They're hacking the planet. They're hacking the planet. They're on rollerblades going down Broadway with a 3.5 inch floppy disk to hand over the hacked data. You see me, Jason. You see me. I see you. I see you and William Gibson and just all tomorrow's parties. So I'm freaking nerd.

We're super nerds. So anyway, that's the key issue here on a business basis. When I join the board of a company, when we're working with companies, shout out to our friends at broker, sponsors the show. And actually, they help me with this a lot. We have to explain to founders like, Congratulations on raising. You're $3 million,

your $5 million, you're $10 million. Hey, how would it be a good time to get directors insurance? D&O directors and officers in case somebody does something stupid or we do nothing stupid and we get sued? And then how about we get some sort of HR insurance in case somebody does something stupid or we get accused of doing something stupid, even though we didn't do anything stupid?

And cyber insurance in case we get hacked. And then people sue us because now the people who are part of this game can sue Axe Infinity. Yeah. And that's where this becomes, you know, this is where hacks become a bit of a problem. You're going to have a bunch of drive-by-insurance folks, not drive-by, drive-by lawyers and law firms. We're now like, okay, there are a group of people. We're going to start a class action suit where whatever we recover, we as the attorneys get, whatever, half of it, and then we distribute the other half. So now the firm, the company, is going to be dealing with the fallout from the hack and then getting attacked by lawyers. and having to spend a bunch of money to defend themselves while working with law enforcement to try to recover this. And then, God forbid, it's an inside job, you know, where somebody inside was working on this.

I just saw yesterday the SEC did an insider trading thing of Twilio employees, which I see on our docket here. There are going to be so many shoes to drop, and hopefully they can recover the money. But this is a, this is kind of a big deal. And it could be, these hacks sometimes for startups have the risk of ruin potential. In other words, company can go belly up from something like this.

I don't know if that's the case here and how, I don't know what percentage of their holdings, $625 million is. If it's 10% sounds like they could figure out a way to survive. If it's 50% of their holdings, you know, I don't know. Like maybe it's the risk of ruin. Yeah, I don't know either. And I don't know if this, what is stolen represents their actual holdings or just the kind of in-game assets.

I mean, obviously you're not sitting on $625 million in-game assets that you're not doing something else with. So it's unclear at this point, I think, what the business impact of this is, other than just, again, the reputational issue, which is unavoidable when you're building things on top of, you know, yes, as the Nodies are pointing out, the underlying technology here, the blockchain itself is still impervious thus far. That is totally true. But the fact is, you have to layer things on top of this to make it usable. And every layer that you build is a point of entry and means it's, you know, high value targets. And I understand I'm just seeing some Twitter chatter about this happened six days ago,

and they just found out about it. So there, this is one of the things when you run fast, uh, or you move fast and break things, which has been a heuristic philosophy of hacking and building companies. And move fast break things, um, sometimes, you know, you can have a fatal outcome. So when the enterprise gets bigger, you want to slow down and make things more redundant, make things safer. You don't want to break things because the footprint of something getting broken in a small enterprise, you know, if you had a thousand Ethereum, you know, total in this project, well, you know, what's the footprint times 3,000? You know, it's $3 million. One of the investors could just say, here's another $3 million would take 2% of the company and 1% of the company and you can keep going.

loan you the money. You don't even need to go through hacker insurance, cyber insurance. You just float it. When you get big, you have to really make sure you have a security team. Yeah. I don't know that they have a 10 person security team on this project, but the scale of it is such that they probably need to have a 10 person security team. We don't know. Yeah. And that's what happens when things grow too fast. Listen, we all have regrets in life, some of us more than others. But if you ask anyone my age, something they regret, I bet a bunch of them are going to say, they, wish they had started their financial planning and they're saving for retirement just a little bit earlier. When you get started building your wealth early, well, you get to capitalize on compound

interest over decades. And wealth front makes it so easy for you to start building wealth. You can invest out of a Roth IRA, a 401k, and other kinds of investment accounts. And they're trusted with over $28 billion in assets. I kid you're not, $28 billion in assets. And they have almost 500,000 people using the platform right now. And again, the product is simple. It's gorgeous. It's easy to use. And that's why it has

4.9 out of 5 stars in the app store. More you people giving it a 4.9. I mean, this is a 5 out of 5 star app. 9. I don't even know if I've ever seen a 4.9 out of 5 in the app store. Great job to the wealth front team. It's a gorgeous app. It's got so many great features. And

Twist listeners can get their first $5,000 manage. Wait for it. for free, for life. That's right. You got nothing to lose. It's incredibly affordable and you're going to learn a ton. And all you have to do is go to wealthfront.com slash twist. That's W-E-A-L-T-H-F-R-O-N-T-T-com to start building your wealth today. Well, and when the assets in question are worth so much, right? It's sort of like it's not enough to just build a couple layers and have your basic security. This is like you need the really good state. to store these jewels.

Yeah, and there could be all kinds of safeguards that are put in place, and this is why regulation comes into play. The reason we have regulations is because these kind of things have happened before in society. Regulators see them. They add regulation to protect all the stakeholders. I'm using the word stakeholder or not shareholder because fallout can go beyond just the people who own equity in a company. And over time, people get a little upset.

Oh, my God, there's too many, you know, regulations. it's slowing things down. And so you have to look at these projects and say, what's a reasonable amount of friction to protect people? And we have these, like FDIC insurance. You hear about that, you know, or people having to have cyber insurance, people having to have double signatures or whatever your bank requires you to do

when you send a Y or over X amount or reporting. And so this is where the SEC is going to look at the continuing fallout on the, you know, what's the name of the website? Is it Web3? Everything's fine? Yeah, everything's fine. Yeah, Web3 is going great. Web 3 is going great. The reason Web 3 is going great is, it struck such a chord, is because these things have

gotten so big that the fallout is so great with no regulation. And the fair thing to do for everybody in crypto and for all stakeholders and participants is to add friction, regulation. And I am a, you know, go fast person, but as the numbers go up, I may make sure people don't lose their money person as well. These are not, or these are ends. And so this is why we need Gary Gensler and the whole squad over there to really be clear about what the rules are.

I could not agree more. Gary Gensler, love to have you on. Yes, let's get it, Gary. Like regulatory certainty increases markets. Just, you know, regulatory certainty makes markets, if that makes sense, right? Because once you know what the rules are, you know how to make money. Okay, sure. Yes.

And so I sort of feel like there. Yeah. Now I know where to practice my. Yeah, here's the three point line. Now I know where to stand in practice. I'm not coming into the game where the three point line is moving around. Yep. It's fixed.

And I think a fixed regulatory framework here would actually help a lot of these businesses, help even bring other businesses into existence because they know what the rules are and they know how to operate within them. And then, you know, it's like you can build within the, you can bowl within the between the gutters. Exactly. Okay, let's go to our next one. I will say you can put in all the regulatory framework, all the insurance in the world. You can have rules of the road. You can have regulation, but you cannot stop your employees from occasionally ripping you off.

The SEC has fined three Twilio employees for insider trading, specifically three Twilio software engineers. Idiots. Evidently, the engineers in four family, I love the color commentary. Dumbums. Sorry, I don't mean to Yeah, I mean, seriously, like, you're going to get caught. Allegedly, the engineers in four family members and friends made more than a million dollars in collective profits,

which considering the consequences at stake here don't seem worth it. Basically, the charges allege that these engineers, quote, learn through the database that Twilio's customers had increased their usage of the company's products and services in response to health measures taken in light of the COVID-19 pandemic and concluded in a joint chat that Twilio's stock price would, quote, rise for sure. Okay. Now, okay, so the SECSA, we allege that this insider trading ring

took advantage of valuable revenue information related to the pandemic of the San Francisco tech company. I'm sorry, this feels a little excessive. Now that I'm reading the details, like, yeah, this was dumb, dumb stuff. But like, so wait, you work there. I don't know. All right, let me start with the levels of stupidity here. I'm going to help you.

Your engineers at a union. Unicorn, you make a quarter million dollars a year each, you could leave your job and get a 10% raise. You could take on side jobs and make $1,000 an hour, $500 an hour. Yeah. You could, with all the data you have, understand and have insights into other companies. Totally. That would not be insider trading. It would just be, you know about the markets.

And you could trade other stocks. You could trade a competitor, right? Like a Twilio competitor. Well, that would still be inside of trading. Is that so be? I don't know. I don't know. I don't know in the, well, you don't have to even trade a, you don't even have to trade

a competitor. You could know as a developer, because you work at Twilio, you could see all the partners who use Twilio, right? And you don't even have to look at their data. You just know that they sign up for Twilio, which means their company's probably doing pretty good. Or you could just take your general knowledge of developers and watch other signals in the market, right?

So if you do have that brain, you could go to GitHub. You could go to open source libraries, look at who's making the most, you know, commits, right? And if you see, like, tons of commits coming up from Netflix employees or Disney employees, whatever it is, you could maybe figure out through some other, a similar data analysis that some company is going to do well, right?

You could look at the downloads. You could make, you could literally make an algorithm that looks at the changes in public, you could checkmark every publicly traded app in the app stores, look at how they're trending over time. And if they're growing, then make trades on that.

That's public data. You use your engineer brain to do it. To reinforce how stupid these idiots are, these are stupid idiots. Like, there are idiots and there are stupid people. These are stupid idiots. This is just bad at crimeing right here. You literally typed it into a chat room

as a developer knowing how easy that data is to get. I mean, how dumb do you need? And then just used, like, tipped off or used the brokerage accounts of close friends and family. Why? The notice asked a good question, which is who ratted them out. But it probably, I mean, it makes you wonder, like, how did they type a group chat on their work computers? Like, what on earth was happening here? Well, probably what happened was the SEC looks for odd trades.

So they might have seen, like E-Trade or somebody or Robin Hood, might have seen 10 accounts created. in the same week, that all made 10K bets on Twilio stock, all within a certain geo region. And whenever they see those kind of trades, they're responsible for reporting them as odd-looking trade. So there is a concept of, I don't, it's not the word odd, but there's a funky trade trigger in these services that the SEC does. And use the activity kind of stuff, yeah. Yeah, just outside the norm.

I mean. So these people are so stupid. Instead of using a trading account that had third. 30 stocks in it and trading those 30 stocks, you know, twice a year each and then adding another 10 and one of the 10 is, you know, Twilio, they didn't do this. So this is what happens when people count cards playing blackjack. They're betting $10 a hand. The deck becomes what's called charged by people I've talked to.

And so there are more face cards in it than previously. And then when that happens when you have like a plus X number of face cards, they just keep a count of them, you can then increase your bets. by 100 because you have a slight edge. And when you get that slight edge, then you press your luck. And then the dealer goes, huh,

they've been playing for two hours at $10 a hand, and now they're betting $5,000 a hand, the table max. Something's up here. And then they say, we don't need your business. Yeah. So that's the kind of way

people get busted here is they make some very strange-looking trade. In this case, they quite specifically sought permission to trade options from brokerage accounts. They had not used in years, according to the complaint. Oh, we did find that.

Okay, so it was exactly what I anticipated. That was exactly what you just said. Yeah, amazing. Oh, and they're so dumb. They didn't even buy the stock. They did it with option calls. So what they did was they just made short-term bets, right? Like the option to buy the shares so they could make even more condensed bets, I guess,

as opposed to just owning 100 shares and trading it every two years. Yep. Here's the ultimate stupidity in all this. They could have just bought and held the stock. If they never sold the stock, if they did, in fact, working there know that the company was doing well, here's a strategy dipshits. Buy the stock and hold it. Buy the stock and hold it.

Is that a strategy for lighter insider trading or just like a thing that's not going to get too caught? If you're not... Or like in trouble. Let's say you saw this quarter. It depends on what team they're on, right? So if somebody inside Twilio who didn't have access to privilege information was like, I think this pandemic's

going to do well for our stock. Friends and family, you should buy it. That's one thing. These guys were all actually on a team that had signed an agreement. specifically saying we will not provide non-public information in a manner that could end in unlawful trading. Okay, fine. Yeah.

So like, that's probably standard too. Yeah. They're totally pretty standard, but not allowed. Here's another idea. Work hard at your job. Go to your boss and say, I worked really hard. Here are the 10 things I did. Can I get more stock?

Right. And then go on five job interviews. Come back to your boss and say, I went on five job interviews because I've been getting called a lot. I feel like maybe my I wanted to check to see if my comp was in line and I got 17 to 30% higher offers than I have right now. Can I get it all

in stock because I believe in the company? Right. Okay, you just made more money than stealing. This is like somebody who works this is like somebody who works at a butcher that has Wagu beef like literally taking one of the stakes and putting

it in their pants like walking out the door. Like, you could have just asked your boss, like, can I take home of Kobe or can I get a discount on Kobe boss? You're like, you're so great, you come in early, you clean up. Kobe's on me. Yeah. You know, dummies.

Throw the book at these dummies. Make an example out of them. I hate to say it's really true. And it's just what's really kind of sad about it. And I'm not saying that this isn't, that, you know, quarter of a million dollars isn't a lot of money for people. But to do this for a million dollars in the aggregate. between like them and their 10 friends and family and whatever, is just like, oh, for God's sake.

Because now you're done. Now your career is over. Let this be a warning to everybody. Like going to jail sucks. Going to like jail even for six months, which is what they're going to do, right? They're going to have to pay fines. They're never going to be able to.

They're not going to jail, but their careers are over. I don't know. Sometimes they make them go for three months into one of those like, yeah. I think sometimes they're like to try. Yeah, they kind of like to put you in a white collar jail because it just gives you enough fear of like, you watch the TV show Oz and you see Cillinger

and then they put you in one of these jails that's like next to it. And they're like, hey, you're in the jail and Cillinger's in the jail next to you. Considering that like, we can put you in this one, but you're going to be in this one for six weeks.

I would be shocked. I would bet you a shiny $2 bill that none of these dumb dumps are going to jail. It's just not that big a mastermind. Speaking of $2 bills and gambling. Yes. I had a really great session one time. in Vegas and, you know, I'm like in the VIP suite where they give you your bricks of cash.

And the woman, you know, I tip everybody out. I had one like 20 dimes. So I give 100 bucks this person, 100 bucks this person. You know, I'm especially cashy. And, uh, what was this is anything else we can do for you for your account? It's like, how would you like your bills? I'm like, I like, I like 50s. I'm a big 50 guy. Like 50 all bills. Yeah. She's like, anything else we do for us. Like, you got any $2 bills? She's like, of course. I was like, you know, it's a lucky thing for me. Can I get like a hundred of them? She's like, we can have like a thousand dollars and we have a ton, nobody ever wants them. I was like, give me $1,000 and $2 bills. The best. I then took those $2 bills. I put them in my backpack. And anytime I would go to a valet or whatever, I would give

$2 bill tips. Yeah, I'd give $6 in $2 bills, $10 in $2 bills. Yeah, I tell him, hey, it's lucky give it to your kids because they never get to see a $2 bill bill. And that every time I would pull up to a valet, whatever, they would remember me a year later. Two dollar bill guy. Yep. My stepfather is obsessed with weird money and he gives us, I mean, like, he loves to buy those strange little coins and the specials and whatever, but every birthday and holiday, you get a stack of $2 bills commensurate to your age on the birthday. So we always have, right, and this is a great birthday gift. Like, if you're going to a kid's birthday party and you don't know what to give them, get them their age plus one and $2 bills. And so, yeah, I'm always like buying coffee and tipping

in $2 bills and people get so excited. So you're looking forward to getting your $15, $2 bills next week. Exactly. 15 plus one. Uh-huh. Yeah, there you go. Absolutely, 29. Yeah. I go for The big 30, we got to have a big 30th birthday party for you mom. It's going to be great. It's going to be a hell of a party. God. I mean, I can't afford much because I'm only 30, you know, I haven't really. Well, you know, now that I'm 40, I'm like, I'm having my midlife crisis.

Exactly. Like 50. How did I get old? It's so weird to be turned 50, I have to say, because everybody used to think I was young. And now suddenly everybody's like, he's, that guy's 50 years old. For a 50 year old, really? I'm like, what happened? Then you're just about looking young for your age is what it.

I'm in May, I turn 47, and then I will be incontrovertibly. I'll have to round up. Oh, boy. Like, you can't, at 46, you can kind of pretend you don't have to round up, but at 47, you really do have to round up. Yeah, yeah. Well, here's the thing. We look great.

50s are the new 30s. All right. Listen, everybody knows someone who's invested in crypto at this point, and lots of people have exposure to different tokens themselves. But did you know you can now invest in crypto through your retirement account? That's right. With I trust capital, you can buy and sell cryptocurrencies from your crypto, IRA. This means you'll get the same tax advantages as a traditional IRA. I Trust Capital has over

two dozen of the most popular cryptocurrencies to invest in, and unlike the stock market, you can buy and sell 24 hours a day if you want. The I Trust Capital platform is easy to use, and it only takes a few minutes to create your account. Setting up an IRA is free, and ITrust fees are super low, free monthly accounts, and a 1% fee for crypto transaction. So, here's your call to action. Visititrust.competal to start investing today. That's I trust. Dot Capital slash TWIST. Quick disclosure,

taxes and conditions may apply, fees apply, and cryptocurrencies are a speculative investment with the risk of loss. I trust Capital Inc. does not provide legal investment or tax advice, consult with a qualified legal investment

or tax professional. Speaking of trading, Robin Hood has announced that it will extend its equities trading window by four hours now ranging unless of course

there's some game stop situation happening. Ha ha ha ha. Robin Hood has announced it will extend its equities training window by four hours

now ranging from 7 a.m. to 8 p.m. Eastern, which brings them in line with offerings from rival brokers and Fidelity.

Charles Schwab, interactive brokers and fidelity. They cited customer demand for extended hours trading and want to eventually reach 24-7

trading. Fantastic. Yeah. I think it's going to be great when people could participate in the market. 24 hours a day and have panic attacks on Saturday evenings.

No, I think, you know, it will make for a more fluid market. It'll probably create some volatility, but I'm not an expert on markets, so I don't know. We have crypto's big rallying cry as the markets are 24 hours, so you don't have these weird holiday weekends where, you know, something terrible happens and people have to wonder, oh my God, for the next 36 hours. So you will remove those What happens Monday You know, when the market opens moments

Because it will kind of be baked in because it's 24 hours a day. Which is really, yeah. I mean, this is the kind of thing that solve that takes a big step toward solving the things that crypto says it can solve, right? Which is like, why are you closed on weekends? Seriously?

I make a transaction, a digital transaction. It's all digital. I upload a picture of a deposit and it's all digital and whatever, but I still don't get the money for four days because like there's a holiday. it's digital. You know who the big winner here is? Who?

CNBC. Yeah. Now CNBC gets to open up their trading window, Mark, you know? And then you know who the big loser is in this? Sleep. Sleep, exactly. Oh my Lord. Jesus Christ.

It's hard enough to look at my stock portfolio over the last year. You don't want to know. Six months. You want to be able to go to bed. It's like how in the old days kids could come home and like and their friends couldn't get in touch with them and yell at them. But now they can't. on messaging. Yeah, the casino was never closed.

The casino never closes now. So we're just going to have to get it. We're going to have to adjust to this. But I'm still long Robin Hood. Obviously, I was an investor before they launched. I still have a ton of shares in the company and I plan on holding them for the next decade because they have over 22 million net cumulative funded accounts as of their last quarterly report.

And despite the fact that there was a lot of stock trading and weird stuff, I think more participation by people in the market at younger ages is a good thing. as long as there's some rules of the road, you know, like obviously giving people who are young margin. You have to think about how much margin they should have and quickly funding accounts. You have to think about what's reasonable there.

And I think the firm is, I don't speak for Robin Hood. I'm a minor, minor, minor shareholder now in the grand scheme of things. But, you know, there is, we just talked about friction in previous stories and rules of the road. You want to get people onboarded quickly.

You want to let them trade. You also want to have safeguards. So people don't trade. beyond their limit. I am the type of person who feels people should be able to gamble or reasonably participate in equities, reasonably participate in gambling and learn how to be an adult and manage their own money. So net net net, net, I feel like this is all good. And I think, you know, crypto shows that people will make bets on insanely speculative things with no regulation. So at least if you're betting in stocks, they have to reach the basic benchmark of what it means to have a

publicly traded equity as opposed to a coin, which means somebody distributed them and created a pump and dump room. I also just feel like the more this exists at the consumer level, the more it'll push for this kind of basic education, whether it comes from school or YouTube, I mean, this is, I'm sorry, like, they should teach this in schools. Like, schools should have curriculum around understanding your finances and how financial markets work. The fact that, like, a minority of Americans participate in the stock market other than their 401k is appalling. That's a appalling. They are public markets by definition. So anything that democratizes that for people and incentivizes education, great. My son's got like a little fractional trading account on Fidelity.

He's so proud of his little portfolio. He's always talking about what he's going to, like, that I think is going to be, I'm not going to say it's more valuable than his biology class. I'm just saying, yeah, it's useful. It would be amazing if every kid in America, we talked about like the freedom dividend, giving everybody when they're born $2,000 worth of equities locked in an account. And then when they hit whatever, 25 years old, they can trade the account maybe once a year or something, rebalance it or maybe even actively trade it, but they can't take money out, but maybe they can take a little out for college. And then it stays until they retire.

So then every American would, 100% of Americans would have equity participation. Here's another idea. You go to public school, and on the first day of school, they, you know, whatever, fifth, sixth, seventh grade, they give you $50 worth of equities in a Robin Hood account that you can't trade however you want, but you can't take the money out. And you trade it however you want. And every year we put another 50 in for 10 years of school. You have $500. And when you graduate, it goes into your college account, up or down or zero. Yep. And so it's basically every student gets $500 when they're a young adult to bet, and then it goes for their college fund or it goes into their retirement fund.

They can't take it out. It's just for a fund to bet. Can you imagine what would be happening in fifth, sixth, seventh grade where kids were, you know, taking out, I don't want to say Robin Hood, but taking out, you know, whatever account they chose to put it in, E trade, Robin Hood, whatever. Man, it would make all these kids be sitting around saying, how do equities work? Right. And it would cost $50 per student. What do we spend on these goddamn textbooks?

And also, how do businesses work, right? Like, if they would literally potentially be learning business fundamentals at the same time, the ones who were careful and wanted to understand, then you have a generation that's building better businesses. Like, it's just a, that's, you know, that's how you. invest not only in their actual individual futures, but in creating people and a whole collection of kids who understand how the economy works, that can only be good for your economy. Well, that's why with Founder University, this brand that we're creating Founder.

That university 12-week course, $700 to go for 12 weeks. If you make it through the 12 weeks, you get the $700 back. So it's free. We do that to help society and founders. I want to do Founder University High School Edition and just allow 15 to 20 or 15 to a 17-year-old. join and just run them through the exact same course. Yes. Squarespace is the platform where you can build or sell anything. You all know Squarespace. It's the best. We love them here at launch and we've used them for a bunch of different projects. Here are three awesome Squarespace features that all

founders will absolutely love. Number one, e-commerce. Squarespace has the tools you need to get your business off the ground, including beautiful templates, inventory management APIs, advanced analytics, and a super simple checkout process. Plus they've got mobile optimization. All websites are optimized for mobile right out of the box. The content automatically adjusts so your site looks great on any device. And Squarespace now has member areas. If you want to generate revenue through exclusive members-only content,

well, Squarespace is now the place to do that. Like if you want to sell a subscription to your cooking classes and recipes, maybe you're doing piano tutorials, the possibilities are absolutely endless. And this can be done on Squarespace's easy to use platform. So if you don't want to give the rate to all those other platforms, build it yourself on Squarespace. Here's a very quick call to action, squarespace.com slash twist for a free trial.

And when you're ready to purchase, use that offer code twist to save 10% off your first purchase of a website or domain. All right. Let's do our startup of the day. Subject.com, formerly known as Emily Learning, is an accredited. Emil.

Emil. Emil? Emil, no accent in Cloud. Is an accredited learning platform offering high school level education, nice rebranding. Subject.com is like a $500,000 domain name for those of you who are wondering.

Anytime it's in the dictionary, you can add a zero to it. Subject.com currently has 65 courses, including 29 plus core courses like algebra, Spanish, year's history, 21 advanced placement courses, calculus biology physics, 15 electives.

Students can access material for just nine, 59 a month or $69.99 a year selling a pitchman. To me, this is great when you look at what textbooks cost. I really wish this was more open source and free. And then they charge for paper. In other words, anybody could access it for free. But then if you wanted to take a certification where you proved you learned it,

then you pay the, you know, 10 bucks a month or something. But whatever, it's such a de minimis amount of money. Per month, it's less than the average minimum wage in the country. So I always look at that. If something costs less than one hour of work or two or three, then it's probably easily affordable by everybody. And so what do you think? I mean, I love this.

I was actually doing a little research to try to see because I feel like I had heard some chatter about the ed tech startup ecosystem. It was obviously the hot thing. And I'm trying to figure out sort of where it sits now. There's been a lot of investment. But I do think, and actually one of the NOTIs sort of, you didn't seal my line because I hadn't said it. but database said what I've been thinking for a long time,

which is like we are so, we're so proto matrix right now. We're like all almost neo. Just like, chunk, jack in, learn whatever you want. And I feel like more opportunities for that is incredibly valuable.

And I like the fact that this also includes credentialing. So that you do come away with some sort of a certificate that says, I completed this thing. There is value in it. I did this work. You can, you know, believe that I have gotten this education.

which is frankly no different from your little like fifth grade graduation certificate or your diploma at this point. And it's a really well designed looking website. I don't know who runs it, but they have like, it looks like really charismatic teachers for each of these and you enroll and you can take any of these courses. And, you know, like any of any disrupt education. It's like the only thing that came out of the pandemic undisrupted. And I like still wish that my school had a high school had a high school. hybrid option so that we could all go and work from someplace for a week or so that, you know, I mean, I think the idea of innovating on education in this way is not happening

in schools, but it is starting to happen on these edges and with these ed tech and, you know, I'm not advocating a wholesale. Like, I love my teachers. Don't get me wrong. But I think there's a lot of value in being pushed in this direction. More competition means better results. And the biggest problem in education today is no competition. And the teachers unions and, you know, incumbents, whether you're a pro union or not, what they've basically done is they've created a cartel where you cannot compete with them. And what we need to have is competition. Charter schools, homeschools, hybrid model, online model. Just let a thousand flowers bloom, let there be competition, and let the best solution win. And sometimes the best solution

for one student will be going to a classroom, sitting for six, seven hours, and be the factory farming model that we all went through. And for other kids, it might be, I don't know, they come in for, you know, a week and then they have three weeks on their own because they're self-led, or for some people it might be tutoring, it might be homeschool. Let competition happen. Yeah. And, you know, I was always like very reticent to, you know, I really understood the arguments against vouchers when I heard it. And for a period of of my life, I was like, yeah, I mean, I'm a product of the public school system up until eighth grade when I got into too many fights. And then they put me in private school. It's a separate story. Um, public school doesn't work for everyone. Doesn't work for everyone. But anyway, I was like, yeah, I don't want all the smart parents or the parents who have means taking the 10K voucher, putting them in private school and then who's left in public school. It would have been me, right? Uh, and it would have been like, okay, now it's spiraling downhill. It's already spiraling downhill. Yeah. So now I'm pro vouchers. and now that I have kids and I've seen it up close and personal

and I realize there is no competition or not enough, put it this way. If five parents who were, let's say, not from affluent households, so lower income households, got a $15,000, which is what we spent on each student, I think in California's $18,000. Imagine five people, you know, in the Bay area. Pick a community that's lower income. Five people times 18.

Okay, we're talking about close to, a hundred grand, right? You're talking about 80 grand, 90 grand, whatever it wants it being. You're telling me, make it six kids, so it's just over 100. You're telling me those six parents couldn't get together, pay a teacher $80,000 or $90,000 to homeschool those five or six kids, move it from one house to the other and the parents could be involved to whatever level. Some might be involved one hour a month, others might be 10, and you could divvy it up and make a budget and that wouldn't be a better education possibly than going to an overcrowded public school. A super under-resourced, yeah. And believe me, I'm aware, I'm highly aware as a longtime school

auction mom. I ran it for three years. And our school would raise, and we would be on the hook for raising $150,000 from an auction. So I am very aware of how under-resourced public schools are. And I don't, you know, the big argument, of course, is you don't want to drive them into the death spiral by saying, oh, these other options exist. We don't have to fund them. No. But also, this industry has been deeply, deeply resistant to change at the administrator level, right? Like, not just, we always want to blame the teachers union. It's not just that. But like, there needs to be innovation. And I support the matrixification of education. Well, I mean, it's in every aspect of a society where there's competition, we see increased results.

Yes. And so to pretend that education would be. immune from that in the face of, you know, lowering outcomes and increasing prices, it feels like we have created a bubble where you don't need to have performance. And then you look at the percentage of administrators to in-room classroom teachers and the fact that teachers can't be, again, this is not a jihad against teachers, but there are teachers who maybe should have been fired just like there are

developers or salespeople or firefighters or cops or in any other trade and principals and principals in any class of work there are people who should be fired whether they're making a student get ready for the real world or they're making a a mocha you know and a cappuccino yeah some people suck at those jobs and should be fired so that the money can go and somebody else who is a higher performer can get that seat and do that job. We have taken that concept out of education. Nobody gets fired for performance. And then we wonder why the performance is bad.

You have to fire sometimes people if they suck. And you have to then take that money and reward the people who are excellent and pay them more. When you take out that dynamic, whether it's an education or healthcare or housing, you get what you pay for. You paid for mediocrity.

you took out, you know, this stuff and here we go. Yeah. We strayed a little bit from our startup of the day, but on the plus side, our startup of the day sounds great. It sounds like, just more of that. More of that. Please. More of that, please. Yep.

And I think, you know, what we're now going to get to is motivation and people knowing that this opportunity exists. And that's the next bridge. And that's what I'm really looking for a startup in is, since all the materials are out there, we are investors in Brilliant.org. I highly recommend everybody check that out. It's also like 100 bucks a year.

We're also investors in Dexter Learning, which does remote schools. So we have a couple of bets in this space. We also have comm and steasy, musician for music. We like these consumer subscription education plays that sell directly. But there's one piece that's missing

that I'm hoping somebody in the entrepreneurial community will take a look at, which is the motivation to get on this track. Because every time you talk about these things, there is a group of people who doesn't know this exists and they don't know how it leads to a career.

You know what I'm saying? So let's say you're the kid in Brooklyn, you know, like me, you don't have rich parents, you don't know what bankers do or VCs do. You've never met a banker or a VC. How does Jason Calacanus in 6th, 7th, in eighth grade at McKinley Junior High

school getting a fights know that there is a track to become a VC. I found it through journalism, eventually it was a lot of hustle I had to do and a lot of luck. And that piece, if somebody could take the randomness that I experienced in my career and make it into not random, like how to, how do I become successful as a startup where it just took somebody who was not successful and was like, I know nothing about how to make a life. You know, I'm 12 years old. Totally. And then, then they just said, okay, go here, go here, go here, go here. And hey, we'll sit in a room with you or a chat room and help you move over there. My God, that could change everything.

So this is a great startup, but I'm still looking for more. On tomorrow's show, I just want to give a little preview. We're going to talk about, I don't know how to frame this, I need your help, Molly, but I want to train people on a trend they don't know about. So catch me up on Webtoons tomorrow. So for Wednesday show, we're going to do Catch Me Up on Webtoons. If you don't know, Pocoma is a Japanese webtoon, you know, app that's part of, you know, a big trend that's going on in Asia. And they've achieved monthly revenues of close to $100 million.

This is an incredible trend. And tomorrow we're going to unpack it for all of you. Thanks so much for tuning in today. My final note on the day is, you know, on that, the smack we talked about and this nonsense. There's a lot more important things going on in the world. and if somebody is suffering from having a mental breakdown, which is I think what we witnessed. I don't know where you wound up with all this,

but I just like, this person has obviously mental issues that are acute. That doesn't mean I forgive anything they say, but I hope that we can get back to the bigger issues in the world, climate change, education, wars, dictatorships, entrepreneurship, hope. And let's forget about stupid shit like a person who, you know, he's super entitled, perhaps suffering from mental illness,

acting out. That's my closing note on it. I don't know if you have feelings on it, but let's get back to work on important. That's perfect. Yep. I almost feel guilty that we indulged ourselves talking about it so much,

but you know, I thought about that too, and I don't think that we should apologize for that because frankly, what I think it was, all of that is true. And it was, what it really was,

is top to bottom, a sad story. It's just a sad, it was a sad situation. Yeah. And it incorporated so many sad things about society, and that's true. And also, everything has been so hard that people needed a diversion. We needed a

diversion. Yes. Like, we just needed it. And I, and it is awful to say that we use that sad situation as a diversion, but we did because we needed to talk about something else for a minute, because it is hard to live under the shadow of like recurring pandemic, thermonuclear war, you know, pending recession. Like, it's hard. So that's why celebrity gossip exists. And, and, how do you not talk about it because it's so far off on the simulation expectation that something like that would ever occur? It's never occurred. So we all watched it. We all watched it. You know, but as one of our Noddy gang is saying, you know, maybe talk about domestic violence. Yeah. We talk about violence writ large. Maybe talk about mental health. Yeah. Because I think that's what we saw was an acute mental health issue. You know, who knows what the background on it is. But, you know, if you're suffering from mental health issues, you know, you know, if you're suffering from mental health issues. You know, you know, if you're feeling anxiety, feeling violent, feeling depressed,

whatever it is, just go talk to somebody. I mean, I think that's the end message. Yeah. Go talk to somebody. There's no shame in going and talking to somebody about how you feel.

It will release a lot of anxiety and you can get help out there. So if you're feeling desperate, go get help. Period, full stop. Because what we saw yesterday, I think, is a mental health crisis. and I hope that the person involved gets professional help

and figures out why they snapped. So they don't do it again. If they sincerely are feeling like that didn't represent who they are, very simple way for you to do that is go talk to some professional help. Then that person needs to talk to somebody two or three times a week for a couple of months and figure out, okay, what happened here? And how do I put it behind me? Because celebrities do live under a microscope.

They do have an extraordinary amount of pressure on them. And again, I don't want to forgive what happened, but there's something going on there that's deeper than what we saw. Yes. Couldn't agree more. All right. On that note, go ahead and give us a follow on YouTube.com this weekend. So you can see the live program every day at 10 a.m. Molly and I talk live for an hour or two.

And you can join us there. And we have a lot of fun. And you just hit the subscribe button. And next to it is a bell. Everybody always asks, hey, how can we help you with the show? if you have great ideas for the show and you want to be a producer, an associate producer, just send your ideas to producers at This Week in Startups.com. Tell us what we could do better, what we could do. That's more helpful. Check off Founder.com. University. Next cohort's going to start

in a couple of months. And if you want to invest in startups with Molly and I, the syndicate.com for our general deal flow. And the syndicate.com slash climate, if you're an accredited investor and would like to read deal memos that Molly's going to write about climate, we have our first deal coming soon. The syndicate.com slash climate. Follow Mollywood, Twitter.com slash Mollywood. You'll follow your boy, Jason, Twitter.com slash Jason. If you want to see me skiing,

about 40 days in this year. I think I might take up a surfing. I was going to say, what are you going to do when it's not snowy? I'm thinking about the, what's the one we have a board and that a parachute? Oh, a parachute? Like a boat pulls you?

No, you pull your... Like kiteboarding or whatever? I'm thinking about kiteboarding out in the bed. Damn. You want to go kiteboarding? My boyfriend is a long, long, long time wind surfer. So he'll be able to give you some tips on that kind of boarding and where to go in the bay. Every time we fly over, he's like, there, there.

See you next time, everybody. Bye, bye, bye. Hey, everyone. Producer Nick here. I want to tell you about the SaaS Syndicate. If you're a founder of a SaaS company with a product and market, our investment team wants to talk to you. Head over to the syndicate.com slash SaaS, S-A-A-S to apply to raise from the SaaS syndicate. And you can join Jason's syndicate of over 9,000 accredited.

investors at the syndicate.com. Producer Justin here, know a cool startup? Check out openscouting.com where anyone can refer a startup to our investment team here at launch. Even if you don't know the founder, if you're the first to flag a company for us

and we decide to invest, you'll get 5K in cash or 10% of our carry. Hey everybody, producer Rachel here. Are you an early stage startup that has product and market, some traction, and are looking to raise at least $500,000? Apply today to remote demo day

for your chance to pitch to over 9,000 investors in Jason's syndicate. Submit your application at Remote Demoday.com. Our next event is on April 27th. And if you want to learn how to invest in startups from the world's greatest angel investor, and no, we're not talking about Chris Saka, then head to Angel.combe to apply. The four-hour workshop costs $300 and all proceeds are donated to charity. To date, we've donated over $175,000 to various charities,

and you can see the full list at angel.university slash charity.