This Week in Startups - Best of This Week in Startups: August 10th-August 14th, 2020

Episode Date: August 15, 2020

E1094 featuring Thrasio's Josh Silberstein: https://rb.gy/otvxnh E1095 featuring Roofstock's Gary Beasley: https://rb.gy/3sdgon E1096 featuring Overcast's Marco Arment & Oxford Road's Dan Granger: https://rb.gy/yqlfwh Follow Jason: https://linktr.ee/calacanis

Today on the program, we have a founder who seems to have found a business in that area by buying other Amazon businesses that break out. His name is Josh Soberstein, and he is with a company called Thrasio. All right, Josh, let me, you know, last week I saw this Jeff Bezos. He gave an amazing opening statement talking about his, um, adopt, his, his birth mother, his adopted father, or the father who adopted him and just his rags to Rich's story. Uh, and, He talked about how, hey, we have this third-party ecosystem and people internally didn't want us to create it. What did you think overall, because of his performance, because they are such a small amount of overall commerce. There are a significant amount of e-commerce, but they seem to be the most open and level playing field of any tech giant.

So how did you, when you saw his performance, grade it? I'm not sure the word performance is the word I'd use. But when I think about Amazon, what I think is, first of all, here's a company that has opened up a platform that has made tens of thousands of people millionaires and have given hundreds of thousands of people their livelihood. And for the most part, it's been a pretty fair shake. It's not perfect, but it's pretty darn good. If you go, you sell a good product, you get a good result. In the last two years, they haven't raised fees. I think they raised shipping fees 2% this year or 3%.

They haven't raised their referral fees, which is a bigger profit center for them. They actually lowered them the year before last. So they've built this ecosystem, which has made a lot of people, has put a lot of people in a position to put themselves through college or pay the rent or whatever it happens to be. And instead of there being sort of discussion about how what they've created It is perhaps the greatest entrepreneurial wealth platform in history. There's all this talk of, you know, the fact that one percent of sales are Amazon house products or, you know, something might be inequitable in it.

And, you know, it honestly, it makes me angry because, you know, when you think about like, think about, and I don't know what your experience has been like for the last 90 days, but I can tell you, you know, my house is littered with Amazon packages. Oh, my God. It looks like my garage looks like it's a UPS depot. I mean, it's ridiculous. All right. So you've got somebody somewhere managing a nationwide set of distribution centers where people potentially get sick with people who have real families, real causes, real lives. And somehow or other, in the midst of a world in which everybody else is shutting down,

you're staying open and you're delivering products to every family in America. Everybody in America is getting some hard, large percentage of what they need from Amazon. Right. And what you don't see on the front pages of the newspapers is thank God for Amazon. Yeah. Thank you capitalism is what we should be saying. We're sympathetic on this. We are so cynical now that we look at Jeff Bezos's net worth and forget about the net contribution he's made to entrepreneurship. And all of those millionaires you're talking about and all that opportunity, he could at the snap of his fingers turn off the third party program or have never approved it. We should be thanking him and for what he's built. and it drives prices lower, right? You have the most at stake, and you appreciate him enough to build a giant business on top of his platform. Look, I mean, I'm obviously thankful for what Amazon has done because it's enabled us to do what we've done. But even before that, you know, I was a consumer.

You know, you buy something on Amazon, it costs less than it would have cost you else. There was a study somewhere I can't remember. I think it was one of the feds that said that, you know, maybe 100 or 100. 20 basis points of inflation were taken away because of Amazon's pricing. Think about that. I mean, everybody in the United States pay 1% less for everything they buy for 10 years. It's huge. It's a difference.

Well, I mean, and this is why we can't understand why inflation doesn't arrive on American shores. And I think you and I are of similar ages. I mean, in the 80s, you could buy a pair of jeans for 20, 30 bucks. And now here we are in 2020. And you can buy a pair of jeans for 20 bucks. Like what has happened in the world? I mean,

while education and housing and healthcare, all of them highly regulated have gone, you know, up extraordinary percentages to the point of which nobody can afford college, healthcare, or a home, then you look at goods and services. They're the only thing that's getting cheaper.

I mean, what is a flat panel cost today? Flat panel TV is like $200. And it used to be $2,000. In your pocket, you're carrying a computer in your pocket that's more powerful than anything existed five years ago. we're going to talk to Gary Beasley, who's from Roof Stock, and he's got an interesting take on housing, and it's very interesting to have you here on the podcast, Gary, because we're taping this

during a pandemic, and I was listening to a podcast you did on some niche real estate podcast, and you were talking in November of 2019 about, you know, there could be a downturn at some point, and, you know, if that happens, here's what's, here's my views on the world. So welcome to the podcast. And my first question is, are we in an acute housing downturn right now? It's July, end of July 2020. When we're taping this, this will come out in August 2020. Not yet. I think what we're seeing is almost the opposite. It's defined gravity a little bit, Jason. It's a little bit like the stock market, which today seems a little bit disconnected to the real economy. what you're seeing in housing is for the most part, especially if you get out of the urban areas and the high end, prices have really held up quite well. You're still seeing price increases, very low inventory.

And so that shortage of supply and the low interest rates are really contributing to, I think, still more of a bull housing market. You know, more like three and a half, four months of supply, not six, which might be more of an equilibrium. So I would say we're going to have to wait and see how things transpire over the next six to 12 months, because I think there are some offsetting effects that will be at play and we'll see which dominate. So if one of your best friends, your best friend, not even one of them, your absolute best friend came to and said, hey, I got money. I want to invest in, you know, a property. What are the top three cities I should look at in terms of appreciation? I'm looking for like a 10, 20-year appreciation window. I'm 40 and I want to get this money out when I'm 60 and my kids go to school.

What three cities would you tell them might have the chances of the most appreciation? Yeah, that's a tricky one. You know, I personally am very bullish on Austin for lots of reasons. I think you continue to see a lot of in-migration there. And I think there's a lot to like about Phoenix as well. over the long term, even though there is an awful lot of land there. That's the one thing I do worry about a little bit with Phoenix. But there's a pretty diversified job base there as well.

And then, you know, I think you think about, I also personally am bullish on Atlanta long term. Because I think it's when you look at the southeast and a major kind of employment Hub that has high quality life, great airlifts, still very low cost. I think those are all interesting cities and those are all pretty popular today with investors, I think, for good reason. But I think all good long-term plays. Awesome. Yeah, Austin would have been on my list for sure, but not Atlanta. I wasn't aware of that. I know people say Nashville and Florida. Nashville's great too. I love Nashville. It's run up quite a bit. So the,

The yields are definitely lower than you'd see in an Atlanta, but I am bullish on Nashville as well. That would be in my top probably five. I'm really excited about today's podcast because I've got two of the smartest people in podcasting, and one of them makes the greatest podcasting app, in my opinion. His name is Marco Arment, and he created the Overcast podcasting app. Also on the program today is Dan Granger, and he runs a firm, called Oxford Road. Now, if you're a civilian podcast listener, you may not know what that is. And so I brought both of these gentlemen on the podcast, one from the standard side and the consumer

consumption side and one from the business side in terms of advertising to talk about the state of podcasting in 2020. Marco, when you saw the announcement that Joe Rogan had, has his show, I believe, licensed, not bought for what looks like, man, a $50, $100 million for some number of years. I don't think all the details are out. You were like, F.R.B. this, I think, on Twitter was your quote. Explain why that is so problematic to you and to the industry. The main thing is that podcasting has gotten to where it is and is as great and awesome as it is for all the reasons anybody who's ever heard of RSS should already be familiar

with. It's this wonderful open ecosystem with a wide variety of producers and consuming apps and this great ecosystem that isn't controlled by a single entity for the most part. You know, Apple's kind of an asterisk in certain ways, but for the most part, it's not really controlled by an individual entity. And you can compare it to something like YouTube, where if you want to make video that matters at all today, it has to be on YouTube, basically. And so that you have this one company, this one platform controlling the, by far, like the majority of this really important medium. And you look at doing stuff on the web. And if you do stuff on the web, you are really

beholden to Facebook for traffic and you're really beholden to Google for inbound search and so you had these like these couple of massive companies that control a massive part of your business and and like in the case of YouTube it's even worse than the web because you have to do all of your business on their platform as well and podcasting doesn't have that right now and it never has Apple has been the directory of choice and Apple still has the largest app to consume podcasts but they really been fairly benevolent in their ruling of podcasts. They've really taken a very light hand to it and have really embraced and empowered the open ecosystem as much as they really could.

So this one company having this massive share hasn't really been a problem for us. And then everybody who's not Apple is all kind of working in the same ecosystem for the most part. And then the difference is that Spotify did what a few other companies have tried to do before and have met with mixed success, which is to kind of create a walled garden of podcasts that tries to become the default way people listen to podcasts. And that normally wouldn't go very far, but the difference here is that with a combination of Spotify's immense existing market share people listening to music using their apps and also an immense amount of money they've put into it, Spotify has been able to not only acquire a pretty big chunk of market share pretty quickly,

although it's not as big as as most people think it is, but it is still a substantial market share. But also they've been able to now really put a pretty big push of buying exclusive content for Spotify. And this is where it becomes tricky

because if you're just trying to get listeners, then everyone's still playing on basically the same footing. Everyone's still, you know, there have been a couple of premium services before that had exclusive content, but they weren't very big. They didn't go very far. So for the most part, you know, an app like Overcast, like my app, it can compete pretty easily as well as any other app that's like OverCard.

I mean, there's hundreds of podcast apps out there. And we could all basically play the same catalog of content. And so it's this wonderful ecosystem of all this creativity and all these wonderful tools and different apps for different preferences. It's with a few exceptions, very privacy respective, very creator-friendly. it puts a lot of control in the creator's hands. To me, this is another domino to fall that for those of us that have been working in this field for a long time, you know, a decade or longer, some of us, you know, it's been getting gentrified for a while. And, you know, I think to some extent this is, this harkens back to like Howard Stern moving from terrestrial radio to Sirius or XM at the time. But I think it's

just a general trend. And this really started in 2018. You know, the shot across the bow that I saw was when I heart picked up stuff media for like 55 million. And then one by one, you keep seeing these things happen. Now, Rogan, because he's top dog, that one's getting the most headlines. But I think this is just one in a succession of many. And unfortunately, I think that it is, um, for and fortunately, I think that this is the new way that this is going to go. You know, this is Starbucks moving into the, the hipster town. And everybody goes, oh, man, it's getting so commercial. It's going to happen. It's going to ruin some things that we love about podcast. It's going to open up opportunities as well. And I think... What is the opportunity to open so? Yeah.

Potentially better listener experiences. You know, you've got real horsepower behind groups like Spotify that are coming in and can actually, you know, like how long have people been complaining about discoverability, you know, and recommendations? You know, how about navigability being able to go, you know, you can't talk to the thing right now. But we may talk about this later in our conversation here today. But, you know, think about the opportunity with connected voice and what's going to happen as that industry keeps emerging and what real players are going to be able to do to evolve the listening experience.

And they're also just going to be able to resource some programs that is really, really hard in kind of the rag tag way that most of us. have come to love the industry. So I think it's both. I think there's a good and a bad, but what you have to understand is that there's really two worlds that are starting to split off here. This place was built by venture capital-backed startups.

You know, I was at the beginning, and we launched brands like Dollar Shave Club, zip recruiter, Blue Apron, Meandis. These were companies that came in, and we put them on podcast because, frankly, they couldn't afford to do a lot else other than, you know, search. And that's why we've had all these crazy promo codes and vanity URLs for all these reasons, because these are performance marketers.

They're counting customers when they buy the ads. Now, that's not going to be what gets podcast to the next level. That's what got us here. What gets the ecosystem to the next level is when they get brand dollars. So Coors Light, which is a sponsor of our podcast now, and I'm popping open to Chris Porz Light ones in a while.