This Week in Startups - Best of This Week in Startups: Week of August 31st, 2020

Episode Date: September 5, 2020

Watch E1103 featuring Fast's Domm Holland: https://rb.gy/wgw3mo Watch E1104 featuring Degreed's David Blake: https://rb.gy/nuj9we Watch E1105 featuring foreign policy expert Jacob Helberg: https://rb.gy/hvvzxf Follow Jason: https://linktr.ee/calacanis

And on the podcast today is a founder named Dom. You can follow him on the Twitter at D-O-M-M. He seems to be highly active on the Twitter for his company. Fast, but not fast.com, because if you type in fast.com, you'll get a speed test, which I'd use. It's a pretty good speed test. I think it's sponsored by Netflix, and we'll tell you how fast your computer is going. But he does fast.com. And the company's raised a bunch of money, and they're working in what people,

would categorize as the checkout space, you know, critical part of any e-commerce business is getting people not only to discover products, but eventually put them in a shopping cart and eventually get them to check out as fast as possible. Is it over for retail? Is it going to be, what's the footprint going to be like in five years in your mind? I absolutely believe it, believe it is, you know, or like drastically different. And not just in SF all around the world. I can tell you in Australia, you know, there was, you know, the, the, the, the, the average store was closing down, you know, over the last 10 years, you know, over the last few years, if you have a look, we've had major retail chains, major, you know, going bankrupt and being put

into liquidation, left, right and center over the last few years. And, you know, the trend was here well before COVID. COVID is just, like, stuck the knife in and screwed it. I, it is not coming back the same degree. There is always going to be a level of, like, I think retail is just going to become the boutique, you know, the boutique offering, right? But it's, it's a lot of, but it's, it is absolutely not going to be the mainstay. I think that the adoption of e-commerce is only going to increase, and like dramatically even from here. And, yeah, retail is just going to be radically different.

Commercial real estate is going to be radically different. Is this ultimately better for consumers or worse for consumers? Let's take the consumer first. Well, I'll tell you what, I just bought, we moved into a house recently. I just bought a grill, right? We call on barbecues at Australia, but it grills here. And I was desperate to see a grill in a store. Like websites have not worked out how to sell barbecues or grills.

There was, you know, not enough photos of the burners, you know, like the experience is kind of terrible. But there was no stores that had stock, no stores open that sold, you know, sold barbecues or grills. And the ones that were had just no stock. And so it was a pretty bad experience. Buying it online, I had to just really kind of wing it and go off reviews and, you know, whatever else.

I actually quite like the grill, but that experience wasn't great. So the reality is, and this is, and this is, why, you know, Fast has had such, you know, really large adoption and there's a lot of excitement is COVID's been a forcing function for business to adopt e-commerce at a much faster rate than they were, especially enterprise. And so right now, the e-commerce experience for a lot of consumers isn't as good as it needs to be, right? And it's kind of substandard. And that's why we're really excited to be offering a product that actually makes the e-commerce experience, fantastic. And enterprise is, you know, we've seen some of the biggest brands in the world engages already,

pre-launch and getting ready to... Yeah, but isn't your experience illustrative of the fact that it might have been in your head that you needed to go visit a store because products are so good right now, product for review vectors are so good, you could go to the wire cutter now owned by the New York Times, you can go to Consumer Reports, you could look at Amazon's ratings of them, see which ones is the editor's choice over there, and just pick whatever the consensus is, and that's actually going to be a better experience than going and playing with it. Yeah, so I, and I think that in 90% of cases at the moment, that's typically true.

And then the 10%, yeah, but when they're in the 10% it's not, you just return it. And it, well, the 10% is getting better is, is my point is that like enterprise is now forcing function going, well, we're going to have to just get better at this because the only way that people are buying grills now is online. So maybe take better photos and, and, you know, go deeper on descriptions. That's true, too. It's like they don't even have the 360 view. Sometimes they don't even know what people want to know. This is one of the things I think is brilliant about Amazon is, I don't know if you've had this experience where you go down and you just look at the questions.

I just go down and look at the questions people are asking and I expand it. I'm just curious what people who are making a decision are asking. Does it come with that or is? Search the questions. You know, like it's always like what's the width, right? I had a very, you know, small width that I could fit this thing in. And of course, go to questions, search width. Like that's, you know, again, Amazon's got a lot of data and they've got a lot of scale and

they've worked out a lot of this stuff. And so, you know, it's the same thing is that other enterprise now are going to go, well, we just need all of these pieces in our own e-commerce experience. And that's what we offer. Education is one of those problems that we can solve right now. And our guest today is trying to do just that. Welcome to the program, David Blake, from degreid.com, D-E-G-R-E-E-D-com, correct? Correct.

That's it. Education, higher education, specifically, is, a complete rip-off and totally unnecessary in today's workforce? Yes or no? For more people than not. Okay. So for the majority of people, I just did that as a test to see how candid you would be on the podcast. And you passed the test. It's a hard thing to say, but it is the absolute reality that you or I, do. Do you have kids, may ask? I do. I've got three. Okay, I have three as well. And my oldest is 10. Your oldest is 12. Okay, so we will be dealing with this issue in your case in just three or four years and I'll be dealing with it in six or seven.

And we are people of means, but even we would question the value of going 250K into debt or spending 250K on a college degree, correct? Correct. How did it all go so wrong? So the heart of the issue is the credential. I mean, if you want to take a broad brush stroke and sort of understand what's actually going. on, it's the credential. We've seen education be democratized. I mean, right now available to every listener on this program, today for free is an Ivy League education. Between edX and the MOOC platforms and OER resources, if you are dedicated and hardworking, you can go get yourself an Ivy League

education today for free. And yet that hasn't brought down the price that these institutions are charging. And, you know, it's interesting as we come to COVID, it's a good revelation of what is going on. But you have to ask, where is the value held? And a majority of the value is held in the actual credential. And there's value held in other parts. And I think that's what people are seeing with COVID, which is you start to pull apart the pieces and is a big bundle. people were willing to pay $200,000 for it, but you start pulling the pieces apart and saying, is this piece worth what to me? And one of the biggest revelations is that what you pay for in education is not the learning. The learning is available today for free online. What you are paying

for are other things primarily the credential, but people are just waking up to that because all of a sudden, they're on a Zoom call with a professor and 30 other people and being charged $16,000 for the pleasure. What's the outcome you're selling with this software platform? Yeah, the genesis and the vision was tell me about your education. And when people go skip 10, 15, 20 years of their lives to answer with university, it's a reflection of this need and opportunity in the market. And our vision was to create a model of lifelong learning where people could answer for all of their real-time education and skills, all of their academics, all of their personal and formal learning, all of their professional training. And that's what we built. We started

in circa 2012 sort of, you know, Fitbit and quantified self was a big theme. So that that sort of theme of tracking and reflecting was a big one. You know, and, you know, where it's taken us is this currency, as we look in the rearview mirror, the currency that we transacted on was the college degree, but as we look forward, the needs of the workplace, the demand for half-life of skills is coming down. That means we have to learn more and more. The skills gap is growing. The war for skilled talent remains even amongst COVID unemployment. We're in an environment where there's a high level of need for particular skills, and that's created a pressure and an opportunity.

And the future of work, the currency will be skills. It increasingly is. We've seen it with Google. We've seen it from the- Google just made an announcement, right? They just made this announcement. Google announces 100,000 scholarships for online certificates in data analytics project management and UX.

Google basically is saying, hey, you know, what colleges are offering, we're just going to do ourselves, correct? They're looking to just find talented people and teach them what they need and, you know, college degree, credential be damned. We're now the credentialer. If you pass one of those certificates, they waive sort of any degree requirement. So I want to introduce you to Jacob Helfberg. And Jacob, I know that you're a senior advisor in cyber policy at the Cyber Policy Center at Stanford University. But if you could welcome to the program number one, you heard,

my intro and my concerns about human rights. If you could give me just in the audience, a brief overview of what you do and what you know about the relationship with China. Sure. So I'm currently, as you said, a senior advisor at the Cyber Policy Center's program on geopolitics and technology where I'm currently investigating issues at the nexus of technology and geopolitics and national security. I'm currently writing a forthcoming book that will be published next year by Simon & Schuster, and I've been working on publishing a few pieces that on issues that I think are salient to the country's national security in the moment that we find ourselves in. Okay. So when one looks at the relationship with China today, it's certainly

becoming more and more adversarial. I wanted to start with maybe how we got here, because I am not a student of history, but I was told, that as I was growing up, that globalization was a good thing, and that when countries did business together, this reduced the ability for those countries to go to war, and it increased the chances that democracy and human rights would increase around the world and with those different partners. And when we look at the United States engaging China, net, net, over these last 20 or 30 years, has this been a successful endeavor for America and for democracy for the people of China? Well, Jason, as you're accurately pointing out, the big picture that I think provides a lot of the framing for what we're living through today is that we are in the early stages of a new kind of a cold war between the United States and China.

and unfortunately in the United States, we've had a tendency to forget that China has as much agency as we do in the U.S.-China relationship. In other words, they're not a non-active player. We've known from leaked CCP documents that date back to 2013 that Xi Jinping had every intention to avoid being the Mikhail of Gorbachev of China. He saw the USSR's attempts to liberalize as the key reason for the collapse of the Soviet Union, and in fact, In January of 2013, he delivered a speech saying as much to members of the Central Committee. So since then, Xi has also outlined a lot of different plans that paint a naked ambition to dominate the world's technology companies, which has led several prominent national security professionals, including the current head of the FBI, to conclude that China's long-term

aim isn't to be one of several superpowers, but it's to be the world's only superpower. and that raises some serious questions for democracies. So the writing's been on the wall for some time, and China has backed up a lot of their rhetoric with action aggressively engaging in what the U.S. military calls gray zone conflict, which typically refers to attacks on an adversary that fall just short of the conventional threshold of war. We call them gray zone because these tactics are often said to be in the murky gray zone

between war and peace. And just to cite a few examples, by some accounts, up to 90% of the world's fentanyl compounds are made in China and are all for export, the vast majority of which go to the United States, where 35,000 Americans die from fentanyl overdoses every single year. China's unfair trade practices has produced a bilateral trade deficit in goods that's the size of a G20 economy, just to put things in perspective. they've blocked nearly every American content platform, including Facebook, Twitter, GitHub, Google, YouTube, Reddit, just to name a few.

The level of IP theft that they've engaged in has been referred to by the former head of cybercom as the greatest transfer of wealth in human history. And the FBI announced that they now open a China-related investigation every 10 hours, which paints color on the scope of China's corporate espionage operations in the United States, they're actively working to dislocate the dollar status as the world's reserve currency through bilateral currency swap agreements with a number of African countries as well as Russia, as well as through new institutional

mechanisms like the Asian Infrastructure and Investment Bank. And of course, more recently, they've sought to export their model of authoritarianism around the world. So piece on those terms, Jason, and a piece that's predicated on the United States abdicating so many of its core interests is, as George Orwell once described, it's a piece that's not really a piece. And that's why in the last three years or so, we've seen policymakers in the United States increasingly awakened to the comprehensive nature of the threat posed by the Chinese Communist Party. When we look at this, it is a bipartisan issue now. It does not seem like it's just Republicans who are concerned about that here in the United States. It's the Democrats. And what seems to

have happened in my estimation is we had an interesting run-up over the last year. One of them was Darrell Mori from the Rockets, the Houston Rockets, the greatest general manager of this generation, I think anybody would say in what he's done with the Houston Rockets, just tweeting, you know, I support the people of Hong Kong. It was just a GIF or, you know, an image on Twitter. And the entire NBA got into a frenzy and essentially attacked him you know superstars up and down

and then we had Hong Kong which I had just visited just two years ago when my book came out had a wonderful time and how we show my friend where the protest used to be and then I left and whatever a couple months later we started to see the protest and we started to see the law

changed there and you could start to take people from Hong Kong and then put them trial in mainland China. And then lo and behold, the pandemic happens and we realize PP, you know, this PPPs and masks and everything, or PPE rather, and certain medicines, putting aside fentanyl, the drug, certain pharmaceutical medicines that we need, maybe we're over, we're at too much risk in terms of our dependency on China. So these three things seem to all happen within 12-month period.

Is that what kind of shock the system to bringing everybody to this collective awareness now? The reason that I think this digital geopolitical struggle has escalated dramatically, really over the last decade, and as you know, there's been a saying that the coronavirus has only accelerated trends that were already underway before the coronavirus, is that over the last decade, Now, more than ever, the internet at both the software level and the hardware level is the platform where we fulfill the most critical functions of our daily lives. We have personal and intimate conversations with close ones. We conduct sensitive, confidential, professional work.

We express our views on things big and small. So the potential to leverage these information platforms to project political power has increased substantially. Fundamentally, I think it's important to appreciate what's at stake. The contest that we're seeing between the U.S. and China is a choice between competing visions of world order. And as Tim Cook pointed out in a speech at the EU Parliament, it's about choosing what kind of world we want to live in. Do we want to live in a world where the internet is decentralized, free, and empowers ordinary people? Or do we want to live in a world where the internet is centralized, repressive and essentially a government tool of political control.

That is fundamentally the choice we have before us today. And technology companies are caught in the crosshairs of those two profoundly contradictory visions of world order. And ultimately, as I wrote a few weeks ago, I think it's only a matter of time before straddling both sides of the great firewall becomes untenable. And tech companies are eventually forced to pick aside.