This Week in Startups - Brad Gerstner's open letter to Zuck, Meta's lack of efficiency, Divvy Homes hit piece | E1594

Episode Date: October 25, 2022

J+M cover Brad Gerstner's letter to Zuck and three-point plan to boost Meta's FCF 2x (7:04), an NFT project located at the Fyre Fest island (33:19), and a hit piece on Divvy Homes and its CEO, Adena Hefets. (39:38) (0:00) J+M tee up today's topics! (2:08) Opening banter/weekend catch-up! (7:04) Brad Gerstner published an open letter to Meta CEO Mark Zuckerberg, outlining a plan to double FCF and boost its stock price (12:11) Linode -  Apply to Linode's Rise program for up to six figures in discounts at https://linode.com/twist (13:41) Specific plans in Brad's letter, the "open-letter approach", Meta efficiency comparisons and advertiser treatment (27:16) House of Macadamias - Get 20% off at https://houseofmacadamias.com/twist by using code TWIST20 (28:32) Meta's revenue/capex vs. Google (33:19) Homeownership NFTs on the infamous Fyre Fest island! (38:08) Vanta - Get $1000 off your SOC 2 at https://vanta.com/twist (39:38) J+M go through a hit piece against Divvy Homes and Adena Hefets and describe what subtle tells indicate a hit piece (1:10:40) Jay Trading update, geopolitics, and more! FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood Subscribe to our YouTube to watch all full episodes: https://www.youtube.com/channel/UCkkhmBWfS7pILYIk0izkc3A?sub_confirmation=1

All right, everybody, welcome back. It's Monday. It's a big week. Friend of the pod, Brad Gersner, has penned an open letter. It's exploded on Wall Street today to the Meta Corporation, aka Facebook. On behalf of his fund altimeter capital, we're going to break down why he wrote this letter and what it says. Yeah, it's basically a plan for meta to cut CapEx boost free cash flow or one assumes. Alt cap is out. We'll see. And then we cover the Firefest Island back in the new. news as a home for luxury properties to be purchased with NFTs. And Fast Company is published a hit piece on Divi Holmes and the CEO, Adina Heffitz. And we'll break that down and just how you can identify when a story feels bias and it's a hit piece, which is when we kind of agree feels like. It's got the vibe. It's got the vibe. And then we just have some random musings at the end of the show. Because you know what? We miss each other on the weekend. And then when we come back together, We just want to talk about like China and the future of humanity and whether we're progressing in the right direction and the J trade portfolios.

And yeah, we just, it's like we, you know, you got to hang out. Reconnecting on Mondays. Standard Monday show. So it's going to be a great episode. Stick with us. This week in startups is brought to you by Linode. Apply to Linode's rise program for founder led early stage startups and get a $500 credit, up to $120,000 in infrastructure credit.

in year one, cloud consulting, and so much more. Apply at Linode.com slash twist. House of Macadamia's is the next big health trend. Get 20% off your first purchase at House of Macadamias.com slash twist by using code Twist 20 and Vanta. Compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a sock to report fast. Twist listeners can get $1,000 off for a limited time at vanta.com slash twist. All right, everybody, it's Monday, and there's a lot of news for us to discuss. But first up, Molly, how was your weekend?

You have a decent weekend? I did. I did some really good hikes, not dangerous at all. Some Halloween decorating, some real quality time with my child. It was just was a great weekend. It was like just check. There was like a lot of travel recently. Just shut it all down.

It was great. A little downtime always a good thing. A little downtime always a good thing. And I got a little downtime. The kids and the wife went out a little bit on Saturday. And I just, I worked. I was like, you know what? I'm just going to go dive into the Slack replies.

And just, you know, we have this founder slack with 400 of our founders in it. And so at any point in time, I can just do two or three hours of just going through our portfolio. companies are just saying hi and jumping into conversations. It's wildly efficient. Oh, it's super wildly efficient. My son was actually supposed to have friends over on Sunday and I was like, this is going to be amazing. I'm going to get so much work done. And then they bailed on him and I was like, son of a biscuit. I had to go to how to go to bed at. I do this thing where I'm like, I have to go to bed at eight. And I get in my laptop. I get a bed with the laptop. And I'm like, the device gets you every time. Now, if you want to. No, I do it on purpose. I'm like, good night, son.

You know, like I have to go to bed now. And it's, and it's a bit. And it's, and it's, It's really just so I can get some work done. I got you. Love him, but he really wants to hang out with me still. Yeah, you know, I'm right around that point where they, I understand, you know, 12 to 15-ish, they start, you know, like the peer group and other things become as important as mom and dad or whatever. And so I think I'm, you know, enjoying the last days with my 12-year-old before she starts finding more meaning. But it's been delightful. Oh, by the way, I took them all to see Black Adam on Friday at my favorite movie theater.

Oh, nice. We have these fancy Sinopolis theater. Shout out to them. Like, you press a button, you can order food. So when you have kids, this is like a super unlock because it's dinner and a movie at the same time. Oh, hell yeah, yeah. So in terms of efficiency, you know what I'm talking about. You know, like, even down to I just have to pay one credit card bill.

I don't have to fill out two slabs. I can just zip, zip, zip, zip. And it's dessert. So, you know, we get everything done. And my lord, these kids love this movie theater and doing this. And it was. Was Black Adam good? Excellent. The kids loved it. I'm not a rock guy. Like, I'm not into the rock. I know that he's a big draw. And I was super skeptical about this one. But, but, but no spoilers or anything. But it does seem based on the conversation with, which we had with the new head of people missed it last Thursday, we had the new head of DC comics on Lon Harris, who's running the show over there. And he said he was going to have multiple timelines in his new version of this, you know, how to manage DC.

And I'm really much, very much enjoying, you know, this timeline, which is kind of the Snyder, Patty Jenkins verse. And now it seems like the rock is going to be the anchor of this because Black Adam, which is a character I really did not care about, is awesome. He's this an awesome, fun character. And he's going to fit in quite nicely. And they had this like, Pierce Brosnan was in there. As long as they leave room for Aquaman, Lon, as long as you leave room for Aquaman.

Keep Aquaman in the mix. I love the rock. I am a longtime rock fan. I'm all the way back to the people's eyebrow. Like, love the rock. But don't be kicking my Aquaman out of bed for eating crackers here. Yeah, no, he's great. And so anyway, delightful film, delightful time with the kids.

It was very cute too because, you know, I got the six-year-olds and we sit in these big chairs. Now, when you're in a double chair, like two, it's almost like two reclining chairs, like two first-class giant chairs. With a little arm between it. And she pulled the arm up and she just started snuggling me, you know, we've got my arm around. just got her head on my chest, we're watching black at them together while eating pepperoni pizza. I mean, you're talking about like peak experience in life for me, pizza, my daughter, and a comic book film. It's the best. Everything is right in the world.

It was like you were reading a rival this weekend. So you were having peak experience because you're a sci-fi nerd. Well, I had this like kind of awesome thing happen where my phone died overnight because it didn't charge. It wasn't seated right on the wireless charger. So then on Sunday morning I got up and nobody else was up. Hmm. And I read a book on the couch, like some sort of a business. are old school, I lit a candle. I didn't really, but I mean, I was just like, is it, is it, is it like, is it like, is it like, is it like, is it like, is it like, is it like, is it like, is it like,

stereotyping you as like, just have coffee. I just thought you were trying to celebrate the moments of your life. You know, I know, I really like it's like it's like it's always like it's like it's. TV commercial like, you were doing it for me. Speaking of doing it for me, a friend of the pod, Brad Gersenor, decided he, you know, he's a shareholder in this meta corporation and he decided he had had enough of losing money, apparently. Apparently. As Mark Zuckerberg, you know, spends money like a drunken seller on this VR debacle. And Brad Gersner decided he would write an open letter. Now, he's got a lot of Facebook stock. And as we've, talked about, Zuckerberg has these super shares.

Like, he, he, is Zuckerberg's like great, great, great grandchildren are going to control this company based on the way he structured the voting shares. But maybe you can give us an overview of this letter that Brad wrote. Yeah, this is a shot across the bow. So it is, as you said, an open letter published to Mark Zuckerberg in the meta board, urging them to tighten their belt and sharpen their investment focus. The plan would 2X annual free cash flow to $40 billion. double down on AI, but put a cap on Metaverse-related investments. So not that kind,

not the Metaverse kind of AI. For some context, of course, Meta has been tanking to quite an astonishing degree, actually. Meta stock is down 55% compared to an average 19% for its big tech peers. It's down, that's over the last 18 months. It's down 60% just in the past 52 weeks. We'll get to the letter and some of those details in a minute, but there was a comment from Bill Gurley almost immediately in response to Brad Gersoner's tweet about the open letter saying meta's PE ratio has fallen from 23x to 12x. It now trades at less than half the average PE of its peers. And so this price to earnings ratio. Price to earnings ratio. Yeah. And how much money you make times. Yeah, how much money you. Times your stock price, right? Yeah. Your market

cap. So you divide the market cap by, yeah. So what's interesting. is that I think for a while, people have been looking at that P.E. ratio, for example, they've been looking at meta's declining stock price. They've been saying meta still makes tons of money on its ad business, despite this like weird metaverse distraction. We think this might be a buying opportunity. Like there's been a little bit of a slack in the system, right? I think let out like, well, we'll just see where it goes and what again.

And all of a sudden, apparently everybody's reached the breaking point all at once. And they're like, you got to pull it together as evidenced. this open letter. Yeah, this is something that's been brewing to give people a little sort of back channel on this because, you know, we're all in the same peer group. Bill Gurley's been talking about this for years. He's blogged about it publicly, so I'm not speaking out of school here, but we've all had a conversation since Google decided when they figured out their money printing machine, they said, it's best for us. And we've talked about this on the show many times, about to just hire every single person we can. Because

we have so much cash. We have so much free cash flow. F-C-F. Why not just hire talented people and figure out what they're going to do later? So imagine a basketball team. Like, let's say the Lakers or the Warriors, were printing so much money that people were paying a million dollars

for season tickets, as opposed to, you know, 50,000 or 100,000 for season tickets. And the sponsors were paying a billion dollars to sponsor the arena. And there was just tons of cash there, and there was no salary cap. Well, what would be the logical thing for, you know, the folks at the Warriors to do, it would be to hire every single person. You'd say, hey, Kevin Durant, you're making

50 million a year. We'll pay you 200 million a year. And then you have Kevin Durant coming off the bench. Yeah. Right? Or, you know, your 30th best player would be the CEO, or be the star player of the Lakers, right? You'd have LeBron coming off the bench, whatever it is. That's what happened in Silicon Valley with the talent wars. This was a, this was done explicitly by the Google team to, to, you'd have, you block people from creating competitors and Facebook followed suit. The number of employees at Facebook is truly extraordinary. There's 85,000 people there. And I think three or four years ago, he mentions in his letter there were 25,000.

So you have to ask yourself, like, why do you have triple the number of employees? What are they actually doing? Right. And that's what nobody can figure out. It was its very own catch and kill strategy. Yes. Like scoop them all up, give them a de minimis amount of work, pay them plenty, and nobody else can get to hire them. Correct.

And so this strategy, though, in a down market, when people are like, huh, why would I buy, you know, I have other options with my money and I got to think logically here, the combination of too many people and $10 billion a dollar a year being burned, incinerated on VR headsets

on this crazy debacle, it's just weird. It's just like those two things together, I think, are depressing. Apparently nobody wants to own the stock. But this is Bill Gurley's influence on, I think, the peer group of, you know, him saying like, hmm.

And I think Uber, Twitter, Google, a number of these companies are going to face something similar,

which is why not be more profitable, buy back your shares and maybe give a dividend. All of those things would be on the table to drive the share price up.

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your site fast and resilient. Linode.com slash twist, L-I-N-O-D-E-com slash twist. And you can immediately try out. Linode with $500 in free credits, no questions asked. And you can also apply to their startup program, Rise, which I suggest you do. Think about this. Rise members receive up to $120,000 in free infrastructure credits during their first year. And you get 50% discounts thereafter. Great job to my friends at Leno. Lano. Congratulations on the acquisition. Linneau.com slash twist. Let's talk a little bit about what's in the letter. And then I want to talk about, I actually do want to talk about this approach of an open letter because it's very interesting. It's very aggressive. Brad opens the letter by stating, quote, I am sharing an open letter strongly encouraging.

meta to streamline and focus its path forward. Like many other companies in a zero rate world, meta has drifted into the land of excess. Too many people, too many ideas, too little urgency. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. So as we mentioned, it's a three-step plan to double FCF to $40 billion per year, including reduce headcount expense like you were just talking about by at least 20 percent and take that number of employees back to a mid-2020 level. So not even, you know, I mean, it's like the number of employees is up 3x from 25,000 to 85,000. And just the last four years this is talking about getting rid of a relatively small number of those employees.

Reduce annual CAPEX by at least $5 billion. Meta has apparently gone from $15 billion in annual CAPX in 2018, 19, and 20 to $30 billion in annual CAPX in 2022. that is not inclusive, we should be clear, of the Metaverse expenditures. Like, that's just, you know, the money they're using to acquire, upgrade, and maintain physical assets, like property, plants, building, technology, or equipment. So there's, so he's saying, cut that by $5 billion before you even get to Metaverse, but also cut cap Metaverse spending at $5 billion a year. Yeah, I mean, they have so much cash coming out of that big,

known as Facebook, it's so profitable that, you know, they can do things like build huge campuses, they can buy land and buildings, and then also obviously, you know, paying to make these headsets and then nobody using them. And even though they're expensive or whatever, you know, they're obviously subsidizing them a bit. So yeah, it's a lot of CAPEX. And it's probably a large unnecessary. And, you know, 10% of 85,000 is 8,500 people. You know, so you double that and you get to 17,000 people. Right. So 17,000 people, and Brad mentions this like, hey, listen, I know these are real people, but understand, and again, back to this sort of common discussion going on, he says, those people would go back into the startup ecosystem that easily find jobs. So I know these are people with families in some cases and bills

to pay. You don't want to have to worry about them. So that kind of dovetails with maybe the unwinding of this catching kill strategy, this, you know, taking players off the market strategy. And maybe it's unnecessary to do that. And it would be better to take that. And it would be better to take that money and maybe buy back your stock or give a dividend or just have more money and more profits, which would then make it more attractive to buy the stock. He closes the letter by saying, quote, we don't have any demands. We simply wanted to further engage and continue sharing our thoughts as an interested shareholder. We believe in this team.

We know meta has more reach, more relevance and more incredible opportunities for growth than almost any platform on the planet. So here, we are all familiar. with the famous scene in succession where Adrian Brody. Yeah. Plays their biggest investor, calls Logan Roy to him, like ultimate power play makes him go on this like crazy walk.

There we go. Yeah. And, yeah, I was like, you got to get the picture of him in all his layers and his like hoodie and stuff because his style. Well,

you know, layers are for players. His style is not dissimilar to Brad, who, and the few times I have met him seems to be a kind of a casual, kind of a casual. Oh, dear God. We put his face on Adrian Brody.

But so like that was a private meeting as portrayed in the movie. And it was a real era of the show. It's a really big deal. It's like I'm a huge investor and I have concerns. I have to assume and I do not know anything here, but I have to assume that meetings like this must have occurred with Mark Zuckerberg. Of course they have. Yeah.

So to me, what is really interesting about this letter is that it is being published in public. Because that suggests to me that the Adrian Brody Clambankan meetings did not work. Precisely. Your assessment would undoubtedly be correct. So, yeah, of course, these conversations have occurred. Management frequently meets with large shareholders. They take the temperature, hey, because they could buy more shares.

They could trim their positions. So you want to at least know what they're thinking. And so all of the large companies know who owns, whether it's Altimeter or Fidelity or whoever owns large positions. I just want to check in with them. Hey, how's things going? And this is pretty much an. activist letter.

Now, it's not demanding board seats or demanding governance changes or demanding a change in personnel.

It's just making some suggestion. So on the scale of like constructive private notes to activism,

this is like somewhere in between. Yeah. It's constructive yet forceful public feedback. And now,

what... Yeah. Yeah. So the fact that it's public, is like 10 times more aggressive than giving it privately. But what it signals to me is frustration

that the message, if you were going to game theory this, the message was delivered at the clam bake. The message wasn't taken, was ignored. And okay, next step is we make it public. Now, the next step of this is we sell the stock and we clear our position and we're done. And then the stock goes down more because if large institutions are selling,

that means who's buying? Retail, I don't know, other institutions, but you probably have a business. better place to put your money than a company that does not have financial discipline. We better to own Apple, better own Tesla, better to own Uber, better to own Microsoft. There are better options. And that's where the peer group comes in. If their PE is half of their peer group, what that says is just people are sellers of the

sock and it just keeps plummeting down. So the question from here is, does Zuckerberg even care? Yeah. I mean, if he doesn't care in private, it's so interesting because I read this letter, you know me to be a bit of a cowgirl. And you've seen the occasional response that I have when I perceive that someone's trying to tell me what to do. Sure. And I am not going to lie to you.

I had that response reading this letter. And you know me to be no Mark Zuckerberg defender here. But I read this letter and I was like, huh, if I were the god king of my thing and I believed in my own genius and I was like, nobody understands that I'm making a long-term play, I would read this and I would be furious. I'd be like, this is short-term thinking. You're just following the crowd with this AI thing. I have a vision that's bigger than all of you. You fools. It made me wonder what the...

Is there an expectation that this will actually land in a way that could change the trajectory of the company? Because I would get pissed. It's part of a process. Yeah. It's part of a process. And so the next part of the process is, do people keep selling their and moving? their position out of META into a competitor, right? So that's the key issue here.

If you look at this chart, you'll see META's revenue versus total operating expenses. And in a tech company, these things, your operating expense should not grow in parallel with your revenue. In other words, it's a fixed cost business in some ways. You should have a fixed cost. The more people who buy your software, like the next incremental purchaser of your service or product should not, you know, if you get one more dollar in software revenue for Canva, for Figma, for Adobe, one more dollar in advertising revenue, you shouldn't see a dollar in

expense. You might see 10 cents or five cents, but you shouldn't see like a full dollar because you're giving something that's digital, right? It's, I mean, sure you need more servers, but you don't need an exact amount to the revenue. Now, with something like. But now he's building an entire planet. That costs money. You have to invest in the future. It's a virtual planet. It's a virtual one. If you're building a whole new entire world, universe even, it costs money. You have to spend money to make money, don't you? In a long term, you know, like I'm just saying I think I could imagine the argument, even though I think you're totally right.

I would be surprised if there was an expectation that Zuckerberg was going to see this, receive it in some way that he had not received earlier conversations in private and go like, yeah, you know what? You're right. I'm going to trim the sales here. I'm going to dial it back. Well, now take a look at this chart. And this is looking at. alphabet, aka Google, meta, aka Facebook. Nobody can call their service what we all call it as civilians.

You notice that trend, too? Well, yeah. I'm not, I told you when they changed the name. I was like, that's the biggest red flag to me ever. When you change your name as a company, you're screwed. Yeah. So I'm just going to call this what it is. Green in this chart is Google.

Blue is Facebook. The Facebook Corporation. I'm not going for your silly names. But if you look, you notice the light green to the dark green. You notice that gap between. those two, widens over time. In other words, they become more profitable, right? So there's their operating expense at 20 billion in 2022, and their, you know, revenue over at 69. It is quarterly. Now, Google's OPEX was only 20 billion compared to Facebook's 15 billion, you know, like a third

more, 30%, let's say. But then you look at the top line, 28 versus 609, it's more than double top line. So that just shows you like, in other words, for every dollar Google spends, they make more than three. For every dollar, Facebook is making,

they're making, it spends, they're making two. And so that's just where you're seeing. It's a operational efficiency. Now, of course, if you were to take out this, you know, billions of dollars

in salaries and billions of dollars in this investment in VR, you know, you'd be concerned. Now, I can see this too is if you, as a shareholder, want to bet on the future and you believe VR and AR is the next mobile, then Facebook is doing something crazy and they're not operating this business for efficiency. They're operating it for the future. The promise of VR is more important than the profitability of today. So buy the shares if you believe in that vision. If you are a cutthroat shareholder and you only want the shares to go up in value, then you would invest in a company that buys back their shares and operates purely for profit, or mostly for profit. Now, if you look at Microsoft and Apple, they do buybacks.

I think Microsoft gives dividends, right? So you start to look at those two companies. They're saying, you know what, we're tech companies. We're growing at this incredible clip. But we're also going to give you a lot of value here in terms of how we manage this business and throw off cash. In the case of Microsoft, it's the dividend in case of Apple. They do a lot of buybacks. And so I think this is why Warren Buffett is in love with Apple.

And many people are in love with Microsoft. And in a down market, people are going to look at these fundamentals. Almost makes me want to make a J-trade here. This is what I'm talking about. Like, there was something about this letter. I know. Like, there was something about this letter that made me go, like, hang on here.

I don't want to be in this uncomfortable position, but they're making a long-term bet and they might be right. I don't know. one thing I did think was really interesting though in the replies to Brad's original tweet was from someone who tweeted Henry Avery as someone who spends 50 million plus on ads annually. I can tell you they have completely neglected advertisers as of late. Their ad targeting went from the best in the industry to unusable and unprofitable. TikTok is superior. Zuck needs to be right about the metaverse or meta is as zero.

zero. I would like to get somebody on to try to collaborate this opinion. Yeah. If I don't know if this is related to the Apple changes or not, but this to me felt like a real bomb. Like it's one thing to say. Yeah. Because then there's no hope that that revenue line keeps going higher, right? Like the ad machine has been a money printing machine. That's just been unstoppable. What if that goes down? Now the gap between the two. Yeah. Those things, if that starts coming down and expenses have been going up, well, now you're going to become not a profitable company.

You can become a break-even company or something. And then people are going to totally say, well, how does this valuation even make sense? I do think directionally, I've heard the same thing for my startups. And so Field Report is startups who are spending hundreds of thousands, millions of dollars, hundreds of thousands a month,

millions of dollars, tens of millions of dollars a month on Facebook and Instagram to sell apps, to sell software, are telling me it's not worth it. It's not working anymore. D to C company started telling me last year. Now, this is all because of the, tracking that you can no longer do on phones because Apple, you know, gave that headwind to the industry and said, you know what, you can't track people even anonymously on their phones. So that's a headwind. And should

Zuckerberg be hiding in Burlingame by the airport in a virtual world or should he be fixing these problems? Exactly. And if the leader is saying, yeah, I mean, this would be like me not showing up for the pot or investment team meetings. It'd be like, well, what are we supposed to take from this, right? Like, when the leader, where the leader spends their time, that kind of signals something. And the focus level at Facebook on their advertising is horrific. All right, listen, this brand has a special place in my heart. The founders, Brandon and Carmen, are twist listeners. They've been for a long time.

And they told me they started this company. I kid you not, after listening to the pod and reading my book, Angel. Oh my God, that warms my heart. In fact, their first angel investor wound up being a big hit. What do they do with the money they made? they use the returns from that investment to start a macadamia nuts business. I am crazy. Happens to be my favorite nut.

I love it with dark chocolate. And you can see this graphic on the screen, not all nuts are created equal. This is why you need to get in on a macadamia nuts. Compared to peanuts, almonds, cashews, and walnuts. Macadamian nuts are higher in omega-7s. That's what's been linked to fat loss and natural collagen. And they have more healthy fats. They also have less carbs because, you know, listen, I'm trying to lose a little weight here.

And the product is vegan, keto and paleo. Take it for me. I eat these macadamias all the time. They're totally delicious. And I love the bars. They have spicy ones. They've got dark chocolate covered ones. Here's what I want you to do. Here's your call to action. Get in on macadamias. I'm all in on them. Houseof macadamias.com slash twist. Right now for 20% off just for being a listener. The nuts are delicious. The bars are amazing. And of course, the dark chocolate dip packs are my favorite. House of macadamias.com slash twist. Let's take a look at one more chart here. And this is critically important. So now we're looking at alphabet, I'm sorry, Google and Facebook's

revenue, right? That's your top lines. The big green line, 69.69 billion for Google last quarter. And then 28.8 billion for last quarter for Facebook. Okay, there's a lot of money. Now let's look at the capital expenditures. Yeah, they're almost at the same. For those of you are not watching. Yeah. We're looking at charts here. Yeah. The blue chart, the dark blue, it turns out meta is spending more on CAPX to make $28 billion. They're spending $7.5 on CAPX. And Google's spending but $6.8 billion to make $69 billion.

So they're, I mean, this would be as if Google, if Google's making 2x more, that means Google would be spending like $15 billion on CAPX. if these ratios were the same, but they're not. You know, the words, they're more efficient. You know what's bonkers about this is that we're actually talking about alphabet. Like, we're being snotty here. But it is relevant in this case that we're talking about alphabet because alphabet makes hardware. Alphabet has multiple divisions. Alphabet has exactly X and Waymo underneath it and is still spending less on cap X.

They've controlled that. They have controlled that. And meta, I mean, that's where you do really see. think we're talking ourselves out of your j-trade by the way because this is a stunning lack of discipline which is why you know brad is you know i guess probably at his wit's end i think you know the next thing is he just he should just take the loss and sell his shares i think that like this is i think so too i don't think this letter gets him anywhere i think this is like last call for him he's like okay listen i i'm a loyal patron of this restaurant but if you don't fix the food i'm out you

know you don't have like a restaurant you love and you've been going there for years and then it goes downhill and like you're just like oh the service is terrible now and my food came out cold and at some point you just give up and you're like I used to love that place but do you tell him or he's walk though like this is where I'm still trying to figure out like what is the hope if you care you tell the letter about being nice I guess if you're like if you have a relationship and you've been but yes you're a regular it's a little bit of a it's a little bit of a yelp post though that's right again there's the private conversation versus the yelp review like Brad just posted a yelp review I'll do that

That's who I am, too. I'll do that too. I will tell the manager. It's harsh. Hey, listen, I love this restaurant. Yeah. My food came out cold the last two times. The service has been dismal.

It took for a long time for it to seat us. You know, the drinks came late, whatever it is. I would tell the manager, I tell the owner if I knew them, if I was a regular. And then I would. I'm in fact, like a bit of a Karen. If I gave something a four or five star review on Yelp and then it sucks, like every quarter I get like an email from, because I was Yelp elite for a little while, which makes me feel good.

Every now and again, they're like, hey, rate these restaurants. I'm like, you know what? That's my civic duty to do that as a foodie, and I'll go rate them. And I will change my rating. I'll go back and I'll say update it. And I'll say update. This was four stars. It's now three.

Here's why. And maybe I'm a Karen. I'm screaming into, what's the male version of a Karen? Is it a Ken? I don't. I think it's such a sexist stupid term anyway, so I don't know. I guess it's a Ken. Like, it's a Brad.

Just be a Karen. I'm a Brad. Take the gender. You're a Brad. That could stay. Amazing. Amazing. Yeah.

Just take gender. Just take, you know what? Karen can be a gender neutral term. You could still be a Karen. I think it's general neutral. Yeah. Well, you know, I have this, I have this dark web signal group.

Update. Yeah. I have a dark web signal group. And they are going wild with the Brad and Zuck memes. You saw that first one with him as Adrian Brody from Billions, the Clambake. Succession. Here's another.

one that came up. This is the classic Superman making a decision of what to do. Never gets old. Never gets old. We have our two buttons in case here, again, if you're not watching on YouTube, you probably should be YouTube.com slash this weekend. But here we have the classic Superman dilemma. On the left, we have the shareholder value button. On the right, we have personal pet project. And then we have a sweaty suck just stuck. Doesn't even know what to do. Yeah. Or this was my favorite. The old Kylo Wren from the terrible Star Wars films when he wants more power, more power. And it's Brad Gersner saying more free cash flow. More, more. All right. Well, speaking about mismanagement. I hope it works. But if not, Brad, just sell. Just walk away. Speaking of mismanagement, you remember the fire fest, right? That kid's out of jail, by the way. I can't wait to see how much money, In Drieson Harwitz gives him.

for his next idea. I was just going to say that I'm so glad you said it, not me. You're already blocked. I'm just unfollowed. I'm still skating the line. Yeah, that's the process with Mark Andreessen. He unfollowed you and he blocks you. Yeah.

But he'll be back. He'll be back. I'm convinced he'll be back. Fate loves irony. So Fire Festival was on an island in the Bahamas. It was a disaster for those of you who didn't see the two competing documentaries. Both documentaries have something to offer. I highly recommend both.

But yeah, if you pay thousands of dollars because the card dashing slash Jenner's told you to do it and they never showed up and they got paid 50 grand or something to tweet this BS. They are now taking the island that Billy McFarland christened for his luxury con artist, Billy McFarland, I should say. I mean, so basic. Con artist, Billy McFarland back in 2017. I mean, this is becoming ancient history now. They're going to make luxury crypto condo community? What? I mean, okay. So apparently a company called A-G-I-A international. And we really need to do some proper Colombo here on whether Billy McFarland is associated with

this operation or not is claiming that it will sell, quote, 60 ultra-luxurious pavilions and villas ranging from 1,000 to 6,000-square feet on this island. We do not know, by the way, anything about this company. We cannot find anything more than it was. website, but it seems to have, it doesn't even seem, it is only purchasable via NFT. So you can only buy this property. It will be the only community, quote, strictly sold via NFTs. According to the website, residents will be hatched $10,000 to get on the allow list. And homes are expected to range from $1.5 million. So they've just gone with the, the, the, the

complete lack of irony that you might expect from the crypto community. They're just repurposing without comment and in fact even saying, yes, I don't know that they're bragging about how it's the site of the fire festival, but without comment, they are repurposing this island site of the biggest debacle in recent influencer memory and turning it into basically like a crypto influencer island slash show company. There's nothing sketchy here. But apparently you pay $10,000 for an NFT. Just to get on the list.

Get you on the list to buy homes for a couple million bucks. No, all you get there is the right to mint, the right to ownership, NFT. Got it. Okay. So that couldn't possibly be a grift. I've never heard an allow list price. What is it, an allow list price? It's like, you give me $10,000 and yeah.

You give me $10,000 and then I let you. It's like a per seat license thing. Totally. That's exactly what it is. It's the right to buy it in the first place. Well, anyway, listen. Anyway, don't do this. I would advise people to, yeah, if you're doing a real estate community and NFTs are in any way involved, that's a big red flag.

And then if Billy McFarland is involved, it's just like every red flag in the world waving at you. We don't know that he is. We have no idea. We don't. And we literally have no idea because you can't find anything more than a website and a LinkedIn. page with eight followers and two employees about this entire company that's showing these incredible renderings of like beautiful houses with infinity pools that are definitely going to be built there because nothing has ever gone wrong there before. I mean, I don't know, man. But okay,

it's your 10K. You know what? It's your 10K. And if it turns out Billy McFrollen is behind this, I will not be in the slightest bit surprised. The bad news here is for the people running this grift and it feels like a grift to me. That's my personal opinion. That this would have been if it is in fact a grip. The perfect grift for 2020. If this was 20, 2020, 21, this grift would have just gone supernova. I mean, they would have sold all the, yeah, I mean, just timing everything, folks. If you're going to do a crypto real estate grift in 2022, when people's portfoliers are down 20, 30, 40 percent, you might not find too many buyers. Like, they may want to buy Amazon or something. Yeah. They may not want to buy your shares and your NFT grift. But whatever, I mean, if it is a grift, I don't

I don't know. Feels gritty to me. You never know. You never know. But if I was just going to buy like a really fancy house with an infinity pool on an island, maybe just would want to use money. Yeah. Listen, founders, very important. If you're in SaaS or you're in services and you store customer data in the cloud, you need to be SOC2 compliant yesterday. And you know, you might be hearing this and you may not even know what SOC2 is or maybe you heard about it. You know you're behind the eight ball. Let's get this solved today. This week, I want you to be. compliant from a third party so that you can close big deals. Do it now. Do not look like a dope when you try to close a deal and they're like, do you have SOC 2 and you're like, uh, that long pause?

That's going to be the sound of them going to your competitor. Use Vanta, which makes it incredibly easy to get and renew your sock to. On average, Vanta customers are SOC2 compliant in just two to four weeks and compare that to three to five months without Vanta. And they partner with over two dozen audit firms who have been trained to file SOC2 reports directly within Vanta. I was able to invest in Vanta. It's a great company. A bunch of my portfolio founders have used Vanta. They've had amazing experiences. They give it their highest rating. And, and let's just be clear here, if you're not stock two compliant, you can't close major customers. It's that simple. It's one of the first things they're going to ask for. Here's the best part of this ad read. Vanta

loves this week in startups. They want to support founders and they want to support founders early. And they don't want you to break the bank. So they're going to give you $1,000. off. Think about that. Get $1,000 off at vanta.com slash twist. V-A-N-T-A-com slash T-W-I-S-T-T-W-I-S-T-T-T-E. Get your sock to now. It looks like there's a divy Holmes hit piece in Fast Company. We'll have to have Edina come on and talk about it, but I thought we'd, I'd just queue it up. And so this, you know, I'm almost reticent to go after this story right now because I don't see. see Divi has responded to it. So I guess the question is, do we cover it now?

I don't know. It does feel like sort of, um... One-sided, right? It feels one-sided. It feels one-sided. It feels one-sounding. Exactly. I mean, I think the only reason we brought it up is because, like, it feels really

one-sided and, like, maybe a lady CEO hit piece in disguise. And I don't know, we like it. But yeah, maybe we should just wait and see how this shakes out a little bit before we give it more play. Yeah, I mean, because we have access to Adina. So we can just have her come on tomorrow and talk about it as opposed to. All right. So let's do this.

We can leave this in the show that there was a hit piece on Divy Holmes and Fast Company. We've read the article. We have the notes, but feels hit piece-ish to us in our judgment, right? We both agree. Yeah, it does, actually. It's a pretty snotty piece. It's got tone. It's got a tone.

And so we'll just make a little bit of, we'll call an audible here. We will, we're aware of the story. instead of detailing the story now, let's ask Adina to come on tomorrow or the next day, and we'll detail the story and get her response because she's a friend of the pod. So Nick, leave this in the show, Molly and I making this decision,

and then open invite to Adina to come on the show in the next day or two or send us some notes. And then we'll cover it then when we get her side. It's like being editorially fair, which the story doesn't feel. It doesn't. No, it does not. It does not feel.

This is the thing. you have one bad customer review and then a journalist decides to make that the focus of a piece, I always find that quite unfair. Or even 100, right? Like, that's, it's, in terms of scale. Right. Depends on the denominator, right? A hundred out of a billion. Exactly. It means nothing. A hundred out of 500 means something, one in five, right? So there is some point at which a bad review counts. So, yeah. Right. Or a number of bad reviews. It's not a, it's not a, feel like this had a very like, I don't know. It had a very canon fodder feel to it.

I did not, I did not care for the tone personally. Felt like a hit piece. And we are, we believe, I speak from Molly on this behalf because we've both discussed it here. We believe collectively that women are getting hit pieces on startup founders who are female are getting hit with this bullshit. This BS. harder than men are. The bar for a hit piece for a woman is like, I told somebody to do their job

that I'm paying them for. And it's never accompanied by, I mean, listen, this is, and we will talk about this, it's a hard business to be in. The human elements are real, and when things go wrong, they can go very wrong and it can be a big bill attached in a very disruptive situation for the humans involved, right?

Like, it's tough business. Because it's people's homes. Because it's people's homes. And also, once you're, as soon as you get to the part in the story, and I was just waiting for it, line by line, where you bring up the founder by name. And you talk about how she likes to use her history and you make a little side swipe at her Ivy League education.

Then it's just like, okay, here we are. Here it is. Here it is. Here it is. It got personal. Got personal. That is like a huge tell. that the person who wrote it maybe has some issue with the person.

Now, yeah, that is actually a really interesting point. But it's just like, there it is, right? Like, if you, like, I just want to go, but I even started this morning and, of course, ran out of time because we had a show to do, to look through all the fast, sort of the past company, like archives, recent stories. Like, show me a story that's just a hit piece on a company and its business model that doesn't have this kind of like personal. Mm-hmm.

Yes. Like, as soon as it does, I know that there's a woman CEO involved. And I'm, it's not to say that women CEOs can't screw up. But it's just like, the cadence of the hit piece on the lady CEO is like about every, you know, 10 to 18 months. And then the next thing is going to be, you can always tell like, and they're like, oh, and she has her nanny. She has her two nannies with their baby at the office and set up a playroom for a kid at the office. And it's like, yeah, because she's a mom and she's taking care of the kid and she's got means to have a nanny. And the dad, you know, I go to work. Of course there's nannies here taking care of my kids

when I'm at work. What do you think I'm doing? Throw them in the backyard. But nobody would ever say, like, oh, Venture Capitalist, Jason Calacanis brought his nanny with him to a speaking gig. You know, like when I go to a speaking gig and I bring my kids or something I'm at an event with my kids. Yes, there's two nannies with us. Three kids, two nannies. Yes. Okay. I have some, a Mount of Means as a CEO founder. Yes, and I'm not carrying my kids with me, but I might bring a nanny. But a woman brings a nanny. Oh, that's got to be in the story.

That's part of the hippies. It's just a double standard. It's a BS double standard. It just is. And this is a really, and because this is such a snarky piece, like snarky, right? It's like that you can't, that frankly, we'd just rather have a conversation with her. Go straight to the source and say, yeah. I mean, this reminds me the away CEO one where she gave like the big speech.

It does. It has that same tone where it's just like. Same tone as the away piece. Yeah. Yeah. And then in the away piece, they're like, she's white and the people who are in the, this industry, you know, in this group where people of color, it's just like, what are we even talking about here? Like, what does that have to do with anything? Like, she, she's, she said to the people who are working in the department that does customer support to work harder during Christmas because that's when we sell most of our stuff. Like, everybody. gives that speech. Hey, let's go everybody. You know, Amazon gives that speech. Bezos gave that

speech countless times. Hey, it's go time. It's Black Friday. It's Cyber Monday. Let's go team. Even like, we're not here for work life balance. It's go time. This is our busy. Right. Like, all of that is just within the, it's just like, it's so. Yeah. It's like, I mean, cloaked, claims. It ends with like, Divi is happy to be your landlord indefinitely. I'm sorry, what? Like it's not, it's, it's, it's, it's, it's happy to have you as a customer either way. If you buy the home or your landlord, yeah, it's a hippie. Yeah. It's a hippies.

You know, I, I tell people straight up, you've been in the meetings. Hey, if you're going to work for me in an investment company, fixed 50, solid 60, I'm referring to the hours per week. Why do I say that? Literally, we had a rough side. I was wearing the culture. I was like, listen, don't work here. If you're not willing to answer the phone if a founder calls on Saturday night, a 10 p.m. and get out of the movies and go handle that situation. That's what we do.

Yeah. So we do. It's not a, this is not a nine to five. You know, the end. Don't work here. Yep. Yeah. Yeah. And I don't, you know what I get for that? High fives. You get in drag me for saying that. Yeah. I don't see you getting like, literally compared. She is compared in this piece back to back with predatory lending contract. purveyors in Chicago who stripped black families of three to four billion dollars in household wealth during the 1950s and 1960s. I mean, come on. Like literally, it's like, it's like, so Hephitz and her co-founders are doing this.

And before that, there was this thing. Yeah. So same, same, right? I mean. And before I asked people to work 50, 60 hours a week, the great pharaohs in Egypt demanded that people carry stones on their backs up to the pyramids. you know, for 80 hours a week, seven days a week. Just like J-Cal.

Just like J-Cal and the pharaohs who built the pyramids and forced them. Modern-day pharaoh. Yes. It's super analogous, right? Like, literally, like, the 19-s, I mean, that's a deep pull. Take concerns. Take, have all the concern you want with the rent-to-own, right? Like, it's like, you can write a piece that's like,

is this the right way to incentivize homeownership? And is the homeownership such a goal that, that, right? None of that is, this is not that. This is not that piece. This is Jay Cal is just like the pharaohs. I love, I love this sentence. Which by the way, is my literally favorite thing. Advocates. You know, just advocates. I like how we said we weren't going to talk about the story, but it is that freaking egregious that we cannot stop. However, I mean, this is the world we live in right now. There's a group of people who are doing real, I mean, I defended this on all end when people were like, journalism is that. I'm like, no, no, no, no.

There's just content creation and journalism sitting next to each other. And there are people doing unbelievable journalism. Yes. There are important groups at the Boston Globe, the New York Times, he was like, you can look up any event. He's like, you can look up any event

that happened in the world. I'm like, where do you think you're going to find the story about that event? Like, come on, man. Journalism is alive and well, and there are incredible moments of journalism happening every day, every minute. People deserve Pulitzer's.

They deserve raises. They're doing investigative pieces. They're independent journalists, doing substacks that are crushing it. Amazing. Amazing. But also next to it, as you always say, and, and there's content creation.

And then there's content creators who are compensated based on clicks, traffic, and followers. In fact, when I was looking for a co-host to join me here, Molly, one of the reasons you were on the top of the list was not just how good you are at your job. It was that at the time you had 100,000 followers on Twitter. And I said to myself, well, if I'm going to bring somebody in here, it would be nice. if when they tweeted about the show or that were doing something that may be somebody would show in other words they had a following right

okay when you hire the rock to play black Adam just a little bit of a callback you do that in the DC universe because you know you're going to bring a group of people to the DC universe who might not have been there before this is a specific play they made they wanted a mass audience

who watched Fast and Furious because he's part of that franchise correct yeah bro hello Okay, I've never seen one. I've never seen any Fast and Furious. You haven't even seen the awesome spinoff, Hobbs and Shaw, the most fun movie ever? I've never seen any of this. I'm derailing.

So anyway, I know that he's involved in that. And I was talking to, is it Michelle Rodriguez who's in that? Yeah. Okay. So I know Michelle Rodriguez. It's like there's only one 14 year old boy on this show. Okay. Well, anyway, I know Michelle Rodriguez.

I'm a friend of a friend. And I've had dinner with her and I sat and had a long conversation with her about the Fast and Furious. and she said to me, J. Cow, this is the most international movie franchise in history. Chinese people,

Korean people, African people, European, South Americans, blacks, whites, everybody in between has some representation in this and they're drawn to it.

It's never happened before. This is, you know, because if it's an ensemble piece, she explained to me, you're bringing in all these different like superheroes. And they had a whole movie set

in Tokyo that everybody wants to Okay, great. Tokyo direct, yeah. So there was some conscientious effort for, dare I say, inclusion in that franchise that brought everybody in. That's what they're doing with the Rock, right?

You're bringing in to have more people in this. It's a big tent. They even call it. It's a big tent strategy. That's literally what it's called. Anyway. Yeah. Yeah. And so, you know, but this is also when they have the advocates, they bundle together a group of people's opinions,

without people's names. This is when, like, the content creators, as opposed to journalism, it's a little bit lazy, right? Like, if you really want to go for advocates, like, just give us five different people's names, name, name three. I think, for me, I always told my people,

bring me three. If you, you know, just so it's not like you cherry-picked. Give me three. So if there were problems, at least three people who had the problem. And if there are people who have an opinion on this, let's get three people on record. And I never like these anonymous source things.

Name a study. Name a study. I have had many editors. Sure. I have literally had editors be like, if you're starting your sentence with experts say, start over. And that's what this is.

Which expert? Yeah. Right. So the point being, like, people are now hiring based on like Black Adam hiring, you know, DC universe bringing in the rock. That's part of journalism now.

It's like these super, these super journalists who have big followings, how do you get a big following? Well, we all know how you get a following on Twitter. It's by picking a side, right? joining a tribe.

Like this is kind of like the playbook. And I feel like this is a little tribal, like, you know. Well, beating up on tech is 100% of playbook too, right? It's like, yeah, sure. Find the thing that. And again, this is why I brought up that housing touches a lot, it presses a lot of buttons, right? Because it does get to inequality. And it does get to.

There is inequality in housing. And there has been a history of predatory lending. And the rent to own model has had a lot of scrutiny. And there is so, there are so many ways to do that story. that do not feel this snotty. I mean, I know I keep coming back to that word, but that's the tone here.

It's like borderline. It matters. It matters a lot. It doesn't feel a lot. No, come on, not in the slightest. Listen to this sentence. Advocates caution that modern implementations of rent-to-own models

have the potential to be just as exploitive as past incarnations. I mean, that's a lot of word-sallet to say nothing. Okay, you're saying rent-to-own models, past and period. the new ones could be just as exploitive as old exploitive ones, or said another way, they could be different and not be exploitive. Exactly, or not.

So I could say, advocates and experts say that moderate implementations of rent-to-own models could be better and solve the problems of past incarnations. You literally could say the same thing. You could talk to advocates for this and say, yeah, this could be better. But that doesn't help. anybody to just put in a biased sentence like that? Advocates caution. What does it even mean? Which advocate? Like, if you and I were editing this piece, big red pen. I'd be like, give me a, show me a study. Show me a study. Sure. Like, studies are good. And studies are not perfect either, but you're trying

to triangulate on the truth. And word salad does not get you any closer to the truth. Yeah. There could be real problems. Again, there could be real problems. But there is not a lot of proof in here. There are stories about their outlier stories about things that went wrong. And there are always things that go wrong in a company. But as soon as you're like, in other words, they're happy to be your landlord forever and so on and so forth. Right. Particularly galled by Divvy's attempts to shirk responsibility in the name. Like, it's just like, okay. Anyway.

In breaking news, we don't like that. Advocates caution that people working for Jason Kalakanish should work no more than 40 hours a week so that our returns could be industry standard. And no better. I guess, do question that. Advocates too. Advocates for doing just fine and no better. Yeah. Yeah. Anyway, so, Adina, please come on.

Yeah. I mean, Indiana will come on, I'm sure. I mean, also, like, I believe her when she said she wanted to help this group of people. We've had her on the pod multiple times and then she spoke at all in summit. Like, there's a group of people who can almost own a home and they might want to, you know, select the home, buy it with the help of Divi. Like, that's the group we're talking about here. Now, is it possible that some of them maybe overreach?

Sure. What's the harm? They pay a little extra? There's real harm and they overreach. And, right? It's like, I don't. And divvy's on the hook. And it's not necessarily Adina's fault personally and nor does it more.

Like, when, like, I just looked up five stories about Black Rock buying a bunch of single family homes. Nobody's named here. Nobody's parent. Nobody's origin story is named here. There's no like around the time that Larry Fink at Black Rock decided that the total addressable market for single family homes that can be rented out at an exploitative price. Right. Like, he's not in here by name.

And BlackRock is taking millions of homes off of the market every year. I mean, look at this weird sentence in this story. This is from Catherine Bracey, co-founder CEO of Non-Provitate Advocacy Group, Tech Equity Collaborative. I'm sure she's got great intent, but this is the quote. I'm trying to understand this sentence. do. The real danger is that the incentive structure around venture capital supercharges these models,

and then the people who are building the companies don't have the historical context to understand when they may be replicating something that has created harm in the past. So they're saying Adina, who went to an Ivy League education, spent years building this business, does it own the history, doesn't know the history

of rent-to-own? Is that what she's saying here? Because I've met Adina, I spent time with her. She's brilliant, and you're sure that she has studied this. She might be one of the biggest experts in the world today on rent-to-own and you can be sure the venture capital is giving her funding.

I mean, she's raised, he's a, this is a unicorn company. You can be sure they understand the history of this and they've studied it and they've modeled it. So it's kind of the opposite of what this person is saying. Right. Of course, they put the May in there. She got that,

just got that Masters of in Business from Stanford. And listen, again, maybe not. Right? Like, maybe. not. Maybe there is some universe and we should always allow for the possibility in order to be as gender neutral and objective as possible that maybe she doesn't know the history. But there's no sign in this article that she's been asked directly. And the assumption throughout is that she is essentially on equal footing. She personally, and I want to make this clear, right, they're not saying

the company. The assumption throughout this article is that Edina personally is very likely on the same level as all those predatory lenders in Chicago in the 50s and 60s. Don't print until you have her. I'm sorry. Yeah. I mean, and maybe talk to, this is so lazy because there's a really easy thing to do here. This is my note as an editor because I was an editor in chief and publisher. Started my own magazine.

Started countless blogs, including a gadget, auto blog, joystick. These are like very famous blogs in their industry. I would just say to somebody, get me three other own, get me three other divy owners. Go on a Reddit some forum. on Craigslist, tweet. Does anybody know anybody? Divi. Go find me more Divi owners and let's talk to it.

Or you say to the company, hey, can you put us in touch with three owners? We'd like to talk to them. I mean, that's another way to go. You just basically spend one more day. I would say one more day on the story. Get me other owners of Divi Holmes. But, you know, a lot of journalists, Molly, have to file daily or every two days or twice a day. And so this precludes them from doing work.

And that's part of the problem with journalism. Yes, although this is under the long read tag. So presumably there was more time. So then if you didn't spend the time, what would that tell you? It basically, yeah, that you want to get it out and you want to get a bunch of clicks for your hit pace. Like at this point, because there is such a long history of pieces like this being aimed quite particularly at women CEOs by name and having the same kind of just like a little over the top tone. Dramatic. I'm to the point where I no longer take it seriously.

I'm just like, yeah, I actually don't believe you. You have created such a culture of bad journalism that now when I read this piece, I don't believe you. I just reflexively believe Adina here. Because your tone is that not objective. And your history is so poor. And I mean this as the general you, the general journalism you, not this writer in particular. Yeah. Anyway.

Anyway. All right. I think that's enough show for today. That's enough show for today. I know. Shake it off. Shake it off. Well, I, yeah, I mean, it's a little bit frustrating, but it is what it is.

I think just whenever you're reading these stories, we're just trying to give people a little education on how to understand if you should believe what you're reading. Yes. Anonymous sources, experts say, you know, this sort of bombastic stuff, personally attacking the founder. When you start seeing those things, you got to wonder about the agenda of the piece. Now, you used to, we used to live in a world where we didn't worry about agendas, right? Yeah, totally. But now we worry that, and we don't even worry. It's true.

There was like a Paul Graham tweet the other day that was citing some data about headlines over the past, like, 30 years. And showing that they have gotten quite notably, like empirically more outrageous and angering. And, I mean, we really are. I was looking up the history of yellow journalism and the law, you know, there was that whole journalism. trend in the 1800s that led to all the libel and slander laws that we have today. Because the goal of journalism at that time was to inflame and enrage. And there were even those who suggested that it like contributed to America getting involved in a war. And I can't remember which one. But it was literally like, I mean, it was, it felt like a mirror of this moment.

It was like the march toward war. Anyway, um, yes, headlines suggesting fear, anger, disgust, and sadness. And this is that type of story where it's like, if you read this and you find yourself getting mad and horrified and outraged and thinking to yourself like, oh my God, Edina, Hefitz is a predatory lender just like Chicago in the 50s and 60s. There's a reason you feel that way. It's the writing. They literally used every device possible to make you feel that way. These experts and advocates told you to feel that way because they're experts and advocates. And, you know, these are just little journalism tricks. The Spanish-American War. Yeah. Well, and remember, why were they doing this kind of outrageous headlines back then? There were political agendas, of course, and they also wanted to sell papers. You know, if you walk by a paper, you see an outrageous headline, you're like, okay, I'll give a nickel to read the story on page six about that. Okay, I'll jump ahead and try to read the story. And if you pick up the newspaper and you go to page six and you start reading, the person says, hey, you can't read here. This is on the library. Give me to the nickel.

Right. Yeah, like kind of famous scene. It's the same thing here. Give me the click. I want the click. I want the eyeballs. I need your attention. And this was when there were two major newspapers and the publishers and the publishers were Joseph Pulitzer and William Randolph Hurst. Yeah. And the competition between the two were so fierce.

I went and looked this up because I was like, this is not the most polarized that the media has ever been. But it came across the story where it was like this extremely sensationalist style and the profit-driven coverage of world events got so intense that it arguably in part led to American involvement in the Spanish-American War. Yeah, that's a good poll. Well, and then this is why podcasting is... Is what a nerd I am?

Well, podcasting, if you look at history. Actually, I've actually... I've found a book on the history of generalism. No, here's the thing. I'm going to take my retainer out for this. I think this is part of why podcasting is surging as a way for people to get the news source, because it's nice to listen to stuff, right?

and then you build a relationship with people you trust, you get to know them, and people say, okay, Molly was a journalist, Jason was a journalist, okay, they invest in companies. They got a good 360-degree view from all sides of the table. You know, Jake House built companies, Molly's investing in companies. She's been a journalist. Okay, like maybe when they break something down,

I'll get more out of that than I will just from a journalist or just from a venture capitalist doing a post or just from an expert doing a post. you kind of can find people who have a range of experiences, get into a rhythm with them, trust them. And that's what I encourage people to do. You find some sources in podcasting. You feel you can trust.

And then that becomes like part of your editorial mix. I'm not saying the only thing. Yep. But part of it, you know. Yeah. It could be a nice piece of it that, you know, you can then build off of it. And I think this is why you're seeing this surging level of interest in podcast.

Because a certain person, Molly, works as a podcaster. I think you have to have an intellectual honesty to build that trust. You have to be willing to be wrong, right? Sometimes we're wrong about things. Yes. And you have to have some broad experience that people say, you know what, I'm listening to this person's voice. I get it. They know what they're talking about. Okay, Molly's invested in companies now. She's been at the New York time. She's been at NPR, whatever marketplace, you know, public radio. You know, you collect some experience in life, and then this is the unique thing about podcasting. And you have time. It is.

You have time. And honestly, you have the ability. You are rewarded for critical thinking. Like, it shouldn't be, if anything, I think it should, you should consider it. This is, apologies to all of my former employers. You should consider it a greater credential that I left those places. That, like, at some point, the commitment to critical thinking. overrides what your editors want you to do.

And I think you see journalists leave for those reasons. And there's sort of a certain code for people who have left various places. And it usually says, it usually breaks down to, I wanted to be smarter than this. Because journalism is mass by definition. And a mass audience usually doesn't, usually wants to get mad about stuff. They want to get mad. They want to get sad. They want to be entertained.

sex does sell, if it bleeds it leads, like all of that is just true about any mass medium. Yeah. And we have, you know, we get to, we have this like beautiful opportunity to cultivate smaller, smarter slices. Yeah. You can be more thoughtful. I like this sort of thing. You can be more thoughtful. And you're rewarded for critical thinking as opposed to penalized for it because, you know, and this is where I think journalism has a, a structural problem.

if you were to write a headline here, Divy Holmes is attempting to make a better rent-to-own model. Would not be clicked on and it would not release the dopamine of the outrage that you get from this piece. So the person who wrote a more accurate headline or a more accurate story or a fairer story

would not get people as charged up. Now, when people get charged up, what do they do? They retweet you. So this is a very, like, nuanced point. There's no reason to retweet an insightful, thoughtful, critical thinking piece. It's not like, if you heard our discussion here and you thought, well, that was thoughtful, your first point isn't, I need to retweet that thoughtfulness. Wow, that Molly has really broke that down with some critical thinking. Now, if we were upset and angry, oh, my lord, here we go, this is retweetable.

It's a fight. It's an argument. I have to pick a side. I'm a Republican. I'm a Democrat. I'm, you know, whatever. A coastal elite. I'm a redneck.

Whatever it is. And you feel your tribe's been wronged. Yeah, you get that retweet action. What does that do? It increases audience. You also get content. You get to create content and potentially get attention for it. And to Francis's point, like, I think we're trying, I agreed that in some ways we are being

dismissive. I agree with you. I am being dismissive of the serious issue. issues in this piece because this piece is written in a way that makes me want to be mad about the serious issues in this piece. Yes. Instead of laying them out in a reasoned way with enough expertise behind them with a, with a fair treatment of the founder that I believe that I have engaged, right?

Because again, I have acknowledged over and over in this conversation, this could be true. Sure. But because of the way it is presented to me, because it's like, what could possibly go wrong? Silicon Valley owns the American dream. I'm already, I'm on my heels. I am defensive because this does not feel fair. Right. But you're thinking, now you've gotten to this metacognition level.

And anybody who spent time in the media machine has this where you're like, okay, what happened in the Star Chamber when they were discussing the headline? Who wrote the headline? Did the author write the headline in the subhead? Probably not. Who wrote it? The social media group was really good at this stuff. what was the editor thinking?

The editor might be thinking, hmm, we get compensated based on our pages. We're behind Business Insider. Business Insider's writing crazy headlines every day. They're writing crazy headline pieces and trying to get your subscribe for 99 cents so that you then get billed 10 bucks a month. You know their game, right?

They're like, let's write something outrageous about these 20 people, make a listicle of 20 people, get people outraged and get them to subscribe because they can't get it anywhere else. Put it behind the paywall. There's all these games being played. And once you've been inside the machine, you just see them.

And so hopefully the audience here, we've helped you see when a piece feels biased, again, to Molly's point, could be true. Right. But we all, but J-Cal and I know what it looks like. Yeah. Right? Like, we know what it looks like

when something is designed to get a specific response. This is our specific expertise as former journalists and media purveyors. And this is that kind of piece. It's totally that kind of piece. And it could be changed so easily. All you had to do is talk to two, people who love their divvy homes. Talk to somebody who actually was an expert on predatory loans,

who actually could explain to you the contracts that people signed in those predatory loans, and then pulled out the paperwork and the document that Adina makes people sign for Divi, compared those two, and then as Adina about those specific changes. So that would be the way I would do it. I would find the contract that people in the 50, 60 signed that was predatory. That contract exists somewhere on the internet. We probably would find him five minutes. And I'm sure Adina's contract with homeowners is available either publicly or this disgruntal homeowner would have given it to you. And then you could just pull it up and say, well, this person knew that they're responsible

for making sure that, you know, the stuff in the house is replaced, you know? Right. Or whatever. And talk to the inspectors and have, right, exactly. Like, we also know what it would have looked like if it had done right, been done right. And that's why we're fired up about this right now. Yeah. But anyway, we'll have Adina on.

And, all right, it's a big week this week. So thanks for tuning in. Earning season is coming. So we got Google, Microsoft, Spotify reporting tomorrow. And I am a shareholder in Google. And I think I j-traded Microsoft as well. So I have Google and Microsoft in my portfolio. So I'm excited to see what this.

I don't know if I have Google. Do I have some alphabet? I will find out. I definitely have some Microsoft. Yeah, I mean, I edit Netflix. I edited Netflix. And, yeah. But I was thinking about buying Microsoft because of the Netflix.

So that would have been a pair trade there. And I haven't bought Spotify yet. I'm a little concerned about Spotify, but maybe this would be a good chance for me to think about those. And do a little rebound. My portfolio is coming back. The gain and loss has trimmed. It was a little dark there during the real down market. But I'm only down 10% right now, which I am fine with being down 10 or 11%.

Because I'm building this for a 10 year. My biggest gain right now is Adobe. My biggest loss is Disney. And on a cash base, it's not a percent basis. So what's so much Disney? But I still feel pretty good about Disney. I'm actually thinking about buying more Disney. What are we going to do about that Warner Brothers?

What are we going to do with that? Ooh, Taiwan Semiconductor. Ouch. I might buy more, yeah. Yeah. Well, that's the headwinds of the global chip. I mean, they're going to get invaded, so that can be a problem. It could be a little bit of a problem, yeah.

I come on this show and I keep it together, and then I go back to my life, and it's all UK Prime Minister and she takes. takeover of China, like, all the time. That's like, these are my two. If you, if my Twitter algorithm could talk right now, it would be like, wow, this lady is only interested in international news. Let me ask you a question, Molly. Yeah.

In our lifetime. Yeah. Yeah. Has there been a nuclear war? No. No. Has it been a nuclear war since we, uh, dropped the bombs on Hiroshima and Nagasaki? I'm not talking about nuclear war, but where did this come from?

But no. I'm just putting it out there as just a general statement. It has not happened. I don't think it's going to happen. And has China invaded another country in our lifetime? I don't believe so. Hong Kong was given back to them by the British, but that was not an invasion. You're going with China is not going to invade Taiwan?

I don't believe so. I don't believe so. All right. No, I'm not saying it's not possible, but I don't think it's probable. And I think the probable case in the world, world is that cooler heads prevail, that the world tips towards less wars and more congeniality between nations. I believe that trend continues, even if right now we are in acute state where it doesn't feel like that. Because I'm looking at the multi-decade trend of peace in the

world and cooler heads prevailing and things being resolved. I think Ukraine gets resolved. I don't think China invades Ukraine, uh, invades, Taiwan. Uh, and I think the world

bends towards justice and, and calm and resiliency. So I think this is like a dark moment in the world where people are realizing how resiliency doesn't exist in the system. Mm-hmm. And then correcting that. And COVID plus this crisis and this war and some dictator bad behavior,

it just makes everything feel chaotic. And then I think these things resolve themselves. And relatively quickly, in fact. The resiliency that this Ukraine war is going to create the system. And the resiliency that will be created in the system because of the pandemic is going to make the world more stable. And so Europe will be less dependent on foreign, on dictator oil. The U.S. and the rest of the world be less dependent on pharmaceuticals, PPE, and chips from dictatorships. And that will in fact make the world more stable long term. Because then when we have discussions with dictators or other

countries like that, you're not as dependent on them, right? So I feel this is like a lot of short-term pain for an extraordinary long-term game. I'm super positive. You know that. I do. Yeah. I think we have just a different, interestingly, like philosophical take on time. Like, I think time is a wheel. And I just think these things reoccur. Yes. And that's sort of the nature of things and there's not a like a, I don't think we're in a storyline that progresses to an ending happy or otherwise. Does that make sense? Like, I just think these things reoccur in life. And then on top of that, honestly, like, didn't you see that video of China, literally of the cooler head being escorted right out of the meeting? Like, yeah, I don't know.

I think the fallacy is in assuming that the logical progression is the same in different cultures and among different people. There could be Black Swan events, of course. And there could be, but here's what I think about the wheel. China's like, we're going to do China 20, 25. And then they direct all the resources of the country there. And then we're going to like build all these miles of rail. We're going to do that.

And then we're going to do this. And then they do it. And they direct all of the resources of a country. And she has more power in the world than any single human and just stood there and was like, we're going to get back Taiwan. We're not ruling anything out. We're not taking anything off the table in terms of reunification. It is happening.

And if they do it and they lose trade partners and those factories, go dark, they'll have a revolution because nobody will have work to do. And so these are the other balancing things that they have to consider. They just shut down the whole country because of COVID zero, like for COVID zero, they just did all that to themselves and have had no revolution and have disappeared millions of people. Again, yeah, that's true. But imagine if iPhones and semiconductors are no longer made in China and they're made in Korea, Vietnam, and other places, and they don't have this influx of money coming in. And their factories are not churning out products, which I think is kind of what's happening in this as the wheel spins

is that people are saying, you know what, yeah, it's a little crazy over there. The dictatorship's a little crazy. And as the dictators go a little crazy, people say, you know what, I have to disconnect from the dictator. And then all of a sudden, it looks more like North Korea

than a vibrant economic trade partner of China or Russia that where Germans were building pipelines with them. I'm saying they 100% like she does not care about that. I think the mistake isn't assuming that he cares about that. And if he doesn't, he becomes North Korea. and then the people take them out of power. So that's, but I see, I think here's the thing about the wheel.

I think the wheel is trending upwards towards a better life for all humanity. I feel like as the wheel spins, yes, these things happen, but I feel like the gains in technology and democracy accrue to individuals who are living more longer than ever and less people are living in object poverty than ever. And justice is better than that. I don't, I don't dispute any of that. Yeah. I also think we would be.

silly to assume that history will not repeat itself. It always has before. It always has. And societies throughout history, by the way, have had like a massively increased quality of living and then collapsed. I'm not even trying to be a bummer here. It's just more like, I'm, I feel sort of Buddhist about it. It's like, I don't know, this is, this is now.

Like, I don't know. I think there'll always be instability, but I do feel like the, I'm in the Stephen Pinker camp that things are getting so much better that we don't appreciate them. So while the conflict, in Ukraine feels horrible. It's not comparable to World War II or World War I, you know, et cetera, et cetera. But anyway.

Yeah. Anyway, we've got all the, happy Monday, everybody. Happy Monday, everybody. We've got all the feelings here. We got all the feelings. I don't know. I don't have any feelings about this. Crypto roundtable this Wednesday, too.

I'm excited about that. Yeah. It's going to be a, it's just remained. Please ask him about the island. You know, I won't be here on Wednesday, so I will not get to be part of the crypto roundtable with the year. That's all right. But I look forward to listening to it as a fan.

Anyway, all that's coming up and those earnings and much more philosophical musings about the state of the world. See you all tomorrow. Bye bye. Bye bye.